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GRAPHIC PACKAGING HOLDING CO

GRAPHIC PACKAGING HOLDING COGPKEarnings & Financial Report

NYSE · Materials · Paperboard Containers & Boxes

Graphic Packaging International is a Fortune 500 corporation based in Atlanta, Georgia, United States. It designs and manufactures packaging solutions for commercial products. GPI manufactures paperboard and folding cartons for a wide range of popular consumer goods, particularly beverages and packaged food. The company operates paperboard mills in Kalamazoo, Michigan; Macon, Georgia; Middletown, Ohio; Prosperity, South Carolina; Texarkana, Texas; and West Monroe, Louisiana, that use recycled...

What changed in GRAPHIC PACKAGING HOLDING CO's 10-K — 2023 vs 2024

Top changes in GRAPHIC PACKAGING HOLDING CO's 2024 10-K

249 paragraphs added · 290 removed · 182 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

52 edited+15 added−25 removed25 unchanged
For more information, see “ Note 4 - Business Combinations ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During the third quarter of 2023, the Company decided to discontinue its project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus its growth investments in the strategic expansion of coated recycled paperboard capacity.
For more information, see “ Note 4 - Business Combinations ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During the third quarter of 2023, the Company decided to discontinue its project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of recycled paperboard capacity.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 4 During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019.
The joint venture agreement covers unbleached paperboard supply, use of proprietary carton designs and marketing and distribution of packaging systems. Sales and Marketing The Company markets its products principally to multinational beverage, food, quick-service restaurants, health/beauty and other well-recognized consumer products companies. The beverage companies include Anheuser-Busch, Inc., MillerCoors LLC, PepsiCo, Inc. and The Coca-Cola Company, among others.
The joint venture agreement covers unbleached paperboard supply, use of proprietary carton designs and marketing and distribution of packaging systems. 6 Sales and Marketing The Company markets its products principally to multinational beverage, food, quick-service restaurants, health/beauty and other well-recognized consumer products companies. The beverage companies include Anheuser-Busch, Inc., MillerCoors LLC, PepsiCo, Inc. and The Coca-Cola Company, among others.
The Company also sells paperboard in the open market to independent and integrated paperboard packaging producers. 7 Sales of the Company’s principal products are primarily accomplished through sales offices in the U.S., Australia, Brazil, China, France, Germany, Italy, Japan, Mexico, Spain, the Netherlands and the United Kingdom, and, to a lesser degree, through broker arrangements with third parties.
The Company also sells paperboard in the open market to independent and integrated paperboard packaging producers. Sales of the Company’s principal products are primarily accomplished through sales offices in the U.S., Australia, Brazil, China, France, Germany, Italy, Japan, Mexico, Spain, the Netherlands and the United Kingdom, and, to a lesser degree, through broker arrangements with third parties.
For the West Monroe, LA, Macon, Georgia, Texarkana, Texas, and Augusta, Georgia paperboard manufacturing facilities, the Company relies on private landowners and the open market for all of its pine and hardwood pulp and recycled fiber requirements, supplemented by clippings that are obtained from its packaging operations.
For the West Monroe, LA, Macon, Georgia, and Texarkana, Texas paperboard manufacturing facilities, the Company relies on private landowners and the open market for all of its pine and hardwood pulp and recycled fiber requirements, supplemented by clippings that are obtained from its packaging operations.
The packaging facilities print, cut, fold and glue paperboard into cartons and containers designed to meet customer specifications. Joint Venture The Company is a party to a Japanese joint venture, Rengo Riverwood Packaging, Ltd., in which it holds a 50% ownership interest.
The Company's packaging facilities print, cut, fold and glue paperboard into cartons and containers designed to meet customer specifications. Joint Venture The Company is a party to a Japanese joint venture, Rengo Riverwood Packaging, Ltd., in which it holds a 50% ownership interest.
Consumer concerns regarding the growing plastic packaging waste problem represents one of the strongest trends in the packaging industry, and the Company focuses on developing innovative, sustainable consumer packaging solutions that are recyclable and help customers achieve their packaging sustainability goals.
Consumer concerns regarding growing plastic packaging waste represents one of the strongest trends in the packaging industry, and the Company focuses on developing innovative, sustainable consumer packaging solutions that are recyclable and help customers achieve their packaging sustainability goals.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” On September 8, 2023, the Company completed the acquisition of Bell Incorporated (“Bell”) for $264 million, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” On September 8, 2023, the Company completed the acquisition of Bell Incorporated (“Bell”) for $262 million, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024. Production from these facilities has been consolidated into our existing packaging facilities.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024. Production from these facilities has been consolidated into other existing packaging facilities.
The Company believes that adequate supplies from both private landowners and open market fiber sellers currently are available in close proximity to its paperboard manufacturing facilities to meet its raw material needs. The paperboard grades produced at the Kalamazoo, Michigan, Middletown, Ohio, Tama, Iowa, and East Angus, Quebec paperboard manufacturing facilities are made from 100% recycled fiber.
The Company believes that adequate supplies from both private landowners and open market fiber sellers currently are available in close proximity to its paperboard manufacturing facilities to meet its raw material needs. The paperboard grades produced at the Kalamazoo, Michigan, Middletown, Ohio, and East Angus, Quebec paperboard manufacturing facilities are made from 100% recycled fiber.
For additional information on such regulation and compliance, see “Environmental Matters” in “Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “ Note 14 - Environmental and Legal Matter ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Climate change presents both challenges and opportunities for the Company and its communities.
For additional information on such regulation and compliance, see “Environmental Matters” in “Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “ Note 14 - Environmental and Legal Matters ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 9 Climate change presents both challenges and opportunities for the Company and its communities.
The Company follows a due diligence process to ensure virgin fiber inputs are sourced from sustainaby managed forests and do not contribute to deforestation or habitat loss for ecosystems with high conservation value.
The Company follows a due diligence process to ensure virgin fiber inputs are sourced from sustainably managed forests and do not contribute to deforestation or habitat loss for ecosystems with high conservation value.
The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers like the Company that file electronically with the SEC at http://www.SEC.gov. 11
The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers like the Company that file electronically with the SEC at http://www.SEC.gov. 10
The Company takes significant steps to protect its intellectual property and proprietary rights. Human Capital We believe that the Company’s greatest asset is our workforce. Solving day-to-day operational and business challenges in order to drive positive results for stakeholders requires attracting, developing, and retaining talented individuals with different skills, ideas, and experiences.
The Company takes significant steps to protect its intellectual property and proprietary rights. Human Capital We believe that Graphic Packaging’s greatest asset is its workforce. Solving day-to-day operational and business challenges in order to drive positive results for stakeholders requires attracting, developing, and retaining talented individuals with different skills, ideas, and experiences.
For more information, see “ Note 1 - Business Combinations, Exit Activities and Other Special Charges, Net ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During the second quarter of 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”).
For more information, see “ Note 1 - Business Combinations, Exit Activities and Other Special Items, Net ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”).
For more information, see “ Note 4 - Business Combinations ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Share Repurchases and Dividends On July 27, 2023, the Company's board of directors authorized an additional share repurchase program to allow the Company to purchase up to $500 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the “2023 share repurchase program”).
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Share Repurchases and Dividends On July 27, 2023, the Company's Board of Directors authorized an additional share repurchase program to allow the Company to purchase up to $500 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the “2023 share repurchase program”).
For more information on research and development expenses see “ Note 1 - Nature of Business and Summary of Significant Accounting Policies ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Patents and Trademarks As of December 31, 2023, the Company had a large patent portfolio, presently owning, controlling or holding rights to more than 2,900 U.S. and foreign patents, with more than 850 U.S. and foreign patent applications currently pending.
For more information on research and development expenses see “ Note 1 - Nature of Business and Summary of Significant Accounting Policies ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Patents and Trademarks As of December 31, 2024, the Company had a large patent portfolio, presently owning, controlling or holding rights to more than 3,100 U.S. and foreign patents, with more than 850 U.S. and foreign patent applications currently pending.
Pine pulpwood, hardwood pulp, paper and recycled fibers (including DLK, OCC and ONP) and energy used in the manufacture of paperboard, as well as poly sheeting, plastic resins and various chemicals used in the coating of paperboard, represent the largest components of the Company’s variable costs of paperboard production (other than labor).
Pine pulpwood, hardwood pulp, paper and recycled fibers and energy used in the manufacture of paperboard, as well as poly sheeting, plastic resins and various chemicals used in the coating of paperboard, represent the largest components of the Company’s variable costs of paperboard production (other than labor).
We are putting programs and initiatives in place to drive engagement to the 75% percentile (using the Gallup Q12 ® framework). In 2023 we conducted an employee engagement survey and we have executed a robust communication plan to ensure each employee hears results and a commitment for action from their leader.
The Company is putting programs and initiatives in place to drive engagement to the 75% percentile (using the Gallup Q12 ® framework). In 2023 and 2024, the Company conducted an employee engagement survey and executed a robust communication plan to ensure each employee hears results and a commitment for action from their leader.
During 2023, 2022 and 2021, the Company did not have any one customer that represented 10% or more of its net sales. Competition Although a relatively small number of large competitors hold a significant portion of the paperboard packaging market, the Company’s business is subject to strong competition.
During 2024, 2023 and 2022, the Company did not have any one customer that represented 10% or more of its net sales. Competition Although a relatively small number of large competitors hold a significant portion of the paperboard packaging market, the Company’s business is subject to strong competition within paperboard packaging, and from plastic and other packaging materials.
In 2024 and 2025, the Company estimates it will spend $134 million and $33 million respectively, for such projects as a new wastewater treatment system and upgrades to waste water treatment systems at certain of our paperboard manufacturing facilities.
In 2025 and 2026, the Company estimates it will spend $53 million and $91 million respectively, for such projects as a new wastewater treatment system and upgrades to waste water treatment systems at certain of our paperboard manufacturing facilities.
In 2023, the Company spent $18 million of capital on projects to maintain compliance with environmental laws, regulations and the Company’s permits granted thereunder.
In 2024, the Company spent $65 million of capital on projects to maintain compliance with environmental laws, regulations and the Company’s permits granted thereunder.
Our Vision 2030 outlines how we will be leaders in innovation, build a world-class culture, protect our planet, and deliver results for all of our stakeholders. Culture is one of the pillars of our Vision 2030 and the safety and wellbeing of our employees is our top priority. Employee engagement is key to a safe and stable workforce.
The Company's Vision 2030 outlines how to lead in innovation, build a world-class culture, protect the planet, and deliver results for all of the Company's stakeholders. Culture is one of the pillars of the Company's Vision 2030 and the safety and wellbeing of employees is a top priority. Employee engagement is key to a safe and stable workforce.
The Company converts recycled, unbleached and bleached paperboard, as well as other grades of paperboard, into cartons, containers and other packaging for consumer goods products at packaging facilities the Company operates in various locations globally, including a packaging facility associated with the Company's joint venture in Japan, and at licensees outside the U.S.
The Company converts paperboard into cartons, containers and other packaging for consumer goods products at packaging facilities the Company operates in various locations globally, including a packaging facility associated with the Company's joint venture in Japan, and at licensees outside the U.S.
It is reported within the Paperboard Manufacturing reportable segment. Subsequently, in the second quarter of 2023, the Company closed this facility.
Tama was reported within the Paperboard Manufacturing reportable segment. Subsequently, in the second quarter of 2023, the Company closed this facility.
Our Vision 2030 plan outlines our targets for protecting the environment and include: achieving our approved 2032 Science Based Targets for Scope 1, 2, and 3 GHG emissions reductions; achieving 90% renewable fuel use in wood fiber paperboard manufacturing facilities; raising our purchased renewable electricity percentage to 50%; and ensuring that 100% of our purchased forest products come from sustainably managed sources. 10 Available Information The Company’s website is located at http://www.graphicpkg.com .
Our Vision 2030 plan outlines our targets for protecting the environment and include: achieving our approved 2032 Science Based Targets for Scope 1, 2, and 3 GHG emissions reductions; achieving 90% renewable fuel use in wood fiber paperboard manufacturing facilities; raising our purchased renewable electricity percentage to 50%; and ensuring that 100% of our purchased forest products come from sustainably managed sources.
The Company operates in three geographic areas: the Americas, Europe and Asia Pacific. 5 For reportable segment and geographic area information for each of the last three fiscal years, see “ Note 15 - Business Segment and Geographic Area Information ” in the Notes to Consolidated Financial Statements included herein under “Item 8.
For reportable segment and geographic area information for each of the last three fiscal years, see “ Note 15 - Business Segment and Geographic Area Information ” in the Notes to Consolidated Financial Statements included herein under “Item 8.
For more information, see “ Note 19 - Impairment and Divestiture of Russian Business ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 2022 In May 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” In May 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility.
Americas Paperboard Packaging includes paperboard packaging sold primarily to consumer packaged goods (“CPG”) companies and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants (“QSR”) serving the food, beverage, and consumer product markets in the Americas.
Products The Company has three reportable segments as follows: Americas Paperboard Packaging includes paperboard packaging sold primarily to consumer packaged goods (“CPG”) companies serving the food, beverage, and consumer product markets and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants (“QSR”) in the Americas.
We are enhancing the capabilities of our workforce as our business and strategy evolve. We have invested in innovation, research and development, and digital capabilities to position us to capture organic sales growth supported by consumer preferences for low impact, recyclable packaging.
The Company is enhancing the capabilities of its workforce as its business and strategy evolve. The Company has invested in innovation, research and development, and digital capabilities to position it to capture organic sales growth supported by consumer preferences for low impact, recyclable packaging.
During 2023, 2022 and 2021, GPHC paid cash dividends of $123 million, $92 million and $87 million, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations.
(b) Excluding $2 million of excise taxes incurred in 2024. During 2024, 2023 and 2022, GPHC paid cash dividends of $122 million, $123 million and $92 million, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations.
ITEM 1. BUSINESS Overview Graphic Packaging Holding Company (“GPHC” and, together with its subsidiaries, the “Company”) is committed to providing consumer packaging that makes a world of difference.
ITEM 1. BUSINESS Overview Graphic Packaging Holding Company (“GPHC” and, together with its subsidiaries, the “Company”) is committed to providing consumer packaging that makes a world of difference. The Company is a leading provider of consumer goods packaging made from renewable or recycled materials.
The Company’s hedging program for natural gas is discussed in “ Note 10 - Financial Instruments, Derivatives and Hedging Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Seasonality The Company’s net sales, income from operations and cash flows from operations are subject to moderate seasonality, with demand usually increasing in the late spring through early fall due to increases in demand for beverage and food products. 8 Research and Development The Company’s research and development team works directly with its sales, marketing and consumer insights personnel to understand long-term consumer and retailer trends and create relevant new packaging.
The Company’s hedging program for natural gas is discussed in “ Note 10 - Financial Instruments, Derivatives and Hedging Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Seasonality The Company’s net sales, income from operations and cash flows from operations are subject to moderate seasonality, with demand usually increasing in the late spring through early fall due to increases in demand for beverage and food products.
The Company's European packaging operations consume unbleached paperboard supplied from the Company's paperboard manufacturing facilities and utilize other paperboard grades such as white-lined chip and folding box board purchased from external suppliers in its packaging facilities. Energy Energy, including natural gas, fuel, oil and electricity, represents a significant portion of the Company’s manufacturing and distribution costs.
The Company's European packaging operations consume unbleached paperboard supplied from the Company's paperboard manufacturing facilities and also utilize paperboard purchased from external suppliers in its packaging facilities. 7 Energy Energy, including natural gas, fuel, oil and electricity, represents a significant portion of the Company’s manufacturing and distribution costs.
The previous $500 million share repurchase program was authorized January 28, 2019 (the “2019 share repurchase program”). Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and retained earnings.
Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and retained earnings.
Action plans have been developed at the local level in locations around the globe as we strive to further engage our employees. Additionally, our talent acquisition, development, succession and diversity and inclusion strategies are all critical components of our multi-year plan to focus on our people and our culture.
Action plans have been developed at the local level in locations around the globe as the Company strives to further engage its employees. The Company also considers its talent acquisition, development, and succession strategies to be critical components of its multi-year plan to focus on people and culture.
The Company also installs its packaging machines at customer plants and provides support, service and advanced performance monitoring of the machines.
The Company also installs its packaging machines at customer plants and provides support, service and advanced performance monitoring of the machines. The majority of the paperboard the Company produces is consumed internally in its packaging facilities.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 4 In September 2022, the Company closed its Norwalk, Ohio carton facility, which closure had been announced in March 2022.
For more information, see “ Note 19 - Divestitures ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 2022 In March 2022, the Company announced its decision to close the Norwalk, Ohio packaging facility and closed the facility in September 2022.
The Company provides a wide range of innovative, paperboard packaging solutions for the following end-use markets: • Beverage, including beer, seltzer, soft drinks, energy drinks, teas, water and juices; • Food, including cereal, desserts, frozen, refrigerated, microwavable foods and pet food; • Prepared food and drinks, including snacks, quick-serve food and drinks for restaurants and food service providers; • Household products, including dishwasher and laundry detergent, tissues and papers; • Air filter frames; and • Healthcare and beauty aids.
The Company provides a wide range of innovative, paperboard packaging solutions for the following end-use markets: • Food, including dry foods and food ingredients, frozen, refrigerated, and microwavable prepared foods, and desserts; • Beverage, including beer, seltzer, soft drinks, energy drinks, teas, water and juices; • Foodservice, including cups and containers for food and drinks for quick-service restaurants and other food service providers; • Household products, including cleaning products, tissues products, home air filters and pet care products; and • Health and beauty products.
The following presents the Company's share repurchases for the years ended December 31, 2023, 2022, and 2021: Amount repurchased in millions, except share and per share amounts Amount Repurchased Number of Shares Repurchased Average Price per Share 2023 $ 54 2,389,224 $ 22.80 2022 $ 28 1,315,839 $ 20.91 2021 $ — — $ — At December 31, 2023, the Company had $565 million available for additional repurchases under the 2023 and 2019 share repurchase programs.
The following table presents the Company's share repurchases under the 2019 and 2023 share repurchase programs for the years ended December 31, 2024, 2023, and 2022: Amount repurchased in millions, except share and per share amounts Amount Repurchased Number of Shares Repurchased Average Price per Share 2024 (a)(b) $ 200 7,243,734 $ 27.61 2023 $ 54 2,389,224 $ 22.80 2022 $ 28 1,315,839 $ 20.91 (a) Including $65 million shares repurchased under the 2019 share repurchase program, which completed that program.
Although plastics and corrugated packaging may be priced lower than unbleached paperboard, the Company believes that packaging made from unbleached paperboard offers advantages over these materials in areas such as recyclability (versus plastic alternatives), design flexibility, distribution, brand awareness, carton designs, package performance and package line speed.
In beverage packaging, the Company competes with other paperboard-based containers, plastic and shrink-wrap, and corrugated packaging. The Company believes that packaging made from unbleached paperboard offers advantages over alternative materials in areas including recyclability, design flexibility, distribution, brand awareness, carton designs, package performance and package line speed.
Our Total Recordable Incident Rate, which is the annual rate of workplace injuries per 100 full-time employees, is 1.0, reflecting better performance than the industry average.
Employee Health and Safety Maintaining a safe work environment is vital to the Company, and we are committed to the health, safety and wellness of our employees. Our Total Recordable Incident Rate, which is the annual rate of workplace injuries per 100 full-time employees, is 0.88, reflecting better performance than the industry average.
As our business continues to evolve, we will continue to invest in capability development areas that serve as a competitive advantage for the Company and we will adapt our workforce and invest in our employees to ensure that we have the necessary human capital capabilities in place to support our growth strategy.
As its business continues to evolve, the Company will continue to invest in capability development areas that serve as a competitive advantage and will adapt its workforce and invest in its employees to ensure that it has the necessary human capital capabilities in place to support its growth strategy. 8 As of December 31, 2024, the Company had more than 23,000 employees based in more than 100 locations in over 25 different countries around the world.
Paperboard not consumed internally is sold externally to a wide variety of paperboard packaging converters and brokers. The Paperboard Manufacturing segment's Net Sales represent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard Manufacturing segment to reflect the economics of the integration of these segments.
The Paperboard Manufacturing segment's Net Sales represent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard Manufacturing segment to reflect the economics of the integration of these segments. 5 The Company operates primarily in three geographic areas: the Americas, Europe and Asia Pacific.
Acquisitions, Closures, and Dispositions The Company has successfully completed several acquisitions in the past three years and expects to pursue acquisition opportunities in the future as part of its overall growth strategy. 2023 In January 2023, the Company completed the acquisition of Tama Paperboard, LLC (“Tama”), a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million.
Acquisitions, Closures, and Dispositions The Company has successfully completed several acquisitions, closures and dispositions in the past three years and expects to pursue acquisition opportunities in the future as part of its overall growth strategy. 2024 On May 1, 2024, the Company completed the sale of its Augusta, Georgia bleached paperboard manufacturing facility (the “Augusta Divestiture”) to Clearwater Paper Corporation for a total consideration of $711 million.
Products The Company has three reportable segments as follows: Paperboard Manufacturing , previously referred to as the Paperboard Mills reportable segment, includes the seven North American paperboard manufacturing facilities that produce unbleached, bleached and recycled paperboard, which is consumed internally to produce paperboard consumer packaging for the Americas and Europe Packaging segments.
Paperboard Manufacturing includes the six North American paperboard manufacturing facilities that produce recycled, unbleached and bleached paperboard, which is primarily consumed internally to produce paperboard consumer packaging for the Americas and Europe Paperboard Packaging segments. Paperboard not consumed internally is sold externally to a small group of paperboard packaging converters.
Approximately 58% of our employees were represented by labor unions and covered by collective bargaining agreements or covered by works councils in Europe. As of December 31, 2023, 550 of the Company’s employees were working under expired contracts, which are currently being negotiated, and 1,015 were covered under collective bargaining agreements that expire within one year.
As of December 31, 2024, 850 of the Company’s employees were working under expired contracts, which are currently being negotiated, and 1,866 were covered under collective bargaining agreements that expire within one year. The Company considers its employee relations to be satisfactory.
The Compensation and Management Development Committee of our Board of Directors annually reviews the processes and practices related to workforce diversity and inclusion programs to ensure continued equitable treatment of all employees and a culture of inclusion.
The Compensation and Management Development Committee of our Board of Directors annually reviews the processes and practices related to talent and engagement to ensure the equitable treatment of all employees, and alignment with the Company's strategic objectives. Community Engagement Building connections between our employees, their families, and our communities creates a more meaningful, fulfilling and enjoyable workplace.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 2021 On July 1, 2021, the Company acquired substantially all the assets of Americraft Carton, Inc. (“Americraft”), the largest independent operator of packaging facilities in North America.
For more information, see “ Note 19 - Divestitures ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” During 2024, the Company decided to close multiple packaging facilities by the end of 2024 and early 2025.
We strive to achieve an injury-free workplace through various safety initiatives and programs, and our Vision 2030 goal is zero life injuries. 9 Diversity and Inclusion We believe that a diverse and inclusive working environment encourages creativity, innovation, and collaboration and that a diverse and inclusive culture propels our ability to serve our global customers and communities.
We strive to achieve an injury-free workplace through various safety initiatives and programs, and our Vision 2030 goal is zero life injuries. Company Culture Graphic Packaging works to enable a safe, engaged, and customer-focused culture, and has a solid record of delivering outstanding results for its customers across the globe.
For more information, see “ Note 4 - Business Combinations ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” On November 1, 2021, the Company acquired all the shares of AR Packaging Group AB (“AR Packaging”), Europe's second largest producer of paperboard consumer packaging.
For more information, see “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 2023 In January 2023, the Company completed the acquisition of Tama Paperboard, LLC (“Tama”), a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million.
These innovative solutions provide customers with differentiated packaging to meet consumer preferences.
Research and Development The Company’s research and development team works directly with its sales, marketing and consumer insights personnel to understand long-term consumer and retailer trends and create relevant new packaging. These innovative solutions provide customers with differentiated packaging to meet consumer preferences.
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The Company, a leading sustainable consumer packaging provider, operates on a global basis, is one of the largest producers of cartons and containers for the packaging of consumer goods and paperboard-based foodservice packaging solutions in the United States (“U.S.”) and Europe, and holds leading market positions in paperboard used to produce consumer packaging solutions, including recycled, unbleached and bleached paperboard.
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The Company designs and manufactures sustainable packaging solutions including cartons, multipack cartons, trays, carriers, paperboard canisters, and cups and bowls made primarily from unbleached paperboard, recycled paperboard, and bleached paperboard. The Company serves a wide variety of consumer markets, from food and beverage, to foodservice, household products, beauty and health care.
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The Company’s customers include many of the world’s most widely recognized companies and brands with prominent market positions in beverage, food, foodservice and other consumer products. The Company strives to provide innovative paperboard packaging solutions preferred by consumers.
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We produce packaging solutions at over 100 locations in over 20 countries around the world, serving customers ranging from local to multinational consumer products companies and retailers. The Company offers one of the most comprehensive ranges of packaging design, manufacture, and execution capabilities available.
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The Company delivers marketing and performance benefits to its customers through its global packaging network, its proprietary carton and packaging designs, and its commitment to quality, service, and environmental stewardship.
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The Company currently manufactures most of the paperboard it consumes in the Americas and purchases from third parties the majority of the paperboard it consumes in its Europe Paperboard Packaging operations. Graphic Packaging works closely with its customers to understand their needs and goals and to create new and innovative designs customized to their specific needs.
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The acquisition included seven packaging facilities across the United States and is reported within the Americas Paperboard Packaging reportable segment.
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The Company’s approach serves to build and strengthen long-term relationships with purchasing, brand management, marketing, and other key customer functions. The Company is organized to bring the full resources of its global and local innovation, design, and manufacturing capabilities to all of its customers with the goal of delivering packaging solutions that are more circular, more functional, and more convenient.
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The acquisition included 30 packaging facilities in 13 countries and is reported within the Europe Paperboard Packaging reportable segment.
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These are in addition to the multiple packaging facilities that the Company decided to close by the end of 2023 and early 2024. Production from these facilities will be consolidated into other existing packaging facilities.
Removed
The Company’s packaging applications meet the needs of its customers for: Strength Packaging. The Company's products provide sturdiness to meet a variety of packaging, handling, and delivery needs, including wet and dry tear strength, puncture resistance, durability and compression strength (providing the ability to ship products in their own branded carton and stacking strength to meet store display packaging requirements).
Added
Current Assets within the Consolidated Balance Sheet include $15 million relating to multiple packaging facilities that met the held for sale criteria as of December 31, 2024.
Removed
Promotional Packaging. The Company offers a broad range of promotional packaging options that help differentiate its customers’ products in the marketplace. These promotional enhancements improve brand awareness and visibility on store shelves. Convenience and Cooking Packaging.
Added
The previous $500 million share repurchase program was authorized on January 28, 2019 (the “2019 share repurchase program”) and was completed in May 2024. At December 31, 2024, the Company had $365 million available for additional repurchases under the 2023 share repurchase program.
Removed
These packaging solutions improve package usage and food preparation: • Beverage multiple-packaging — multi-packs for beer, soft drinks, energy drinks, teas, water and juices; • Active microwave technologies — packages that improve the heating and browning of foods in the microwave; and • Easy opening and closing features — dispensing features, pour spouts and sealable liners. Barrier Packaging.
Added
The Company elects to produce its own paperboard where it believes that doing so allows it to generate a higher return on capital, and delivers better results for customers. The Company also purchases paperboard from external sources.
Removed
The Company provides packages that protect against moisture, temperature (hot and cold), grease, oil, oxygen, sunlight, insects and other potential product-damaging factors.
Added
The various bleached, unbleached, and recycled grades of paperboard that the Company produces internally and buys externally offer distinctly different combinations of strength, printability, appearance, and recycled-content, as well as other functional and non-functional characteristics of importance to customers.
Removed
The Company offers a variety of laminated, coated and printed packaging structures that are produced from its recycled, unbleached and bleached paperboard grades, as well as other grades of paperboard that are purchased from third-party suppliers. 6 Below is the production at each of the Company’s paperboard manufacturing facilities during 2023: Location Paperboard Product # of Machines 2023 Net Tons Produced West Monroe, LA Unbleached 2 863,482 Macon, GA Unbleached 2 693,847 Texarkana, TX Bleached 2 570,720 Augusta, GA Bleached 2 521,391 Kalamazoo, MI (a) Recycled 2 956,276 Middletown, OH Recycled 1 156,407 East Angus, Québec Recycled 1 90,088 Tama, IA (b) Recycled 1 15,407 (a) During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019.
Added
Smurfit WestRock plc is the Company's largest competitor within paperboard packaging. In non-beverage consumer packaging and foodservice, the Company competes with packaging utilizing a wide range of paperboard, plastic, foam, molded fiber, and other materials. Packaging suppliers compete on the basis of design and execution capabilities, price, functionality, appearance, quality and customer service.
Removed
(b) Closed in the second quarter of 2023. The Company consumes most of its paperboard output in its packaging operations, which is an integral part of the customer value proposition. In 2023, approximately 78% of combined paperboard production of unbleached, bleached and recycled paperboard was consumed internally. Unbleached Paperboard Production.
Added
Approximately 68% of our employees are in the Americas and 32% are in Europe and the rest of the world. Approximately 59% of our employees were represented by labor unions and covered by collective bargaining agreements or covered by works councils in Europe.
Removed
The Company is the largest of four worldwide producers of unbleached paperboard. Unbleached paperboard is manufactured primarily from pine-based wood fiber and is a specialized high-quality grade of coated paperboard with excellent wet and dry tear strength characteristics and printability for high resolution graphics that make it particularly well-suited for a variety of packaging applications.
Added
As a leading innovator in consumer packaging, a deep understanding of the widest range of consumers is essential to the success of the Company's designs and product execution. As such, the Company seeks to recruit and retain talented employees whose perspectives and experience are broadly representative of the consumers its customers serve.
Removed
Both wood and recycled fibers are pulped, formed on paperboard machines, and clay-coated to provide an excellent printing surface for superior quality graphics and appearance characteristics. Bleached Paperboard Production. The Company is one of the largest North American producers of bleached paperboard.
Added
Similarly, strong relationships with the communities in which the Company operates have a substantial impact on hiring costs, retention rates, employee engagement, operating performance and safety. The Company therefore seeks to build and maintain strong and capable teams broadly representative of those communities.
Removed
Bleached paperboard is manufactured primarily from bleached pine and hardwood-based wood fiber and is the highest quality paperboard substrate, with excellent wet and dry strength characteristics and superior printability for high-end packaging. Both wood and recycled fibers are pulped, formed on paperboard machines, and clay-coated to provide an excellent printing surface for superior quality graphics and appearance characteristics.
Added
The Company believes that its recent safety performance is among the best in the industry, and considers employee engagement to be critical to maintaining and improving upon that level of safety performance. The Company has a number of initiatives underway to drive employee engagement higher.

… 12 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

28 edited+4 added−4 removed37 unchanged
The Company's ability to integrate the acquired businesses successfully, including obtaining anticipated cost savings or synergies and expected operating results within a reasonable period of time, is an important factor in the Company's future performance.
The Company's ability to successfully integrate the acquired businesses, including obtaining anticipated cost savings or synergies and expected operating results within a reasonable period of time, is an important factor in the Company's future performance.
As a result of events, such as pandemics or other global health emergencies and widespread military and geopolitical conflicts and other social and political unrest in Eastern Europe, Africa and the Middle East, there could be unpredictable disruptions to the Company’s operations that could limit production, reduce its future revenues and negatively impact the Company’s financial condition.
As a result of events, such as pandemics or other global health emergencies and widespread military and geopolitical conflicts and other social and political unrest in Eastern Europe, Africa and the Middle East, there could be unpredictable disruptions to the Company’s operations that could limit production, reduce future revenues and negatively impact the Company’s financial condition.
In addition, to the extent the Company’s operations are subject to labor, safety and climate change regulations and requirements not stringently imposed in the states and countries in which our competitors operate, our competitors could gain cost or other competitive advantages.
In addition, to the extent the Company’s operations are subject to labor, safety and climate change regulations and requirements that are not stringently imposed in the states and countries in which our competitors operate, our competitors could gain cost or other competitive advantages.
However, there can be no assurance that such measures will be effective for a particular event that we may experience. In addition to the possible disruptions to our facilities' production as discussed above, because approximately 62% of the Company's employees are represented by unions, the Company could experience disruptions such as work slowdowns or strikes from time to time.
However, there can be no assurance that such measures will be effective for a particular event that we may experience. In addition to the possible disruptions to our facilities' production as discussed above, because approximately 59% of the Company's employees are represented by unions, the Company could experience disruptions such as work slowdowns or strikes from time to time.
Although the Company takes appropriate measures to minimize the risk and effect of material disruptions to the business conducted at our facilities, natural disasters such as hurricanes, tornadoes, heat waves, freezing events, floods, droughts, fire and other extreme weather events, (all of which may be exacerbated by climate change), as well as other unexpected disruptions such as the unavailability of critical raw materials, power outages and equipment breakdowns or failures can reduce production and increase manufacturing costs.
Although the Company takes appropriate measures to minimize the risk and effect of material disruptions to the business conducted at our facilities, natural disasters such as hurricanes, tornadoes, heat waves, freezing events, floods, droughts, fire and other extreme weather events, (all of which may be exacerbated by climate change), and our employees' inability to get to our facilities as a result of such events, as well as other unexpected disruptions such as the unavailability of critical raw materials, power outages, and equipment breakdowns or failures can reduce production and increase manufacturing costs.
The Company competes with consumer packaging companies, both domestically and internationally, including paperboard packaging producers. The Company's products compete with those made from other manufacturers' paperboard, as well as consumer packaging made primarily from plastic, shrink film, paper, corrugated containers, biobased materials and other packaging materials.
The Company competes with consumer packaging companies, both domestically and internationally, including paperboard packaging producers. The Company's products compete with those made from other manufacturers' paperboard, as well as consumer packaging made primarily from plastic, shrink film, paper, corrugated containers, bio-based materials and other packaging materials.
The Company must comply with a wide variety of environmental, health and safety laws and regulations, including those governing GHG emissions and other discharges to air, soil and water and the management, treatment and disposal of hazardous substances, the investigation and remediation of contamination resulting from releases of hazardous substances, waste disposal, recycling of packaging, extended producer responsibilities, deforestation risks, and the health and safety of employees.
The Company must comply with a wide variety of environmental, health and safety laws and regulations, including those governing GHG emissions and other discharges to air, soil and water and the management, treatment and disposal of hazardous substances, the investigation and remediation of contamination resulting from releases of hazardous substances, waste disposal, recycling of packaging, extended producer responsibilities, labor and human rights, and the health and safety of employees.
These laws and regulations, particularly those that relate to GHG emissions, are evolving and expected to become more stringent over time, which could result in significant additional compliance costs (such as the installation or modification of emission control equipment), increased costs of purchased energy or other raw materials, increased transportation costs, restrictions on our operations, or additional costs associated with air and water emissions.
These laws and regulations, particularly those that relate to GHG emissions, supply chain due diligence, and reporting on sustainability-related matters, are evolving and expected to become more stringent over time, which could result in significant additional compliance costs (such as the installation or modification of emission control equipment), increased costs of purchased energy or other raw materials, increased transportation costs, restrictions on our operations, or costs associated with air and water emissions.
Moreover, with no unifying standards for both U.S. and international data privacy laws and regulations, the Company could incur additional compliance cost in order to comply with the large number of data privacy laws and regulations, which could result in a negative impact to the Company’s results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None 15
Moreover, with no unifying standards for both U.S. and international data privacy laws and regulations, the Company could incur additional compliance cost in order to comply with the large number of data privacy laws and regulations, which could result in a negative impact to the Company’s results of operations.
Additionally, the Company's Fourth Amended and Restated Credit Agreement (as amended, the “Current Credit Agreement”) and the indentures governing the 0.821% Senior Notes due 2024, 4.125% Senior Notes due 2024, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 (the “Indentures”), limit the Company's ability to incur additional indebtedness.
Additionally, the Company's Fifth Amended and Restated Credit Agreement (as amended, the “Current Credit Agreement”) and the indentures governing the 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 and 6.375% Senior Notes due 2032 (the “Indentures”), limit the Company's ability to incur additional indebtedness.
The inability to develop new or better products that satisfy customer and consumer preferences in a timely manner may impact the Company's competitive position.
The inability to develop new or better products that satisfy customer and consumer preferences for packaging that is more functional and more convenient in a timely manner may impact the Company's competitive position.
If the Company is unable to prevent prolonged interruptions of the Company's operations at any of its' facilities due to slowdowns, strikes or other work interruptions, the Company may experience a negative impact to its' financial results.
If the Company is unable to prevent prolonged interruptions of the Company's operations at any of its' facilities due to slowdowns, strikes or other work interruptions, the Company may experience a negative impact to its' financial results. The Company may face a shortage of skilled workers and key management personnel.
The Company is also subject to the following significant risks associated with operating in foreign countries: • Export compliance; • Compliance with and enforcement of environmental, health and safety, labor laws and data privacy and other regulations of the foreign countries in which the Company operates; • Difficulties moving funds from certain countries back to the U.S.; • Imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; and • Imposition of new or increases in capital investment requirements and other financing requirements by foreign governments. 14 Financial Risks The Company's indebtedness may adversely affect its financial condition and its ability to react to changes in its business.
The Company is also subject to the following significant risks associated with operating in foreign countries: • Export compliance; • Compliance with and enforcement of environmental, health and safety, labor laws and data privacy and other regulations of the foreign countries in which the Company operates; • Difficulties moving funds from certain countries back to the U.S.; • Imposition of tariffs on packaging materials moved across borders; • Imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; and • Imposition of new or increases in capital investment requirements and other financing requirements by foreign governments.
The Company's ability to execute on these projects in order to achieve planned outcomes, including obtaining expected returns and strategic long-term goals within a reasonable period of time, is an important factor in the Company's financial results and commitments to the market.
The Company's ability to execute on these projects in order to achieve planned outcomes, including obtaining expected returns and strategic long-term goals within a reasonable period of time, is an important factor in the Company's financial results and commitments. As these investments start up, the Company may experience unanticipated business disruptions and not achieve the desired benefits or timelines.
As of December 31, 2023, approximately 20% of the Company’s debt is subject to variable rates of interest and exposes the Company to increased debt service obligations in the event of increased market interest rates.
As of December 31, 2024, approximately 36% of the Company’s debt is subject to variable rates of interest and exposes the Company to increased debt service obligations in the event of increased market interest rates. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 14
The Company may incur higher costs to hire and retain new workers, and the failure to attract and retain sufficient skilled workers may result in operational inefficiencies or require additional capital investments to reduce reliance on labor, which may adversely impact the Company's results. The Company is subject to the risks of doing business in foreign countries.
The failure to attract and retain sufficient skilled workers may result in operational inefficiencies or require additional capital investments to reduce reliance on labor, which may adversely impact the Company's results.
Legal and Regulatory Risks The Company is subject to a broad range of foreign, federal, state, and local laws and regulations, including environmental, health and safety, sustainability, data privacy, labor and employment, corruption, tax, and healthcare, and costs to comply with such laws and regulations, or any liability or obligation imposed under new laws or regulations, could negatively impact its financial condition and results of operations.
Further, others may develop technologies that are similar or superior to the Company's technologies, duplicate its technologies or design around its patents, and steps taken by the Company to protect its technologies may not prevent misappropriation of such technologies. 13 Legal and Regulatory Risks The Company is subject to a broad range of foreign, federal, state, and local laws and regulations, including environmental, health and safety, sustainability, data privacy, labor and employment, corruption, tax, supply chain, human rights and healthcare, and costs to comply with such laws and regulations, or any liability or obligation imposed under new laws or regulations, could negatively impact its financial condition and results of operations.
The Company may face a shortage of skilled workers and key management personnel. The Company's ability to maintain or expand its business depends on our ability to attract, develop and retain a skilled workforce at all levels within our organization, including production employees and key managers.
The Company's ability to maintain or expand its business depends on our ability to attract, develop and retain a skilled workforce at all levels within our organization, including production employees and key managers. Changing demographics and workforce trends may result in a loss of knowledge and skills as experienced workers retire or resign.
This volatility and loss of employment may negatively impact consumer buying habits, which could adversely affect the Company’s financial results. 13 The Company could be adversely impacted if the Company is unable to successfully integrate acquired businesses. The Company has made a significant number of acquisitions throughout its history and expects to make additional acquisitions in the future.
The Company could be adversely impacted if the Company is unable to successfully integrate acquired businesses. The Company has made a significant number of acquisitions throughout its history and expects to make additional acquisitions in the future.
The improper handling and disclosure of or access to personal data in violation of privacy laws and regulations such as the European Union’s General Data Protection Regulation (“GDPR”), the California Privacy Rights Act (“CPRA”), the Virginia Consumer Data Protection Act (“CDPA”), and Canada’s Consumer Privacy Protection Act (“CPPA”) could cause harm to the Company’s reputation, cause loss of consumer confidence, subject the Company to government enforcement actions, or result in private litigation against the Company.
The improper handling and disclosure of or access to personal data in violation of privacy laws and regulations across multiple countries and U.S. states could cause harm to the Company’s reputation, cause loss of consumer confidence, subject the Company to government enforcement actions, or result in private litigation against the Company.
The Company has contingency plans in place to prevent or mitigate the impact of these events, however, if they are not effective on a timely basis, business interruptions could occur which may adversely impact results of operations.
These systems could be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, computer viruses or cyber-based attacks. 11 The Company has contingency plans in place to prevent or mitigate the impact of these events, however, if they are not effective on a timely basis, business interruptions could occur which may adversely impact results of operations.
If these trends continue and the Company is unable to adapt to them, then the Company’s financial results could be adversely affected. 12 Operational Risks The Company could experience material disruptions at our facilities, that could adversely impact the Company's financial results and could increase the cost of insurance and level of deductibles.
The Company could experience material disruptions at our facilities, that could adversely impact the Company's financial results and could increase the cost of insurance and level of deductibles.
The Company’s information technology systems could suffer interruptions, failures, unauthorized access, or breaches and our business operations could be disrupted, adversely affecting results of operations and the Company’s reputation. The Company’s information technology systems, some of which are dependent on services provided by third parties, serve an important role in the operation of the business.
The Company’s information technology systems, some of which are dependent on services provided by third parties, serve an important role in the operation of the business.
As these investments start up, the Company may experience unanticipated business disruptions and not achieve the desired benefits or timelines. In addition, the Company's acquisitions may require more capital than expected to achieve synergies or expected operating results. Additional spending and unachieved benefits may adversely affect the Company's cash flow and results of operations.
In addition, the Company's acquisitions may require more capital than expected to achieve synergies or expected operating results. Additional spending and unachieved benefits may adversely affect the Company's cash flow and results of operations. Also, the Company may not achieve or make satisfactory progress on its Vision 2030 goals, thereby harming its reputation with customers, investors and other stakeholders.
The Company invests significant amounts of cash each year on capital projects, which have expected returns to the Company.
The Company's capital spending may not achieve the desired benefits, which could adversely impact future financial results. The Company invests significant amounts of cash each year in capital projects, which have expected returns to the Company.
In addition, at December 31, 2023, approximately 27% of the Company's total assets were denominated in currencies other than the U.S. dollar. The Company pursues a currency hedging program in order to reduce the impact of foreign currency exchange fluctuations on financial results.
The Company pursues a currency hedging program in order to reduce a portion of the impact of foreign currency exchange fluctuations on financial results.
The Company has packaging facilities and one paperboard manufacturing facility in 20 countries outside of the U.S. and sells its products worldwide. For 2023, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 30% of the Company’s net sales. The Company’s revenues from foreign sales fluctuate with changes in foreign currency exchange rates.
For 2024, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 30% of the Company’s net sales. The Company’s revenues from foreign sales fluctuate with changes in foreign currency exchange rates. In addition, at December 31, 2024, approximately 26% of the Company's total assets were denominated in currencies other than the U.S. dollar.
The Company had an aggregate principal amount of $5,396 million of outstanding debt as of December 31, 2023.
Financial Risks The Company's indebtedness may adversely affect its financial condition and its ability to react to changes in its business. The Company had an aggregate principal amount of $5,209 million of outstanding debt as of December 31, 2024.
Removed
Product substitution may occur in response to price, quality and service issues, as well as environmental and social concerns, such as the use of recycled post-consumer plastic and biobased materials in the production process.
Added
Paperboard packaging competitors may expand their existing facilities or build new paperboard manufacturing or converting capacity, which could negatively impact our business. In addition, product substitution by customers may occur in response to price, quality and service issues, as well as environmental and social concerns.
Removed
These systems could be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, computer viruses or cyber-based attacks.
Added
If these trends continue and the Company is unable to adapt to them, then the Company’s financial results could be adversely affected. Operational Risks The Company’s information technology systems could suffer interruptions, failures, unauthorized access, or breaches and our business operations could be disrupted, adversely affecting results of operations and the Company’s reputation.
Removed
Further, others may develop technologies that are similar or superior to the Company's technologies, duplicate its technologies or design around its patents, and steps taken by the Company to protect its technologies may not prevent misappropriation of such technologies. The Company's capital spending may not achieve the desired benefits, which could adversely impact future financial results.
Added
The Company may incur higher costs to hire and retain new workers due to changes to the size of skilled labor pools and increased demand for skilled workers by other manufacturing industries.
Removed
Changing demographics and workforce trends may result in a loss of knowledge and skills as experienced workers retire or resign.
Added
This volatility and loss of employment may negatively impact consumer buying habits, which could adversely affect the Company’s financial results. 12 The Company is subject to the risks of doing business in foreign countries. The Company has packaging facilities and one paperboard manufacturing facility in 20 countries outside of the U.S. and sells its products worldwide.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed7 unchanged
Working with the CIO and the Vice President, Information Security, the Audit Committee periodically reviews the strategy, priorities, and goals of the cybersecurity program and the CIO and Vice President, Information Security, provide regular updates to the Audit Committee.
Working with the CIO and the Vice President, Information Security, the Audit Committee periodically reviews the strategy, priorities, and goals of the cybersecurity program and the CIO and Vice President, Information Security, provide regular updates to the Audit Committee. 15
The Company’s Vice President, Information Security, who has 15 years of experience in information security and has several industry certifications such as Certified Information Security Manager (“CISM”), Certified in Risk and Information Systems Control (“CRISC”), and Certified Information Privacy Professional (“CIPP”), is primarily responsible for managing and assessing cybersecurity risks.
The Company’s Vice President, Information Security, who has 19 years of experience in information security, including 8 years as a Chief Information Security Officer ("CISO"), and holds a post-graduate degree in a related field of study and is a Certified Information Systems Security Professional ("CISSP"), is primarily responsible for managing and assessing cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

3 edited+3 added−5 removed1 unchanged
(b) Multiple facilities in this location. (c) Closed in the third quarter of 2023. (d) Sold in the fourth quarter of 2023. (e) Multiple facilities in this location which includes a leased facility and an owned facility. 18 ITEM 3 .
(b) Leased facility. (c) Multiple facilities in this location. (d) Multiple facilities in this location, which includes a leased facility and an owned facility. (e) Sold in the fourth quarter of 2024.
The Company also leases certain smaller facilities, warehouses and office space throughout the U.S. and in foreign countries from time to time. 16 Location Related Products or Use of Facility Paperboard Manufacturing Facilities: Augusta, GA Bleached paperboard East Angus, Québec Recycled paperboard Kalamazoo, MI Recycled paperboard Macon, GA Unbleached paperboard Middletown, OH Recycled paperboard Tama, IA (a) Recycled paperboard Texarkana, TX Bleached paperboard West Monroe, LA Unbleached paperboard, Research and Development Other: Atlanta, GA (b) Headquarters, Research and Development, Packaging Machinery and Design Clemson, SC (b) Research and Development Concord, NH (b) Research and Development, Design Center Crosby, MN Packaging Machinery Engineering, Design and Manufacturing Louisville, CO (b) Research and Development Menomonee Falls, WI Foodservice Rebuild Center (a) Closed in the second quarter of 2023.
Location Related Products or Use of Facility Paperboard Manufacturing Facilities: Augusta, GA (a) Bleached paperboard East Angus, Québec Recycled paperboard Kalamazoo, MI Recycled paperboard Macon, GA Unbleached paperboard Middletown, OH Recycled paperboard Texarkana, TX Bleached paperboard West Monroe, LA Unbleached paperboard, Research and Development Other: Atlanta, GA (b) Headquarters, Research and Development, Packaging Machinery and Design Clemson, SC (b) Research and Development Concord, NH (b) Research and Development, Design Center Crosby, MN Packaging Machinery Engineering, Design and Manufacturing Louisville, CO (b) Research and Development Menomonee Falls, WI Foodservice Rebuild Center (a) Sold during the second quarter of 2024.
(b) Leased facility. 17 North American Packaging Facilities: International Packaging Facilities: Auburn, IN (d) New Albany, IN (b) Aachen, Germany Kanfanar, Croatia Carol Stream, IL Newton, IA Auckland, New Zealand (a) Krakow, Poland Centralia, IL North Portland, OR Augsburg, Germany Leeds, United Kingdom Charlotte, NC Omaha, NE Bardon, United Kingdom (b) Lund, Sweden (a)(b) Chicago, IL (a) Oroville, CA (a) Bawen, Indonesia Magdeburg, Germany (a) Clarksville, TN Pacific, MO Bekasi, Indonesia Maliaño, Spain Cobourg, Ontario (a) Perry, GA Berlin, Germany (b) Masnières, France (a) Elgin, IL Pineville, NC Bremen, Germany (b) Melbourne, Australia (a) Elk Grove, IL (a)(b) Pittston, PA Bristol, United Kingdom (e) Munich, Germany (a) Fort Smith, AR (b) Prosperity, SC Cambridge, United Kingdom (a) Newcastle Upon Tyne, United Kingdom (a) Gordonsville, TN (a) Querétaro, Mexico (a) Cholet, France (a) Perth, Australia Grand Rapids, MI Randleman, NC Frankfurt, Germany (a) Portlaoise, Ireland (a) Gresham, OR (a) Shelbyville, IL Gateshead, United Kingdom (a) Poznan, Poland (b) Groveport, OH (a) Sioux Falls, SD (a)(b) Graz, Austria Requejada, Spain Hamel, MN Solon, OH Halmstad, Sweden (a) Rotherham, United Kingdom (a) Irvine, CA St.-Hyacinthe, Québec (a) Hannover, Germany Sneek, Netherlands Kalamazoo, MI St.
Paul, MN Charlotte, NC (a) Kingston Springs, TN North Portland, OR Staunton, VA Chicago, IL Lancaster, TX Omaha, NE Stone Mountain, GA (b) Clarksville, TN Lawrenceburg, TN Oroville, CA (b) Sturgis, MI Cobourg, Ontario (b) Lebanon, TN (b) Pacific, MO Tijuana, Mexico (b) Elgin, IL Lowell, MA (a) Perry, GA Tuscaloosa, AL Elk Grove, IL (b)(c) Lumberton, NC Pineville, NC Valley Forge, PA Fort Smith, AR (c) Marietta, GA Pittston, PA Vancouver, WA (b) Gordonsville, TN (b) Marion, OH Prosperity, SC Visalia, CA Grand Rapids, MI (a) Memphis, TN (e) Querétaro, Mexico (b) Wausau, WI Gresham, OR (b) Mississauga, Ontario (b) Randleman, NC (a) Wayne, NJ Groveport, OH (b) Mitchell, SD Shelbyville, IL West Monroe, LA (a)(c) Hamel, MN Monroe, LA (b) Sioux Falls, SD (b)(c) Winnipeg, Manitoba Irvine, CA Monterrey, Mexico (b) Solon, OH Winston Salem, NC Kalamazoo, MI International Packaging Facilities: Aachen, Germany Frankfurt, Germany (b) Kanfanar, Croatia Portlaoise, Ireland (b) Auckland, New Zealand (b) Gateshead, United Kingdom (b) Krakow, Poland Poznan, Poland Augsburg, Germany Graz, Austria Leeds, United Kingdom Requejada, Spain Bardon, United Kingdom Halmstad, Sweden (a) Lund, Sweden (b)(c) Rotherham, United Kingdom (b) Bawen, Indonesia Hannover, Germany Magdeburg, Germany (b) Sneek, Netherlands Bekasi, Indonesia Highbridge, United Kingdom (b) Maliaño, Spain St.
Removed
Paul, MN Highbridge, United Kingdom (a) St. Gallen, Switzerland (a) Kendallville, IN Staunton, VA Hoogerheide, Netherlands St.
Added
The Company also leases certain smaller facilities, warehouses and office space throughout the U.S. and in foreign countries from time to time.
Removed
Petersburg, Russia (d) Kenton, OH Stone Mountain, GA (a) Ibadan, Nigeria Sydney, Australia (a) Kingston Springs, TN Sturgis, MI Igualada, Spain Tabasalu, Estonia Lancaster, TX Tijuana, Mexico (a) Ingerois, Finland (a) Tibro, Sweden Lawrenceburg, TN Tuscaloosa, AL Jundiai, Sao Paulo, Brazil Timashevsk, Russia (d) Lebanon, TN (a) Valley Forge, PA Winsford, United Kingdom (a) Lowell, MA Vancouver, WA (a) Lumberton, NC Visalia, CA Marietta, GA Wausau, WI Marion, OH Wayne, NJ Memphis, TN West Monroe, LA (b) Mississauga, Ontario (a)(b)(c) Winnipeg, Manitoba Mitchell, SD Winston Salem, NC Monroe, LA (a) Xenia, OH (a)(c) Monterrey, Mexico (a) (a) Leased facility.
Added
(b) Leased facility. 16 North American Packaging Facilities: Carol Stream, IL Kendallville, IN New Albany, IN (a)(c) St.-Hyacinthe, Québec (b) Centralia, IL Kenton, OH Newton, IA St.
Removed
LEGAL PROCEEDINGS The Company is a party to a number of lawsuits arising in the ordinary conduct of its business.
Added
Gallen, Switzerland (b) Berlin, Germany Hoogerheide, Netherlands Masnières, France (b) Sydney, Australia (b) Bremen, Germany Ibadan, Nigeria Melbourne, Australia (b) Tabasalu, Estonia Bristol, United Kingdom (a)(d) Igualada, Spain Munich, Germany (b) Tibro, Sweden Cambridge, United Kingdom (b) Ingerois, Finland (b) Newcastle Upon Tyne, United Kingdom (b) Winsford, United Kingdom (b) Cholet, France (b) Jundiai, Sao Paulo, Brazil Perth, Australia (a) Closed facility during 2024 and classified as held-for-sale.
Removed
Although the timing and outcome of these lawsuits cannot be predicted with certainty, the Company does not believe that disposition of these lawsuits will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
Removed
See “ Note 14 - Environmental and Legal Matters ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

9 edited+0 added−0 removed10 unchanged
Maggie Bidlingmaier , 53, joined Graphic Packaging Holding Company as the Executive Vice President and President, Americas business unit on January 28, 2022. Maggie was most recently President, Performance Solutions for Invista, a subsidiary of Koch Industries, Inc., where she led numerous multimillion-dollar global businesses within the flooring, apparel and airbag fiber segments.
Maggie Bidlingmaier , 54, joined Graphic Packaging Holding Company as the Executive Vice President and President, Americas business unit on January 28, 2022. Maggie was most recently President, Performance Solutions for Invista, a subsidiary of Koch Industries, Inc., where she led numerous multimillion-dollar global businesses within the flooring, apparel and airbag fiber segments.
Prior to that, she was Vice President, Surfaces at Invista, following a successful career with Avery Dennison in global sales and marketing roles of increasing responsibility. Michael Farrell , 57, became the Executive Vice President, Mills Division of Graphic Packaging Holding Company in September 2018.
Prior to that, she was Vice President, Surfaces at Invista, following a successful career with Avery Dennison in global sales and marketing roles of increasing responsibility. Michael Farrell , 58, became the Executive Vice President, Mills Division of Graphic Packaging Holding Company in September 2018.
Tashma , 57, is the Executive Vice President, General Counsel and Secretary of Graphic Packaging Holding Company. She joined the Company in February 2014. Previously, Ms. Tashma served as Senior Vice President, General Counsel and Secretary of Fortune Brands Home & Security, Inc., where she led the legal, compliance and EHS functions. Prior to that, Ms.
Tashma , 58, is the Executive Vice President, General Counsel and Secretary of Graphic Packaging Holding Company. She joined the Company in February 2014. Previously, Ms. Tashma served as Senior Vice President, General Counsel and Secretary of Fortune Brands Home & Security, Inc., where she led the legal, compliance and EHS functions. Prior to that, Ms.
Yost has also served in the following positions: Director, Finance and Centralized Services from 2003 to 2006 with Graphic Packaging International, Inc. and from 2000 to 2003 with Graphic Packaging Corporation; Manager, Operations Planning and Analysis – Consumer Products Division from 1999 to 2000 with Graphic Packaging Corporation; and other management positions from 1997 to 1999 with Fort James Corporation. 20 PART II
Yost has also served in the following positions: Director, Finance and Centralized Services from 2003 to 2006 with Graphic Packaging International, Inc. and from 2000 to 2003 with Graphic Packaging Corporation; Manager, Operations Planning and Analysis – Consumer Products Division from 1999 to 2000 with Graphic Packaging Corporation; and other management positions from 1997 to 1999 with Fort James Corporation. 18 PART II
Scherger , 59, is the Executive Vice President and Chief Financial Officer of Graphic Packaging Holding Company. From October 1, 2014 through December 31, 2014, Mr. Scherger was the Senior Vice President – Finance. From April 2012 through September 2014, Mr. Scherger served as Senior Vice President, Consumer Packaging Division. Mr.
Scherger , 60, is the Executive Vice President and Chief Financial Officer of Graphic Packaging Holding Company. From October 1, 2014 through December 31, 2014, Mr. Scherger was the Senior Vice President – Finance. From April 2012 through September 2014, Mr. Scherger served as Senior Vice President, Consumer Packaging Division. Mr.
Doss , 57, is the President and Chief Executive Officer of Graphic Packaging Holding Company. He was elected to the Board of Directors on May 20, 2015. Prior to January 1, 2016, Mr.
Doss , 58, is the President and Chief Executive Officer of Graphic Packaging Holding Company. He was elected to the Board of Directors on May 20, 2015. Prior to January 1, 2016, Mr.
From December 11, 2008 until October 27, 2009, Mr. Farrell was the Manufacturing Manager of the West Monroe, Louisiana mill and from September 1, 2006 until December 10, 2008 he was the General Manager of the Middletown, Ohio mill. Elizabeth Spence, 44 , is the Executive Vice President, Human Resources. She joined the Company on April 1, 2022.
From December 11, 2008 until October 27, 2009, Mr. Farrell was the Manufacturing Manager of the West Monroe, Louisiana mill and from September 1, 2006 until December 10, 2008 he was the General Manager of the Middletown, Ohio mill. Elizabeth Spence, 45 , is the Executive Vice President, Human Resources. She joined the Company on April 4, 2022.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 19 EXECUTIVE OFFICERS OF THE REGISTRANT Pursuant to General Instruction G.(3) of Form 10-K, the following list is included as an unnumbered item in Part I of this Report in lieu of being included in the definitive proxy statement that will be filed within 120 days after December 31, 2023. Michael P.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 17 EXECUTIVE OFFICERS OF THE REGISTRANT Pursuant to General Instruction G.(3) of Form 10-K, the following list is included as an unnumbered item in Part I of this Report in lieu of being included in the definitive proxy statement that will be filed within 120 days after December 31, 2024. Michael P.
Tashma had various roles with Fortune Brands, Inc., including Vice President and Associate General Counsel. Joseph P. Yost , 56, is the Executive Vice President and President, International of Graphic Packaging Holding Company. Prior to January 5, 2022, he served as Executive Vice President and President, Americas. Prior to January 5, 2017, Mr.
Tashma had various roles with Fortune Brands, Inc., including Vice President and Associate General Counsel. Joseph P. Yost , 57, is the Executive Vice President and President, International of Graphic Packaging Holding Company. Prior to March 31, 2022, he served as Executive Vice President and President, Americas. Prior to January 5, 2017, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+14 added−4 removed2 unchanged
Container & Packaging Index. The graph assumes $100 invested on December 31, 2018 in GPHC’s common stock and each of the indices.
Container & Packaging Index. The graph assumes $100 invested on December 31, 2019 in GPHC’s common stock and each of the indices.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES GPHC’s common stock is traded on the New York Stock Exchange under the symbol “GPK.” On February 20, 2024, there were approximately 911 stockholders of record and approximately 126,193 beneficial holders of GPHC's common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES GPHC’s common stock is traded on the New York Stock Exchange under the symbol “GPK.” On February 11, 2025, there were 869 stockholders of record and approximately 150,000 beneficial holders of GPHC's common stock.
As of December 31, 2023, the Company had $565 million available for additional repurchases under the 2023 and 2019 share repurchase programs. Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and retained earnings.
Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and retained earnings.
On November 15, 2022, the Company drew $250 million from the senior secured domestic revolving credit facilities and used the proceeds, together with cash on hand, to redeem its 4.875% Senior Notes due in 2022. 21 Total Return to Stockholders The following graph compares the total returns (assuming reinvestment of dividends) of the common stock of Graphic Packaging Holding Company, the Standard & Poor’s (“S&P”) 500 Stock Index and the Dow Jones (“DJ”) U.S.
The Third Amendment also modified the borrowing mechanics for certain term Secured Overnight Financing Rate (“SOFR”) loans under the domestic revolving line of credit. 20 Total Return to Stockholders The following graph compares the total returns (assuming reinvestment of dividends) of the common stock of Graphic Packaging Holding Company, the Standard & Poor’s (“S&P”) 500 Stock Index and the Dow Jones (“DJ”) U.S.
The following presents the Company's share repurchases for the years ended December 31, 2023, 2022, and 2021: Amount repurchased in millions, except share and per share amounts Amount Repurchased Number of Shares Repurchased Average Price per Share 2023 $ 54 2,389,224 $ 22.80 2022 $ 28 1,315,839 $ 20.91 2021 $ — — $ — 2023 On February 7, 2023, Graphic Packaging International, LLC (“GPIL”), a Delaware limited liability company and a direct subsidiary of Graphic Packaging International Partners, LLC (“GPIP”), a Delaware limited liability company and a wholly-owned subsidiary of the Company entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (the “Third Amendment”).
The following presents the Company's share repurchases for the years ended December 31, 2024, 2023, and 2022: Amount repurchased in millions, except share and per share amounts Amount Repurchased Number of Shares Repurchased Average Price per Share 2024 (a)(b) $ 200 7,243,734 $ 27.61 2023 $ 54 2,389,224 $ 22.80 2022 $ 28 1,315,839 $ 20.91 (a) Including $65 million shares repurchased under the 2019 share repurchase program, which completed that program.
During 2023, 2022 and 2021, GPHC paid cash dividends of $123 million, $92 million and $87 million, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations.
Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations. 2024 On August 14, 2024 the Company drew $300 million from the senior secured domestic revolving credit facilities and used the proceeds to redeem its 4.125% Senior Notes due in 2024.
The stock price performance on the following graph is not necessarily indicative of future stock price performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Graphic Packaging Holding Company $ 100.00 $ 159.82 $ 166.14 $ 194.34 $ 225.18 $ 253.58 S&P 500 Stock Index 100.00 131.49 155.68 200.37 164.08 207.21 Dow Jones U.S.
The stock price performance on the following graph is not necessarily indicative of future stock price performance. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Graphic Packaging Holding Company $ 100.00 $ 103.95 $ 121.60 $ 140.89 $ 158.66 $ 177.28 S&P 500 Stock Index 100.00 118.40 152.39 124.79 157.59 197.02 Dow Jones U.S.
Removed
On January 28, 2019, the Company's board of directors authorized a share repurchase program to allow the Company to purchase up to $500 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the “2019 share repurchase program”).
Added
The previous $500 million share repurchase program was authorized January 28, 2019 (the “2019 share repurchase program”) and was completed in May 2024. At December 31, 2024, the Company had $365 million available for additional repurchases under the 2023 share repurchase program.
Removed
The Third Amendment also modified the borrowing mechanics for certain term Secured Overnight Financing Rate (“SOFR”) loans under the domestic revolving line of credit. 2022 On November 4, 2022, GPIL entered into Amendment No. 2 to the Fourth Amended and Restated Credit Agreement (the “Second Amendment”).
Added
(b) Excluding $2 million of excise taxes incurred in 2024. During 2024, 2023 and 2022, GPHC paid cash dividends of $122 million, $123 million and $92 million, respectively.
Removed
The Second Amendment provided for a change in the floating interest rate benchmark for the domestic revolving credit facility and the USD denominated term loans from LIBOR-based to Term SOFR plus 10bps. The Second Amendment also added JSC AR Packaging to the Schedule of Permitted Asset Sales to facilitate the sale of the Company's Russian operations.
Added
On June 3, 2024, Graphic Packaging International, LLC (“GPIL”), a Delaware limited liability company and a direct subsidiary of Graphic Packaging International Partners, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company entered into a Fifth Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) to extend the maturity date of certain of its Senior Secured Term Loan Facilities and Senior Secured Revolving Credit Facilities and to amend certain other terms of the agreement including revised debt covenants.
Removed
Container & Packaging Index 100.00 128.59 155.76 172.84 142.07 152.91 ITEM 6. [RESERVED] 22
Added
However, there were no changes to the maximum Consolidated Total Leverage Ratio and the minimum Consolidated Interest Expense Ratio covenants. Under the terms of the agreement, $1,425 million and €200 million of the Company’s Senior Secured Term Loan Facilities remain outstanding.
Added
The Company added $50 million to its Senior Secured Revolving Credit Facilities. $500 million (A-1) of the Senior Secured Term Loan Facilities and all of the Senior Secured Revolving Credit Facility loans continue to bear interest at a floating rate per annum ranging from SOFR plus 1.35% to SOFR plus 2.10%, determined using a pricing grid based upon the Company’s consolidated total leverage ratio from time to time, and the maturity for these loans were extended from April 1, 2026 to June 1, 2029. $425 million (A-2) of the Senior Secured Term Loan Facilities continue to bear interest at a fixed rate per annum equal to 2.67% and mature on their originally scheduled maturity date of January 14, 2028. $250 million (A-3) of the Senior Secured Term Loan Facilities continue to bear interest at a floating rate per annum ranging from SOFR plus 1.60% to SOFR plus 2.35%, determined using a pricing grid based upon the Company’s consolidated total leverage ratio from time to time, and mature on their originally scheduled maturity date of July 22, 2028. $250 million of the Senior Secured Term Loan Facilities continue to bear interest at a floating rate per annum ranging from SOFR plus 1.725% to SOFR plus 2.35%, determined using a pricing grid based upon the Company’s consolidated total leverage ratio from time to time, and mature on their originally scheduled maturity date of June 1, 2029. €200 million of the Senior Secured Term Loan Facilities continues to bear interest at a floating rate per annum ranging from SOFR plus 1.225% to SOFR plus 1.85%, determined using a pricing grid based upon the Company’s consolidated total leverage ratio from time to time, and the maturity for these loans was extended from April 1, 2026 to June 1, 2029. 19 On May 13, 2024, GPIL completed a private offering of $500 million aggregate principal amount of its 6.375% senior unsecured notes due 2032 (the “Senior Notes”).
Added
The net proceeds were used by the Company to repay a portion of the outstanding borrowings under its domestic revolving credit facility under its senior secured credit facility and to pay fees and expenses incurred in connection with the offering of the Senior Notes.
Added
On April 15, 2024, the Company drew $400 million from the senior secured domestic revolving credit facilities and used the proceeds, together with cash on hand, to redeem its 0.821% Senior Notes due in 2024.
Added
On March 22, 2024, GPIL entered into an Incremental Facility Amendment to the Fourth Amended and Restated Credit Agreement for $250 million of new incremental term loans (the “New Incremental Term Facilities”).
Added
The New Incremental Term Facilities consist of a $50 million Incremental Term A-5 Facility (the “Incremental A-5 Loans”) and a $200 million Incremental Term A-6 Facility (the “Incremental Term A-6 Loans”). The New Incremental Term Facilities are senior secured term loans and mature on June 1, 2029.
Added
The Incremental Term A-5 and A-6 Loans bear interest at a floating rate ranging from SOFR plus 1.725% to SOFR plus 2.35%, determined using a pricing grid based upon GPIL’s Consolidated Leverage Ratio.
Added
As long as the Incremental Term A-2, A-3, A-5 and A-6 Loans are outstanding, GPIL will be eligible to receive an annual patronage credit from the participating lender banks, which will be paid in cash and stock in the lead member bank.
Added
Patronage payable each year is variable and based on the individual financial performance of each of the member banks then participating in the loan.
Added
The Incremental Term A-5 and A-6 Facilities are governed by the same covenants as are set forth in the Fourth Amended and Restated Credit Agreement and are secured by a first priority lien and security interest in certain assets of GPIL. 2023 On February 7, 2023, GPIL entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (the “Third Amendment”).
Added
Container & Packaging Index 100.00 121.14 134.41 110.49 118.91 136.68 ITEM 6. [RESERVED] 21

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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CONTROLS AND PROCEDURES 84 ITEM 9 B. OTHER INFORMATION 84
CONTROLS AND PROCEDURES 78 ITEM 9 B. OTHER INFORMATION 78
ITEM 6. [RESERVED] 22 ITEM 7 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23 ITEM 7 A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 36 ITEM 8 . FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 37 ITEM 9 . CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 84 ITEM 9 A .
ITEM 6. [RESERVED] 21 ITEM 7 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21 ITEM 7 A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 33 ITEM 8 . FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 34 ITEM 9 . CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 78 ITEM 9 A .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+31 added−66 removed39 unchanged
Bell is reported within the Americas Paperboard Packaging reportable segment. • During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019. • During the third quarter of 2023, the Company decided to discontinue the project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of coated recycled paperboard capacity. • During 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”).
Bell is reported within the Americas Paperboard Packaging reportable segment. • During the third quarter of 2023, the Company decided to discontinue the project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of recycled paperboard capacity. • During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019. • During 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”).
For further discussion of the Company’s environmental matters, see “ Note 14 - Environmental and Legal Matters ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 32 International Operations The Company has packaging facilities and one paperboard manufacturing facility in 20 countries outside of the U.S. and sells its products worldwide.
For further discussion of the Company’s environmental matters, see “ Note 14 - Environmental and Legal Matters ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” International Operations The Company has packaging facilities and one paperboard manufacturing facility in 20 countries outside of the U.S. and sells its products worldwide.
The Company concluded that all reporting units with goodwill have a fair value that exceeded their carrying value, and thus goodwill was not impaired. The discount rate used for each reporting unit ranged from 8% to 9%, and we utilized a transaction multiple of 8.0 times to calculate terminal period cash flows.
The Company concluded that all reporting units with goodwill have a fair value that exceeded their carrying value, and thus goodwill was not impaired. The discount rate used for each reporting unit ranged from 7% to 8%, and we utilized a transaction multiple of 9.0 times to calculate terminal period cash flows.
Measurement of the impairment loss, if any, is based on the fair value of the asset, which is determined by an income, cost or market approach. 34 Deferred Income Taxes and Potential Assessments According to the Income Taxes topic of the FASB Codification, a valuation allowance is required to be established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized.
Measurement of the impairment loss, if any, is based on the fair value of the asset, which is determined by an income, cost or market approach. 31 Deferred Income Taxes and Potential Assessments According to the Income Taxes topic of the FASB Codification, a valuation allowance is required to be established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized.
The Company also pursues a hedging program that utilizes derivatives designed to manage risks associated with future variability in cash flows and price risk related to future energy cost increases. Under this program, the Company has entered into natural gas swap contracts to hedge a portion of its forecasted natural gas usage for 2024.
The Company also pursues a hedging program that utilizes derivatives designed to manage risks associated with future variability in cash flows and price risk related to future energy cost increases. Under this program, the Company has entered into natural gas swap contracts to hedge a portion of its forecasted natural gas usage for 2025.
If we had concluded that it was appropriate to increase the discount rate we used by 100 basis points to estimate the fair value of our respective reporting units, the fair value of each reporting unit would have continued to exceed its carrying amount. The Europe reporting unit had goodwill totaling $462 million.
If we had concluded that it was appropriate to increase the discount rate we used by 100 basis points to estimate the fair value of our respective reporting units, the fair value of each reporting unit would have continued to exceed its carrying amount. The Europe reporting unit had goodwill totaling $500 million.
The assumptions used in the goodwill impairment testing process could also be adversely impacted by certain of the risks discussed in “Item 1A., Risk Factors” and thus could result in future goodwill impairment charges. The Company performed its annual goodwill impairment tests as of October 1, 2023.
The assumptions used in the goodwill impairment testing process could also be adversely impacted by certain of the risks discussed in “Item 1A., Risk Factors” and thus could result in future goodwill impairment charges. The Company performed its annual goodwill impairment tests as of October 1, 2024.
If the results of the qualitative analysis of any of the reporting units is inconclusive, or if significant changes in the business have occurred since the last quantitative impairment assessment, the Company will perform a quantitative analysis for those reporting units. As of October 1, 2023, the Company performed a quantitative impairment test.
If the results of the qualitative analysis of any of the reporting units is inconclusive, or if significant changes in the business have occurred since the last quantitative impairment assessment, the Company will perform a quantitative analysis for those reporting units. As of October 1, 2024, the Company performed a quantitative impairment test.
As of December 31, 2023, the Company has provided for deferred U.S. income taxes attributable to future withholding tax expense related to the Company's equity investment in the joint venture, Rengo Riverwood Packaging, Ltd.
As of December 31, 2024, the Company has provided for deferred U.S. income taxes attributable to future withholding tax expense related to the Company's equity investment in the joint venture, Rengo Riverwood Packaging, Ltd.
Potential impairment of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. As of October 1, 2023, the Company had seven reporting units, five of which had goodwill.
Potential impairment of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. As of October 1, 2024, the Company had seven reporting units, five of which had goodwill.
The Company has not provided for deferred U.S. income taxes on outside basis differences of approximately $92 million in its other international subsidiaries because of the Company’s intention to indefinitely reinvest its earnings outside the U.S.
The Company has not provided for deferred U.S. income taxes on outside basis differences of approximately $80 million in its other international subsidiaries because of the Company’s intention to indefinitely reinvest its earnings outside the U.S.
As of December 31, 2023, the Company's credit was rated BB+ by Standard & Poor's and Ba1 by Moody's Investor Services. Standard & Poor's and Moody's Investor Services' ratings on the Company included a stable outlook.
As of December 31, 2024, the Company's credit was rated BB+ by Standard & Poor's and Ba1 by Moody's Investor Services. Standard & Poor's and Moody's Investor Services' ratings on the Company included a stable outlook.
Realized gains and losses on these contracts are included in the financial results concurrently with the recognition of the commodity consumed. In addition, the Company uses interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan facility.
Realized gains and losses on these contracts are included in the financial results concurrently with the recognition of the commodity consumed. In addition, the Company has used interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan facility.
The Company determined that no deferred tax liability should be recorded related to the outside basis difference of its Canadian subsidiary as of December 31, 2023.
The Company determined that no deferred tax liability should be recorded related to the outside basis difference of its Canadian subsidiary as of December 31, 2024.
As of December 31, 2023 and 2022, the Company sold receivables of $1,136 million and $1,124 million, respectively, related to these arrangements. The Company has arranged a supplier finance program (“SFP”) with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice.
As of December 31, 2024 and 2023, the Company sold receivables of $1,104 million and $1,136 million, respectively, related to these arrangements. The Company has arranged a supplier finance program (“SFP”) with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice.
The Company also paid dividends and distributions of $92 million and withheld $18 million of restricted stock units to satisfy tax withholding payments related to the payout of restricted stock units. Supplemental Guarantor Financial Informatio n As a result of International Paper Company's final exchange in 2021, the Company currently owns 100% of the outstanding interests in GPIP.
The Company also paid dividends and distributions of $123 million and withheld $22 million of restricted stock units to satisfy tax withholding payments related to the payout of restricted stock units. Supplemental Guarantor Financial Informatio n As a result of International Paper Company's final exchange in 2021, the Company currently owns 100% of the outstanding interests in GPIP.
The effect of changes in the U.S. dollar exchange rate against these currencies produced a net currency translation adjustment loss of $65 million, which was recorded in Other Comprehensive (Loss) Income for the year ended December 31, 2023. The magnitude and direction of this adjustment in the future depends on the relationship of the U.S. dollar to other currencies.
The effect of changes in the U.S. dollar exchange rate against these currencies produced a net currency translation adjustment loss of $149 million, which was recorded in Other Comprehensive Income (Loss) for the year ended December 31, 2024. The magnitude and direction of this adjustment in the future depends on the relationship of the U.S. dollar to other currencies.
For 2023, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 30% of the Company’s net sales. The Company’s revenues from export sales fluctuate with changes in foreign currency exchange rates. In addition, at December 31, 2023, approximately 27% of the Company's total assets were denominated in currencies other than the U.S. dollar.
For 2024, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 30% of the Company’s net sales. The Company’s revenues from export sales fluctuate with changes in foreign currency exchange rates. In addition, at December 31, 2024, approximately 26% of the Company's total assets were denominated in currencies other than the U.S. dollar.
As of December 31, 2023, the Company has a valuation allowance of $37 million against its net deferred tax assets in certain foreign jurisdictions and against domestic deferred tax assets related to certain federal tax credit carryforwards. As of December 31, 2022, a total valuation allowance of $57 million was recorded.
As of December 31, 2024, the Company has a valuation allowance of $45 million against its net deferred tax assets in certain foreign jurisdictions and against domestic deferred tax assets related to certain federal tax credit carryforwards. As of December 31, 2023, a total valuation allowance of $37 million was recorded.
Receivables sold under all programs subject to continuing involvement, which consist principally of collection services, were approximately $770 million and $753 million as of December 31, 2023 and 2022, respectively. The Company also participates in supply chain financing arrangements offered by certain customers that qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification.
Receivables sold under all programs subject to continuing involvement, which consists principally of collection services, were approximately $778 million and $770 million as of December 31, 2024 and 2023, respectively. The Company also participates in supply chain financing arrangements offered by certain customers that qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification.
The Company is implementing strategies (i) to expand market share in its current markets and to identify and penetrate new markets; (ii) to capitalize on the Company’s customer relationships, business competencies, and paperboard manufacturing and packaging facilities; (iii) to develop and market innovative, packaging products and applications that benefit from consumer-led sustainability trends; and (iv) to continue to reduce costs by focusing on operational improvements.
The Company is implementing strategies (i) to develop and market innovative, packaging products and applications that benefit from consumer-led sustainability trends; (ii) to expand market share in its current markets and to identify and penetrate new markets; (iii) to capitalize on the Company’s customer relationships, business competencies, and manufacturing facilities; and (iv) to continue to reduce costs and drive productivity through operational improvements.
Transfers under these agreements meet the requirements to be accounted for as sales in accordance with the Transfers and Servicing topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification”). The loss on sale is not material and is included in Other Expense (Income), Net line item in the Consolidated Statement of Operations.
Transfers under these agreements meet the requirements to be accounted for as sales in accordance with the Transfers and Servicing topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification”). The loss on sale is not material and is included in Other Expense, Net in the Consolidated Statements of Operations.
It is reported within the Paperboard Manufacturing reportable segment. Subsequently, in the second quarter of 2023, the Company closed this facility. • During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024.
Tama is included within the Paperboard Manufacturing reportable segment. Subsequently, in the second quarter of 2023, the Company closed this facility. • During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024.
At December 31, 2023, the Company was in compliance with such covenant and the ratio was 2.58 to 1.00. The Company must also comply with a minimum Consolidated Interest Expense Ratio of 3.00 to 1.00. At December 31, 2023, the Company was in compliance with such covenant and the ratio was 7.96 to 1.00.
At December 31, 2024, the Company was in compliance with such covenant and the ratio was 2.81 to 1.00. The Company must also comply with a minimum Consolidated Interest Expense Ratio of 3.00 to 1.00. At December 31, 2024, the Company was in compliance with such covenant and the ratio was 7.31 to 1.00.
The following table summarizes the activity under these programs for the year ended December 31, 2023 and 2022, respectively: Year Ended December 31, In millions 2023 2022 Receivables Sold and Derecognized $ 3,696 $ 3,299 Proceeds Collected on Behalf of Financial Institutions 3,646 3,179 Net Proceeds Received from Financial Institutions 28 152 Deferred Purchase Price at December 31 (a) 1 — Pledged Receivables at December 31 150 197 (a) Included in Other Current Assets on the Consolidated Balance Sheets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure.
The following table summarizes the activity under these programs for the year ended December 31, 2024 and 2023, respectively: Year Ended December 31, In millions 2024 2023 Receivables Sold and Derecognized $ 3,572 $ 3,696 Proceeds Collected on Behalf of Financial Institutions 3,562 3,646 Net Proceeds Received from Financial Institutions 15 28 Deferred Purchase Price at December 31 (a) 5 1 Pledged Receivables at December 31 131 150 (a) Included in Other Current Assets on the Consolidated Balance Sheets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure.
Principal and interest payments under the term loan facilities and the revolving credit facilities, together with principal and interest payments on the Company's 0.821% Senior Notes due 2024, 4.125% Senior Notes due 2024, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 (the “Notes”), represent liquidity requirements for the Company.
Principal and interest payments under the term loan facilities and the revolving credit facilities, together with principal and interest payments on the Company's 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029, 3.75% Senior Notes due 2030 and 6.375% Senior Notes due 2032 (the “Notes”), represent liquidity requirements for the Company.
The Europe reporting unit had a fair value that exceeded its respective carrying value by 26%, whereas all other reporting units exceeded by more than 90%.
The Europe reporting unit had a fair value that exceeded its respective carrying value by 24%, whereas all other reporting units exceeded by more than 69%.
As discussed in “ Note 5 - Debt ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” the Senior Notes issued by GPIL (the “Issuer”) are guaranteed by certain domestic subsidiaries (the “Subsidiary Guarantors”), which consist of all material 100% owned subsidiaries of the issuer other than its foreign subsidiaries, and in certain instances by the Company (a Parent guarantee) (collectively “the Guarantors”).
As such, the Company has included Supplemental Guarantor disclosures herein that were previously included in the GPIL SEC filings. 27 As discussed in “ Note 5 - Debt ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” the Senior Notes issued by GPIL (the “Issuer”) are guaranteed by certain domestic subsidiaries (the “Subsidiary Guarantors”), which consist of all material 100% owned subsidiaries of the issuer other than its foreign subsidiaries, and in certain instances by the Company (a Parent guarantee) (collectively “the Guarantors”).
(b) Includes accelerated depreciation related to exit activities in 2023, 2022, and 2021. See “ Note 18 - Exit Activities ” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information. (c) Includes expenses related to business combinations, exit activities and other special charges.
(b) Includes accelerated depreciation related to exit activities in 2024 and 2023. See “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information. (c) Includes expenses related to business combinations, exit activities and other special items.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION This management’s discussion and analysis of financial conditions and results of operations is intended to provide investors with an understanding of the Company’s past performance, financial condition and prospects.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION This management’s discussion and analysis of financial conditions and results of operations is intended to assist you in understanding the Company’s past performance, financial condition and prospects.
The Company's future financial and operating performance, ability to service or refinance its debt and ability to comply with the covenants and restrictions contained in its debt agreements (see “Covenant Restrictions” below) will be subject to future economic conditions, including conditions in the credit markets, and to financial, business and other factors, many of which are beyond the Company's control, and will be substantially dependent on the selling prices and demand for the Company's products, raw material and energy costs, and the Company's ability to successfully implement its overall business and profitability strategies.
The Company's future financial and operating performance, ability to service or refinance its debt and ability to comply with the covenants and restrictions contained in its debt agreements (see “Covenant Restrictions” below) will be subject to future economic conditions, including conditions in the credit markets, and to financial, business and other factors, many of which are beyond the Company's control, and will be substantially dependent on the selling prices and demand for the Company's products, raw material and energy costs, and the Company's ability to successfully implement its overall business and profitability strategies. 28 Accounts receivable are stated at the amount owed by the customer, net of an allowance for estimated uncollectible accounts, returns and allowances, and cash discounts.
Current year financing activities included borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $54 million and payments on debt of $26 million. The Company also paid dividends of $123 million and withheld $22 million of restricted stock units to satisfy tax withholding obligations related to the payout of restricted stock units.
The Company also paid dividends of $122 million and withheld $25 million of restricted stock units to satisfy tax withholding obligations related to the payout of restricted stock units. In the prior year the Company made borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $54 million, and payments on debt of $26 million.
NEW ACCOUNTING STANDARDS For a discussion of recent accounting pronouncements impacting the Company, see “ Note 1 - Nature of Business and Summary of Significant Accounting Policies ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” BUSINESS OUTLOOK Total capital investment for 2024 is expected to be approximately $950 million.
NEW ACCOUNTING STANDARDS For a discussion of recent accounting pronouncements impacting the Company, see “ Note 1 - Nature of Business and Summary of Significant Accounting Policies ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” 32
Income Tax Expense During 2023 and 2022, the Company recognized Income Tax Expense of $210 million and $194 million, on Income before Income Taxes of $932 million and $716 million, respectively.
Income Tax Expense During 2024 and 2023, the Company recognized Income Tax Expense of $229 million and $210 million, on Income before Income Taxes of $886 million and $932 million, respectively.
Cash Flows Years Ended December 31, In millions 2023 2022 Net Cash Provided by Operating Activities $ 1,144 $ 1,090 Net Cash Used in Investing Activities $ (1,025) $ (435) Net Cash Used in Financing Activities $ (106) $ (666) 30 Net cash provided by operating activities in 2023 totaled $1,144 million, compared to $1,090 million in 2022.
Cash Flows Years Ended December 31, In millions 2024 2023 Net Cash Provided by Operating Activities $ 840 $ 1,144 Net Cash Used in Investing Activities (342) (1,025) Net Cash Used in Financing Activities (489) (106) Net cash provided by operating activities in 2024 totaled $840 million, compared to $1,144 million in 2023.
Production from these facilities will be consolidated into our existing packaging network. • On September 8, 2023, the Company completed the acquisition of Bell, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio for $264 million.
Production from these facilities has been consolidated into other existing packaging facilities. • On September 8, 2023, the Company completed the acquisition of Bell Incorporated (“Bell”), adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio for $262 million.
See “ Note 1 - General Information ” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information. (d) Includes accelerated depreciation related to exit activities in 2023.
See “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information. (f) Includes accelerated depreciation related to exit activities in 2024, 2023, and 2022.
The critical judgments by management relate to acquisitions, future cash flows associated with impairment testing for goodwill and long-lived assets, and deferred income taxes. Acquisitions The Company uses the acquisition method of accounting for acquired businesses.
The critical judgments by management relate to future cash flows associated with impairment testing for goodwill and long-lived assets, and deferred income taxes.
The increase is primarily driven by the ongoing construction of the Company's new recycled paperboard manufacturing facility in Waco, Texas.
The increase in capital spending was driven by the construction of the Company's new recycled paperboard manufacturing facility in Waco, Texas.
Financial Statements and Supplementary Data.” 27 Year Ended December 31, In millions 2023 2022 2021 NET SALES: Paperboard Manufacturing $ 1,022 $ 1,290 $ 1,007 Americas Paperboard Packaging 6,200 6,015 4,996 Europe Paperboard Packaging 2,024 1,973 992 Corporate/Other/Eliminations (a) 182 162 161 Total $ 9,428 $ 9,440 $ 7,156 INCOME (LOSS) FROM OPERATIONS: Paperboard Manufacturing (b)(c) $ (23) $ 45 $ (10) Americas Paperboard Packaging (c)(d) 1,088 800 456 Europe Paperboard Packaging (c)(e) 127 59 82 Corporate and Other (c) (18) 2 (121) Total $ 1,174 $ 906 $ 407 (a) Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments.
Financial Statements and Supplementary Data.” Year Ended December 31, In millions 2024 2023 2022 NET SALES: Americas Paperboard Packaging $ 6,101 $ 6,200 $ 6,015 Europe Paperboard Packaging 1,893 2,024 1,973 Paperboard Manufacturing 655 1,022 1,290 Corporate/Other/Eliminations (a) 158 182 162 Total $ 8,807 $ 9,428 $ 9,440 INCOME (LOSS) FROM OPERATIONS: Americas Paperboard Packaging (b)(c) $ 1,072 $ 1,088 $ 800 Europe Paperboard Packaging (c)(d)(e) 122 127 59 Paperboard Manufacturing (c)(f)(g) (60) (23) 45 Corporate and Other (c) (15) (18) 2 Total $ 1,119 $ 1,174 $ 906 (a) Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments.
Income from Operations decreased due to lower open market volume, higher levels of maintenance and market downtime, accelerated depreciation and charges related to the closure of the three recycled paperboard manufacturing facilities (refer to “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8.
Income from Operations decreased due to lower pricing and accelerated depreciation and charges related to the closure of packaging facilities (refer to “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8.
Income from Operations also increased due to a reduction in impairment charges related to the sale of its Russian operations. Refer to “ Note 19 - Impairment and Divestiture of Russian Business ” in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data,” for additional information.
Income from Operations was also favorably impacted by a reduction in impairment charges related to the sale of our Russian operations in 2023. Refer to “ Note 19 - Divestitures ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information.
Paperboard not consumed internally is sold externally to a wide variety of paperboard packaging converters and brokers. The Paperboard Manufacturing segment's Net Sales represent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard Manufacturing segment to reflect the economics of the integration of these segments.
The Paperboard Manufacturing segment's Net Sales represent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard Manufacturing segment to reflect the economics of the integration of these segments.
See “ Note 18 - Exit Activities ” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information. (e) Includes impairment charges related to Russia.
See “ Note 1 - General Information ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information (d) Includes impairment charges related to Russia in 2023 and 2022.
The Corporate and Other caption includes the Pacific Rim and Australia operating segments and unallocated corporate and one-time costs. These segments are evaluated by the chief operating decision maker based primarily on Income from Operations, as adjusted for depreciation and amortization.
These segments are evaluated by the chief operating decision maker based primarily on Income from Operations, as adjusted for depreciation and amortization.
Receivables are charged to the allowance when determined to be no longer collectible. 29 The Company has entered into agreements to sell, on a revolving basis, certain trade accounts receivable to third party financial institutions.
The allowance for doubtful accounts is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible. The Company has entered into agreements to sell, on a revolving basis, certain trade accounts receivable to third party financial institutions.
For further discussion of the Company's acquired recycled paperboard manufacturing facility and packaging facilities, see “ Note 4 - Business Combinations ” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Capital spending was $804 million and $549 million in 2023 and 2022, respectively.
For further discussion of the Company's acquired coated recycled paperboard manufacturing facility and packaging facilities, see “ Note 4 - Business Combinations ” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Net cash used in financing activities in 2024 totaled $489 million compared to $106 million in 2023.
Europe Paperboard Packaging includes paperboard packaging, primarily cartons, sold primarily to CPG companies serving the food, beverage and consumer product markets including healthcare and beauty products primarily in Europe. The Company allocates certain paperboard manufacturing and corporate costs to the reportable segments to appropriately represent the economics of these segments.
Europe Paperboard Packaging includes paperboard packaging sold primarily to CPG companies serving the food, beverage and consumer product markets, including healthcare and beauty, primarily in Europe.
Additional information regarding our acquisitions is included in “ Note 4 - Business Combinations ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Goodwill The Company evaluates goodwill for potential impairment annually as of October 1, as well as whenever events or changes in circumstances suggest that the fair value of a reporting unit may no longer exceed its carrying amount.
Goodwill The Company evaluates goodwill for potential impairment annually as of October 1, as well as whenever events or changes in circumstances suggest that the fair value of a reporting unit may no longer exceed its carrying amount.
The Company does not hold or issue financial instruments for trading purposes. See “Item 7A., Quantitative and Qualitative Disclosure About Market Risk.” Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of financial statements in conformity with U.S.
The Company does not have any other off-balance sheet arrangements. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of financial statements in conformity with U.S.
Interest Expense, Net increased due to higher interest rates and higher debt balances. As of December 31, 2023, approximately 20% of the Company’s total debt was subject to floating interest rates.
Interest Expense, Net Interest Expense, Net was $230 million and $239 million in 2024 and 2023, respectively. Interest Expense, Net decreased primarily due to an increase in capitalized interest. As of December 31, 2024, approximately 36% of the Company’s total debt was subject to floating interest rates.
Liquidity and Capital Resources The Company expects its material cash requirements for the next twelve months will be for: capital expenditures, periodic required income tax payments, periodic interest and debt service payments on associated debt (as discussed in Note 5), lease agreements which have fixed lease payment obligations (as discussed in Note 6), and minimum purchase commitments (as discussed in Note 13) along with ongoing operating costs, working capital, share repurchases and dividend payments.
In millions December 31, 2024 SUMMARIZED BALANCE SHEET Current assets (excluding intercompany receivable from Nonguarantor) $ 1,610 Noncurrent assets 6,654 Intercompany receivables from Nonguarantors 231 Current liabilities 1,416 Noncurrent liabilities 5,928 Liquidity and Capital Resources The Company expects its material cash requirements for the next twelve months will be for: capital expenditures, periodic required income tax payments, periodic interest and debt service payments on associated debt (refer to “ Note 5 - Debt ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information), lease agreements which have fixed lease payment obligations (refer to “ Note 6 - Leases ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information), and minimum purchase commitments (refer to “ Note 13 - Commitments ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information) along with ongoing operating costs, working capital, share repurchases and dividend payments.
See “ Note 19 - Impairment and Divestiture of Russian Business ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information. 2023 COMPARED WITH 2022 Paperboard Manufacturing Net Sales decreased due to lower open market volume, partially offset by higher pricing.
See “ Note 19 - Divestitures ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for further information. 25 2024 COMPARED WITH 2023 Americas Paperboard Packaging Net Sales decreased due to lower pricing and packaging volumes, partially offset by innovation sales growth driven by conversions to our sustainable consumer packaging solutions, and the acquisition of Bell in September 2023.
The Company completed the acquisition of Tama on January 31, 2023 from Greif Packaging LLC for approximately $100 million. The Company also completed the acquisition of Bell for approximately $264 million on September 8, 2023 (including cash acquired of $3 million).
In the prior year the Company completed the acquisition of Tama on January 31, 2023 from Greif Packaging LLC for approximately $100 million. The Company also completed the acquisition of Bell Incorporated, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio for approximately $262 million on September 8, 2023.
Segment Reporting The Company has three reportable segments as follows: Paperboard Manufacturing , previously referred to as the Paperboard Mills reportable segment, includes the seven North American paperboard manufacturing facilities that produce recycled, unbleached and bleached paperboard, which is consumed internally to produce paperboard consumer packaging for the Americas and Europe Packaging segments.
Paperboard Manufacturing includes the six North American paperboard manufacturing facilities that produce recycled, unbleached and bleached paperboard, which is primarily consumed internally to produce paperboard consumer packaging for the Americas and Europe Paperboard Packaging segments. Paperboard not consumed internally is sold externally to a small group of paperboard packaging converters.
The favorable increase was mainly due to an increase in income from operations, offset by higher levels of working capital. Pension contributions in 2023 and 2022 were $15 million and $24 million, respectively.
The decrease was mainly due to a decrease in income from operations, an increase in payments for income taxes, and higher levels of working capital. Pension contributions in 2024 and 2023 were $12 million and $15 million, respectively. Net cash used in investing activities in 2024 totaled $342 million, compared to $1,025 million in 2023.
As of December 31, 2023, the Company has $565 million available for additional repurchases under the 2023 and 2019 share repurchase programs. • During 2023, the Company declared and paid cash dividends of $123 million. 25 RESULTS OF OPERATIONS Year Ended December 31, In millions 2023 2022 2021 Net Sales $ 9,428 $ 9,440 $ 7,156 Income from Operations $ 1,174 $ 906 $ 407 Nonoperating Pension and Postretirement Benefit (Expense) Income (3) 7 5 Interest Expense, Net (239) (197) (123) Income before Income Taxes and Equity Income of Unconsolidated Entity $ 932 $ 716 $ 289 Income Tax Expense (210) (194) (74) Income before Equity Income of Unconsolidated Entity $ 722 $ 522 $ 215 Equity Income of Unconsolidated Entity 1 — 1 Net Income $ 723 $ 522 $ 216 2023 COMPARED WITH 2022 Net Sales The components of the change in Net Sales are as follows: Year Ended December 31, Variances In millions 2022 Price Volume/Mix Foreign Exchange 2023 Decrease Percent Change Consolidated $ 9,440 $ 556 $ (580) $ 12 $ 9,428 $ (12) (0.1) % The Company's Net Sales in 2023 decreased by $12 million or 0.1%, to $9,428 million from $9,440 million for the same period in 2022, due to lower organic sales and lower volumes of open market sales.
RESULTS OF OPERATIONS Year Ended December 31, In millions 2024 2023 2022 Net Sales $ 8,807 $ 9,428 $ 9,440 Income from Operations 1,119 1,174 906 Nonoperating Pension and Postretirement Benefit (Expense) Income (3) (3) 7 Interest Expense, Net (230) (239) (197) Income before Income Taxes and Equity Income of Unconsolidated Entity 886 932 716 Income Tax Expense (229) (210) (194) Income before Equity Income of Unconsolidated Entity 657 722 522 Equity Income of Unconsolidated Entity 1 1 — Net Income $ 658 $ 723 $ 522 23 2024 COMPARED WITH 2023 Net Sales The components of the change in Net Sales are as follows: Year Ended December 31, Variances In millions 2023 Price/ Volume/ Mix M&A Foreign Exchange 2024 Decrease Percent Change Consolidated $ 9,428 $ (349) $ (248) $ (24) $ 8,807 $ (621) (6.6) % The Company's Net Sales in 2024 decreased by $621 million or 6.6%, to $8,807 million from $9,428 million for the same period in 2023, due to the Augusta divestiture and reduced open market paperboard volumes and pricing of bleached paperboard, lower packaging volumes, pricing declines, including pass through of lower input costs in Europe, the divestiture of our two packaging facilities in Russia in 2023 ($92 million) and unfavorable foreign currency exchange ($24 million), partially offset by the acquisition of Bell in September 2023 ($118 million).
In millions Twelve Months Ended December 31, 2023 SUMMARIZED STATEMENTS OF OPERATIONS Net Sales (a) $ 7,166 Cost of Sales 5,458 Income from Operations 1,032 Net Income 631 (a) Includes Net Sales to Nonguarantor Subsidiaries of $520 million. 31 In millions December 31, 2023 SUMMARIZED BALANCE SHEET Current assets (excluding intercompany receivable from Nonguarantor) $ 1,612 Noncurrent assets 6,463 Intercompany receivables from Nonguarantors 1,300 Current liabilities 2,067 Noncurrent liabilities 5,478 Covenant Restrictions Covenants contained in the Current Credit Agreement and the Indentures may, among other things, limit the Company's ability to incur additional indebtedness, dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase shares, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the Indentures under which the Notes are issued, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates.
The activity of the Company's outstanding obligations confirmed as valid under its SFP for the years ended December 31, 2024, and 2023, is as follows: Year Ended December 31, In millions 2024 2023 Confirmed Obligations Outstanding at the Beginning of the Year $ 30 $ 34 Invoices Confirmed During the Year 108 117 Confirmed Invoices Paid During the Year (108) (121) Confirmed Obligations Outstanding at the End of the Year $ 30 $ 30 Non-cash additions to Property, Plant and Equipment, Net included within Accounts Payable on the Company’s Consolidated Balance Sheets were $198 million, $145 million and $55 million as of December 31, 2024, 2023 and 2022, respectively. 29 Covenant Restrictions Covenants contained in the Current Credit Agreement and the Indentures may, among other things, limit the Company's ability to incur additional indebtedness, dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase shares, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the Indentures under which the Notes are issued, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates.
For further discussion of the Company's new recycled paperboard manufacturing facility and continued investments made as part of the integration of acquisitions, see “ Note 18 - Exit Activities ” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” In 2022, the capital investments were primarily due to planned asset upgrades at the U.S.-based paperboard manufacturing facilities, including the now completed recycled paperboard machine in Kalamazoo, Michigan.
For more information on the construction of the new recycled paperboard manufacturing facility in Waco, Texas, and continued investments made as part of the integration of acquisitions, see “ Note 18 - Exit Activities ” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” On May 1, 2024, the Company completed the sale of the Augusta Paperboard Manufacturing Facility to Clearwater Paper Corporation for total cash consideration of $711 million.
Americas Paperboard Packaging includes paperboard packaging sold primarily to consumer packaged goods (“CPG”) companies and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants (“QSR”) serving the food, beverage, and consumer product markets in the Americas.
Equity Income of Unconsolidated Entity Equity Income of Unconsolidated Entity was less than $1 million in both 2024 and 2023 and is related to the Company’s equity investment in the Rengo Riverwood Packaging, Ltd. joint venture. 24 Segment Reporting The Company has three reportable segments as follows: Americas Paperboard Packaging includes paperboard packaging sold primarily to consumer packaged goods (“CPG”) companies serving the food, beverage, and consumer product markets and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants (“QSR”) in the Americas.
Income from Operations increased due to higher pricing and cost savings from continuous improvement and other programs, partially offset by commodity inflation and other inflation (primarily labor and benefits), higher levels of maintenance and market downtime and charges related to the closures of packaging facilities (refer to “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8.
Income from Operations was also favorably impacted by reductions in accelerated depreciation and charges related to the closures of several packaging facilities (refer to “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information).
Capital Investment The Company’s capital investments in 2023 were $885 million ($804 million was paid), compared to $430 million ($549 million was paid) in 2022. During 2023, the Company had capital spending of $838 million for adding capacity and improving process capabilities, $24 million for capital spares and $23 million for manufacturing packaging machinery.
The Company had capital spending of $1,203 million ($1,256 million was capitalized of which $1,169 million was for adding capacity and improving process capabilities, $22 million for capital spares and $34 million for manufacturing packaging machinery) and $804 million ($894 million was capitalized) in 2024 and 2023, respectively.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. OVERVIEW OF BUSINESS The Company’s objective is to strengthen its position as a leading provider of consumer packaging made from renewable resources.
A detailed discussion of the fiscal 2024 year-over-year changes can be found below and a detailed discussion of fiscal 2023 year-over-year changes can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Income from Operations also increased due to a reduction in impairment charges in 2023 compared to 2022 related to the sale of the Company's Russian Operations. Refer to “ Note 19 - Impairment and Divestiture of Russian Business ” in the Notes to Consolidated Financial Statements included herein under “Item 8.
Income from Operations was also favorably impacted by a reduction in impairment charges related to the sale of our Russian operations in 2023 (refer to “ Note 19 - Divestitures ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information), a reduction in accelerated depreciation related to the closures of several packaging and paperboard manufacturing facilities of $36 million, and a reduction in charges related to the discontinuation of the Texarkana swing capacity project (refer to “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information).
Income from Operations increased due to higher pricing and cost savings from continuous improvement and other programs, partially offset by commodity inflation primarily related to external board, energy and other inflation (primarily labor and benefits), unfavorable foreign currency exchange and lower organic sales.
Financial Statements and Supplementary Data” for additional information), partially offset by higher packaging volumes, commodity deflation, cost savings from continuous improvement and other programs and favorable foreign currency exchange. The commodity deflation was primarily related to external board, which is passed through to our customers, partially offset by other inflation (primarily labor and benefits).
The Company’s ability to fully implement its strategies and achieve its objectives may be influenced by a variety of factors, many of which are beyond its control, such as inflation of raw material and other costs, which the Company cannot always pass through to its customers, and the effect of overcapacity in the worldwide paperboard packaging industry.
The Company’s ability to fully implement its strategies and achieve its objectives may be influenced by a variety of factors, many of which are beyond its control. We cannot predict with any certainty the impact that rising interest rates, a global or regional recession, or higher inflation may have on our customers or suppliers.
Income from Operations also increased due to a reduction in impairment charges in 2023 compared to 2022 related to the sale of its Russian Operations. Acquisitions and Dispositions • In January 2023, the Company completed the acquisition of Tama, a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million.
Current Assets within the Consolidated Balance Sheet include $15 million relating to multiple packaging facilities that met the held for sale criteria as of December 31, 2024. • In January 2023, the Company completed the acquisition of Tama Paperboard, LLC (“Tama”), a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million.
Americas Paperboard Packaging Net Sales increased due to higher pricing and new product introductions driven by conversions to our sustainable consumer packaging solutions and the acquisition of Bell in September 2023, partially offset by lower organic sales. Lower packaging volumes in beverage, cereal, dry foods, frozen foods, and dairy were partially offset by higher packaging volumes in foodservice and tissue.
Europe Paperboard Packaging Net Sales decreased due to lower pricing, predominantly due to pass through of lower input costs, the divestiture of our two packaging facilities in Russia in 2023 and unfavorable foreign currency exchange, partially offset by innovation sales growth driven by conversions to our sustainable consumer packaging solutions and higher volumes.
Core packaging volumes were lower in beverage, cereal, dry foods, frozen foods, dairy, convenience, and healthcare, partially offset by higher packaging volumes in foodservice, tissue and beauty.
Lower packaging sales in food, health and beauty, and household markets were partially offset by higher packaging sales in the beverage market.
As further discussed in “Note 5 - Debt ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” 2022 activities included the redemption of the 4.875% Senior Notes due 2022 of $250 million.
For further discussion of the Company's newly acquired debt and redemptions, see “ Note 5 - Debt ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Other current year activities include borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $200 million and payments on debt of $23 million.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The Company broadly defines liquidity as its ability to generate sufficient funds from both internal and external sources to meet its obligations and commitments.
Income from Operations was also favorably impacted by reductions in accelerated depreciation related to the closure of Tama (refer to “ Note 18 - Exit Activities ” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data” for additional information), and a reduction in charges related to the discontinuation of the Texarkana swing capacity project. 26 FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The Company broadly defines liquidity as its ability to generate sufficient funds from both internal and external sources to meet its obligations and commitments.
On November 30, 2023, the Company completed the sale of its Russian Operations. • In May 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility. • In September 2022, the Company closed its Norwalk, Ohio packaging facility, which it had announced to close in March 2022.
On November 30, 2023, the Company completed the sale of its Russian Operations.
Removed
The following will be discussed and analyzed: • Overview of Business • Overview of 2023 Results • Results of Operations • Financial Condition, Liquidity and Capital Resources • Critical Accounting Policies • New Accounting Standards • Business Outlook A detailed discussion of the fiscal 2023 year-over-year changes can be found below and a detailed discussion of fiscal 2022 year-over-year changes can be found in Item 7.
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OVERVIEW OF BUSINESS Graphic Packaging is a leading global provider of consumer goods packaging made from renewable or recycled materials. The Company designs and manufactures sustainable packaging solutions including cartons, multipack cartons, trays, carriers, paperboard canisters, and cups and bowls, made primarily from unbleached paperboard, recycled paperboard, and bleached paperboard.
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To achieve this objective, the Company designs and delivers sustainable packaging solutions such as cartons, carriers, paperboard canisters, cups and lids preferred by consumers. Packaging offerings include a variety of laminated, coated and printed packaging structures that are produced from the Company’s recycled, bleached and unbleached paperboard.
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Paperboard used in its packaging solutions comes from wood fiber, a renewable resource, and from secondary (reused) fiber. Graphic Packaging’s consumer packaging is designed to be recycled, and the Company works across the value chain to make it easier for people to recycle.
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Innovative designs and combinations of paperboard, films, foils, metallization, holographic and embossing are customized to the individual needs of the customers.
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With this focus, the Company plays an active role in support of the move to a more circular economy and a sustainable future for generations to come. Graphic Packaging’s commitment to reducing the environmental impact of everyday consumer packaging is fundamental to our strategy, our goals, and to our business purpose.
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Significant Factors That Impact the Company’s Business and Results of Operations Impact of Inflation/Deflation. The Company’s cost of sales consists primarily of energy (including natural gas, fuel, oil and electricity), pine and hardwood fiber, chemicals, secondary fibers, purchased paperboard, aluminum foil, ink, plastic films and resins, depreciation expense and labor. Costs increased year over year by $175 million in 2023.
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The Company serves a wide variety of consumer markets, from food and beverage, to foodservice, household products, beauty and heath care. We produce packaging solutions at over 100 locations in over 20 countries around the world, serving customers and brands ranging from local to multinational consumer products companies and retailers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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The purpose of these forward exchange contracts is to protect the Company from the risk that the eventual functional currency cash flows resulting from the collection of these receivables will be adversely affected by changes in exchange rates. At December 31, 2023, multiple foreign currency forward exchange contracts existed, with maturities ranging up to three months.
The purpose of these forward exchange contracts is to protect the Company from the risk that the eventual functional currency cash flows resulting from the collection of these receivables will be adversely affected by changes in exchange rates. At December 31, 2024, multiple foreign currency forward exchange contracts existed, with maturities ranging up to eight months.
Interest Rates The Company is exposed to changes in interest rates, primarily as a result of its short-term and long-term debt, which include both fixed and floating rate debt. The Company uses interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan facilities.
Interest Rates The Company is exposed to changes in interest rates, primarily as a result of its short-term and long-term debt, which include both fixed and floating rate debt. The Company has previously used interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan facilities.
Those forward currency exchange contracts outstanding at December 31, 2023, when aggregated and measured in U.S. dollars at December 31, 2023 contractual rates, had net notional amounts totaling $131 million. The Company continuously monitors these forward exchange contracts and adjusts accordingly to minimize the exposure.
Those forward currency exchange contracts outstanding at December 31, 2024, when aggregated and measured in U.S. dollars at December 31, 2024 contractual rates, had net notional amounts totaling $116 million. The Company continuously monitors these forward exchange contracts and adjusts accordingly to minimize the exposure.
Long-Term Debt Principal Amount by Maturity-Average Interest Rate Expected Maturity Date In millions 2024 2025 2026 2027 2028 Thereafter Total Fair Value Total Debt Fixed Rate $719 $27 $960 $300 $1,125 $1,071 $ 4,202 $ 4,036 Average Interest Rate 2.34% 7.60% 4.05% 4.75% 3.87% 3.33% Variable Rate $20 $16 $978 $— $— $1 $ 1,015 $ 1,003 SOFR+Spread SOFR+Spread SOFR+Spread SOFR+Spread SOFR+Spread SOFR+ Spread Net Investment Hedge On October 29, 2021 and November 19, 2021, the Company drew the full amount of the €210 million delayed draw term loan facility and completed a private offering of €290 million aggregate principal amount of the 2.625% senior unsecured notes due 2029, respectively.
Long-Term Debt Principal Amount by Maturity-Average Interest Rate Expected Maturity Date In millions 2025 2026 2027 2028 2029 Thereafter Total Fair Value Total Debt Fixed Rate $— $504 $300 $875 $650 $900 $ 3,229 $ 3,096 Average Interest Rate —% 1.98% 4.75% 3.10% 3.10% 5.21% Variable Rate $14 $23 $35 $285 $1,458 $2 $ 1,817 $ 1,798 SOFR+ Spread SOFR+ Spread SOFR+ Spread SOFR+ Spread SOFR+ Spread SOFR+ Spread Net Investment Hedge On October 29, 2021 and November 19, 2021, the Company drew the full amount of the €210 million delayed draw term loan facility and completed a private offering of €290 million aggregate principal amount of the 2.625% senior unsecured notes due 2029, respectively.
The carrying value and fair value of the natural gas swap contracts is a net liability of $7 million as of December 31, 2023. Such contracts are designated as cash flow hedges and are accounted for by deferring the quarterly change in fair value of the outstanding contracts in Accumulated Other Comprehensive Loss in Shareholders’ Equity.
Such contracts are designated as cash flow hedges and are accounted for by deferring the quarterly change in fair value of the outstanding contracts in Accumulated Other Comprehensive Loss in Shareholders’ Equity. The resulting gain or loss is reclassified into Cost of Sales concurrently with the recognition of the commodity consumed. 33
At December 31, 2023, the Company had active interest rate swap agreements with a notional amount of $750 million expiring in April 2024. The table below sets forth interest rate sensitivity information related to the Company’s debt.
At December 31, 2024, the Company had no outstanding interest rate swaps. The table below sets forth interest rate sensitivity information related to the Company’s debt.
For more information, see “ Note 1 - General Information ” of the Company's 2021 Annual Report on Form 10-K for the year ended December 31, 2021. Natural Gas Contracts The Company has hedged a portion of its expected natural gas usage for 2024.
Natural Gas Contracts The Company has hedged a portion of its expected natural gas usage for 2025. The carrying value and fair value of the natural gas swap contracts is a net asset of $1 million as of December 31, 2024.
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Deal Contingent Hedge On May 14, 2021, in connection with the AR Packaging acquisition, the Company entered into deal contingent foreign exchange forward contracts, with no upfront cash cost, to hedge €700 million of the acquisition price.
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These forward contracts settled October 29, 2021, immediately prior to the acquisition of AR Packaging and are accounted for as derivatives under ASC 815, Derivatives and Hedging.
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Realized losses of $48 million for the year ended December 31, 2021 resulting from these contracts are recognized in Business Combinations, Exit Activities and Other Special Charges, Net in the Consolidated Statements of Operations.
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The resulting gain or loss is reclassified into Cost of Sales concurrently with the recognition of the commodity consumed. 36

Other GPK 10-K year-over-year comparisons