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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

Amendment No. 1 to

FORM 10-K

10-K/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 20162018

Commission File Number 1-5277

BEMIS COMPANY, INC.

(Exact name of Registrant as specified in its charter)

Missouri

43-0178130

Missouri43-0178130

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

One Neenah Center, 4th Floor, P.O. Box 669,2301 Industrial Drive, Neenah, Wisconsin  54957-066954956

(Address of principal executive offices)

Registrant’s telephone number, including area code:  (920) 527-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange


on Which Registered

Common Stock, par value $0.10 per share

New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act:  NoneNone

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YES  ýx NO  o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YES  o  NO  xý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  ýx  NO  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES  ýx  NO  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405) is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form��Form 10-K or any amendment to this Form 10-K.  ýx

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer x

Accelerated Filer o

Non-Accelerated Filer o

Smaller Reporting Company o

(Do not check if a smaller reporting company)

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).  YES  o  NO  xý

The aggregate market value of the voting and non-voting common equity held by nonaffiliates of the Registrant on June 30, 2016,29, 2018, based on a closing price of $51.49$42.21 per share as reported on the New York Stock Exchange, was $4,876,642,461.

$3,841,516,355.

As of February 15, 2017,13, 2019, the Registrant had 92,450,46891,165,312 shares of Common Stock issued and outstanding.


Documents Incorporated

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EXPLANATORY NOTE

This Amendment No. 1 to Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K of Bemis Company, Inc. (the “Company” “our” “us” or “we”) for the year ended December 31, 2018, which was originally filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2019 (the “Original Filing”), and is being filed solely for the purpose of providing certain information required by Reference

Items 10, 11, 12, 13, and 14 of Part III.

PortionsThis information was previously omitted from the Original Filing in reliance on General Instruction G(3) to Form 10-K, which permits the information in the above-referenced items to be incorporated in the Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year end. We are filing this Amendment to include Part III information in our Form 10-K because a definitive proxy statement containing this information will not be filed by us within 120 days after the end of the Proxy Statement - Annual Meetingfiscal year covered by the Form 10-K.  The reference on the cover of Shareholders May 4, 2017 -the Original Filing to the incorporation by reference to portions of a definitive proxy statement or amendment to our Form 10-K into Part III of the Original Filing is hereby deleted.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, Part III, Items 10 through 14 of the Original Filing are hereby amended and restated in their entirety, and Part IV, Item 15 of the Original Filing is hereby amended and restated in its entirety, with the only change being the addition of Exhibits 31.3 and 31.4 filed herewith.

Except as specifically set forth herein, this Amendment does not amend or otherwise update any other information in the Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.





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BEMIS COMPANY, INC. AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K



Forward-Looking Statements

Unless otherwise indicated, references to "Bemis Company," the "Company," "we," "our," and "us" in this Annual Report on Form 10-K refer to Bemis Company, Inc. and its consolidated subsidiaries.

This Annual Report contains certain estimates, predictions, and other “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995, and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended).  Forward-looking statements are generally identified with the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “target,” “may,” “will,” “plan,” “project,” “should,” “continue,” “outlook,” “approximately,” “would,” “could,” or the negative thereof or other similar expressions, or discussion of future goals or aspirations, which are predictions of or indicate future events and trends and which do not relate to historical matters.  Such statements are based on information available to management as of the time of such statements and relate to, among other things, expectations of the business environment in which we operate, projections of future performance (financial and otherwise), including those of acquired companies, perceived opportunities in the market and statements regarding our strategy and vision.  Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Factors that could cause actual results to differ from those expected include, but are not limited to:

The costs, availability, and terms of acquiring our raw materials (particularly for polymer resins and adhesives), as well as our ability to pass any price changes on to our customers;
Our ability to retain and build upon the relationships and sales of our key customers;
The potential loss of business or increased costs due to customer or vendor consolidation;
The ability of our foreign operations to maintain working efficiencies, as well as properly adjust to continuing changes in global politics, legislation, and economic conditions;
Variances in key exchange rates that could affect the translation of the financial statements of our foreign entities.
Our ability to effectively implement and update our global enterprise resource planning ("ERP") systems;
Our ability to realize the benefits of our acquisitions and divestitures, and whether we are able to properly integrate those businesses we have acquired;
Fluctuations in interest rates and our borrowing costs, along with other key financial variables;
A potential failure in our information technology infrastructure or applications and their ability to protect our key functions from cyber-crime and other malicious content;
Unexpected outcomes in our current and future administrative and litigation proceedings;
Changes in governmental regulations, particularly in the areas of environmental, health and safety matters, fiscal incentives, and foreign investment;
Changes in the competitive conditions within our markets, as well as changes in the demand for our goods;
Our ability to effectively introduce new products into the market and to protect or retain our intellectual property rights;
Changes in our ability to attract and retain high performance employees;
Changes in the value of our goodwill and other intangible assets;
Changes in import and export regulation that could subject us to liability or impair our ability to compete in international markets;
Our ability to manage all costs associated with our pension plan;
Changes in our credit rating; and
A failure to realize the full potential of our restructuring activities.

These and other risks, uncertainties, and assumptions identified from time to time in our filings with the Securities and Exchange Commission, including without limitation, those described under Item 1A "Risk Factors" of this Annual Report on Form 10-K and our quarterly reports on Form 10-Q, could cause actual future results to differ materially from those projected in the forward-looking statements. In addition, actual future results could differ materially from those projected in the forward-looking statements as a result of changes in the assumptions used in making such forward-looking statements.





PART I
ITEM 1 — BUSINESS
Bemis Company, Inc., a Missouri corporation (the “Registrant” or “Company”), continues a business formed in 1858.  We were incorporated in 1885 as Bemis Bro. Bag Company with the name changed to Bemis Company, Inc. in 1965.  We are a global manufacturer of packaging products.
Our strategic objectives are to accelerate growth, focus innovation, and continuously improve, all focused at delivering strong long-term financial performance. In support of the strategic objectives, our vision is: passionate commitment to the growth and success of our customers will make Bemis the clear choice for inspired packaging solutions.

The majority of our products are sold to customers in the food industry.  Other customers include companies in the following types of businesses: chemical, agribusiness, medical, pharmaceutical, personal care, electronics, construction, and other consumer goods. Further information about our operations in our business segments and geographic areas is available in Note 20 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
As of December 31, 2016, we had approximately 17,500 employees worldwide. Approximately 8,500 of these employees were in the U.S., with approximately 40 percent of the 6,000 hourly production employees covered by collective bargaining agreements involving six different unions. Of the approximately 9,000 employees who were outside the U.S., over half of the hourly production employees and some of the salaried workforce are covered by collective bargaining agreements and are represented by numerous unions.
Working capital fluctuates throughout the year in relation to business volume and other marketplace conditions.  We maintain inventory levels that provide a reasonable balance between obtaining raw materials at favorable prices and maintaining adequate inventory levels to enable us to fulfill our commitment to promptly fill customer orders.  Manufacturing backlogs are not a significant factor in the industries in which we operate.  The business of each of the reportable segments is not seasonal to any significant extent.
We are the owner or licensee of a number of United States and foreign patents and patent applications that relate to certain of our products, manufacturing processes, and equipment.  We also have a number of trademarks and trademark registrations in the United States and in foreign countries.  Our patents, licenses, and trademarks collectively provide a competitive advantage.  However, the loss of any single patent or license alone would not have a material adverse effect on our results as a whole or those of any of our segments.

Our business activities are organized around our two reportable business segments, U.S. Packaging (65 percent of 2016 net sales) and Global Packaging (35 percent). Both internal and external reporting conform to this organizational structure.  A summary of our business activities reported by our two reportable business segments follows.

U.S. Packaging Segment
The U.S. Packaging segment represents all food, consumer, and industrial products packaging-related manufacturing operations located in the United States. This segment manufactures multilayer polymer, blown and cast film structures which are then converted to produce packaging for processed and fresh meat, dairy, liquids, frozen foods, cereals, snacks, cheese, coffee, condiments, candy, pet food, bakery, lawn and garden, tissue, fresh produce, personal care and hygiene, disposable diapers, and agribusiness.
Global Packaging Segment
The Global Packaging segment includes all packaging-related manufacturing operations located outside of the United States as well as global medical device and pharmaceutical packaging-related manufacturing operations. This segment manufactures multilayer polymer, blown and cast film structures to produce packaging sold for a variety of food, medical, pharmaceutical, personal care, electronics, and industrial applications. Additional products include injection molded and thermoformed plastic and folding carton packaging. These products include processed and fresh meat, dairy, liquids, snacks, cheese, coffee, condiments, candy, bakery, tissue, fresh produce, personal care and hygiene, disposable diapers, agribusiness, pharmaceutical, and medical devices.





Marketing, Distribution, and Competition
While our sales are made through a variety of distribution channels, substantially all sales are made by our direct sales force.  Sales offices and plants are located throughout North America, Latin America, Europe, and Asia-Pacific to provide prompt and economical service to thousands of customers.  Our technically trained sales force is supported by product development engineers, design technicians, field service technicians, and a customer service organization.
Sales to the Kraft Heinz Company, and its subsidiaries, accounted for approximately 11 and 12 percent of our sales in 2016 and 2015, respectively. Business arrangements with them and certain large customers require a large portion of the manufacturing capacity at a few individual manufacturing sites.  Any change in the business arrangement would typically occur over a period of time, which would allow for an orderly transition for both our manufacturing sites and the customer.
The major markets in which we sell our products are highly competitive.  Areas of competition include service, innovation, quality, and price.  This competition is significant as to both the size and the number of competing firms.  Competitors include Amcor Limited, Berry Plastics Group, Inc., Bryce Corporation, Coveris Holdings S.A., Printpack, Inc., Sealed Air Corporation, Sonoco Products Company, Wipak OY, Winpak Ltd, and a variety of other privately held companies. 
We consider ourselves to be a significant participant in the markets in which we serve; however, due to the diversity of our business, our precise competitive position in these markets is not reasonably determinable.  Advertising is limited primarily to business and trade publications emphasizing our product features and related technical capabilities.
Raw Materials
Polymer resins and films, paper, inks, adhesives, aluminum, and chemicals constitute the major raw materials used by us.  These are purchased from a variety of global industry sources, and we are not significantly dependent on any one supplier for our raw materials.  While temporary industry-wide shortages of raw materials may occur, we expect to continue to successfully manage raw material supplies without significant supply interruptions.  Currently, raw materials are readily available.
Environmental Matters
Our operations and the real property we own or lease are subject to broad environmental laws and regulations by multiple jurisdictions.  These laws and regulations pertain to the discharge of certain materials into the environment, handling and disposition of waste, and cleanup of contaminated soil and ground water as well as various other protections of the environment.  We believe that we are in substantial compliance with applicable environmental laws and regulations based on implementation of our Environmental, Health, and Safety Management System and regular audits. However, we cannot predict with certainty that we will not in the future incur liability with respect to noncompliance with environmental laws and regulations due to contamination of sites formerly or currently owned or operated by us (including contamination caused by prior owners and operators of such sites) or the off-site disposal of regulated materials, which could be material.  In addition, these laws and regulations are constantly changing and we cannot always anticipate these changes. 
See Note 19 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information regarding certain environmental matters. 
Available Information
We are a large accelerated filer (as defined in Exchange Act Rule 12b-2) and are also an electronic filer.  Electronically filed reports (Forms 4, 8-K, 10-K, 10-Q, S-3, S-8, etc.) can be accessed at the Securities and Exchange Commission (SEC) website (http://www.sec.gov) or by visiting the SEC’s Public Reference Room located at 100 F St., N.E., Washington, DC 20549 (call 1-202-551-8090 or 1-800-732-0330 for hours of operation). Electronically filed and furnished reports can also be accessed through our own website (http://www.bemis.com), under Investors/SEC Filings or by writing for free information, including SEC filings, to Investor Relations, Bemis Company, Inc., One Neenah Center, 4th Floor, P.O. Box 669, Neenah, Wisconsin 54957-0669, or calling (920) 527-5000.  In addition, our Board Committee charters, Principles of Corporate Governance, and our Code of Conduct can be electronically accessed at our website under About Bemis/Corporate Governance or, free of charge, by writing directly to the Company, Attention:  Corporate Secretary.  We will post any amendment to, or waiver from, a provision of the Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer, and other persons performing similar functions on the Investor Relations section of our website (www.bemis.com) promptly following the date of such amendment or waiver.


Explanation of Terms Describing the Company’s Products
Aseptic packaging — Packaging used in a flash-heating process in which a food product and its packaging are sterilized separately and then combined and sealed under sterile conditions. This process retains more nutrients and uses less energy than conventional sterilization techniques and extends the shelf life of processed food without using preservatives.
Barrier products — Products that provide protection and extend the shelf life of the package contents.  These products provide protection from oxygen, moisture, light, odor, or other environmental factors by combining different types of plastics and additives into a multilayered plastic package. 
Cast film — A plastic film that is extruded through a straight slot die as a flat sheet during its manufacturing process.
Coextruded film — A blown or cast film extruded with multiple layers extruded simultaneously.
CSD labels — Carbonated soft drink labels.
Extruded film — A plastic film manufactured by forcing heated resin through a shaped die. This forms a tube of thin plastic film which is then expanded by an internal column of air to produce a continuous ribbon of film.
EZ Open packaging — Package technologies such as peelable closures or laser scoring used to allow the consumer easy access to a packaged product. EZ Open packaging may be combined with reclose features such as plastic zippers to allow for convenient storage of the packaged material once opened.
Film laminate — A multilayer plastic film made by laminating two or more films together with the use of adhesive or a molten plastic to achieve a barrier for the packaged contents.
Flexible pouches — A packaging option that delivers a semi-finished package, instead of rollstock, to a customer for filling product and sealing/closing the package for distribution.
Flexographic printing — The most common flexible packaging printing process using a raised rubber or alternative material image mounted on a printing cylinder.
Forming films — A flexible plastic film that is designed to take the shape determined by a cavity when subjected to heat and vacuum.
Injection molded plastic — Plastic that is created through a manufacturing process where heated plastic is injected into a die or mold.
Multipack — A film manufactured by a modified extrusion process that is used for wrapping and holding multipacks of products such as canned goods and bottles of liquids, replacing corrugate and fiberboard.
Narrow-web rolls — Films that are produced one-across at widths typically less than one meter and can be produced in either tube or roll form depending on the application.
Retort packaging — A multilayer flexible or rigid package able to withstand the thermal processing used for sterilization, similar to the process used for pressure cooking. The food is prepared and sealed in a package and then heated to approximately 250 degrees Fahrenheit under high pressure. This process extends the food product’s shelf life under normal room temperature conditions.
Rigid packaging — A form of packaging in which the shape of the package is retained as its contents are removed. Bottles, trays and clamshell packaging are examples of rigid packaging options.
Rollstock — The principal form in which flexible packaging material is delivered to a customer.  Finished film wound on a core is converted in a process at the end user’s plant that forms, fills, and seals the package of product for delivery to customers.
Rotogravure printing — A high quality printing process utilizing a metal engraved cylinder.
Shrink bags/films — An extruded packaging film that is cooled, reheated, and stretched at a temperature near its melting point. The film is made to shrink around a product by an application of thermal treatment, and can be a barrier product if a layer of oxygen barrier material is added.
Specialty filmPlastic films that are produced for non-food applications and are typically used as either secondary packaging
or incorporated into a film structure to impart specific physical and /or performance characteristics.
Sterilization packaging — Packaging materials and preformed packaging systems that support the sterilization process, physical and sterile barrier protection through global distribution, and aseptic operating room presentation of life saving medical devices and technologies.
Thermoformed plastic packaging — A package formed by applying heat to a film to shape it into a tray or cavity and then sealing a flat film on top of the package after it has been filled.
Vacuum skin packaging ("VSP") — Vacuum skin packaging combines the benefits of traditional vacuum packs in terms of shelf life extension and premium second-skin presentation of meats, fish, and ready-made meals. VSP systems include multilayer high barrier top webs and adapted forming webs and trays.


ITEM 1A — RISK FACTORS
The following factors, as well as factors described elsewhere in this Form 10-K, or in other filings by the Company with the Securities and Exchange Commission, could adversely affect the Company’s consolidated financial position, results of operations or cash flows. Other factors not presently known to us or that we presently believe are not material could also affect our business operations and financial results.

Raw materials — Raw material cost increases or shortages could adversely affect our results of operations.
As a manufacturer, our sales and profitability are dependent on the availability and cost of raw materials, which are subject to price fluctuations. Inflationary and other increases in the costs of raw materials have occurred in the past and are expected to recur, and our performance depends in part on our ability to reflect changes in costs in selling prices for our products. We have generally been successful in managing the impact of higher raw material costs by increasing selling prices through our contractual pass-through mechanisms with most of our customers. The disruption of raw materials from certain single-source providers could impact our supply chain. Additionally, natural disasters, such as hurricanes, tornadoes, and fires, may also negatively impact the production or delivery capacity of our raw material suppliers in the chemical and paper industries. This could result in increased raw material costs or supply shortages, which may have a negative impact on our profitability if the cost increases are sustained sequentially over multiple periods or, in the case of a shortage, if we are unable to secure raw materials from alternative sources.

Key customers — The loss of key customers or a significant reduction in sales to those customers could significantly reduce our revenues.
Our customer base includes key (generally large) customers that are important to our success and represent a sizable portion of sales. Our required response to continued marketplace competition could result in lower than expected net pricing of our products. Furthermore, if key customers experience financial pressure, they could request more favorable contractual terms, which could place additional pressure on our margins and cash flows.

Consolidation of customer base — A significant consolidation of our customer base could negatively impact our business.
Many of our largest customers have acquired companies with similar or complementary product lines. This consolidation has increased the concentration of our business with our largest customers. Such consolidation may be accompanied by pressure from customers for lower prices, reflecting the increase in the total volume of products purchased or the elimination of a price differential between the acquiring customer and the company acquired. While we have generally been successful at managing customer consolidations, increased pricing pressures from our customers could have a material adverse effect on results of operations.

Global operations — Changing conditions in the U.S. and foreign countries, may significantly impact our reported results of operations.
We have operations globally. Our revenues and net income may be adversely affected by economic conditions, political situations, and changing laws and regulations, as to which we have no control. Additionally, our operations could be disrupted by geopolitical conditions such as boycotts and sanctions, acts of war, terrorist activity or other similar events. Such events could make it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our business globally or in certain regions. While we maintain similar manufacturing capacities at different locations and coordinate multi source supplier programs on many of our materials which would better enable us to respond to these types of events, we cannot be sure that our plans will fully protect us from all such disruptions. Similarly, more ordinary course disruptions that are directly attributable to the foreign nature of our business, such as flight and shipping delays or cancellations, could also significantly impact business operations.

Restructuring activities — Our restructuring activities and cost saving initiatives may not achieve the results we anticipate.
We have undertaken and may continue to undertake restructuring activities and cost reduction initiatives to optimize our asset base, improve operating efficiencies and generate cost savings. We cannot be certain that we will be able to complete these initiatives as planned or that the estimated operating efficiencies or cost savings from such activities will be fully realized or maintained over time. In addition, we may not be successful in migrating production from one facility to another.

Exchange rates — We have foreign currency conversion and transaction risks that may adversely affect our operating results.
In 2016, approximately 30 percent of our sales were generated by entities operating outside of the United States. Because of this, variations in exchange rates may have a sizable effect on the translation of the financial statements of our foreign entities. Our primary foreign exchange exposure is to the Brazilian Real, but we also have foreign exchange exposure to


the Euro, Argentine Peso, Mexican Peso, British Pound, and other currencies. A strengthening U.S. dollar relative to foreign currencies has a dilutive conversion effect on our financial statements. Conversely, a weakening U.S. dollar has an additive translation effect. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. In short, the volatility of currency exchange rates may impact our operating results.

Implementing our ERP system — We face risks related to the implementation of our global enterprise resource planning system.
We are currently engaged in a multi-year process of conforming the majority of our operations onto one global ERP system. The ERP system is designed to improve the efficiency of our supply chain and financial transaction processes, accurately maintain our books and records, and provide information important to the operation of the business to our management team. The ERP system will continue to require significant investment of human and financial resources, and we may experience significant delays, increased costs and other difficulties as a result. Any significant disruption or deficiency in the design and implementation of the ERP system could adversely affect our ability to fulfill and invoice customer orders, apply cash receipts, place purchase orders with suppliers, and make cash disbursements, and could negatively impact data processing and electronic communications among business locations, which may have a material adverse effect on our business, consolidated financial condition or results of operations. We also face the challenge of supporting our older systems and implementing necessary upgrades to those systems while we implement the new ERP system. While we have invested significant resources in planning and project management, significant implementation issues may arise.

Acquisitions and divestitures — We may not be able to successfully integrate businesses that we acquire or limit ongoing costs associated with the operations we divest.
We have made numerous acquisitions in the past and are regularly considering new acquisitions that we believe will provide meaningful opportunities to grow our business and improve performance in the future. Acquired businesses may not achieve the levels of revenue, profit, productivity, or otherwise perform as we expect. Acquisitions involve special risks, including, without limitation, the potential assumption of unanticipated liabilities and contingencies as well as difficulties in integrating acquired businesses. While we believe that our acquisitions will improve our competitiveness and future financial performance, we can give no assurance that acquisitions will be successful.

We also make strategic divestitures from time to time and we may agree to indemnify acquiring parties for certain liabilities arising from our former businesses which could negatively impact future results.

Interest rates — An increase in interest rates could reduce our reported results of operations.
At December 31, 2016, our variable rate borrowings approximated $828.1 million (which includes $400 million fixed rate notes that have been effectively converted to variable rate debt through the use of a fixed to variable rate interest rate swap). Fluctuations in interest rates can increase borrowing costs and have an adverse impact on results of operations. Accordingly, increases in short-term interest rates will directly impact the amount of interest we pay. For each one percent increase in variable interest rates, our annual interest expense would increase by approximately $8.3 million on the $828.1 million of variable rate debt outstanding as of December 31, 2016.

Information technology — A failure in our information technology systems could negatively affect our business.
We depend on information technology to record and process customers' orders, manufacture and ship products in a timely manner, and maintain the financial accuracy of our business records. Increased global information technology (“IT”) security threats and more sophisticated cyber-crime pose a potential risk to the security and availability of our IT systems, networks, and services, including those that are managed, hosted, provided, or used by third parties, as well as the confidentiality, availability, and integrity of our data. Other malicious activity, such as unauthorized access attempts, phishing, attempts at monetary theft through our IT systems, computer viruses or other malignant codes may also pose a threat to our operations. If the IT systems, networks, or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of business or other sensitive information, due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our business continuity plans do not effectively and timely address these failures, we may suffer interruptions in our ability to manage operations and reputational, competitive, or business harm, which may adversely affect our business operations or financial condition.

Litigation — Litigation or regulatory developments could adversely affect our business operations and financial performance.
We are, and in the future will become, involved in lawsuits, regulatory inquiries, and governmental and other legal proceedings arising out of the ordinary course of our business. As we expand our global footprint, we become exposed to more uncertainty regarding the regulatory environment. The timing of the final resolutions to lawsuits, regulatory inquiries, and


governmental and other legal proceedings is typically uncertain. Additionally, the possible outcomes of, or resolutions to, these proceedings could include adverse judgments or settlements, either of which could require substantial payments. See “Legal Proceedings" included in Item 3 of this Annual Report on Form 10-K.

Environmental, health, and safety regulations — Changing government regulations in environmental, health, and safety matters may adversely affect our company.
Numerous legislative and regulatory initiatives have been passed and anticipated in response to concerns about Greenhouse Gas emissions and climate change. We are a manufacturing entity that utilizes petrochemical-based raw materials to produce many of our products. Increased environmental legislation or regulation could result in higher costs for us in the form of higher raw materials, as well as energy and freight costs. It is possible that certain materials might cease to be permitted to be used in our processes. We could also incur additional compliance costs for monitoring and reporting emissions and for maintaining permits. Additionally, a sizable portion of our business comes from healthcare packaging and food packaging, both highly regulated markets. If we fail to comply with these regulatory requirements, our results of operations could be adversely impacted.

Changes in market demand and competition — Changes in consumer demand or buying habits for our goods, an increase in substitutions, or significant innovation by our competitors, may adversely affect our business.
Our success depends on our ability to respond timely to changes in customer product needs and market acceptance of our products. We must produce products that meet the quality, performance, and price expectations of our customers. Additionally, because many of our products are used to package consumer goods, our sales and profitability could be negatively impacted by changes in consumer preferences for those underlying products. We also operate in a highly competitive industry. Our response to marketplace competition may result in lower than expected net pricing of our products.

Patents and proprietary technology — Our success is dependent on our ability to develop and successfully introduce new products and to develop, acquire and retain intellectual property rights.
Our success depends in large part on our proprietary technology. We rely on intellectual property rights, including patents, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish our proprietary rights. If we are unable to enforce our intellectual property rights, our competitive position may suffer. Our pending patent applications, and our pending trademark registration applications, may not be allowed or competitors may challenge the validity or scope of our patents or trademarks. In addition, our patents, trademarks and other intellectual property rights may not provide us a significant competitive advantage. We may need to spend significant resources monitoring our intellectual property rights. Our competitive position may be harmed if we cannot detect infringement and enforce our intellectual property rights quickly or at all. Competitors might avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries which could make it easier for competitors to capture market share and could result in lost revenues.

Attracting and retaining key personnel — If we are unable to attract and retain key personnel, we may be adversely affected.
Our continued success depends, in large part, on our ability to identify, attract, motivate, train and retain qualified personnel in key functions and geographic areas. Losing the services of key employees in any of our operations could make it difficult to meet our objectives. To effectively manage our global business, we will need to continue to recruit, train, assimilate, motivate and retain employees who actively promote and meet the standards of a high performance culture.

Goodwill and other intangible assets — A significant write-down of goodwill and/or other intangible assets would have a material adverse effect on our reported results of operations and net worth.
We review our goodwill balance for impairment at least once a year using the business valuation methods allowed in accordance with current accounting standards. These methods include the use of a weighted-average cost of capital to calculate the present value of the expected future cash flows of our reporting units. Future changes in the cost of capital, expected cash flows, or other factors may cause our goodwill and/or other intangible assets to be impaired, resulting in a non-cash charge against results of operations to write down these assets for the amount of the impairment. In addition, if we make changes in our business strategy or if external conditions adversely affect our business operations, we may be required to record an impairment charge for goodwill or intangibles, which would lead to decreased assets and reduced net operating results. If a significant write down is required, the charge would have a material adverse effect on our reported results of operations and net worth. We have identified the valuation of intangibles as a critical accounting estimate. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates and Judgments—Intangible assets and goodwill” included in Item 7 of this Annual Report on Form 10-K.



Imports and exports — We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.
Certain of our products are subject to export controls and may be exported only with the required export license or through an export license exception. If we were to fail to comply with export licensing, customs regulations, economic sanctions and other laws, we could be subject to substantial civil and criminal penalties, including fines for the Company and incarceration for responsible employees and managers, and the possible loss of export or import privileges. In addition, if our distributors fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected through reputational harm and penalties. Obtaining the necessary export license for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities.

Furthermore, export control laws and economic sanctions prohibit the shipment of certain products to embargoed or sanctioned countries, governments and persons. While we train our employees to comply with these regulations, we cannot assure that a violation will not occur, whether knowingly or inadvertently. Any such shipment could have negative consequences including government investigations, penalties, fines, civil and criminal sanctions, and reputational harm. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in our decreased ability to export or sell our products to existing or potential customers with international operations. Any limitation on our ability to export or sell our products could adversely affect our business, financial condition and results of operations.

Funded status of pension plans — Recognition of pension liabilities may cause a significant reduction in stockholders’ equity.
In December of 2013, new amendments to our U.S. pension plan for salaried and non-union hourly employees were implemented. These amendments froze all further benefit accruals for all persons entitled to benefits under the plan. While the amendments reduced some risk related to future service costs, there is still risk associated with ongoing liability re-measurement and plan asset valuations. Current accounting standards issued by the Financial Accounting Standards Board ("FASB") require balance sheet recognition of the funded status of our defined benefit pension and postretirement benefit plans. If the fair value of our pension plans’ assets at a future reporting date decreases or if the discount rate used to calculate the projected benefit obligation ("PBO") as of that date decreases, we will be required to record the incremental change in the excess of PBO over the fair value of the assets as a reduction of stockholders’ equity. The resulting non-cash after-tax charge would represent future expense and would be recorded directly as a decrease in the Accumulated Other Comprehensive Income component of stockholders’ equity. While we cannot estimate the future funded status of our pension liability with any certainty at this time, we believe that if the market value of assets or the discount rate used to calculate our pension liability materially decreases, the adjustment could significantly reduce our stockholders’ equity. A significant reduction in stockholders’ equity may impact our compliance with debt covenants or could cause a downgrade in our credit ratings that could also adversely impact our future cost and speed of borrowing and have an adverse effect on our financial condition, results of operations and liquidity. We have identified pension assumptions as a critical accounting estimate. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Estimates and Judgments Pension costs” and “Pension assumptions sensitivity analysis” included in Item 7 of this Annual Report on Form 10-K.

Credit rating — A downgrade in our credit rating could increase our borrowing costs and negatively affect our financial condition and results of operations.
In addition to using cash provided by operations, we regularly issue commercial paper to meet our short-term liquidity needs. Our credit ratings are important to our ability to issue commercial paper at favorable rates of interest. A downgrade in our credit rating could increase the cost of borrowing by increasing the spread over prevailing market rates that we pay for our commercial paper or the fees associated with our bank credit facility.

ITEM 1B — UNRESOLVED STAFF COMMENTS
None.


ITEM 2 — PROPERTIES
Properties utilized by us at December 31, 2016, were as follows:
U.S. Packaging Segment
This segment has 27 manufacturing plants located in 13 states, of which 26 are owned directly by us or our subsidiaries and one is leased from an outside party. 

Global Packaging Segment
This segment has 32 manufacturing plants located in two states within the U.S., the Commonwealth of Puerto Rico, and eleven other countries, of which 27 are owned directly by us or our subsidiaries and five are leased from outside parties.  Initial building lease terms generally provide for minimum terms of five to twenty years and have one or more renewal options. 
Corporate and General
We consider our plants and other physical properties to be suitable, adequate, and of sufficient productive capacity to meet the requirements of our business.  The manufacturing plants operate at varying levels of utilization depending on the type of operation and market conditions.  Our executive offices, which are leased, are located in Neenah, Wisconsin.

ITEM 3 — LEGAL PROCEEDINGS

We are involved in a number of lawsuits incidental to our business, including environmental-related litigation and routine litigation arising in the ordinary course of business.  Although it is difficult to predict the ultimate outcome of these cases, we believe, except as discussed below, that any ultimate liability would not have a material adverse effect on the Company’s consolidated financial condition or results of operations.
Environmental Matters
We are a potentially responsible party ("PRP") pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as “Superfund”) and similar state and foreign laws in proceedings associated with 17 sites around the United States and one in Brazil.  These proceedings were instituted by the United States Environmental Protection Agency and certain state and foreign environmental agencies at various times beginning in 1983.  Superfund and similar state and foreign laws create liability for investigation and remediation in response to releases of hazardous substances in the environment. Under these statutes, joint and several liability may be imposed on waste generators, site owners and operators, and others regardless of fault.  Although these regulations could require us to remove or mitigate the effects on the environment at various sites, perform remediation work at such sites, or pay damages for loss of use and non-use values, we expect our liability in these proceedings to be limited to monetary damages. We expect our future liability relative to these sites to be insignificant, individually and in the aggregate. 

We are involved in other environmental-related litigation arising in the ordinary course of business. We accrue environmental costs when it is probable that these costs will be incurred and can be reasonably estimated. Our reserve for environmental liabilities at December 31, 2016 and 2015 was $3.5 million and $5.6 million, respectively.

Brazil Tax Dispute - Goodwill Amortization
During October 2013, Dixie Toga, Ltda ("Dixie Toga") received an income tax assessment in Brazil for the tax years 2009 through 2011 that relates to the amortization of certain goodwill generated from the acquisition of Dixie Toga. The income tax assessed for those years is approximately $11.7 million, translated to U.S. dollars at the December 31, 2016 exchange rate. We expect that tax examinations for years after 2011 will include similar assessments as we continue to claim the tax benefits associated with the goodwill amortization. An ultimate adverse resolution on these assessments, including interest and penalties, could be material to our consolidated results of operations and/or cash flows.

We have been advised by our legal and tax advisors that our position with respect to the deductions is allowable under the tax laws of Brazil. We are contesting the disallowance and believe it is more likely than not the tax benefit will be sustained in its entirety and consequently have not recorded a liability. We intend to litigate the matter if it is not resolved at the administrative appeals levels. The ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which could take several years.  At this time, we believe that final resolution of the assessment will not have a material impact on our consolidated financial statements.


Brazil Investigation
On September 18, 2007, the Secretariat of Economic Law, a governmental agency in Brazil, which has now been replaced by the General Superintendence of the Administrative Council for Economic Defense (“CADE”), initiated an investigation into possible anti-competitive practices in the Brazilian flexible packaging industry against a number of Brazilian companies including a Dixie Toga subsidiary. The investigation relates to periods prior to our acquisition of control of Dixie Toga and its subsidiaries.

In late November 2016, the investigative arm of CADE issued an advisory opinion recommending, among other actions, the imposition of fines on Itap Bemis, a Dixie Toga subsidiary. The case will now be sent to the CADE Tribunal, which will decide to either accept or decline the recommendation. We expect that the Tribunal decision will be issued in 2017.

In the event of an adverse decision, it is difficult to predict possible fines, but based on CADE's current fining practice, the fines assessed could be as high as $60 million, depending on CADE’s determination of the applicable revenue base for the calculation of the fine. We intend to vigorously defend our position and plan to appeal any adverse decision by the Tribunal. Upon appeal, we would likely be required to post bond, deposit funds equal to the assessed fines, or provide other collateral. We are unable at this time to predict the outcome of this matter, but believe it is not probable that an adverse judgment would stand after exhausting all appeals which are likely to take several years and therefore no provision has been made in the consolidated financial statements.

ITEM 4 — MINE SAFETY DISCLOSURES
Not applicable.


PART II
ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY,RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  (a) (b) (c) (d)
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
January 1-31, 2016 787,231
 $43.89
 787,231
 2,570,660
February 1-29, 2016 212,769
 45.88
 212,769
 22,357,891
August 1-31, 2016 889,700
 50.90
 889,700
 21,468,191
September 1-30, 2016 110,300
 52.34
 110,300
 21,357,891
November 1-30, 2016 1,000,000
 48.50
 1,000,000
 20,357,891
         
    $47.96
 3,000,000
 20,357,891

Our common stock is traded on the New York Stock Exchange under the symbol BMS.  On December 31, 2016, there were 3,130 registered holders of record of our common stock.  On February 4, 2016, our Board of Directors authorized an additional 20 million shares for repurchase. As of December 31, 2016, under authority granted by the Board of Directors, we have remaining authorization to repurchase an additional 20,357,891 shares of our common stock.
Dividends paid and the high and low common stock prices per share were as follows:
For the Quarterly Periods Ended: March 31 June 30 September 30 December 31
         
2016  
  
  
  
Dividend paid per common share $0.29
 $0.29
 $0.29
 $0.29
Common stock price per share  
  
  
  
High 54.19
 53.88
 53.32
 51.44
Low 42.45
 47.28
 49.85
 47.22
         
2015  
  
  
  
Dividend paid per common share 0.28
 0.28
 0.28
 0.28
Common stock price per share  
  
  
  
High 49.44
 47.65
 47.51
 47.59
Low 43.74
 43.50
 38.91
 39.48
         
2014  
  
  
  
Dividend paid per common share 0.27
 0.27
 0.27
 0.27
Common stock price per share  
  
  
  
High 40.99
 41.58
 41.02
 47.20
Low 37.01
 39.13
 37.72
 34.34





The graph below matches the cumulative 5-Year total return of holders of Bemis Company, Inc.'s common stock with the cumulative total returns of the S&P Midcap 400 index and a customized peer group of twenty one companies, which aligns with the Company's incentive compensation plans, that includes: Albemarle Corp, AptarGroup Inc., Ashland Global Holdings Inc., Avery Dennison Corporation, Ball Corporation, Berry Plastics Group Inc., Crown Holdings Inc., Graphic Packaging Holding Company, Greif Inc., Minerals Technologies Inc., Newmarket Corp, Owens-Illinois Inc., Packaging Corp. of America, Polyone Corp, RPM International Inc., Sealed Air Corporation, Sensient Technologies Corp, Silgan Holdings Inc., Sonoco Products Company, The Valspar Corporation and Westrock Co. The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on 12/31/2011 and tracks it through 12/31/2016.

  12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16
Bemis Company, Inc. 100.00
 114.83
 144.32
 163.68
 165.77
 181.62
S&P Midcap 400 100.00
 117.88
 157.37
 172.74
 168.98
 204.03
Peer Group 100.00
 123.97
 169.27
 196.92
 189.73
 225.27
The stock price performance included in this graph is not necessarily indicative of future stock price performance.


ITEM 6 — SELECTED FINANCIAL DATA
FIVE-YEAR CONSOLIDATED REVIEW
(dollars in millions, except per share amounts)
Years Ended December 31, 2016 2015 2014 2013 2012
Operating Data  
  
  
  
  
Net sales $4,004.4
 $4,071.4
 $4,343.5
 $4,476.6
 $4,583.6
Income from continuing operations 236.2
 241.9
 239.1
 192.5
 148.9
           
Common Share Data  
  
  
  
  
Basic earnings per share from continuing operations 2.51
 2.50
 2.39
 1.86
 1.43
Diluted earnings per share from continuing operations 2.48
 2.47
 2.36
 1.85
 1.42
Dividends per share 1.16
 1.12
 1.08
 1.04
 1.00
Book value per share 13.59
 12.70
 14.59
 16.53
 15.88
           
Weighted-average shares outstanding for computation of diluted earnings per share 95.1
 97.9
 101.2
 104.0
 105.0
Common shares outstanding at December 31, 92.7
 95.1
 98.2
 101.9
 103.3
           
Capital Structure and Other Data  
  
  
  
  
Current ratio 2.0x
 1.9x
 2.7x
 2.5x
 2.4x
Working capital $589.4
 $529.9
 $806.4
 $902.6
 $882.0
Total assets 3,715.7
 3,489.8
 3,610.8
 4,105.6
 4,179.8
Short-term debt 17.3
 35.4
 31.3
 14.9
 8.9
Long-term debt 1,527.8
 1,353.9
 1,311.6
 1,416.8
 1,411.7
Total equity 1,259.7
 1,207.4
 1,433.0
 1,684.8
 1,640.9
Depreciation and amortization 162.1
 158.1
 180.6
 190.3
 204.3
Capital expenditures 208.3
 219.4
 185.2
 139.8
 136.4
           
Number of common shareholders 3,130
 3,154
 3,284
 3,416
 3,481
Number of employees 17,678
 17,696
 16,944
 19,106
 19,564


ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis
Three Years Ended December 31, 2016
Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 8 of this Annual Report on Form 10-K.
Three-year review of results
(dollars in millions) 2016 2015 2014
Net sales $4,004.4
 100.0 % $4,071.4
 100.0 % $4,343.5
 100.0 %
Cost of products sold 3,138.2
 78.4
 3,198.0
 78.5
 3,484.4
 80.2
Gross profit 866.2
 21.6
 873.4
 21.5
 859.1
 19.8
             
Operating expenses:            
Selling, general, and administrative expenses 392.2
 9.8
 420.0
 10.3
 416.6
 9.6
Research and development 46.5
 1.2
 44.1
 1.1
 44.1
 1.0
Restructuring and acquisition-related costs 28.6
 0.7
 12.1
 0.3
 
 
Other operating income (10.4) (0.3) (12.4) (0.3) (9.3) (0.2)
Operating income 409.3
 10.2
 409.6
 10.1
 407.7
 9.4
             
Interest expense 60.2
 1.5
 51.7
 1.3
 60.8
 1.4
Other non-operating income (1.8) 
 (6.0) (0.1) (16.8) (0.4)
Income from continuing operations before income taxes 350.9
 8.8
 363.9
 8.9
 363.7
 8.4
             
Provision for income taxes 114.7
 2.9
 122.0
 3.0
 124.6
 2.9
             
Income from continuing operations 236.2
 5.9
 241.9
 5.9
 239.1
 5.5
             
Loss from discontinued operations 
 
 (2.6) (0.1) (48.0) (1.1)
             
Net income $236.2
 5.9 % $239.3
 5.9 % $191.1
 4.4 %
          \
  
Effective income tax rate  
 32.7 %  
 33.5 %  
 34.3 %
             
Diluted earnings per share from continuing operations $2.48
   $2.47
   $2.36
  

Overview
Bemis Company, Inc. is a major supplier of flexible and rigid plastic packaging used by leading food, consumer products, healthcare, and other companies worldwide. Historically, about 80 percent of our total net sales are to customers in the food industry. Sales of our packaging products are widely diversified among food categories and can be found in nearly every aisle of the grocery store. Our emphasis on supplying packaging to the food industry has typically provided a more stable market environment for our U.S. Packaging and Global Packaging business segments.


Market Conditions
The markets into which our products are sold are highly competitive. Our leading market positions in packaging for perishable food and medical device products in many regions reflect our focus on value-added, proprietary products that provide food safety and sterility benefits. We also manufacture products for which our technical know-how and economies of scale offer us a competitive advantage. The primary raw materials for our business segments are polymer resins and films, paper, inks, adhesives, aluminum, and chemicals. 


Sales by Geography and Category

Sales by Geographic Area (in millions)
 2016 2015 2014
United States $2,820.3
 $2,937.8
 $3,040.8
Brazil 483.5
 442.5
 581.5
Other Americas 244.6
 273.5
 273.2
Europe 263.5
 233.9
 258.8
Asia-Pacific 192.5
 183.7
 189.2
Total $4,004.4
 $4,071.4
 $4,343.5

The categories specifically disclosed below include those that had historically benefited our profits most, due to their value-added features and functions. The introduction and success of our asset recapitalization program in recent years minimizes the usefulness of analyzing our business by these categories, as our asset recapitalization program allows us to expand margins in all areas of our business as we install new, efficient converting equipment.

The line items labeled "Other" below include a wide variety of packaging solutions for applications such as bakery goods, beverages, confectionery and snack foods, dry foods, frozen foods, lawn and garden products, and others. None of these categories within "Other" are greater than ten percent of the reportable segment's total sales.

Sales by Category (proportion of sales)
 2016 2015 2014
U.S. Packaging      
Meat & Cheese 35% 34% 33%
Dairy & Liquid 13% 13% 12%
Other 52% 53% 55%
Total 100% 100% 100%
Global Packaging      
Meat & Cheese 18% 19% 18%
Dairy & Liquid 12% 14% 14%
Healthcare (Medical Device & Pharmaceutical) 26% 26% 24%
Other 44% 41% 44%
Total 100% 100% 100%

Sales within the listed categories did not significantly change. During 2015 and 2016, the success of our asset recapitalization program allowed us to pursue business across the breadth of our entire portfolio, in line with our strategy.









Restructuring
To improve efficiencies and reduce fixed costs, we initiated a restructuring program during the second quarter of 2016. As a part of this program, four Latin American facilities within the Global Packaging segment will be closed. Most of the production from these facilities will be transferred to other facilities. As of December 31, 2016, manufacturing operations have ceased at two of these four manufacturing facilities and the remaining closures are expected to be completed in 2017. We expect total project costs of approximately $28 to $30 million, with employee termination costs accounting for $15 to $16 million of the total and the balance in other restructuring costs which include fixed asset accelerated depreciation of approximately $3 million. Cost reductions from the program are expected to reach the full run rate of approximately $16 million annually during 2018. As the economic environment in Latin America continues to challenge consumers, as well as our customers in the region, this consolidation program, in part, helps us offset these headwinds and keeps us on track in achieving our long-term margin targets in the Global Packaging segment.

We recorded $21.6 million of charges associated with the restructuring program during the year ended December 31, 2016. These costs have been recorded on the consolidated statement of income as restructuring and acquisition-related costs. Cash payments in 2016 totaled $8.3 million. Cash payments in 2017 are expected to be approximately $15 million.


Discontinued Operations
On November 7, 2014, we completed the sale of our global Pressure Sensitive Materials business. Proceeds of the transaction totaled $150.5 million. Of the total proceeds, $136.9 was received in fiscal 2014 and $13.6 million was received in April 2015 which related to settlement of customary post-closing adjustments.
The Pressure Sensitive Materials business meets the criteria to be classified as a discontinued operation, which requires retrospective application to certain financial information for all periods presented. Amounts included in the consolidated statement of income have been recast to exclude Pressure Sensitive Materials amounts. The consolidated statement of cash flows for all periods includes both continuing and discontinued operations.
Loss from discontinued operations in 2015 resulted from additional impairment charges, net of tax, reflecting finalization of post-closing adjustments. Loss from discontinued operations in 2014 includes the operating results of the Pressure Sensitive Materials business, goodwill impairment charges, direct transaction costs associated with the divestiture, $25.0 million of plant closure costs associated with our Stow, Ohio facility ($0.16 per share after tax), and the associated income tax effects of these items. The pre-tax $44.7 million ($0.50 per share after tax) non-cash goodwill impairment charge is to reduce net assets held for sale to estimated fair value, less costs to sell.


Acquisitions and Other Divestitures

Acquisition of SteriPack Group
On April 29, 2016, we acquired the medical device packaging operations and related value-added services of SteriPack Group, a global manufacturer of sterile packaging solutions for medical device and pharmaceutical applications. This acquisition includes a facility in Ireland as well as packaging production assets in Malaysia and the U.S. These operations recorded annual net sales of approximately $65 million in fiscal 2015. The cash purchase price was $115.5 million.

Acquisition of Emplal Participacoes S.A.
On December 1, 2015, we acquired the rigid plastic packaging operations of Emplal Participações S.A. ("Emplal"), a privately-owned Brazilian manufacturer of plastic packaging for food and consumer applications. The acquisition supports our growth strategy to expand in markets that fit our strengths and capabilities. The cash purchase price was $66.0 million.

Divestiture of Paper Packaging Division
On March 31, 2014, we completed the sale of our Paper Packaging Division. Annual net sales by this division were approximately $160 million. Net proceeds of the transaction totaled $78.7 million. A $9.3 million pre-tax gain on the sale was recorded as part of other non-operating income during 2014.







Results of Operations

Consolidated Overview — Continuing Operations
(in millions, except per share amounts) 2016 2015 2014
Net sales $4,004.4
 $4,071.4
 $4,343.5
Income from continuing operations 236.2
 241.9
 239.1
Diluted earnings per share from continuing operations 2.48
 2.47
 2.36

2016 versus 2015
Net sales for the year ended December 31, 2016 decreased 1.6 percent from the same period of 2015. The impact of currency translation reduced net sales by 3.5 percent.  The Emplal Participações S.A. and SteriPack acquisitions increased net sales by 2.4 percent in the current year.
Diluted earnings per share from continuing operations for the year ended December 31, 2016 were $2.48 compared to $2.47 reported in the same period of 2015.  Results for 2016 included a $0.16 per share charge for restructuring costs related primarily to planned plant closures and related severance in Latin America. Results also included a $0.07 per share charge for acquisition-related costs comprised primarily of costs associated with the Emplal Participações S.A. and SteriPack acquisitions. These costs were recorded both in operating income and interest expense. A $0.02 per share gain on the sale of land and building was also recorded in 2016. The net impact of currency translation decreased operating profit during 2016 by approximately $0.06 of total Company earnings per share.  Results for 2015 included a $0.05 charge from a healthcare packaging plant closure and a $0.03 charge for acquisition-related costs comprised of direct acquisition costs associated with the Emplal Participações S.A. acquisition and charges related to contingent liabilities associated with a prior acquisition.

2015 versus 2014
Net sales for the year ended December 31, 2015 decreased 6.3 percent from the same period of 2014. Currency translation reduced net sales by 6.2 percent. The divestiture of the Paper Packaging Division in 2014 reduced sales by 0.9 percent. The acquisition of Emplal Participações S.A. in 2015 increased net sales by 0.1 percent in 2015. The remaining 0.7 percent increase in net sales represents a net benefit of increased selling prices and sales mix partially offset by an approximate 1 percent net sales reduction from lower volume.

Diluted earnings per share from continuing operations for the year ended December 31, 2015 were $2.47 compared to $2.36 reported in the same period of 2014. Results for 2015 included a $0.05 charge from a healthcare packaging plant closure and a $0.03 charge for acquisition-related costs comprised of direct acquisition costs associated with the Emplal Participações S.A. acquisition and charges related to contingent liabilities associated with a prior acquisition. The net impact of currency translation decreased earnings per share during 2015 by approximately $0.16 of total Company earnings per share. Results for 2014 included a $0.06 gain on the sale of the Paper Packaging Division.

U.S. Packaging Business Segment
Our U.S. Packaging segment represents all food, consumer, and industrial products packaging-related manufacturing operations located in the United States. Our U.S. Packaging business segment provides packaging for a variety of applications used in packaging meat and cheese, dairy and liquids, confectionery and snack foods, frozen foods, lawn and garden products, health and hygiene products, beverages, bakery goods, and dry foods.

(dollars in millions) 2016 2015 2014
Net sales $2,621.1
 $2,747.5
 $2,860.7
Operating profit 400.0
 391.8
 375.8
Operating profit as a percentage of net sales 15.3% 14.3% 13.1%
2016 versus 2015
U.S. Packaging net sales of $2.6 billion for the full year 2016 represented a decrease of 4.6 percent compared to the same period of 2015. Compared to the prior year, unit volumes were up nearly one percent. The decrease in net sales was driven by the contractual pass through of lower raw material costs as well as the mix of products sold, which reflects the success of our asset recapitalization program.



 Operating profit increased to $400.0 million for the full year 2016, or 15.3 percent of net sales, compared to $391.8 million, or 14.3 percent of net sales, in 2015. This margin increase primarily reflects continued operational improvements attributable to manufacturing efficiencies from our asset recapitalization program.

2015 versus 2014
U.S. Packaging net sales decreased 4.0 percent in the year ended December 31, 2015 compared to the same period of 2014. The first quarter 2014 divestiture of the Paper Packaging Division reduced sales by 1.3 percent. Excluding the impact of divestitures, net sales would have decreased by 2.7 percent. Unit volumes declined by approximately 2 percent for the full year. The remaining change in net sales was driven by the contractual pass through of lower raw material costs throughout the year, partially offset by favorable sales mix.

Operating profit increased to $391.8 million in 2015, or 14.3 percent of net sales, compared to $375.8 million, or 13.1 percent of net sales in 2014. This margin improvement reflects sales mix benefits, driven by our focus on innovation, as well as continued operational improvements, primarily attributable to our asset recapitalization program.    

Global Packaging Business Segment
Our Global Packaging business segment includes all of our packaging-related manufacturing operations located outside of the United States as well as our global medical device and pharmaceutical packaging manufacturing operations. Our Global Packaging business segment provides packaging to a variety of applications used in packaging meat and cheese, dairy and liquids, confectionery and snack foods, frozen foods, lawn and garden products, health and hygiene products, beverages, medical and pharmaceutical products, bakery goods, and dry foods. In the fourth quarter of 2016, the table below was recasted to more clearly reflect that operating segment performance is evaluated based on operating profit before restructuring and acquisition-related costs.

(dollars in millions) 2016 2015 2014
Net sales $1,383.3
 $1,323.9
 $1,482.8
Operating profit 114.0
 116.5
 113.3
Operating profit as a percentage of net sales 8.2% 8.8% 7.6%
2016 versus 2015
Global Packaging net sales for the full year 2016 of $1.4 billion represent an increase of 4.5 percent compared to the same period in 2015. Currency translation reduced net sales by 10.7 percent. Acquisitions increased net sales by 7.3 percent. Excluding the impact of currency translation and acquisitions, net sales would have increased by 7.9 percent, primarily reflecting increased selling prices along with increased unit volumes of approximately 1 percent.
Operating profit for the full year 2016 was $114.0 million, compared to $116.5 million, for the same period in 2015. The net impact of currency translation decreased operating profit during the year by $8.3 million as compared to the prior year, or approximately $0.06 of total Company earnings per share, primarily due to currencies in Latin America. Operating profit during the year reflects the positive impact of selling prices and mix, partially offset by approximately $15 million of operational inefficiencies at one of our healthcare packaging facilities throughout the year and in Latin America during the first quarter.
2015 versus 2014
Global Packaging net sales of $1.3 billion for 2015 represent a decrease of 10.7 percent compared to 2014. Currency translation reduced net sales by 18.2 percent, primarily due to currencies in Latin America. The December 2015 acquisition of Emplal Participações S. A. increased full year net sales by 0.3 percent. Excluding the impact of currency translation and the acquisition, net sales would have increased by 7.2 percent, fully driven by positive sales price and mix.
Operating profit was $116.5 million in 2015, or 8.8 percent of net sales, compared to $113.3 million, or 7.6 percent of net sales in 2014. The net impact of currency translation reduced operating profit during 2015 by $24.0 million as compared to the prior year, or approximately $0.16 of total Company earnings per share, primarily due to currencies in Latin America. Margin improvement in the Global Packaging segment reflects strong operating performance and the overall favorable impact of increased sales of sophisticated, value-added packaging.




Consolidated Gross Profit
(dollars in millions) 2016 2015 2014
Gross profit $866.2
 $873.4
 $859.1
Gross profit as a percentage of net sales 21.6% 21.5% 19.8%
Gross profit in 2016 and 2015 reflects the benefits of improvements in selling prices and mix and operational efficiencies.

Consolidated Selling, General, and Administrative Expenses
(dollars in millions) 2016 2015 2014
Selling, general, and administrative expenses (SG&A) $392.2
 $420.0
 $416.6
SG&A as a percentage of net sales 9.8% 10.3% 9.6%
Selling, general, and administrative expenses ("SG&A") declined in 2016 due primarily to our pay-for-performance practices, along with currency and strong cost controls.

SG&A expenses as a percent of sales increased in 2015 primarily due to sales declines related to the impact of contractual pass through associated with lower raw material prices.

Research and Development (R&D)
(dollars in millions) 2016 2015 2014
Research and development (R&D) $46.5
 $44.1
 $44.1
R&D as a percentage of net sales 1.2% 1.1% 1.0%
R&D expenses were consistent during the periods presented and reflect our continued investment in research and development projects that are expected to create long-term growth opportunities.


Other Operating Income
(dollars in millions) 2016 2015 2014
Other operating income $(10.4) $(12.4) $(9.3)

Other operating income includes fiscal incentives, income of unconsolidated affiliates and foreign currency transactional gains and losses.  Fiscal incentives are the largest component ($9.9 million in 2016) and are associated with net sales in South America and are included in Global Packaging segment operating profit. 


Interest Expense
(dollars in millions) 2016 2015 2014
Interest expense $60.2
 $51.7
 $60.8
Effective interest rate 4.1% 3.8% 4.4%
Interest expense in 2016 increased primarily as a result of higher debt balances due to recent acquisitions and higher interest rates on commercial paper and other variable-rate debt. The increase was also a result of new notes that were issued in September 2016 and $0.9 million of fees paid in 2016 to extinguish portions of the debt assumed related to the Emplal Participações S.A. acquisition. Interest expense in 2015 declined primarily as a result of refinancing bonds that matured August 1, 2014 with lower cost variable rate debt.  



Other Non-operating Income
(dollars in millions) 2016 2015 2014
Other non-operating income $(1.8) $(6.0) $(16.8)
In 2016 we recorded interest income of $2.5 million and foreign exchange losses of $0.7 million.

In 2015 we recorded a $2.2 million pre-tax gain on the sale of land and $3.8 million of interest income.

In 2014 we recorded a $9.3 million pre-tax gain related to the sale of our Paper Packaging Division and $7.6 million of interest income.


Income Taxes
(dollars in millions) 2016 2015 2014
Income taxes $114.7
 $122.0
 $124.6
Effective tax rate 32.7% 33.5% 34.3%
Other than the differences noted below, the difference between our overall tax rate and the U.S. statutory rate of 35 percent in each of the three years presented principally relates to state and local income taxes, net of federal income tax benefits, and the differences between tax rates in the various foreign jurisdictions in which we operate.

Our overall tax expense is primarily driven by our operations within the jurisdictions of the United States and Brazil.  Our foreign tax rate differential is largely the result of lower statutory rates in the jurisdictions of our European operations as well as generally lower statutory rates in the remainder of our foreign operating jurisdictions.

The reduction in the effective tax rate to 32.7 percent in 2016 from 33.5 percent for 2015 and 34.3 percent in 2014, is primarily due to differences in the geographic mix of income and the realization of unrecognized tax benefits.
Liquidity and Capital Resources
Net Debt to Total Capitalization
Net debt to total capitalization (which includes total debt net of cash balances divided by total debt net of cash balances plus equity) was 53.9 percent at December 31, 2016, compared to 52.4 percent at December 31, 2015.  Total debt as of December 31, 2016 and 2015 was approximately $1.5 billion and $1.4 billion, respectively. 
Credit Rating
Our capital structure and financial practices have earned us investment grade credit ratings from two nationally recognized credit rating agencies. These credit ratings are important to our ability to issue commercial paper at favorable rates of interest.

Cash Flow
Net cash provided by operations totaled $437.4 million for the year ended December 31, 2016, compared to $552.4 million in 2015 and $248.1 million in 2014.  Operating cash flow in 2015 reflects the initial benefits of programs implemented to drive improvements in working capital. Lower operating cash flow in 2014 reflects high levels of working capital associated with sales growth initiatives. Net cash provided by operations was reduced by income tax payments of $93.1 million, $84.7 million and $134.8 million during 2016, 2015, and 2014, respectively. Net cash provided by operations was reduced by contributions to our defined benefit pension plans of $20.7 million, $2.9 million and $10.8 million during 2016, 2015, and 2014, respectively. Cash payments related to restructuring were $12.2 million, $0.4 million, and $20.8 million in 2016, 2015, and 2014, respectively.

 Net cash used in investing activities totaled $311.2 million for the year ended December 31, 2016 compared to cash used in investing activities in 2015 totaling $262.6 million and cash provided by investing activities in 2014 totaling $40.5 million. Capital expenditures totaled $208.3 million, $219.4 million, and $185.2 million for the full year 2016, 2015, and 2014, respectively, reflecting continued investment in new capacity to support growth initiatives and productivity improvements.


Cash used for acquisitions totaled $114.5 million for 2016, primarily related to our SteriPack acquisition and $66.4 million for 2015, primarily related to our Emplal acquisition. In 2016, we received approximately $10.1 million as net proceeds from the sales of land and buildings in Brazil and Mexico related to a previous restructuring program. The cash proceeds from divesting our Pressure Sensitive Materials business and Paper Packaging Division more than offset increased capital expenditure spending in 2014.
Net cash used in financing activities for the years ended December 31, 2016, 2015, and 2014 included share repurchases of $143.9 million, $150.1 million, and $152.1 million, respectively. Net change in total debt was borrowings of $157.1 million, borrowings of $3.7 million, and repayments of $102.9 million for 2016, 2015, and 2014, respectively.
Available Financing
In addition to using cash provided by operations, we issue commercial paper to meet our short-term liquidity needs.  At year-end, our commercial paper debt outstanding was $221.3 million.  Based on our current credit rating, we enjoy ready access to the commercial paper markets.

On July 22, 2016, we amended our revolving credit facility of $1.1 billion extending the term of the agreement from August 12, 2018 to July 22, 2021. Our revolving credit facility is supported by a group of major U.S. and international banks. Covenants imposed by the revolving credit facility include minimum net worth calculations and a maximum ratio of debt to total capitalization. The revolving credit agreement includes a $100 million multicurrency limit to support the financing needs of our international subsidiaries. As of December 31, 2016, there was $221.3 million of debt outstanding supported by this credit facility, leaving $878.7 million of available credit. If we were not able to issue commercial paper, we would expect to meet our financial liquidity needs by accessing the bank market, which would increase our borrowing costs. Borrowings under the credit agreement are subject to a variable interest rate.

On September 15, 2016, we issued $300 million aggregate principal amount of senior notes due in 2026 with a fixed interest rate of 3.1 percent. The proceeds were used to repay outstanding commercial paper and for general corporate purposes. Public notes totaling $400 million matured in August 2014. On July 15, 2014, we amended our revolving credit facility to provide for a $200 million term loan. This term loan has an eight-year term and a variable interest rate based on the one-month London Interbank Offered Rate (LIBOR) plus a fixed spread. We used this term loan combined with commercial paper borrowings to refinance the $400 million public notes which matured in August 2014.
Liquidity Outlook
As of December 31, 2016, cash and cash equivalents outside of the United States was $69.5 million. We use a notional pooling arrangement with an international bank to help manage global liquidity requirements. Under this pooling arrangement, our participating subsidiaries maintain either a cash deposit or borrowing position through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit. This notional pooling arrangement allows reasonable access to our cash in foreign subsidiaries, and provides a financing option to foreign subsidiaries beyond our multi-currency credit facility.
Management expects cash flow from operations and available liquidity described above to be sufficient to support operations going forward.  There can be no assurance, however, that the cost or availability of future borrowings will not be impacted by future capital market disruptions.  In addition, increases in raw material costs would increase our short term liquidity needs.
Capital Expenditures
Capital expenditures were $208.3 million during 2016, compared to $219.4 million in 2015, and $185.2 million in 2014.  We expect capital expenditures for 2017 of approximately $200 million to support productivity and efficiency projects as well as growth projects. We expect to fund 2017 capital expenditures with cash provided by operating activities.

Dividends
We increased our quarterly cash dividend by 3.6 percent during the first quarter of 2016 to $0.29 per share from $0.28 per share.  This follows increases of 3.7 percent in 2015 and 3.8 percent in 2014.  In February 2017, the Board of Directors approved the 34th consecutive annual increase in the quarterly cash dividend on common stock to $0.30 per share, a 3.4 percent increase.




Share Repurchases
On February 4, 2016, our Board of Directors authorized an additional 20 million shares for repurchase. We purchased 3.0 million, 3.3 million, and 3.8 million shares of our common stock in the open market during 2016, 2015 and 2014, respectively. As of December 31, 2016, a total of 20.4 million shares remained available on our authorizations to purchase common stock for the treasury.

Contractual Obligations
The following table provides a summary of contractual obligations including our debt payment obligations, operating lease obligations, and certain other purchase obligations as of December 31, 2016.  Obligations under capital leases are insignificant.
  Contractual Payments Due by Period
(in millions) Total 2017 2018 2019 2020 2021 Thereafter
Long-term debt obligations (1) $1,533.9
 $
 $1.7
 $403.7
 $1.7
 $623.0
 $503.8
Interest expense (2) 306.3
 60.3
 64.5
 55.6
 41.8
 36.3
 47.8
Operating leases (3) 64.7
 9.9
 8.1
 6.4
 5.1
 4.9
 30.3
Purchase obligations (4) 706.2
 676.1
 17.1
 9.0
 2.2
 1.1
 0.7
Postretirement obligations (5) 32.9
 3.4
 1.7
 3.5
 2.6
 2.5
 19.2
Total $2,644.0
 $749.7
 $93.1
 $478.2
 $53.4
 $667.8
 $601.8

34

(1)

Long-term debt maturing in 2017 is $221.3 million. These amounts have been classified as long-term liabilities in accordance with the Company’s ability and intent to refinance such obligations on a long-term basis.  This debt is commercial paper backed by a bank credit facility that expires on July 22, 2021.  See Note 14 to the Consolidated Financial Statements for additional information about our long term debt.

Signatures

37


(2)A portion of the interest expense disclosed is subject to variable interest rates.  The amounts disclosed above that relate to commercial paper, the term loan, and the interest rate swap were calculated using forward-looking rates. All other amounts assume that future variable interest rates are equal to rates at December 31, 2016.

(3)We enter into operating leases in the normal course of business.  Substantially all lease agreements have fixed payment terms based on the passage of time.  Some lease agreements provide us with the option to renew the lease.  Our future operating lease obligations would change if we exercised these renewal options and if we entered into additional operating lease agreements.

(4)Purchase obligations represent contracts or commitments for the purchase of raw materials, utilities, capital equipment and various other goods and services.

(5)Postretirement obligations represent contracts or commitments for postretirement healthcare benefits and benefit payments for the unfunded Bemis Supplemental Retirement Plan.  See Note 11 to the Consolidated Financial Statements for additional information about our postretirement benefit obligations. Postretirement obligations due in 2017 have been recorded in other current liabilities.


We also have long-term obligations related to our income tax liabilities associated with uncertain tax positions, environmental liabilities, and pension defined benefit plans. These liabilities have been excluded from the table above due to the high degree of uncertainty as to amounts and timing regarding future payments.  See Consolidated Financial Statements and related Notes.

Market Risks and Foreign Currency Exposures
We enter into contractual arrangements (derivatives) in the ordinary course of business to manage foreign currency exposure and interest rate risks.  We do not enter into derivative transactions for speculative trading purposes.  Our use of derivative instruments is subject to internal policies that provide guidelines for control, counterparty risk, and ongoing reporting.  These derivative instruments are designed to reduce the income statement volatility associated with movement in foreign exchange rates and to achieve greater exposure to variable interest rates.
A portion of the interest expense on our outstanding debt is subject to short-term interest rates.  As such, increases in short-term interest rates will directly impact the amount of interest we pay.  For each one percent increase in variable interest


rates, the annual interest expense on $828.1 million of variable rate debt outstanding (which includes $400 million fixed rate notes that have been effectively converted to variable rate debt through the use of a fixed to variable rate interest rate swap) would increase by approximately $8.3 million.
We enter into interest-rate swap contracts to economically convert a portion of our fixed-rate debt to variable rate debt.  During the fourth quarter of 2011, we entered into four interest rate swap agreements with a total notional amount of $400 million.  These contracts were designated as hedges of our $400 million 4.50 percent fixed-rate debt due in 2021.  The variable rate for each of the interest rate swaps is based on the six-month London Interbank Offered Rate (LIBOR), set in arrears, plus a fixed spread.  The variable rates are reset semi-annually at each net settlement date.  The net settlement benefit to us, which is recorded as a reduction in interest expense, was $4.7 million, $7.2 million, and $8.2 million in 2016, 2015, and 2014, respectively.  At December 31, 2016 and 2015, the fair value of these interest rate swaps was $1.3 million and $5.2 million in our favor, respectively, using discounted cash flow or other appropriate methodologies. Asset positions are included in deferred charges and other assets with a corresponding increase in long-term debt.  Liability positions are included in other liabilities and deferred credits with a corresponding decrease in long-term debt.

Our international operations enter into forward foreign currency exchange contracts to manage foreign currency exchange rate exposures associated with certain foreign currency denominated receivables and payables.  At December 31, 2016 and 2015, we had outstanding forward exchange contracts with notional amounts aggregating $4.1 million and $3.8 million, respectively.  Forward exchange contracts generally have maturities of less than six months.  Counterparties to the forward exchange contracts are major financial institutions.  Credit loss from counterparty nonperformance is not anticipated.  We have not designated these derivative instruments as hedging instruments.  The net settlement amount (fair value) related to the active forward foreign currency exchange contracts is recorded on the balance sheet within current assets or current liabilities and as an element of other operating income which offsets the related transactions gains and losses on the related foreign denominated asset or liability.  Amounts recognized in income related to forward exchange contracts were $0.8 million of expense and $0.7 million of income in the years ended December 31, 2016 and 2015, respectively.

i

Critical Accounting Estimates and Judgments
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.  The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  On an ongoing basis, management evaluates its estimates and judgments, including those related to retirement benefits, intangible assets, goodwill, and expected future performance of operations.  Our estimates and judgments are based on historical experience and on various other factors that are believed to be reasonable under the circumstances.  Actual results may differ from these estimates under different assumptions or conditions.
We believe the following are critical accounting estimates used in the preparation of our consolidated financial statements.
The calculation of annual pension costs and related assets and liabilities; and
The valuation of intangible assets and goodwill.

Pension costs
We recognize amounts in our financial statements related to our defined benefit pension plans which are frozen for the majority of participants on an actuarial basis.  The accounting for our pension plans requires us to recognize the overfunded or underfunded status of the pension plans on our balance sheet.  A substantial portion of our pension amounts relate to our defined benefit plans in the United States.  Net periodic pension cost recorded in 2016 was $10.4 million, compared to pension cost of $10.9 million in 2015 and $9.4 million in 2014. We expect pension expense before the effect of income taxes for 2017 to be approximately $5 million. 
One element used in determining annual pension income and expense in accordance with accounting rules is the expected return on plan assets. Beginning in 2013, we adopted a liability responsive asset allocation policy that becomes more conservative as the funded status of the plans improve. The majority of pension plan assets relate to U.S. plans and the target allocation is currently to invest approximately 65 percent in long-term corporate fixed income securities and approximately 35 percent in return seeking funds.
To develop the expected long-term rate of return on assets assumption, we considered compound historical returns and future expectations based on our target asset allocation.  For the historical long-term investment periods of 10, 15, 20 and 25


years ending December 31, 2016, our U.S. pension plan assets earned annualized rates of return of 6.0 percent, 5.7 percent, 7.2 percent, and 7.9 percent, respectively.  Using our U.S. target asset allocation of plan assets, our outside actuaries have used their independent economic models to calculate a range of expected long-term rates of return and, based on their results, we have determined our U.S. asset return assumptions to be reasonable.
This assumed long-term rate of return on assets is applied to a calculated value of plan assets, which recognizes changes in the fair value of plan assets in a systematic manner over approximately three years.  This process calculates the expected return on plan assets that is included in pension income or expense.  The difference between this expected return and the actual return on plan assets is generally deferred and recognized over subsequent periods.  The net deferral of asset gains and losses affects the calculated value of pension plan assets and, ultimately, future pension income and expense.

At the end of each year, we determine the discount rate to be used to calculate the present value of pension plan liabilities.  This discount rate is an estimate of the current interest rate at which the pension liabilities could be effectively settled at the end of the year.  In estimating this rate, we look to changes in rates of return on high quality, fixed income investments that receive one of the two highest ratings given by a recognized ratings agency.  At December 31, 2016, for our U.S. defined benefit pension plans we determined this rate to be 4.25 percent, no change from the rate used at December 31, 2015.
For our non-U.S. pension plans, we follow similar methodologies in determining the appropriate expected rates of return on assets and discount rates to be used in our actuarial calculations in each individual country.
U.S.  Pension assumptions sensitivity analysis
The following charts depict the sensitivity of estimated 2017 pension expense to incremental changes in the discount rate and the expected long-term rate of return on assets.

Discount rate Total increase (decrease) to pension expense from current assumption (in millions) Rate of Return on Plan Assets Total increase (decrease) to pension expense from current assumption (in millions)
3.25 percent $8.5
 6.25 percent $6.3
3.50 percent 6.2
 6.50 percent 4.7
3.75 percent 4.0
 6.75 percent 3.1
4.00 percent 2.0
 7.00 percent 1.6
4.25 percent —                    Current Assumption
 
 
7.25 percent —                       Current Assumption
 
4.50 percent (1.9) 7.50 percent (1.6)
4.75 percent (3.7) 7.75 percent (3.1)
5.00 percent (5.4) 8.00 percent (4.7)
5.25 percent (7.1) 8.25 percent (6.3)






















Contents

Our estimates associated with the goodwill impairment tests are considered critical due to the amount of goodwill recorded on our consolidated balance sheet and the judgment required in determining fair value amounts, including projected future cash flows. Judgment is used in assessing whether goodwill should be tested more frequently for impairment than annually. Factors such as a significant decrease in expected net earnings, adverse equity market conditions, and other external events may require more frequent assessments. The annual goodwill impairment testing has been completed and, as the fair value of each reporting unit was at least 20 percent in excess of the respective reporting unit’s carrying value, it has been determined that our $1.0 billion of goodwill is not impaired as of December 31, 2016. We perform sensitivity analyses of key factors including discount rates and long-term sales growth rates. There were no key factors that a one percentage point change would result in an impairment.



Intangible assets consist primarily of purchased customer relationships, technology, trademarks, and tradenames and are amortized using the straight-line method over their estimated useful lives, which range from one to 30 years, when purchased.  We review these intangible assets for impairment as changes in circumstances or the occurrence of events suggest that the remaining value is not recoverable.  The test for impairment requires us to make estimates about fair value, most of which are based on projected future cash flows.  These estimates and projections require judgments as to future events, condition, and amounts of future cash flows. We have no indefinite-lived intangible assets.


New Accounting Pronouncements
There has been no new accounting guidance issued or effective during 2016 that is expected to have a material impact on our consolidated financial position, results of operations, or cash flows in 2016 or 2017. Refer to Note 3 - New Accounting Guidance for additional detail.

ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this Item 7A is included in Note 8 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, and under the caption “Market Risks and Foreign Currency Exposures” which is part of Management’s Discussion and Analysis included in Item 7 of this Annual Report on Form 10-K.  Certain of our locations have assets and liabilities denominated in currencies other than their functional currencies. We enter into foreign currency forward exchange contracts to offset the transaction gains or losses associated with some of these assets and liabilities. For assets and liabilities without offsetting foreign currency forward exchange contracts, a 10 percent adverse change in the underlying foreign currency exchange rates would reduce our pre-tax income by approximately $5 million.


ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Management’s Responsibility Statement
The management of Bemis Company, Inc. is responsible for the integrity, objectivity, and accuracy of the financial statements of the Company.  The financial statements are prepared by the Company in accordance with accounting principles generally accepted in the United States of America, and using management’s best estimates and judgments, where appropriate.  The financial information presented throughout this Annual Report on Form 10-K is consistent with that in the financial statements.
The management of Bemis Company, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).  Under the direction, supervision, and participation of the Chief Executive Officer and the Chief Financial Officer, the Company’s management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO-Framework (2013)).  Based on the results of this evaluation, management has concluded that internal control over financial reporting was effective as of December 31, 2016.  Item 9A of this Annual Report on Form 10-K contains management’s favorable assessment of internal controls over financial reporting based on their review and evaluation utilizing the COSO-Framework (2013) criteria.
The Audit Committee of the Board of Directors, which is composed solely of outside directors, meets quarterly with management, the Internal Audit Director, and independent accountants to review the work of each and to satisfy itself that the respective parties are properly discharging their responsibilities.  PricewaterhouseCoopers LLP and the Internal Audit Director have had and continue to have unrestricted access to the Audit Committee, without the presence of Company management.
/s/ William F. Austen/s/ Michael B. Clauer/s/ Jerry S. Krempa
William F. Austen, President and Chief Executive OfficerMichael B. Clauer, Senior Vice President and Chief Financial OfficerJerry S. Krempa, Vice President and Chief Accounting Officer



Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Bemis Company, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, equity and cash flows present fairly, in all material respects, the financial position of Bemis Company, Inc. and its subsidiaries at December 31, 2016 and December 31, 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 17, 2017

BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share amounts)



For the years ended December 31, 2016 2015 2014
Net sales $4,004.4
 $4,071.4
 $4,343.5
Cost of products sold 3,138.2
 3,198.0
 3,484.4
       
Gross profit 866.2
 873.4
 859.1
       
Operating expenses:  
  
  
Selling, general, and administrative expenses 392.2
 420.0
 416.6
Research and development 46.5
 44.1
 44.1
Restructuring and acquisition-related costs 28.6
 12.1
 
Other operating income (10.4) (12.4) (9.3)
       
Operating income 409.3
 409.6
 407.7
       
Interest expense 60.2
 51.7
 60.8
Other non-operating income (1.8) (6.0) (16.8)
       
Income from continuing operations before income taxes 350.9
 363.9
 363.7
       
Provision for income taxes 114.7
 122.0
 124.6
       
Income from continuing operations 236.2
 241.9
 239.1
       
Loss from discontinued operations 
 (2.6) (48.0)
       
Net income $236.2
 $239.3
 $191.1
       
       
Basic earnings per share:      
Income from continuing operations $2.51
 $2.50
 $2.39
Loss from discontinued operations 
 (0.03) (0.48)
Net income $2.51
 $2.47
 $1.91
       
Diluted earnings per share:      
Income from continuing operations $2.48
 $2.47
 $2.36
Loss from discontinued operations 
 (0.03) (0.47)
Net income $2.48
 $2.44
 $1.89
       
       
Cash dividends paid per share $1.16
 $1.12
 $1.08

See accompanying notes to consolidated financial statements.
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in millions)


For the years ended December 31, 2016 2015 2014
Net income $236.2
 $239.3
 $191.1
Other comprehensive income (loss):      
Translation adjustments 35.8
 (215.2) (129.4)
Pension and other postretirement liability adjustments, net of tax (a) 26.3
 (3.0) (48.3)
Reclassification from accumulated other comprehensive loss from discontinued operations to net income 
 
 (15.3)
Other comprehensive income (loss) 62.1
 (218.2) (193.0)
Total comprehensive income (loss) $298.3
 $21.1
 $(1.9)
       
       
(a) - Tax (expense) benefit related to pension and other postretirement liability adjustments $(17.8) $3.1
 $30.3

See accompanying notes to consolidated financial statements.

BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions, except per share amounts)


As of December 31, 2016 2015
ASSETS  
  
Current assets:  
  
Cash and cash equivalents $74.2
 $59.2
Trade receivables 461.9
 451.3
Inventories 549.4
 525.9
Prepaid expenses and other current assets 80.0
 82.6
Total current assets 1,165.5
 1,119.0
     
Property and equipment:  
  
Land and land improvements 51.8
 53.3
Buildings and leasehold improvements 620.2
 589.3
Machinery and equipment 1,952.1
 1,776.9
Total property and equipment 2,624.1
 2,419.5
Less accumulated depreciation (1,340.3) (1,213.2)
Net property and equipment 1,283.8
 1,206.3
     
Other long-term assets:  
  
Goodwill 1,028.8
 949.5
Other intangible assets, net 155.2
 149.8
Deferred charges and other assets 82.4
 65.2
Total other long-term assets 1,266.4
 1,164.5
TOTAL ASSETS $3,715.7
 $3,489.8
     
LIABILITIES  
  
Current liabilities:  
  
Current portion of long-term debt $2.0
 $5.8
Short-term borrowings 15.3
 29.6
Accounts payable 378.0
 334.8
Employee-related liabilities 79.6
 93.3
Accrued income and other taxes 31.2
 35.2
Other current liabilities 70.0
 90.4
Total current liabilities 576.1
 589.1
     
Long-term debt, less current portion 1,527.8
 1,353.9
Deferred taxes 219.7
 172.4
Other liabilities and deferred credits 132.4
 167.0
Total liabilities 2,456.0
 2,282.4
     
Commitments and contingencies (See Note 19) 

 

     
EQUITY  
  
Bemis Company, Inc. shareholders’ equity:  
  
Common stock, $0.10 par value:  
  
Authorized — 500.0 shares  
  
Issued — 128.8 and 128.2 shares, respectively 12.9
 12.8
Capital in excess of par value 581.5
 573.2
Retained earnings 2,341.7
 2,216.0
Accumulated other comprehensive loss (447.8) (509.9)
Common stock held in treasury (36.1 and 33.1 shares at cost, respectively) (1,228.6) (1,084.7)
TOTAL EQUITY 1,259.7
 1,207.4
     
TOTAL LIABILITIES AND EQUITY $3,715.7
 $3,489.8
See accompanying notes to consolidated financial statements.
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)


For the years ended December 31, 2016 2015 2014
Cash flows from operating activities:  
  
  
Net income $236.2
 $239.3
 $191.1
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation and amortization 162.1
 158.1
 180.6
Excess tax benefit from share-based payment arrangements (4.5) (1.9) (0.7)
Share-based compensation 18.1
 18.4
 12.4
Deferred income taxes 26.2
 14.2
 (0.5)
Income of unconsolidated affiliated company (2.2) (1.9) (1.7)
Cash dividends received from unconsolidated affiliated company 2.7
 1.7
 
Non-cash impairment charge of discontinued operations 
 3.2
 44.7
Gain on sale of property and equipment (0.1) (1.9) (0.6)
Gain on divestitures 
 
 (9.3)
Changes in operating assets and liabilities, excluding effect of acquisitions, divestitures, and currency:    
  
Trade receivables 7.5
 (3.3) (63.9)
Inventories (7.5) 16.0
 (48.0)
Prepaid expenses and other current assets 1.0
 5.3
 (8.6)
Accounts payable 37.8
 77.5
 (7.6)
Employee-related liabilities (15.6) 8.8
 7.5
Accrued income and other taxes (0.7) 17.1
 (3.7)
Other current liabilities (22.9) 3.5
 (25.9)
Other liabilities and deferred credits 17.6
 6.0
 (0.2)
Deferred charges and other assets (18.3) (7.7) (17.5)
Net cash provided by operating activities 437.4
 552.4
 248.1
       
Cash flows from investing activities:  
  
  
Additions to property and equipment (208.3) (219.4) (185.2)
Business acquisitions and adjustments, net of cash acquired (114.5) (66.4) 
Proceeds from sales of property and equipment 11.6
 9.6
 10.1
Proceeds from divestitures 
 13.6
 215.6
Net cash (used in) provided by investing activities (311.2) (262.6) 40.5
       
Cash flows from financing activities:  
  
  
Proceeds from issuance of long-term debt 299.0
 2.0
 199.4
Repayment of long-term debt (23.8) (0.9) (400.2)
Net (repayment) borrowing of commercial paper (110.0) 12.2
 76.8
Net (repayment) borrowing of short-term debt (8.1) (9.6) 21.1
Cash dividends paid to shareholders (113.9) (109.7) (108.4)
Common stock purchased for the treasury (143.9) (150.1) (152.1)
Deferred payments for business acquisitions 
 (4.3) (6.6)
Excess tax benefit from share-based payment arrangements 4.5
 1.9
 0.7
Stock incentive programs and related withholdings (14.2) (6.8) (1.5)
Net cash used in financing activities (110.4) (265.3) (370.8)
       
Effect of exchange rates on cash and cash equivalents (0.8) (12.4) (12.4)
       
Net increase (decrease) in cash and cash equivalents 15.0
 12.1
 (94.6)
Cash and cash equivalents balance at beginning of year 59.2
 47.1
 141.7
       
Cash and cash equivalents balance at end of year $74.2
 $59.2
 $47.1
       
Interest paid during the year $57.4
 $48.5
 $68.4
Income taxes paid during the year $93.1
 $84.7
 $134.8
See accompanying notes to consolidated financial statements
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EQUITY
(in millions)


  
Common
Stock
 
Capital In
Excess of
Par Value
 
Retained
Earnings
 Accumulated Other Comprehensive Loss 
Common
Stock Held
In Treasury
 Total
Balance as of December 31, 2013 $12.8
 $548.1
 $2,005.1
 $(98.7) $(782.5) $1,684.8
             
Net income  
  
 191.1
  
  
 191.1
Other comprehensive loss  
  
  
 (193.0)  
 (193.0)
Cash dividends declared on common stock  
  
 (109.4)  
  
 (109.4)
Stock incentive programs and related tax withholdings (0.1 shares) 

 (1.5)  
  
  
 (1.5)
Excess tax benefit from share-based compensation arrangements  
 0.7
  
  
  
 0.7
Share-based compensation  
 12.4
  
  
  
 12.4
Purchase of 3.8 shares of common stock for the treasury         (152.1) (152.1)
Balance as of December 31, 2014 12.8
 559.7
 2,086.8
 (291.7) (934.6) 1,433.0
             
Net income  
  
 239.3
  
  
 239.3
Other comprehensive loss  
  
  
 (218.2)  
 (218.2)
Cash dividends declared on common stock  
  
 (110.1)  
  
 (110.1)
Stock incentive programs and related tax withholdings (0.2 shares) 

 (6.8)  
  
  
 (6.8)
Excess tax benefit from share-based compensation arrangements   1.9
  
  
  
 1.9
Share-based compensation  
 18.4
  
  
  
 18.4
Purchase of 3.3 shares of common stock for the treasury         (150.1) (150.1)
Balance as of December 31, 2015 12.8
 573.2
 2,216.0
 (509.9) (1,084.7) 1,207.4
             
Net income     236.2
     236.2
Other comprehensive income       62.1
  
 62.1
Cash dividends declared on common stock     (110.5)     (110.5)
Stock incentive programs and related tax withholdings (0.6 shares) 0.1
 (14.3)       (14.2)
Excess tax benefit from share-based compensation arrangements   4.5
       4.5
Share-based compensation   18.1
       18.1
Purchase of 3.0 shares of common stock for the treasury         (143.9) (143.9)
Balance as of December 31, 2016 $12.9
 $581.5
 $2,341.7
 $(447.8) $(1,228.6) $1,259.7

See accompanying notes to consolidated financial statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1BUSINESS DESCRIPTION

Bemis Company, Inc. (the "Company"), a Missouri corporation, was founded in 1858 and incorporated in 1885 as Bemis Bro. Bag Company.  In 1965 the name was changed to Bemis Company, Inc.  Based in Neenah, Wisconsin, at December 31, 2016, the Company employed approximately 17,500 individuals and had 59 manufacturing facilities.  The Company manufactures and sells packaging products globally.
The Company’s business activities are organized around its two business segments, U.S. Packaging (65 percent of 2016 net sales) and Global Packaging (35 percent).  The Company’s packaging businesses have a strong technical base in polymer chemistry, film extrusion, coating, laminating, printing, and converting.  The Company’s products are primarily sold in the food industry, which accounted for approximately 80 percent of net sales in 2016.  The Company’s packaging products are widely diversified among food categories and can be found in nearly every aisle of the grocery store.  Other markets include chemical, agribusiness, medical, pharmaceutical, personal care products, electronics, construction, and other consumer goods.  All markets are considered to be highly competitive as to price, innovation, quality, and service.

Note 2SIGNIFICANT ACCOUNTING POLICIES

Discontinued operations presentation: The consolidated statement of income and related notes reflects our Pressure Sensitive Materials business as a discontinued operation (see Note 6 — Divestitures and Plant Closures). The consolidated statement of cash flows for all periods includes both continuing and discontinued operations.

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries.  All intercompany transactions and accounts have been eliminated.  Joint ventures which are not majority controlled are accounted for by the equity method of accounting with earnings of $2.2 million, $1.9 million, and $1.7 million in 2016, 2015, and 2014, respectively, included in other operating income on the accompanying consolidated statement of income.  Investments in joint ventures of $6.2 million and $5.4 million as of December 31, 2016 and 2015, respectively, are included in deferred charges and other assets on the accompanying consolidated balance sheet.
Estimates and assumptions required:  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Translation of foreign currencies:The Company considers the local currency to be the functional currency for substantially all foreign subsidiaries.  Assets and liabilities are translated at the exchange rate as of the balance sheet date.  All revenue and expense accounts are translated at average exchange rates in effect during the year.  Translation gains or losses are recorded in the foreign currency translation component in accumulated other comprehensive loss in shareholders’ equity.  Foreign currency transaction gains of $0.4 million in 2016 and losses of $1.4 million and $3.5 million in 2015 and 2014, respectively, are included as a component of other operating income.  Foreign currency transaction losses of $0.7 million were recorded within non-operating income in 2016. There were no foreign currency transaction losses recorded within non-operating income in 2015 or 2014.
Revenue recognition:Sales and related costs of products sold are recognized when persuasive evidence of an arrangement exists, title and risk of ownership have been transferred to the customer, the sales price is fixed or determinable, and collectability is reasonably assured.  These conditions are typically fulfilled upon shipment of products.  All costs associated with revenue, including customer rebates and provisions for estimates of sales returns and allowances, are recognized as a deduction from revenue in the period in which the associated revenue is recorded. Customer rebates are accrued using sales data and rebate percentages specific to each customer agreement. Shipping and handling costs are classified as a component of cost of products sold while amounts billed to customers for shipping and handling are classified as a component of sales. The Company accrues for estimated warranty costs when specific issues are identified and the amounts are determinable and also considers the history of actual claims paid. Taxes assessed by governmental authorities on revenue producing transactions, including sales, value added, excise and use taxes, are recorded on a net basis (excluded from revenue).
Research and development: Research and development expenditures are expensed as incurred.


Restructuring costs: Restructuring costs are recognized when the liability is incurred.  The Company calculates severance obligations based on its standard customary practices.  Accordingly, the Company records provisions for severance when probable and estimable and the Company has committed to the restructuring plan.  In the absence of a standard customary practice or established local practice for locations outside the U.S., liabilities for severance are recognized when incurred.  If fixed assets are to be disposed of as a result of the Company’s restructuring efforts, the assets are written off when the Company commits to dispose of them and they are no longer in use.  Depreciation is accelerated on fixed assets for the period of time the asset continues to be used until the asset ceases to be used.  Other restructuring costs, including costs to relocate equipment, are generally recorded as the cost is incurred or the service is provided.

Cash and cash equivalents:The Company considers all highly liquid temporary investments with a maturity of three months or less when purchased to be cash equivalents.  Cash equivalents include certificates of deposit that can be readily liquidated without penalty at the Company’s option.  Cash equivalents are carried at cost which approximates fair market value.
Trade receivables:Trade accounts receivable are stated at the amount the Company expects to collect, which is net of an allowance for sales returns and the estimated losses resulting from the inability of its customers to make required payments.  When determining the collectability of specific customer accounts, a number of factors are evaluated, including: customer creditworthiness, past transaction history with the customer, and changes in customer payment terms or practices.  In addition, overall historical collection experience, current economic industry trends, and a review of the current status of trade accounts receivable are considered when determining the required allowance for doubtful accounts.  Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to allowance for doubtful accounts.  Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to trade receivables.  Trade receivables are presented net of an allowance for doubtful accounts of $18.2 million and $18.0 million at December 31, 2016 and 2015, respectively.
The Company enters into supply chain financing programs from time to time to sell trade receivables without recourse to third-party financial institutions.  Sales of trade receivables are reflected as a reduction of trade receivables on the consolidated balance sheets and the proceeds are included in the cash flows from operating activities in the consolidated statements of cash flows. During the years ended December 31, 2016 and 2015, the Company sold without recourse trade receivables representing approximately 12 percent and 10 percent, respectively, of net sales, and the associated discount on sale of trade receivables was not significant.   
Inventory valuation:  Inventories are valued at the lower of cost, as determined by the first-in, first-out ("FIFO") method, or net realizable value.  Inventory values using the FIFO method of accounting approximate replacement cost.  Inventories are summarized at December 31, as follows:
(in millions) 2016 2015
Raw materials and supplies $172.2
 $169.3
Work in process and finished goods 377.2
 356.6
Total inventories $549.4
 $525.9
Property and equipment: Property and equipment are stated at cost.  Maintenance and repairs that do not improve efficiency or extend economic life are expensed as incurred.  Plant and equipment are depreciated for financial reporting purposes principally using the straight-line method over the estimated useful lives of assets as follows:  land improvements, 15-30 years; buildings, 15-45 years; leasehold and building improvements, the lesser of the lease term or 8-20 years; and machinery and equipment, 3-16 years.  For tax purposes, the Company generally uses accelerated methods of depreciation.  The tax effect of the difference between book and tax depreciation has been provided as deferred income taxes.  Depreciation expense was $146.1 million, $144.2 million, and $154.6 million for 2016, 2015, and 2014, respectively.  On sale or retirement, the asset cost and related accumulated depreciation are removed from the accounts and any related gain or loss is reflected in income.  Interest costs, which are capitalized during the construction of major capital projects, totaled $0.5 million, $0.4 million, and $0.2 million in 2016, 2015, and 2014, respectively.
The Company reviews its long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying values are reduced to the estimated fair value. 


The Company capitalizes direct costs (internal and external) of materials and services used in the development and purchase of internal-use software.  Amounts capitalized are amortized on a straight-line basis over a period of three to twelve years and are reported as a component of machinery and equipment within property and equipment.
The Company is in the process of developing and implementing a new Enterprise Resource Planning ("ERP") system.  Certain costs incurred during the application development stage have been capitalized in accordance with authoritative accounting guidance related to accounting for costs of computer software developed or obtained for internal use.  The net book value of capitalized costs for this new ERP system were approximately $60.8 million and $65.7 million as of December 31, 2016 and 2015, respectively. These costs are being amortized over the system’s estimated useful life as the ERP system is placed in service. 
Goodwill:Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.  Goodwill is not amortized, but instead tested annually or when events and circumstances indicate an impairment may have occurred. The Company's reporting units each contain goodwill that is assessed for potential impairment. All goodwill is assigned to reporting units, which is defined as the operating segment, or one level below the operating segment. The Company has three reporting units, of which two are included in the Global Packaging reportable segment. The other reporting unit is the U.S. Packaging segment.

Goodwill for the reporting units is reviewed for impairment annually in the fourth quarter of each year using a two-step process. In the first step, the fair value of each reporting unit is compared to its carrying value, including goodwill. The determination of the estimated fair value of the reporting units utilizes both a discounted cash flow valuation and a market multiple method. Significant inputs to the discounted cash flow valuation method include discount rates, long-term sales growth rates and forecasted operating margins. The market multiple method estimates fair value by comparing the Company to similar public companies. If the fair value exceeds the carrying value, step two is not required and an impairment loss is not recognized. If step two were required, the implied fair value of goodwill would be calculated by deducting the fair value of all tangible and intangible net assets, including unrecognized intangible assets, of the reporting unit from the fair value of the reporting unit. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment loss would be recognized equal to the difference.
The annual impairment test indicated no impairment for the years ended December 31, 2016, 2015, or 2014, nor does the Company have any accumulated impairment losses. 
Intangible assets: Contractual or separable intangible assets that have finite useful lives are amortized against income using the straight-line method over their estimated useful lives, with original periods ranging from one to thirty years. The straight-line method of amortization reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period.  The Company tests finite-lived intangible assets for impairment whenever there is an impairment indicator.  Intangible assets are tested for impairment by comparing anticipated undiscounted future cash flows from operations to net book value.
Financial instruments:The Company recognizes all derivative instruments on the balance sheet at fair value.  Derivatives not designated as hedging instruments are adjusted to fair value through income.  Depending on the nature of derivatives designated as hedging instruments, changes in the fair value are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in shareholders’ equity through other comprehensive income until the hedged item is recognized.  Gains or losses, if any, related to the ineffective portion of any hedge are recognized through earnings in the current period.

Note 8 contains expanded details relating to specific derivative instruments included on the Company’s balance sheet, such as forward foreign currency exchange contracts, currency swap contracts, and interest rate swap arrangements.
Other liabilities and deferred credits:Other liabilities and deferred credits balances include non-current pension and other postretirement liability amounts of $59.5 million and $99.8 million at December 31, 2016 and 2015, respectively.
Treasury stock:  Treasury stock purchases are stated at cost and presented as a separate reduction of shareholders’ equity.  During 2016, the Company purchased 3.0 million shares of common stock in the open market for $143.9 million. During 2015, the Company purchased 3.3 million shares of common stock in the open market for $150.1 million.  During 2014, the Company purchased 3.8 million shares of common stock in the open market for $152.1 million.  At December 31, 2016, approximately


20.4 million common shares can be repurchased, at management’s discretion, under authority granted by the Company’s Board of Directors in 2016.


Note 3 — NEW ACCOUNTING GUIDANCE

In August 2016, the Financial Accounting Standards Board ("FASB") issued guidance to simplify elements of cash flow classification. The guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The new guidance requires cash payments for debt prepayment or debt extinguishment costs to be classified as cash outflows for financing activities. It also requires cash payments made soon after an acquisition's consummation date (approximately three months or less) to be classified as cash outflows for investing activities. Payments made thereafter should be classified as cash outflows for financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability should be classified as cash outflows for operating activities. The guidance is required to be applied by the Company in the first quarter of 2018, but early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In March 2016, the FASB issued guidance that will change certain aspects of accounting for share-based payments to employees. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and recognized in the statement of cash flows as operating cash flows. The guidance will also allow employee tax withholdings above the minimum statutory requirement without triggering liability accounting. Finally, the Company will be able to make a policy election to account for forfeitures as they occur. This guidance will be adopted by the Company in the first quarter of 2017 and applied prospectively.

If this guidance was adopted in the first quarter of 2016, diluted earnings per share in the first quarter would have increased by $0.04 from $0.59 to $0.63 due to a reduction in income tax expense. The impact to operating cash flow in the first quarter of 2016 would have been an increase of $4.2 million with a corresponding decrease in financing cash flows. Stock awards typically vest in the first quarter so the impact is concentrated in the first three months of each year. The impact in future years will be dependent on Bemis stock performance and the number of shares vesting each year.  The impact in 2017 will be a $0.9 million reduction of income tax expense and an equivalent benefit to operating cash flow.

In February 2016, the FASB issued guidance that requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today's accounting. The guidance also eliminates today's real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. All entities will classify leases to determine how to recognize lease-related revenue and expense. The guidance is required to be applied by the Company in the first quarter of 2019, but early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In September 2015, the FASB issued guidancethat eliminates the current requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance was adopted in the first quarter of 2016 and did not have a material impact on its consolidated financial statements.

In April 2015, the FASB issued guidance on the recognition of fees paid by a customer for cloud computing arrangements. The new guidance clarifies that if a cloud computing arrangement includes a software license, the customer should account for the software license consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance was adopted in the first quarter of 2016 and did not have a material impact on the Company's consolidated financial statements.

In May 2014, the FASB issued new guidance which supersedes current revenue recognition requirements.  This guidance is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In July 2015, the FASB voted to defer for one year the effective date of the new revenue standard. The guidance is required to be applied by the Company in the first quarter of fiscal 2018 using one of two retrospective applications methods. The FASB also decided to permit entities to early adopt the standard.


The Company has elected to adopt the new revenue guidance as of January 1, 2018. In preparation for adoption of the new guidance, the Company has reviewed representative samples of contracts and other forms of agreements with customers globally and has evaluated the provisions under the five-step model specified by the new guidance. Based on its procedures to date, the Company has preliminarily concluded the new revenue recognition guidance will not have a material impact on its consolidated financial statements. However, this conclusion could change as the Company finalizes its assessment during 2017. The Company will decide which retrospective application to apply once the assessment is finalized.


Note 4 — RESTRUCTURING

During the second quarter of 2016, the Company initiated a restructuring program to improve efficiencies and reduce fixed costs. As a part of this program, four Latin American facilities within the Global Packaging segment will be closed. Most of the production from these facilities will be transferred to other facilities. As of December 31, 2016, manufacturing operations had ceased at two of these manufacturing facilities. Based on current estimates and actual charges to date, the Company expects total restructuring costs of approximately $28 to $30 million, with employee termination costs accounting for $15 to $16 million of the total and the balance in other restructuring costs which includes fixed asset accelerated depreciation of approximately $3 million. Expenses for the twelve months ended December 31, 2016 were $21.6 million.

An analysis of the 2016 program accruals follows:
(in millions) Employee Costs Fixed Asset Related Other Costs Total Restructuring Costs
Net expense accrued $15.4
 $1.9
 $4.3
 $21.6
Utilization (cash payments or otherwise settled) (6.3) (1.9) (2.0) (10.2)
Translation adjustments and other 0.3
 
 
 0.3
Reserve balance at December 31, 2016 $9.4
 $
 $2.3
 $11.7

Plant closings associated with the program are expected to be completed in 2017. Cash payments in 2016 totaled $8.3 million. Cash payments in 2017 are expected to be approximately $15 million. The costs related to restructuring activities have been recorded on the consolidated statement of income as restructuring and acquisition-related costs. The accruals related to restructuring activities have been recorded on the consolidated balance sheet as other current liabilities.


Note 5 — ACQUISITIONS

SteriPack
On April 29, 2016, the Company acquired the medical device packaging operations and related value-added services of SteriPack Group, a global manufacturer of sterile packaging solutions for medical device and pharmaceutical applications. This acquisition includes a facility in Ireland as well as packaging production assets in Malaysia and the United States. The cash purchase price was $115.5 million. The preliminary allocation of the purchase price resulted in approximately $66.8 million of goodwill for the Global Packaging segment, the majority of which is not expected to be tax deductible. The goodwill identified by this acquisition reflects the benefits expected to be derived from product line expansion. The fair value and weighted average useful lives that have been assigned to the acquired identifiable intangible assets of this acquisition are:
(in millions, except useful life) Fair Value Weighted Average Useful Life
Customer relationships $21.8
 8 years
Order backlog 1.7
 2 months
Total $23.5
  

The fair value of assets and liabilities acquired was $131.3 million and $15.8 million, respectively. Pro forma financial information and allocation of the purchase price are not presented as the effects of this acquisition are not material to the Company's results of operations or financial position.




Emplal Participações S.A.

On December 1, 2015, Bemis acquired the rigid plastic packaging operations of Emplal Participações S.A. ("Emplal"), a privately-owned Brazilian manufacturer of plastic packaging for food and consumer applications. The acquisition supports the Company's growth strategy to expand in markets that fit the Company's strengths and capabilities. The cash purchase price was $66.0 million. The allocation of the purchase price resulted in approximately $41.3 million of goodwill for the Global Packaging segment, which is expected to be tax deductible. The fair value and weighted average useful life that has been assigned to the acquired identifiable intangible asset of this acquisition is:

(in millions, except useful life) Fair Value Weighted Average Useful Life
Customer relationships $4.5
 10 years

The fair value of assets and liabilities acquired was $143.8 million and $77.8 million, respectively. Deferred charges and other assets include an amount of approximately $16.9 million to record assets related to the indemnity provisions of the sale and purchase agreement, and are primarily related to tax matters. Pro forma financial information and allocation of the purchase price are not presented as the effects of this acquisition are not material to the Company's results of operations or financial position.

Note 6 — DIVESTITURES AND PLANT CLOSURES

Bemis Healthcare Packaging Plant Closure

In January 2015, the Company announced that it would close a plant in Philadelphia, Pennsylvania, one of its healthcare packaging facilities. Production from this facility was transferred to other healthcare facilities throughout 2015. During the twelve months ended December 31, 2015, plant closure costs of $7.8 million were recorded. These costs were recorded within restructuring and acquisition-related costs and included the Company's best estimate of a withdrawal liability for a multi-employer pension plan settlement. Operations ceased at this location in January 2016. The majority of approximately $7 million of cash payments were disbursed in 2016.

Divestiture of Pressure Sensitive Materials Business

On November 7, 2014, the Company completed the sale its global Pressure Sensitive Materials business. Proceeds of the transaction totaled $150.5 million. Of the total proceeds, $136.9 million was received in fiscal 2014 and $13.6 million was received in April 2015 which related to settlement of customary post-closing adjustments. At September 30, 2014, the Company determined that the Pressure Sensitive Materials business met the criteria to be classified as a discontinued operation, which required retrospective application to certain financial information for all periods presented.
The following table summarizes the results of the Pressure Sensitive Materials business, reclassified as discontinued operations for the twelve month periods ended December 31, 2015 and 2014:
 Twelve Months Ended
 December 31,
(in millions)2015 2014
Net sales$
 $480.9
    
Loss from discontinued operations before income taxes$(3.7) $(39.4)
(Benefit) provision for income taxes on discontinued operations(1.1) 8.6
Loss from discontinued operations, net of tax$(2.6) $(48.0)
    
Loss from discontinued operations in 2015 resulted from additional impairment charges, net of tax, reflecting finalization of post-closing adjustments. Loss from discontinued operations in 2014 includes the operating results of the Pressure Sensitive Materials business, goodwill impairment charges, direct transaction costs associated with the divestiture, plant closure costs associated with the Stow, Ohio plant, and the associated income tax effects of these items.


Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. Accordingly, the Company recorded goodwill impairment charges of $44.7 million in the third quarter of 2014 when it became apparent the business would sell for less than its carrying value.
In March 2014, the Company announced the closure of its plant in Stow, Ohio, one of its Pressure Sensitive Materials manufacturing facilities. Operations ceased at this location in May 2014. During the twelve months ended December 31, 2014, plant closure costs of $25.0 million were recorded and approximately $20.8 million of cash payments were made. These costs are included within loss from discontinued operation and included a final withdrawal payment for a multi-employer pension plan.

Divestiture of Paper Packaging Division

On March 31, 2014, the Company completed the sale of its Paper Packaging Division. Annual net sales by this division were approximately $160 million. Net proceeds of the transaction totaled $78.7 million. A $9.3 million pre-tax gain on the sale was recorded as part of other non-operating income for the twelve months ended December 31, 2014.

Note 7 — FINANCIAL ASSETS AND FINANCIAL LIABILITIES MEASURED AT FAIR VALUE

The fair values of the Company’s financial assets and financial liabilities listed below reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date (exit price).
The Company’s non-derivative financial instruments include cash and cash equivalents, trade receivables, accounts payable, short-term borrowings, and long-term debt.  At December 31, 2016 and 2015, the carrying value of these financial instruments, excluding long-term debt, approximates fair value because of the short-term maturities of these instruments.
Fair value disclosures are classified based on the fair value hierarchy.  Level 1 fair value measurements represent exchange-traded securities which are valued at quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date.  Level 2 fair value measurements are determined using input prices that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.  Level 3 fair value measurements are determined using unobservable inputs, such as internally developed pricing models for the asset or liability due to little or no market activity for the asset or liability.
The fair value measurements of the Company’s long-term debt represent non-active market exchange-traded securities which are valued at quoted prices or using input prices that are directly observable or indirectly observable through corroboration with observable market data. The carrying values and estimated fair values of long-term debt at December 31, 2016 and 2015 follow:
  December 31, 2016 December 31, 2015
  Carrying Fair Value Carrying Fair Value
(in millions) Value (Level 2) Value (Level 2)
Total long-term debt $1,527.8
 $1,592.3
 $1,353.9
 $1,421.6
The fair values for derivatives are based on inputs other than quoted prices that are observable for the asset or liability.  These inputs include interest rates.  The financial assets and financial liabilities are primarily valued using standard calculations / models that use as their basis readily observable market parameters.  Industry standard data providers are the primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third-party or counterparty quotes. The fair value of the Company's derivatives follow: 
  
Fair Value
As of
 
Fair Value
As of
  December 31, 2016 December 31, 2015
(in millions) (Level 2) (Level 2)
Interest rate swaps — net asset position $1.3
 $5.2



Note 8 — DERIVATIVE INSTRUMENTS

The Company enters into derivative transactions to manage exposures arising in the normal course of business.  The Company does not enter into derivative transactions for speculative or trading purposes. The Company recognizes all derivative instruments on the balance sheet at fair value.  Derivatives not designated as hedging instruments are adjusted to fair value through income. Depending on the nature of derivatives designated as hedging instruments, changes in the fair value are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in shareholders' equity through other comprehensive income until the hedged item is recognized. Gains or losses, if any, related to the ineffective portion of any hedge are recognized through earnings in the current period.

The Company enters into interest-rate swap contracts to economically convert a portion of the Company’s fixed-rate debt to variable rate debt.  During the fourth quarter of 2011, the Company entered into four interest rate swap agreements with a total notional amount of $400 million.  These contracts were designated as fair value hedges of the Company’s $400 million4.5% fixed-rate debt due in 2021.  The variable rate for each of the interest rate swaps is based on the six-month London Interbank Offered Rate (LIBOR), set in arrears, plus a fixed spread.  The variable rates are reset semi-annually at each net settlement date.  Fair values of these interest rate swaps are determined using discounted cash flow or other appropriate methodologies.  Asset positions are included in deferred charges and other assets with a corresponding increase in long-term debt.  Liability positions are included in other liabilities and deferred credits with a corresponding decrease in long-term debt.

The Company enters into forward exchange contracts to manage foreign currency exchange rate exposures associated with certain foreign currency denominated receivables and payables.  Forward exchange contracts generally have maturities of less than six months and relate primarily to the U.S. dollar for the Company’s Brazilian operations.  The Company has not designated these derivative instruments as hedging instruments.  At December 31, 2016 and 2015, the Company had outstanding forward exchange contracts with notional amounts aggregating $4.1 million and $3.8 million, respectively.  The net settlement amount (fair value) related to active forward exchange contracts is recorded on the balance sheet as either a current or long-term asset or liability and as an element of other operating income which offsets the related transaction gains or losses. The net settlement amounts are immaterial for all periods presented.
The Company is exposed to credit loss in the event of non-performance by counterparties in forward exchange contracts and interest-rate swap contracts.  Collateral is generally not required of the counterparties or of the Company.  In the event a counterparty fails to meet the contractual terms of a currency swap or forward exchange contract, the Company’s risk is limited to the fair value of the instrument.  The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties.  The Company has not had any historical instances of non-performance by any counterparties, nor does it anticipate any future instances of non-performance.

The fair values, balance sheet presentation, and the hedge designation status of derivative instruments at December 31, 2016 and 2015 are presented in the table below: 
    Fair Value (Level 2) as of
(in millions) Balance Sheet Location December 31, 2016 December 31, 2015
Asset Derivatives    
  
Interest rate swaps — designated as hedge Deferred charges and other assets $1.3
 $5.2

The income statement impact of derivatives are presented in the table below:
    
Amount of Gain (Loss) Recognized
in Income on Derivatives
(in millions) Income Statement Location 2016 2015 2014
Designated as hedges        
Interest rate swaps Interest expense $4.7
 $7.2
 $8.2
Not designated as hedges        
Forward exchange contracts Other operating income (0.8) 0.7
 (0.4)
Total   $3.9
 $7.9
 $7.8




Note 9 — GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill attributable to each reportable business segment follow:
(in millions) U.S. Packaging Segment Global Packaging Segment Total
Reported balance at December 31, 2014 $634.0
 $329.1
 $963.1
Acquisition 
 44.9
 44.9
Currency translation (1.9) (56.6) (58.5)
Reported balance at December 31, 2015 632.1
 317.4
 949.5
Acquisition and acquisition adjustments 
 63.2
 63.2
Currency translation 0.3
 15.8
 16.1
Reported balance at December 31, 2016 $632.4
 $396.4
 $1,028.8
Acquisition and acquisition adjustments are comprised of opening balance sheet adjustments related to the Emplal Participações S.A and SteriPack acquisitions.

The components of amortized intangible assets follow:
  December 31, 2016 December 31, 2015
(in millions) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Contract based $8.9
 $(1.0) $10.0
 $(1.2)
Technology based 79.5
 (52.0) 79.6
 (47.5)
Marketing related 14.2
 (8.9) 12.7
 (7.8)
Customer based 203.9
 (89.4) 180.4
 (76.4)
Reported balance $306.5
 $(151.3) $282.7
 $(132.9)
Amortization expense for intangible assets during 2016, 2015, and 2014 was $16.0 million, $14.3 million, and $15.4 million, respectively.  Estimated annual amortization expense is $17.6 million for 2017 and 2018, $17.5 million for 2019, $16.5 million for 2020, and $15.3 million for 2021.

     The Company completed its annual impairment tests in the fourth quarter of 2016 with no indications of impairment of goodwill found.  The Company does not have any accumulated impairment losses.

Note 10 — PENSION PLANS

Total defined benefit, defined contribution, and multiemployer plan pension expense in 2016, 2015, and 2014 was $32.1 million, $41.2 million, and $37.2 million, respectively. 

The Company sponsors a 401(k) savings plan (a defined contribution plan) for substantially all U.S. employees.  From 2014 through 2016, the Company contributed $0.50 for every pre-tax $1.00 an employee contributed on the first four percent of eligible compensation plus $0.25 for every pre-tax $1.00 an employee contributed on the next four percent of eligible compensation for the plans that included a company match. The Company contributions were invested in Company stock and were fully vested after three years of service.  Effective January 1, 2017, the Company will contribute $1.00 for every pre-tax $1.00 an employee contributes up to eight percent of eligible compensation for the plans that include a company match.  The Company contributions will be invested in target retirement date funds based on employees’ ages and are fully vested after three years of service. Total Company contributions for 2016, 2015, and 2014 were $10.6 million, $10.2 million, and $10.6 million, respectively.
Through December 31, 2016, for employees not participating in defined benefit pension plans, the Company contributed to the Bemis Investment Profit Sharing Plan (BIPSP), a defined contribution plan which was subject to achievement


of certain financial performance goals of the Company. The BIPSP has been terminated for years after 2016.  Total contribution expense for BIPSP and other defined contribution plans (including a multiemployer defined contribution plan and excluding 401(k) plans above) was $11.1 million in 2016, $20.0 million in 2015, and $16.5 million in 2014.  As of December 31, 2016, the Company has withdrawn from all multiemployer defined benefit pension plans. Amounts contributed to the multiemployer plans in 2016, 2015, and 2014 totaled $0.0 million, $0.1 million, and $0.7 million, respectively (refer to Note 12 - Multiemployer Defined Benefit Pension Plans).

 Two of the Company's three U.S. defined benefit plans were frozen as of December 31, 2013. The frozen plans are the salaried retirement plan that covered certain salaried employees and the unfunded supplemental retirement plan that provided senior management with benefits in excess of limits under the federal tax law. The Company’s defined benefit pension plans continue to cover a number of U.S. hourly employees, and the non-U.S. defined benefit plans cover select employees at various international locations.  The benefits under the plans are based on years of service and salary levels.  Certain plans covering hourly employees provide benefits of stated amounts for each year of service.  In 2014, the Society of Actuaries released updated mortality tables and a mortality projection scale which the Company adopted to measure defined benefit plan liabilities. In 2015 and 2016, the Society of Actuaries published new mortality projection scales which were used in conjunction with 2014 mortality tables in measuring defined benefit plan liabilities in 2015 and 2016.
In 2016, the Company recognized a $5.8 million pension settlement charge related to lump sum payments from the U.S. supplemental pension plan.  The lump sum payments totaled $18.1 million and are reflected as benefits paid in the “Change in Benefit Obligation” and the “Change in Plan Assets” tables.  Also during 2016, a lump sum window was offered to certain participants of the other two U.S. defined benefit pension plans which resulted in lump sum payments of $26.3 million.  These payments are also reflected as benefits paid.  Lump sum payments decrease the benefit obligation and decrease plan assets.

Net periodic pension cost for defined benefit plans included the following components for the years ended December 31, 2016, 2015, and 2014
        
(in millions) 2016
2015
2014 
Service cost - benefits earned during the year $7.6
 $7.8
 $7.5
 
Interest cost on projected benefit obligation 32.7
 32.6
 34.0
 
Expected return on plan assets (51.4) (50.7) (47.9) 
Settlement loss 6.1
 0.1
 1.8
 
Curtailment loss 
 
 0.6
 
Amortization of unrecognized transition obligation 
 0.1
 0.2
 
Amortization of prior service cost 0.8
 0.9
 1.4
 
Recognized actuarial net loss 14.6
 20.1
 11.8
 
Net periodic pension cost $10.4
 $10.9
 $9.4
 


















Changes in benefit obligations and plan assets, and a reconciliation of the funded status at December 31, 2016 and 2015, were as follows:
  U.S. Pension Plans Non-U.S. Pension Plans
(in millions) 2016 2015 2016 2015
Change in Benefit Obligation:  
  
  
  
Benefit obligation at the beginning of the year $750.4
 $774.6
 $57.3
 $65.9
Service cost 6.2
 6.1
 1.4
 1.7
Interest cost 30.7
 30.3
 2.0
 2.3
Participant contributions 
 
 0.1
 0.2
Plan amendments 0.1
 1.2
 0.6
 
Benefits paid (79.4) (34.1) (6.2) (2.2)
Actuarial (gain) loss (14.3) (27.7) 10.2
 (5.8)
Foreign currency exchange rate changes 
 
 (8.6) (4.8)
Benefit obligation at the end of the year $693.7
 $750.4
 $56.8
 $57.3
         
Accumulated benefit obligation at the end of the year $693.7
 $750.4
 $51.0
 $51.7

  U.S. Pension Plans Non-U.S. Pension Plans
(in millions) 2016 2015 2016 2015
Change in Plan Assets:  
  
  
  
Fair value of plan assets at the beginning of the year $641.3
 $685.7
 $54.2
 $57.2
Actual return on plan assets 60.4
 (11.6) 8.7
 1.5
Employer contributions 19.1
 1.3
 1.6
 1.6
Participant contributions 
 
 0.1
 0.2
Benefits paid (79.4) (34.1) (6.2) (2.2)
Foreign currency exchange rate changes 
 
 (8.2) (4.1)
Fair value of plan assets at the end of the year $641.4
 $641.3
 $50.2
 $54.2
         
Unfunded status at year end: $(52.3) $(109.1) $(6.6) $(3.1)
  U.S. Pension Plans Non-U.S. Pension Plans
(in millions) 2016 2015 2016 2015
Amount recognized in consolidated balance sheet consists of:  
  
  
  
Prepaid benefit cost, non-current $
 $
 $
 $1.9
Accrued benefit liability, current (3.0) (19.2) (0.2) (0.4)
Accrued benefit liability, non-current (49.3) (89.9) (6.4) (4.6)
Sub-total (52.3) (109.1) (6.6) (3.1)
Deferred tax asset 71.4
 89.7
 1.9
 1.3
Accumulated other comprehensive loss 113.1
 142.0
 7.3
 4.5
Net amount related to pension plans $132.2
 $122.6
 $2.6
 $2.7







Accumulated other comprehensive loss related to pension benefit plans is as follows:
  U.S. Pension Plans Non-U.S. Pension Plans
(in millions) 2016 2015 2016 2015
Unrecognized net actuarial losses $180.9
 $227.3
 $8.3
 $5.4
Unrecognized net prior service costs 3.6
 4.4
 0.6
 0.1
Unrecognized net transition costs 
 
 0.3
 0.3
Tax benefit (71.4) (89.7) (1.9) (1.3)
Accumulated other comprehensive loss, end of year $113.1
 $142.0
 $7.3
 $4.5
Estimated amounts in accumulated other comprehensive income expected to be reclassified to net period cost during 2017 are as follows:
    Non-U.S.
(in millions) U.S. Pension Plans Pension Plans
Net actuarial losses $13.6
 $0.3
Net prior service costs 0.8
 0.1
Total $14.4
 $0.4

The accumulated benefit obligation for all defined benefit pension plans was $744.7 million and $802.1 million at December 31, 2016 and 2015, respectively.
Presented below are the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets and pension plans with accumulated benefit obligations in excess of plan assets as of December 31, 2016 and 2015.
  Projected Benefit Obligation Exceeds the Fair Value of Plan’s Assets 
Accumulated Benefit Obligation
Exceeds the Fair Value of Plan’s Assets
  U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans
(in millions) 2016 2015 2016 2015 2016 2015 2016 2015
Projected benefit obligation $693.7
 $750.4
 $56.8
 $17.2
 $693.7
 $750.4
 $7.9
 $11.7
Accumulated benefit obligation 693.7
 750.4
 51.0
 14.1
 693.7
 750.4
 6.3
 10.4
Fair value of plan assets 641.4
 641.3
 50.2
 12.2
 641.4
 641.3
 3.6
 7.5
The Company’s general funding policy is to make contributions as required by applicable regulations and when beneficial to the Company for tax purposes.  The employer contributions for the years ended December 31, 2016 and 2015, were $20.7 million and $2.9 million, respectively.  Total expected cash contributions for 2017 are $4.0 million which are expected to satisfy plan and regulatory funding requirements.
For the years ended December 31, 2016 and 2015, the U.S. pension plans represented approximately 93 percent and 92 percent, respectively, of the Company’s total plan assets and approximately 92 percent and 93 percent, respectively, of the Company’s total projected benefit obligation.  Considering the significance of the U.S. pension plans in comparison with the Company’s total pension plans, the critical pension assumptions related to the U.S. pension plans and the non-U.S. pension plans are separately presented and discussed below.







The Company’s actuarial valuation date is December 31.  The weighted-average discount rates and rates of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligation for the years ended December 31 are as follows:
  U.S. Pension Plans Non-U.S. Pension Plans
  2016 2015 2016 2015
Weighted-average discount rate 4.25% 4.25% 3.05% 3.96%
Rate of increase in future compensation levels 
 
 3.48% 3.71%
The weighted-average discount rates, expected returns on plan assets, and rates of increase in future compensation levels used to determine the net benefit cost for the years ended December 31 are as follows:
  U.S. Pension Plans Non-U.S. Pension Plans
  2016 2015 2014 2016 2015 2014
Weighted-average discount rate 4.25% 4.00% 4.89% 3.96% 3.67% 4.25%
Expected return on plan assets 7.50% 7.50% 7.50% 6.08% 6.00% 5.78%
Rate of increase in future compensation levels 
 
 
 3.71% 3.66% 3.93%
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(in millions) U.S. Pension Plans Non-U.S. Pension Plans
2017 $38.4
 $1.2
2018 37.7
 1.2
2019 40.2
 1.4
2020 40.0
 1.6
2021 40.6
 1.8
Years 2022-2026 207.7
 10.2
The Company's ERISA Benefit Plan Committee is responsible for overseeing the investments of the pension plans.  The overall investment strategy is to achieve a long-term rate of return that maintains an adequate funded ratio and minimizes the need for future contributions through diversification of asset types, investment strategies, and investment managers.  A target asset allocation policy is used to balance investments in equity securities with investments in fixed income securities.  Beginning in 2013, the Company adopted a liability responsive asset allocation policy that becomes more conservative as the funded status of the plans improve. The majority of pension plan assets relate to U.S. plans and the target allocation is currently to invest approximately 65 percent in long-term corporate fixed income securities and approximately 35 percent in return seeking funds. The return seeking funds primarily include investments in diversified portfolios of domestic large cap and small cap companies.  Fixed income securities include diversified investments across a broad spectrum of primarily investment-grade debt securities. To develop the expected long-term rate of return on assets assumption, the Company considered historical returns and future expectations.  Using the Company’s 2017 target asset allocation based on a liability responsive asset allocation, the Company’s outside actuaries have used their independent economic model to calculate a range of expected long-term rates of return and, based on their results, the Company has determined these assumptions to be reasonable.













The pension plan assets measured at fair value at December 31, 2016 and 2015 follow:
  2016
  U.S. Pension Plans Non-U.S. Pension Plans
  Quoted Price In Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Quoted Price In Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs
(in millions) (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3)
Cash and cash equivalents $9.0
 $2.2
 $
 $
 $
 $
Corporate debt securities 
 248.5
 
 
 
 
U.S. government debt securities 5.4
 
 
 
 
 
State and municipal debt securities 
 18.4
 
 
 
 
Registered investment company funds 
 
 
 44.7
 
 
Common trust funds 
 357.9
 
 
 4.3
 
General insurance account 
 
 
 
 
 1.2
Balance at December 31, 2016 $14.4
 $627.0
 $
 $44.7
 $4.3
 $1.2
  2015
  U.S. Pension Plans Non-U.S. Pension Plans
  Quoted Price In Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Quoted Price In Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs
(in millions) (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3)
Cash and cash equivalents $18.8
 $8.8
 $
 $
 $
 $
Corporate debt securities 
 235.5
 
 
 
 
U.S. government debt securities 2.5
 
 
 
 
 
State and municipal debt securities 
 42.0
 
 
 
 
Corporate common stock 151.9
 16.2
 
 
 
 
Registered investment company funds 10.6
 144.9
 
 44.9
 
 
Common trust funds 
 10.1
 
 
 4.0
 
General insurance account 
 
 
 
 
 5.3
Balance at December 31, 2015 $183.8
 $457.5
 $
 $44.9
 $4.0
 $5.3

Cash and cash equivalents.  This category consists of direct cash holdings and institutional short-term investment vehicles. Direct cash holdings are valued based on cost, which approximates fair value and are classified as Level 1. Institutional short-term investment vehicles are valued daily and are classified as Level 2.
Corporate, U.S. government, state, and municipal debt securities. These securities are valued using market inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data including market research publications. Inputs may be prioritized differently at certain times based on market conditions.
Corporate common stock. This category includes common and preferred stocks and index mutual funds that track U.S. and foreign indices. Fair values for the common and preferred stocks are based on quoted prices in active markets and were therefore classified within Level 1 of the fair value hierarchy. The mutual funds were valued at the unit prices established by the funds' sponsors based on the fair value of the assets underlying the funds. Since the units of the funds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy.
Registered investment company funds. This category includes mutual funds that are actively traded on public exchanges.  The funds are invested in equity and debt securities that are actively traded on public exchanges.


Common trust funds. Common trust funds consist of shares in commingled funds that are not publicly traded.  The funds are invested in equity and debt securities that are actively traded on public exchanges.
General insurance account. The general insurance account is primarily comprised of insurance contracts that guarantee a minimum return.

The reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2016 and 2015 follows: 
(in millions) General Insurance Account
Fair value of plan assets at December 31, 2014 $5.5
Actual return on plan assets 0.3
Foreign currency exchange rate changes (0.5)
Fair value of plan assets at December 31, 2015 5.3
Actual return on plan assets 0.2
Purchases, sales and settlements, net (4.3)
Fair value of plan assets at December 31, 2016 $1.2


Note 11 — POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company sponsors several defined postretirement benefit plans that cover a majority of salaried and a portion of nonunion hourly employees in the U.S.  These plans provide healthcare benefits and, in some instances, provide life insurance benefits.  Postretirement health care plans are contributory, with retiree contributions adjusted annually.  Further health care benefit accruals for all persons entitled to benefits under these plans were frozen as of March 31, 2014. The Company recorded a plan curtailment gain of $3.0 million related to the amendments in 2014. Effective February 1, 2016, participants under the age of 50 as of March 1, 2016, are no longer eligible for the postretirement health care plans. Life insurance plans are noncontributory.
Net periodic postretirement benefit costs included the following components for the years ended December 31, 2016, 2015, and 2014
(in millions) 2016 2015 2014
Service cost - benefits earned during the year $
 $
 $0.1
Interest cost on accumulated postretirement benefit obligation 0.2
 0.3
 0.3
Amortization of prior service credit (0.3) 
 (0.2)
Recognized actuarial net gain (0.7) (0.3) (0.3)
Curtailment gain 
 
 (3.6)
Net periodic postretirement benefit income $(0.8) $
 $(3.7)


Changes in benefit obligation and plan assets, and a reconciliation of the funded status at December 31, 2016 and 2015, are as follows: 
(in millions) 2016 2015
Change in Benefit Obligation  
  
Benefit obligation at the beginning of the year $5.7
 $7.1
Interest cost 0.2
 0.3
Participant contributions 0.7
 0.8
Plan amendments (1.1) 
Actuarial gain (0.3) (1.0)
Benefits paid (1.0) (1.5)
Benefit obligation at the end of the year $4.2
 $5.7
     
Change in Plan Assets  
  
Fair value of plan assets at the beginning of the year $
 $
Participant contributions 0.7
 0.8
Employer contributions 0.3
 0.7
Benefits paid (1.0) (1.5)
Fair value of plan assets at the end of the year $
 $
     
Unfunded status at year end: $(4.2) $(5.7)

(in millions) 2016 2015
Amount recognized in consolidated balance sheet consists of:  
  
Accrued benefit liability, current $(0.4) $(0.4)
Accrued benefit liability, non-current (3.8) (5.3)
Sub-total (4.2) (5.7)
Deferred tax liability (2.2) (2.0)
Accumulated other comprehensive income (3.3) (3.1)
Net amount related to postretirement benefit plans $(9.7) $(10.8)
Accumulated other comprehensive income related to other postretirement benefit plans is as follows: 
(in millions) 2016 2015
Unrecognized net actuarial gains $(4.7) $(5.1)
Net prior service costs (0.7) 
Tax expense 2.1
 2.0
Accumulated other comprehensive income, end of year $(3.3) $(3.1)
Estimated amounts in accumulated other comprehensive income expected to be reclassified to net period cost during 2017 are as follows: 
(in millions) 
Net actuarial gains$0.8
Net prior service costs0.3
Net amount to be reclassified to net period cost$1.1


The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: 
(in millions)Benefit Payments
2017$0.4
20180.4
20190.4
20200.4
20210.4
Years 2022 - 20262.1
The employer contributions for the years ended December 31, 2016 and 2015 were $0.3 million and $0.7 million, respectively.  The expected contribution for 2017 is $0.4 million which is expected to satisfy plan funding requirements.
The health care cost trend rate assumption affects the amounts reported.  For measurement purposes, the assumed annual rate of increase in the per capita cost of covered health care benefits was 6.75 percent for 2016 and 7.5 percent for 2015; each year's estimated rate was assumed to decrease 0.25 percent annually to 5.0 percent and remain at that level thereafter.  A one-percentage point change in assumed health care trends would have a nominal effect on both the total of service and interest cost components for 2016 and the post retirement benefit obligations at December 31, 2016.
The Company’s actuarial valuation date is December 31.  The weighted-average discount rate used to determine the actuarial present value of the net postretirement projected benefit obligation for each of the years ended December 31, 2016 and 2015 was 4.25 percent.  The weighted-average discount rates used to determine the net postretirement benefit cost was 4.25 percent, 4.00 percent, and 4.62 percent for the years ended December 31, 2016, 2015, and 2014, respectively.

Note 12 — MULTIEMPLOYER DEFINED BENEFIT PENSION PLANS
As of December 31, 2016, the Company no longer contributes to any multiemployer defined benefit pension plans.

In 2016, the Company withdrew from the Warehouse Employees Local 169 & Employers Joint Pension Fund as part of the closure of a Bemis Healthcare Packaging plant in Philadelphia, PA (refer to Note 6 - Divestitures and Plant Closures). The withdrawal liability was settled and paid in the January 2017. Company contributions to the plan were $0.0 million, $0.1 million, and $0.1 million in the years ended December 31, 2016, 2015, and 2014, respectively.

In 2014, the Company settled and paid a withdrawal liability for the withdrawal from the Central States Southeast and Southwest Areas Pension Fund as part of a Pressure Sensitive Materials plant closure in Stow, OH (refer to Note 6). Company contributions to the plan were $0.6 million in the year ended December 31, 2014.

Note 13 — STOCK INCENTIVE PLANS
In 2014, the Company adopted the 2014 Stock Incentive Plan, which replaced the 2007 Stock Incentive Plan. The 2014 Stock Incentive Plan provides for the issuance of up to 3,282,170 shares of common stock to certain employees and the Company's Board of Directors. The number of shares available under the 2014 Stock Incentive Plan represented the number of shares that were remaining available for issuance under the 2007 Stock Incentive Plan when the new plan was adopted as no further awards would be made under the prior plan. As of December 31, 2016, 2,448,067 shares were available for future grants under the 2014 Stock Incentive Plan.  Shares subject to awards that are forfeited by an employee under the 2014 Stock Incentive Plan or the 2007 Stock Incentive Plan become available for future grants under the 2014 Stock Incentive Plan. Distribution of stock awards is made in the form of shares of the Company’s common stock on a one for one basis.  Distribution of the shares will normally be made not less than three years, nor more than six years, from the date of the stock award grant to an employee.  Prior to 2016, stock awards for directors were fully vested upon grant.  Beginning in 2016, stock awards for directors generally vest one year from the date of the grant. All other stock awards granted under the plans are subject to restrictions as to continuous employment, except in the case of death, permanent disability, retirement or change in control. 

Total compensation expense related to stock incentive plans was $18.1 million in 2016, $18.4 million in 2015, and $14.0 million in 2014. As of December 31, 2016, the unrecorded compensation cost for stock awards was $18.3 million and


will be recognized over the remaining vesting period for each grant which ranges between 2017 and 2019.  The remaining weighted-average life of all stock awards outstanding as of December 31, 2016 was 0.96 years.  These awards are considered equity-based awards and are therefore classified as a component of additional paid-in capital.

Cash payments equal to dividends on awards are distributed at the same time as the shares of common stock to which they relate.
Time-Based Stock Awards
The cost of time-based stock awards is based on the fair market value of the Company's common stock on the date of grant and is charged to income on a straight-line basis over the requisite service period. The per share fair value of time-based stock awards granted during the years ended December 31, 2016, 2015 and 2014 was $45.56, $45.18, and $40.65, respectively.

Performance-Based Stock Awards
Certain officers and key employees are also eligible to receive performance-based stock awards. Grantees of performance-based awards will be eligible to receive shares of the Company's common stock depending upon the Company's total shareholder return, assuming reinvestment of all dividends, relative to the performance of the Company's comparator group over a three-year period. The per share fair value of performance-based awards granted during the years ended December 31, 2016, 2015 and 2014 was $48.48, $53.14, and $46.42, respectively, which the Company determined using a Monte Carlo simulation and the following assumptions:
 2016 2015 2014
Average risk-free interest rate1.31% 1.07% 0.76%
Expected volatility (Bemis Company, Inc.)16.3% 15.1% 19.7%

The average risk-free interest rate is based on the three-year U.S. treasury security rate in effect as of the grant date. The expected volatilities were determined using daily historical volatility for the most recent three-year period as of the grant date. In 2017, there was a 94.7 percent payout of 2014 awards, and the balance was canceled. In 2016, there was a 93.7 percent payout of 2013 awards, and the balance was canceled. In 2015, there was a 59.5 percent payout of 2012 awards, and the balance was canceled. In 2014, there was no payout of 2011 awards and all awards were canceled.
The following table summarizes stock awards unit activity for the year ended December 31, 2016:
 Time-Based Performance-Based
 Weighted-average grant date share value Stock Awards (in thousands) Weighted-average grant date share value Stock Awards (in thousands)
Outstanding units granted at the beginning of the year$35.55
 1,425
 $44.68
 333
Units granted45.56
 212
 48.48
 241
Units paid (in shares)31.58
 (854) 37.32
 (122)
Units forfeited / canceled42.99
 (37) 41.89
 (14)
Outstanding units granted at the end of the year42.05
 746
 49.43
 438




Note 14 — LONG-TERM DEBT
Debt consisted of the following at December 31,
(dollars in millions) 2016 2015
Commercial paper payable $221.3
 $329.5
6.8% notes payable in 2019 400.0
 400.0
4.5% notes payable in 2021 400.0
 400.0
Notes payable in 2022 200.0
 200.0
3.1% notes payable in 2026 300.0
 
Other debt, including debt of subsidiaries 14.7
 30.5
Interest rate swap of 2021 notes (See Note 8) 1.3
 5.2
Unamortized discounts and debt issuance costs (7.5) (5.5)
     
Total debt 1,529.8
 1,359.7
Less current portion 2.0
 5.8
Total long-term debt $1,527.8
 $1,353.9
Commercial paper has been classified as long-term debt to the extent of available long-term backup credit agreements, in accordance with the Company’s intent and ability to refinance such obligations on a long-term basis.  The weighted-average interest rate of commercial paper outstanding at December 31, 2016, was 1.0 percent.  The maximum amount of commercial paper outstanding during 2016 was $575.5 million, and the average outstanding during 2016 was $393.5 million.  The weighted-average interest rate during 2016 was 0.8 percent.
As of December 31, 2016, the Company had available from its banks a $1.1 billion revolving credit facility.  On July 22, 2016, the Company amended the revolving credit facility extending the terms of the agreement from August 12, 2018 to July 22, 2021.  The revolving credit facility is supported by a group of major U.S. and international banks.  Covenants imposed by the revolving credit facility include limits on the sale of businesses, minimum net worth calculations, and a maximum ratio of debt to total capitalization.  The revolving credit agreement includes a combined $100 million multicurrency limit to support the financing needs of the Company’s international subsidiaries.

The $200 million term loan has an eight-year term and a variable interest rate based on the one-month London Interbank Offered Rate (LIBOR) plus a fixed spread. On September 15, 2016, the Company issued $300 million aggregate principal amount of senior notes due in 2026 with a fixed interest rate of 3.1 percent.

The scheduled maturities of the Company's long-term debt obligations for the next five years as of December 31, 2016, are as follows:
Year Dollars (in millions)
2017 $221.3
2018 1.7
2019 403.7
2020 1.7
2021 401.7

Commercial paper has been classified as long-term liabilities in accordance with the Company's ability and intent to refinance such obligations on a long-term basis. The Company is in compliance with all debt covenants. 





Note 15 — LEASES
The Company has leases for manufacturing plants, land, warehouses, machinery and equipment, and administrative offices that generally expire at various times over the next 15 years.  Under most leasing arrangements, the Company pays the property taxes, insurance, maintenance, and other expenses related to the leased property.  Total rental expense under operating leases was approximately $12.4 million in 2016, $13.9 million in 2015, and $13.3 million in 2014.

Minimum future obligations on leases in effect at December 31, 2016 were: 
 Operating
(in millions)Leases
2017$9.9
20188.1
20196.4
20205.1
20214.9
Thereafter30.3
Total minimum obligations$64.7

Note 16 — INCOME TAXES
(in millions) 2016 2015 2014
U.S. income before income taxes $283.6
 $260.1
 $255.3
Non-U.S. income before income taxes 67.3
 103.8
 108.4
Income from continuing operations before income taxes $350.9
 $363.9
 $363.7
       
Income tax expense consists of the following components:  
  
  
Current tax expense:  
  
  
U.S. federal $63.2
 $71.8
 $82.6
Foreign 20.1
 28.0
 31.2
State and local 5.2
 8.0
 11.3
Total current tax expense 88.5
 107.8
 125.1
Deferred tax expense (benefit):  
  
  
U.S. federal 26.7
 11.5
 1.0
Foreign (3.9) 2.1
 (0.7)
State and local 3.4
 0.6
 (0.8)
Total deferred tax expense (benefit) 26.2
 14.2
 (0.5)
Total income tax expense $114.7
 $122.0
 $124.6












The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are presented below. 
(in millions) 2016 2015
Deferred Tax Assets:  
  
Trade receivables, principally due to allowances for returns and doubtful accounts $4.1
 $4.4
Inventories, principally due to additional costs inventoried for tax purposes 22.9
 19.8
Employee compensation and benefits accrued for financial reporting purposes 60.6
 92.1
Foreign net operating losses 25.7
 21.7
Foreign tax credits 24.1
 24.1
Other 12.8
 12.0
Total deferred tax assets 150.2
 174.1
Less valuation allowance (40.3) (42.0)
Total deferred tax assets, after valuation allowance $109.9
 $132.1
     
(in millions) 2016 2015
Deferred Tax Liabilities:  
  
Plant and equipment, principally due to differences in depreciation and capitalized interest $130.9
 $123.1
Goodwill and intangible assets, principally due to differences in amortization 195.2
 177.6
Total deferred tax liabilities 326.1
 300.7
     
Deferred tax liabilities, net $216.2
 $168.6
The net deferred tax liabilities are reflected in the balance sheet as follows: 
(in millions) 2016 2015
Deferred charges and other assets $3.5
 $3.8
Deferred tax liabilities 219.7
 172.4
Net deferred tax liabilities $216.2
 $168.6
The Company’s effective tax rate differs from the federal statutory rate due to the following items: 
  2016 2015 2014
(dollars in millions) Amount % of Income Before Tax Amount % of Income Before Tax Amount % of Income Before Tax
Computed “expected” tax expense on income before taxes at federal statutory rate $122.8
 35.0 % $127.4
 35.0 % $127.3
 35.0 %
Increase (decrease) in taxes resulting from:  
  
  
  
  
  
State and local income taxes net of federal income tax benefit 5.6
 1.6
 5.6
 1.5
 6.8
 1.9
Foreign tax rate differential (7.4) (2.1) (7.5) (2.1) (7.4) (2.0)
Manufacturing tax benefits (5.8) (1.7) (6.7) (1.8) (7.5) (2.1)
Other (0.5) (0.1) 3.2
 0.9
 5.4
 1.5
Actual income tax expense $114.7
 32.7 % $122.0
 33.5 % $124.6
 34.3 %
The Company's overall tax expense is primarily driven by operations within the jurisdictions of the United States and Brazil.  The Company's foreign tax rate differential is largely the result of lower statutory rates in the jurisdictions of its European operations as well as generally lower statutory rates in the remainder of the Company's foreign operating jurisdictions.


As of December 31, 2016, the Company had foreign net operating loss carryovers of approximately $85.3 million that are available to offset future taxable income.  Approximately $23.9 million of the carryover expires over the period 2017-2033.  The remaining balance has no expiration.  In addition, the Company had $24.1 million of foreign tax credit carryover that is available to offset future tax.  This carryover expires over the period 2018-2024. 

Current authoritative guidance issued by the FASB requires that a valuation allowance be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.  The Company has, and continues to generate, both net operating losses and deferred tax assets in certain jurisdictions for which a valuation allowance is required.  The Company’s management determined that a valuation allowance of $40.3 million and $42.0 million against deferred tax assets primarily associated with the foreign net operating loss carryover and the foreign tax credit carryover was necessary at December 31, 2016 and 2015, respectively.

Provision has not been made for U.S. or additional foreign taxes on $287.5 million of undistributed earnings of foreign subsidiaries because those earnings are considered to be indefinitely reinvested in the operations of those subsidiaries.  It is not practical to estimate the amount of tax that might be payable on the eventual remittance of such earnings.
The Company had total unrecognized tax benefits of $32.9 million and $30.7 million at December 31, 2016 and 2015, respectively. The approximate amount of unrecognized tax benefits that would impact the effective income tax rate if recognized in any future periods was $32.9 million and $30.7 million for the years ended December 31, 2016 and 2015, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, in millions, is as follows: 
  2016 2015
Balance at beginning of year $30.7
 $24.1
Additions based on tax positions related to the current year 2.3
 2.6
Additions for tax positions of prior years 7.0
 11.5
Reductions for tax positions of prior years (4.5) (1.6)
Reductions due to a lapse of the statute of limitations (1.7) (4.7)
Settlements (0.9) (1.2)
Balance at end of year $32.9
 $30.7
The Company recognizes interest and penalties related to unrecognized tax benefits as components of income tax expense. The Company recognized $1.2 million, $1.5 million, and $0.4 million of net tax benefit related to interest and penalties during the years ended December 31, 2016, 2015, and 2014, respectively. The Company had approximately $13.2 million and $11.8 million accrued for interest and penalties, net of tax benefits, at December 31, 2016 and 2015, respectively.

As a result of acquisitions, the Company recorded $2.6 million and $6.8 million of unrecognized tax benefits in 2016 and 2015, respectively and $2.5 million and $7.2 million of interest and penalties related to pre-acquisition tax positions in 2016 and 2015, respectively. Corresponding assets related to these indemnified provisions have also been recorded for these amounts. 

During the next 12 months it is reasonably possible that a reduction of gross unrecognized tax benefits will occur in an amount of up to $6.0 million, exclusive of currency movements, as a result of the resolution of positions taken on previously filed returns.
The Company and its subsidiaries are subject to U.S. federal and state income tax as well as income tax in multiple international jurisdictions.  The Company's U.S. federal income tax returns prior to 2013 are no longer subject to examination.  With few exceptions, the Company is no longer subject to examinations by tax authorities for years prior to 2011 in the significant jurisdictions in which it operates.






Note 17 — ACCUMULATED OTHER COMPREHENSIVE LOSS

The components and activity of accumulated other comprehensive loss are as follows: 
(in millions) Foreign Currency Translation Pension And Other Postretirement Liability Adjustment Accumulated Other Comprehensive Loss
December 31, 2013 $(8.0) $(90.7) $(98.7)
Other comprehensive loss before reclassifications (129.4) (59.1) (188.5)
Amounts reclassified from accumulated other comprehensive loss (13.9) 9.4
 (4.5)
Net current period other comprehensive loss (143.3) (49.7) (193.0)
December 31, 2014 (151.3) (140.4) (291.7)
Other comprehensive loss before reclassifications (215.2) (15.9) (231.1)
Amounts reclassified from accumulated other comprehensive loss 
 12.9
 12.9
Net current period other comprehensive loss (215.2) (3.0) (218.2)
December 31, 2015 (366.5) (143.4) (509.9)
Other comprehensive income before reclassifications 35.8
 13.8
 49.6
Amounts reclassified from accumulated other comprehensive loss 
 12.5
 12.5
Net current period other comprehensive income 35.8
 26.3
 62.1
December 31, 2016 $(330.7) $(117.1) $(447.8)

The following table summarizes amounts reclassified from accumulated other comprehensive loss:

  Twelve Months Ended December 31,
(in millions) 2016 2015
Pension and postretirement costs (See Notes 10 and 11) $20.5
 $21.2
Tax benefit (8.0) (8.3)
Pension and postretirement costs, net of tax $12.5
 $12.9

Accumulated other comprehensive loss associated with pension and other postretirement liability adjustments are net of tax effects of $71.2 million and $89.0 million as of December 31, 2016 and 2015, respectively.
















Note 18 — EARNINGS PER SHARE COMPUTATIONS

A reconciliation of basic and diluted earnings per share is below: 
(in millions, except per share amounts) 2016 2015 2014
Numerator  
  
  
Net income $236.2
 $239.3
 $191.1
       
Denominator  
  
  
Weighted-average common shares outstanding — basic 94.3
 96.7
 100.2
Dilutive shares 0.8
 1.2
 1.0
Weighted-average common and common equivalent shares outstanding — diluted 95.1
 97.9
 101.2
       
Per common share income  
  
  
Basic $2.51
 $2.47
 $1.91
Diluted $2.48
 $2.44
 $1.89

Certain stock awards outstanding were not included in the computation of diluted earnings per share above because they would not have had a dilutive effect.  There were no anti-dilutive stock awards outstanding at December 31, 2016 and 2015. The excluded stock awards represented an aggregate of 0.3 million shares at December 31, 2014. 

Note 19 — COMMITMENTS AND CONTINGENCIES

The Company is involved in a number of lawsuits incidental to its business, including environmental-related litigation and routine litigation arising in the ordinary course of business.  Although it is difficult to predict the ultimate outcome of these cases, the Company believes, except as discussed below, that any ultimate liability would not have a material adverse effect on the Company’s consolidated financial condition or results of operations.
Environmental Matters
The Company is a potentially responsible party ("PRP") pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (commonly known as “Superfund”) and similar state and foreign laws in proceedings associated with 17 sites around the United States and one in Brazil.  These proceedings were instituted by the United States Environmental Protection Agency and certain state and foreign environmental agencies at various times beginning in 1983.  Superfund and similar state and foreign laws create liability for investigation and remediation in response to releases of hazardous substances in the environment. Under these statutes, joint and several liability may be imposed on waste generators, site owners and operators, and others regardless of fault.  Although these regulations could require the Company to remove or mitigate the effects on the environment at various sites, perform remediation work at such sites, or pay damages for loss of use and non-use values, the Company expects its liability in these proceedings to be limited to monetary damages. The Company expects its future liability relative to these sites to be insignificant, individually and in the aggregate. 

The Company is involved in other environmental-related litigation arising in the ordinary course of business. The Company accrues environmental costs when it is probable that these costs will be incurred and can be reasonably estimated. The Company's reserve for environmental liabilities at December 31, 2016 and 2015 was $3.5 million and $5.6 million, respectively.

Brazil Tax Dispute - Goodwill Amortization
During October 2013, Dixie Toga, Ltda ("Dixie Toga") received an income tax assessment in Brazil for the tax years 2009 through 2011 that relates to the amortization of certain goodwill generated from the acquisition of Dixie Toga. The income tax assessed for those years is approximately $11.7 million, translated to U.S. dollars at the December 31, 2016 exchange rate. The Company expects that tax examinations for years after 2011 will include similar assessments as the Company continues to claim the tax benefits associated with the goodwill amortization. An ultimate adverse resolution on


these assessments, including interest and penalties, could be material to the Company's consolidated results of operations and/or cash flows.
The Company has been advised by its legal and tax advisors that its position with respect to the deductions is allowable under the tax laws of Brazil. The Company is contesting the disallowance and believes it is more likely than not the tax benefit will be sustained in its entirety and consequently has not recorded a liability. The Company intends to litigate the matter if it is not resolved at the administrative appeals levels. The ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which could take several years.  At this time, the Company believes that final resolution of the assessment will not have a material impact on the Company's consolidated financial statements.
Brazil Investigation
On September 18, 2007, the Secretariat of Economic Law, a governmental agency in Brazil, which has now been replaced by the General Superintendence of the Administrative Council for Economic Defense (“CADE”), initiated an investigation into possible anti-competitive practices in the Brazilian flexible packaging industry against a number of Brazilian companies including a Dixie Toga subsidiary. The investigation relates to periods prior to the Company's acquisition of control of Dixie Toga and its subsidiaries.

In late November 2016, the investigative arm of CADE issued an advisory opinion recommending, among other actions, the imposition of fines on Itap Bemis, a Dixie Toga subsidiary. The case will now be sent to the CADE Tribunal, which will decide to either accept or decline the recommendation.  The Company expects that the Tribunal decision will be issued in 2017. 

In the event of an adverse decision, it is difficult to predict possible fines, but based on CADE's current fining practice, the fines assessed could be as high as $60 million, depending on CADE’s determination of the applicable revenue base for the calculation of the fine. The Company intends to vigorously defend its position and plans to appeal any adverse decision by the Tribunal. Upon appeal, the Company would likely be required to post bond, deposit funds equal to the assessed fines, or provide other collateral. The Company is unable at this time to predict the outcome of this matter, but believes it is not probable that an adverse judgment would stand after exhausting all appeals which are likely to take several years and therefore no provision has been made in the consolidated financial statements.




























Note 20 — SEGMENTS OF BUSINESS

The Company's business activities are organized around and aggregated into its two principal business segments, U.S. Packaging and Global Packaging, based on their similar economic characteristics, products, production process, types of customers, and distribution methods. Both internal and external reporting conforms to this organizational structure, with no significant differences in accounting policies applied. Intersegment sales (which are not significant) are generally priced to reflect nominal markups.

The Company evaluates the performance of its segments and allocates resources to them based primarily on operating profit, which is defined as profit before restructuring and acquisition-related costs, general corporate expense, interest expense, other non-operating income, and income taxes. In the fourth quarter of 2016, the tables below were recasted to more clearly reflect that operating segment performance is evaluated based on operating profit before restructuring and acquisition-related costs.

Sales to the Kraft Heinz Company, and its subsidiaries, accounted for approximately 11 and 12 percent of the Company's sales in 2016 and 2015, respectively. The Company primarily sells to Kraft Heinz Company in the U.S. Packaging segment.
Products produced within the U.S. and Global Packaging business segments service packaging applications for markets such as food, medical devices, pharma, personal care, agribusiness, chemicals, pet food, and consumer products.
A summary of the Company’s business activities reported by its two business segments follows:
Business Segments (in millions) 2016 2015 2014
Sales including intersegment sales:    
  
U.S. Packaging $2,646.8
 $2,772.8
 $2,889.5
Global Packaging 1,403.4
 1,345.6
 1,507.6
       
Intersegment sales:      
U.S. Packaging (25.7) (25.3) (28.8)
Global Packaging (20.1) (21.7) (24.8)
Total net sales $4,004.4
 $4,071.4
 $4,343.5
       
Segment operating profit    
  
U.S. Packaging $400.0
 $391.8
 $375.8
Global Packaging 114.0
 116.5
 113.3
       
Restructuring and acquisition-related costs 28.6
 12.1
 
General corporate expenses 76.1
 86.6
 81.4
Operating income 409.3
 409.6
 407.7
       
Interest expense 60.2
 51.7
 60.8
Other non-operating income (1.8) (6.0) (16.8)
       
Income from continuing operations before income taxes $350.9
 $363.9
 $363.7





Business Segments (in millions) 2016 2015 2014
Total assets (1):      
U.S. Packaging $2,007.7
 $1,982.5
 $1,977.9
Global Packaging 1,485.3
 1,291.5
 1,345.3
Corporate assets (2) 222.7
 215.8
 287.6
Total $3,715.7
 $3,489.8
 $3,610.8
       
Restructuring and acquisition-related costs (3):      
Global Packaging $26.6
 $9.4
 $
Corporate 2.0
 2.7
 
    Total $28.6
 $12.1
 $
       
Depreciation and amortization:      
U.S. Packaging $93.7
 $97.8
 $96.3
Global Packaging 54.1
 47.7
 62.1
Corporate 14.3
 12.6
 11.7
Total continuing operations 162.1
 158.1
 170.1
Discontinued operations 
 
 10.5
Total $162.1
 $158.1
 $180.6
       
Additions to property and equipment:      
U.S. Packaging $131.2
 $127.5
 $105.5
Global Packaging 69.7
 79.4
 51.0
Corporate 7.4
 12.5
 23.8
Total continuing operations 208.3
 219.4
 180.3
Discontinued operations 
 
 4.9
Total $208.3
 $219.4
 $185.2
       





Operations by geographic area (in millions) 2016 2015 2014
Net sales (4):  
  
  
United States $2,820.3
 $2,937.8
 $3,040.8
Brazil 483.5
 442.5
 581.5
Other Americas 244.6
 273.5
 273.2
Europe 263.5
 233.9
 258.8
Asia-Pacific 192.5
 183.7
 189.2
Total $4,004.4
 $4,071.4
 $4,343.5
       
Long-lived assets (5):  
  
  
United States $949.2
 $897.4
 $831.8
Brazil 212.9
 173.1
 159.0
Other Americas 44.1
 53.1
 55.7
Europe 75.1
 68.6
 68.1
Asia-Pacific 81.3
 75.6
 72.4
Total $1,362.6
 $1,267.8
 $1,187.0
(1)Total assets by business segment include only those assets that are specifically identified with each segment’s operations.
(2)Corporate assets are principally cash and cash equivalents, prepaid expenses, prepaid income taxes, prepaid pension benefit costs, and corporate tangible and intangible property. The Company utilizes a global cash pooling arrangement. The Company treats all cash and cash equivalents, including the net cash position in the cash pooling arrangement, as Corporate assets.
(3)These amounts are excluded from segment operating profit and general corporate expenses.
(4)Net sales are attributed to geographic areas based on location of the Company’s manufacturing or selling operation.
(5)Long-lived assets include net property and equipment, long-term receivables, deferred charges, and investment in affiliates.


Note 21 — QUARTERLY FINANCIAL INFORMATION — UNAUDITED
  Quarter Ended
(in millions, except per share amounts) March 31 June 30 September 30 December 31 Total
2016  
  
  
  
  
Net sales $967.9
 $1,021.3
 $1,027.2
 $988.0
 $4,004.4
Gross profit 208.8
 217.0
 224.8
 215.6
 866.2
Net income 56.2
 50.9
 68.6
 60.5
 236.2
           
Basic earnings per share:          
Net income 0.59
 0.54
 0.73
 0.65
 2.51
           
Diluted earnings per share:          
Net income 0.59
 0.53
 0.72
 0.64
 2.48
           
2015  
  
  
  
  
Net sales $1,040.1
 $1,030.3
 $1,018.3
 $982.7
 $4,071.4
Gross profit 217.5
 221.2
 221.8
 212.9
 873.4
Income from continuing operations 57.0
 65.6
 62.5
 56.8
 241.9
Loss from discontinued operations (2.6) 
 
 
 (2.6)
Net income 54.4
 65.6
 62.5
 56.8
 239.3
           
Basic earnings per share:          
Income from continuing operations 0.58
 0.68
 0.65
 0.59
 2.50
Loss from discontinued operations (0.03) 
 
 
 (0.03)
Net income 0.55
 0.68
 0.65
 0.59
 2.47
           
Diluted earnings per share:          
Income from continuing operations 0.58
 0.67
 0.64
 0.58
 2.47
Loss from discontinued operations (0.03) 
 
 
 (0.03)
Net income 0.55
 0.67
 0.64
 0.58
 2.44




ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

ITEM 9A — CONTROLS AND PROCEDURES

(a)  Management’s Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
The Company’s management, under the direction, supervision, and involvement of the Chief Executive Officer and the Chief Financial Officer, has carried out an evaluation, as of the end of the period covered by this report, of the effectiveness of the design and operation of the disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) of the Company.  Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that disclosure controls and procedures in place at the Company are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b)  Management’s Report on Internal Control Over Financial Reporting
The management of Bemis Company, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).  Under the direction, supervision, and participation of the Chief Executive Officer and the Chief Financial Officer, the Company’s management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO-Framework (2013)).  Based on the results of this evaluation, management has concluded that internal control over financial reporting was effective as of December 31, 2016.
The effectiveness of our internal control over financial reporting as of December 31, 2016, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears on page  30 of this Form 10-K.
(c)  Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter that have materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B — OTHER INFORMATION
None.




PART  III


ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required to be submitted in response to this item with respect to directors is omitted because a definitive proxy statement containing such information will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2016, and such information is expressly incorporated herein by reference.    

The following sets forth the name, age, and business experience for at least the last five years of the principal executive officers of the Company.  Unless otherwise indicated, positions shown are with the Company.

Name (Age)

Positions Held

Period The Position
Was Held

William F. Austen (58)(60)

President and Chief Executive Officer

2014 to present

Executive Vice President and Chief Operating Officer

2013 to 2014

Group President

2012 to 2013

Vice President — Operations

2004 to 2012

President and Chief Executive Officer — Morgan Adhesives Company (1)

2000 to 2004

Michael B. Clauer (59)(61)

Senior Vice President and Chief Financial Officer

2017 to present

Vice President and Chief Financial Officer

2014 to 2016

Executive Vice President and Chief Financial Officer — BWAY Corporation

2009 to 2014

Sheri H. Edison (60)(62)

Senior Vice President, Chief Legal Officer and Secretary

2017 to present

Vice President, General Counsel, and Secretary

2010 to 2016

Senior Vice President and Chief Administrative Officer, Hill-Rom, Inc.

2007 to 2010

Vice President, General Counsel, and Secretary, Hill-Rom, Inc.

2003 to 2007

Timothy S. Fliss (54)(56)

Senior Vice President and Chief Human Resources Officer

2017 to present

Vice President — Human Resources

2010 to 2016

Executive Vice President — Human Resources, Schneider National, Inc.

2003 to 2009

Vice President — Human Resources, Schneider National, Inc.

1995 to 2003

Various operational positions within Schneider National, Inc.

1990 to 1995

William E. Jackson (54)(56)

Senior Vice President and Chief Technology Officer      

2017 to present

Vice President and Chief Technology Officer

2013 to 2016

Vice President of Global Research and Development — Dow Building and Construction

2007 to 2013

Various management positions — General Electric            

1992 to 2007

Jerry S. Krempa (56)(58)

Vice President and Chief Accounting Officer

2017 to present

Vice President and Controller

2011 to 2016

Various finance management positions within the Company

1998 to 2011

James W. Ransom (56)

Louis “Fred” Stephan (53)

President, Bemis North America

2017 to present

Senior Vice President & General Manager of the Insulation Systems - Johns Manville

2014

2011 to present

President — Bemis North America2014 to present
Group President2012 to 2014
Vice President — Operations2007 to 2012
Various management positions within the Company2002 to 20062017


(1)         Identified operation was a 100 percent owned subsidiary or division of the Company. 


William F. Austen

Background

Age 60

Director Since 2014

Committees:

·        Executive

William F. Austen is the Company’s President and Chief Executive Officer, a position he was appointed to in 2014. He was previously Executive Vice President and Chief Operating Officer from 2013 to 2014, Group President from 2012 through 2013 and Vice President of Operations from 2004 to 2012. From 2000 to 2004, Mr. Austen served as the President and Chief Executive Officer of Morgan Adhesives Company which, at the time, was a division of the Company. Prior to joining the Company, Mr. Austen held various positions at General Electric Company from 1980 until 2000.

Qualifications

Mr. Austen has an intimate understanding of the Company’s business, operations and customers. His expertise in global manufacturing and operations, together with his experience in international mergers and acquisitions and business integration, contribute invaluable skills and capabilities to the Board.

Other public company boards

Tennant Company (NYSE: TNC)

Katherine C. Doyle

Background

Age 51

Director Since 2017

Independent

Committees:

·        Compensation

·        Nominating & Corporate Governance

Katherine C. Doyle is Chief Executive Officer of Swanson Health Products, a private equity backed, e-commerce marketer of a full range of healthy living products, a position she has held since April 2016. Prior to her current position, Ms. Doyle was an independent advisor to private equity and venture capital firms from 2014 to 2016. Ms. Doyle was a Corporate Officer of Abbott Laboratories, a global healthcare company, from 2011 to 2014, where she led the $3.2 billion nutrition business across the U.S., Canada and Puerto Rico as the Senior Vice President. In this role, Ms. Doyle had full responsibility for the business’ financial performance, commercial execution (sales and marketing), product innovation and supply chain. Prior to that role, she served as Vice President and General Manager, Pediatric Nutrition. Before joining Abbott, Ms. Doyle was a Senior Partner at McKinsey & Company from 1989 to 2011, working with leading consumer companies across the United States, Europe, Africa and Asia.

Qualifications

Ms. Doyle brings more than 29 years of experience leading and advising consumer and health care companies. Her well-rounded and international professional background provides her with extensive strategy, performance and organizational transformation, commercial execution, innovation and e-commerce expertise, all of which provide valuable contributions to the Board.

Adele M. Gulfo

Background

Age 56

Director Since 2015

Independent

Committees:

·        Audit

Adele M. Gulfo is Chief of Commercial Development at Roivant Sciences, Inc. Prior to her current role, Adele served as EVP & Head of Global Commercial Development and Chief Strategy Officer of Mylan N.V. (NASDAQ: MYL), a leading global pharmaceutical company, from 2014 to 2018. Prior to joining Mylan, Ms. Gulfo spent a total of 14 years at Pfizer, Inc. and legacy companies, most recently as President, Latin America, before that as President and General Manager, U.S. Primary Care, and earlier where she launched LIPITOR in 1997 to become the world’s best-selling medicine. Previously, Ms. Gulfo held leadership positions at AstraZeneca Pharmaceuticals, SpectraTech Inc., and Fischer Scientific. She holds eight patents.

Qualifications

Ms. Gulfo’s experience in the healthcare industry brings valuable marketing, operational and strategic insight to the Board. She has also held various leadership roles with global public companies, giving her valuable strategic experience and perspective in understanding global challenges and opportunities.

Other public company boards

EnPro Industries, Inc. (NYSE: NPO)

David S. Haffner

Background

Age 66

Director Since 2004

Independent

Committees:

·        Audit

·        Finance and Strategy

David S. Haffner retired as the Chairman and Chief Executive Officer of Leggett & Platt, Inc. (NYSE: LEG), a diversified manufacturing company, at the end of 2015. During his tenure at Leggett & Platt, Mr. Haffner served as Chairman of the Board from 2013, Chief Executive Officer from 2006, and President from 2002 until his retirement, as Chief Operating Officer from 1999 to 2006, and as Executive Vice President from 1995 to 2002.

Qualifications

Mr. Haffner has extensive experience managing the operations of an acquisitive, international, public company, which has been beneficial to us in our international acquisitions and subsequent integration activities. In addition, his experience with manufacturing operations, labor relations, compensation strategy, and financial performance measurement at Leggett & Platt gives Mr. Haffner valuable insight and perspectives.

Other public company boards

Delphi Technologies PLC (NYSE: DLPH)

Timothy M. Manganello

Background

Age 69

Director Since 2004

Chairman of the Board

Committees:

·   Executive (Chair)

·   Nominating & Corporate Governance

Timothy M. Manganello retired as Chief Executive Officer of BorgWarner Inc. (NYSE: BWA), a leader in highly engineered components and systems for vehicle powertrain applications worldwide, at the end of 2012 and retired as Executive Chairman of the Board of BorgWarner in 2013, having served in these roles since 2003. Mr. Manganello was also President, Chief Operating Officer in 2002 and a board member of BorgWarner from 2002 until 2013. He served as Executive Vice President from 2001 until 2002 and President and General Manager of BorgWarner TorqTransfer Systems from 1999 to 2002.

Qualifications

Mr. Manganello offers the Board valuable experience in international acquisition integration, global operations management, labor relations, engineering-based research and development, long-term strategic planning, capital markets financing, and financial performance measurement. His experience as a director at other public companies contributes a broad array of experiences and perspectives to the Board.

Other public company boards

Delphi Technologies PLC (NYSE: DLPH)

Other public company boards — last five years

Zep Inc. (NYSE: ZEP)

Arun Nayar

Background

Age 68

Director Since 2015

Independent

Committees:

·        Executive

·        Audit (Chair)

Arun Nayar is currently a senior advisor with McKinsey & Company as well as BC Partners, roles he has held since 2016. Mr. Nayar retired as the Executive Vice President and Chief Financial Officer of Tyco International plc, a fire protection and security company, in 2016, having served in that role since 2012. He joined Tyco in 2008 as the company’s Senior Vice President and Treasurer and later acted as the Chief Financial Officer of Tyco’s ADT Worldwide business and Senior Vice President, Financial Planning & Analysis, Investor Relations and Treasurer. Prior to joining Tyco, Mr. Nayar spent six years at PepsiCo, most recently as Chief Financial Officer of Global Operations, and before that as Vice President and Assistant Treasurer — Corporate Finance.

Qualifications

Mr. Nayar has a career in finance that spans more than 35 years. His global experience and expertise in financial reporting, financial analytics, capital market financing, mergers and acquisitions, and treasury matters provide important insight into the global financial matters of our Company. His extensive finance background makes him well qualified to be the Chair of our Audit Committee.

Other public company boards

TFI International (TSX: TFII)

Rite Aid Corporation (NYE: RAD)

Guillermo Novo

Background

Age 56

Director Since 2018

Independent

Committees:

·        Compensation

·        Nominating & Corporate Governance

Guillermo Novo is currently President and Chief Executive Officer of Versum Materials, Inc. (NYSE: VSM), a leading and innovative electronic materials supplier to the semiconductor industry, a position he has held since October 2016 when Versum separated from Air Products and Chemicals, Inc. Previously, Mr. Novo served as the Executive Vice President, Materials Technologies for Air Products from 2014 to 2016 and as the Senior Vice President Electronics, Performance Materials, Strategy and Technology from 2012 to 2014. Prior to joining Air Products, Mr. Novo held various leadership positions with Dow Chemical Company, including Group Vice President, Dow Coating Materials.

Qualifications

Mr. Novo has over 30 years of experience in the specialty materials industry. He has a vast array of experience in commercial, marketing and management positions globally. Mr. Novo’s professional experiences provides the Board with valuable leadership experience, familiarity with public company matters and experience with international operations.

Other public company boards

Versum Materials, Inc. (NYSE: VSM)

Marran H. Ogilvie

Background

Age 50

Director Since 2018

Independent

Committees:

·        Finance and Strategy

Marran H. Ogilvie previously served as an Advisor to the Creditors Committee for the Lehman Brothers International (Europe) Administration, a position she held from 2008 to 2018. From 1997 to 2010, Ms. Ogilvie served as a member of Ramius, LLC, an alternative investment management firm, where she served in various capacities, including Chief Operating Officer from 2007 to 2009 and General Counsel from 1997 to 2007, until its merger with Cowen Group, Inc., when she transitioned to Chief of Staff until 2010.

Qualifications

Ms. Ogilvie has extensive experience as a public company director at numerous companies in a variety of industries. Her experience with corporate governance, executive compensation, risk management and investment analysis, combined with her financial background, provides a valuable contribution to the Board.

Other public company boards

Evolution Petroleum Corporation (NYSE: EPM)

Ferro Corporation (NYSE: FOE)

Four Corners Property Trust (NYSE: FCPT)

GCP Applied Technologies Inc. (NYSE: GCP)

Other public company boards — last five years

Seventy Seven Energy Inc. (OTC: SSE)

Southwest Bancorp, Inc. (NASDAQ: OKSB)

Zais Financial Corp (now a private company)

Korea Fund (NYSE: KF)

David T. Szczupak

Background

Age 63

Director Since 2012

Independent

Committees:

·        Compensation (Chair)

·        Executive

David T. Szczupak served as the Executive Vice President, Global Product Organization, for Whirlpool Corporation (NYSE: WHR), a manufacturer and marketer of major home appliances from 2008 until his retirement in December 2017. In this role, Mr. Szczupak led Whirlpool’s global research, engineering, product business teams and strategic sourcing. From 2006 to 2008, Mr. Szczupak served as Chief Operating Officer of Dura Automotive Systems, an international automotive supplier. While at Dura, he provided strategic direction for product development, purchasing, manufacturing and product quality. Before joining Dura, Mr. Szczupak worked at Ford Motor Company for 22 years in a variety of leadership roles including Group Vice President of Manufacturing.

Qualifications

Mr. Szczupak’s extensive background in product innovation, strategic planning, engineering, and global manufacturing, give him unique and valuable insights and perspective to our global operations, research and development and innovation.

Holly A. Van Deursen

Background

Age 60

Director Since 2008

Independent

Committees:

·        Executive

·        Compensation

·        Nominating & Corporate Governance (Chair)

Holly A. Van Deursen was most recently an executive in the petrochemical industry and has held a variety of leadership positions at British Petroleum and Amoco Corporation in Chicago, London, and Hong Kong. She was Group Vice President of Petrochemicals for British Petroleum from 2003 to 2005, and Group Vice President of Strategy, based in London, from 2001 to 2003.

Qualifications

Ms. Van Deursen has extensive experience in the chemical industry from which Bemis buys the majority of its raw materials. She also has an engineering background and personal international experience, which is relevant to our strategic focus on technology and innovation, as well as disciplined international expansion. Her experience in strategic analysis at British Petroleum further enhances her ability to analyze and evaluate our financial risks and opportunities. Additionally, Ms. Van Deursen’s governance experience provides important expertise and knowledge making her well qualified to be the Chair of our Nominating and Corporate Governance Committee.

Other public company boards

Actuant Corporation (NYSE: ATU)

Capstone Turbine Corporation (NASDAQ: CPST)

Synthomer plc (LSE: SYNT)

Other public company boards — last five years

Petroleum Geo-Services (OSE: PGS)

Philip G. Weaver

Background

Age 66

Director Since 2005

Independent

Committees:

·        Executive

·        Finance and Strategy (Chair)

Philip G. Weaver is presently a consultant to industry and a director of CMC Group, Inc, a private company providing custom printed labels and other imaging products. Until his retirement in 2009, Mr. Weaver served as Vice President and Chief Financial Officer of Cooper Tire & Rubber Company (NYSE: CTB), a global company specializing in the design, manufacture, and sale of passenger car, light truck, medium truck, motorcycle, and racing tires. He previously served as the Vice President of the tire division from 1994 to 1998 and as Controller of the tire division from 1990 to 1994.

Qualifications

Mr. Weaver’s expertise in accounting and finance, and his experience as a chief financial officer of a public company, provide him with a thorough understanding of financial reporting, generally accepted accounting principles, financial analytics, budgeting, capital markets financing, and auditing.

Other public company boards

None

George W. Wurtz III

Background

Age 62

Director Since 2018

Independent

Committees:

·        Audit

George W. Wurtz III is President, Chief Executive Officer and Chairman of Appvion, a manufacturer of coating formulations and application, a position he has held since June 2018. Mr. Wurtz founded George Wurtz & Associates LLC, a boutique consulting firm, in 2006 where he served as President and Chief Executive Officer from October 2011 to March 2012 and again from October 2015 to present. Before rejoining George Wurtz & Associates, Mr. Wurtz co-founded Soundview Paper Company, a manufacturer of towel and tissue products, where he served as President and Chief Executive Officer from March 2012 to October 2014, and as Chairman of the Board of Directors from October 2014 to April 2015. From 2007 to 2011, Mr. Wurtz served as President and Chief Executive Officer of WinCup, Inc., a manufacturer of disposable, polystyrene cups, bowls and other products.

Qualifications

Mr. Wurtz has extensive experience in the paper industry, which has many parallels to the broader packaging industry. His extensive executive leadership experience, as well his corporate governance experience, provides a valuable contribution to the Board.

Other public company boards — last five years

Appvion, Inc. (now a private company)

Robert H. Yanker

Background

Age 60

Director Since 2018

Independent

Committees:

·        Finance and Strategy

Robert H. Yanker is a Director Emeritus at McKinsey & Company, a global management consulting firm. He previously served at McKinsey from 1986 to 2013, where he worked on a full range of issues including strategy, portfolio assessment, sales and operations transformation, restructuring and capability building.

Qualifications

Mr. Yanker’s strong background in advising and consulting for senior management teams provides him with significant managerial and operational expertise, which provides a valuable contribution to the Board.

Other public company boards

Aaron’s, Inc. (NYSE: AAN)

Other public company boards — last five years

Wausau Paper Corp. (acquired by SCA)

Director Independence

The Board has determined that all Directors, except Mr. Austen, are “independent” as that term is defined in the applicable listing standards of the New York Stock Exchange (“NYSE”). In addition, the Board has determined that each member of the Audit, Compensation, and Nominating and Corporate Governance Committees, is independent. In accordance with the NYSE director independence rule, the Board looked at the totality of the circumstances to determine a Director’s independence. To be independent, a Director must be, among other things, able to exercise independent judgment in the discharge of his or her duties without undue influence from management. The Board specifically reviewed the following transactions and concluded that none of these transactions impaired the applicable Director’s independence. In addition, none of these transactions are related person transactions under Item 404 of Regulation S-K as none of the applicable related persons has a direct or indirect material interest in the underlying transaction.

Director

Entity and Relationship

Transactions

Below NYSE
Threshold(1)

Katherine C. Doyle(2)

Marsh Clearsight; Spouse — Sr. Vice President, Marsh ClearSight(3)

In 2018, Bemis purchased $140,000 in cloud-based risk management software services from Marsh Clearsight.

Yes



(1)NYSE threshold is the greater of (1) $1,000,000 or (2) 2 percent of consolidated gross revenues of involved entity.

(2)Ms. Doyle was not involved in this transaction. The transaction has been reviewed and it has been concluded that the transaction was an arm’s length transaction made in the ordinary course of business.

(3)Ms. Doyle’s spouse retired from Marsh Clearsight in March of 2018.

Audit Committee

Members:

Responsibilities

Mr. Nayar (Chair)(1)

· Assists the Board of Directors by performing the duties described in the Audit Committee Charter

Ms. Gulfo

· Oversight responsibility for the integrity and fair presentation of our financial reporting

Mr. Haffner

· Responsible for the appointment, compensation, and oversight of our independent registered public accounting firm

Mr. Wurtz

· Meets with the independent registered public accounting firm, without management present, to consult with it and review the scope of its audit



(1)The Board has determined that all members of the Audit Committee are financially literate and that Director Nayar is a financial expert as defined by the SEC. Each member also meets the independence standards for audit committee membership under the rules of the SEC.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that Directors, Executive Officers, and persons who own more than 10 percent of our Common Stock file initial reports of ownership of our Common Stock and changes in such ownership with the SEC. To our knowledge, based solely on a review of copies of forms submitted to us during and with respect to 2018, and on written representations from our Directors and Executive Officers, all required reports were filed on a timely basis during 2018.

The following table lists the beneficial ownership of shares of our Common Stock as of March 1, 2019, by each director, each Named Executive Officer for fiscal year 2018, and all of our current directors and Executive Officers as a group. Percentage of outstanding shares is based on 91,211,989 shares of our Common Stock outstanding as of March 1, 2019.

Beneficial Owner

 

Direct(1)

 

Voting or
Investment
Power(2)

 

Right to
Acquire(3)

 

Total

 

Percent of
Outstanding
Shares

 

William F. Austen

 

294,913

 

45,725

 

37,467

 

378,105

 

*

 

Michael B. Clauer

 

26,037

 

 

8,375

 

34,412

 

*

 

Katherine C. Doyle

 

2,581

 

 

3,174

 

5,755

 

*

 

Sheri H. Edison

 

52,767

 

 

4,873

 

57,640

 

*

 

Timothy S. Fliss

 

17,515

 

17,767

 

3,357

 

38,639

 

*

 

Adele M. Gulfo

 

9,113

 

 

3,174

 

12,287

 

*

 

David S. Haffner

 

48,872

 

 

3,174

 

52,046

 

*

 

Timothy M. Manganello

 

88,647

 

 

5,494

 

94,141

 

*

 

Arun Nayar

 

16,106

 

 

3,174

 

19,280

 

*

 

Guillermo Novo

 

241

 

 

3,174

 

3,415

 

*

 

Marran H. Ogilvie

 

807

 

 

3,174

 

3,981

 

*

 

Fred Stephan

 

12,420

 

 

 

12,420

 

*

 

David T. Szczupak

 

15,337

 

 

3,174

 

18,511

 

*

 

Holly A. Van Deursen

 

27,429

 

 

3,174

 

30,603

 

*

 

Philip G. Weaver

 

35,635

 

 

3,174

 

38,809

 

*

 

George W. Wurtz

 

841

 

 

3,174

 

4,015

 

*

 

Robert H. Yanker

 

1,930

 

 

3,174

 

5,104

 

*

 

All directors and executive officers as a group (19 persons)

 

722,970

 

63,492

 

100,690

 

887,152

 

*

 


*      Less than one percent.

(1)These shares are held individually or jointly with others, or in the name of a bank, broker, or nominee for the individual’s account. Also included are shares held in 401(k) accounts of executive officers.

(2)This column identifies shares included under the Direct holdings column over which directors and Executive Officers have or share voting or investment power, including shares directly owned by certain relatives with whom they are presumed to share voting and/or investment power.

(3)Includes shares that are currently vested or that will vest within 60 days of March 1, 2019 pursuant to the grants made under our 2007 Stock Incentive Plan or 2014 Stock Incentive Plan, representing a pro-rata portion of outstanding units that vest in the event of the director or Executive Officer’s retirement.

The only persons known to us to beneficially own, as of March 1, 2019, more than five percent of outstanding shares of Common Stock are set forth in the following table. Percentage of outstanding shares is based on 91,211,989 shares of our Common Stock outstanding as of March 1, 2019.

Beneficial Owner

 

Number of
Shares
Beneficially Owned

 

Percent of
Outstanding
Shares

 

The Vanguard Group, Inc.(1)

 

9,419,790

 

10.3

%

100 Vanguard Blvd.

 

 

 

 

 

Malvern, PA 19355

 

 

 

 

 

BlackRock, Inc.(2)

 

8,281,577

 

9.1

%

55 East 52nd Street

 

 

 

 

 

New York, NY 10022

 

 

 

 

 

State Street Corporation(3)

 

7,024,614

 

7.7

%

One Lincoln Street

 

 

 

 

 

Boston, MA 02111

 

 

 

 

 

American Century Investment Management, Inc.(4)

 

2,570,643

 

2.8

%

4500 Main Street

 

 

 

 

 

9th Floor

 

 

 

 

 

Kansas City, MO 64111

 

 

 

 

 


(1)Based on information contained in a Schedule 13G filed by such beneficial owner with the SEC on February 11, 2019, Vanguard has sole voting power over 42,887 shares, sole dispositive power over 9,371,510 shares, shared voting power over 13,812 shares and shared dispositive power over 48,280 shares.

(2)Based on information contained in a Schedule 13G filed by such beneficial owner with the SEC on February 4, 2019, BlackRock has sole voting power over 7,904,356 shares and sole dispositive power over 8,281,577 shares.

(3)Based on information contained in a Schedule 13G filed by such beneficial owner with the SEC on February 13, 2019, State Street Corporation has shared voting over 6,442,082 and shared dispositive power over 7,024,614 shares.

(4)Based on information contained in a Schedule 13G filed by such beneficial owner with the SEC on February 11, 2019, American Century Investment Management has sole voting power over 2,372,143 shares and sole dispositive power over 2,570,643 shares.

ITEM 11 — EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

OVERVIEW AND INTRODUCTION

The Compensation Discussion and Analysis (“CD&A”) identifies and describes the basic principles, philosophies and rationale underlying our compensation decisions and programs as well as the key elements of compensation for our Named Executive Officers identified in the Summary Compensation Table. For 2018, our Named Executive Officers (“NEOs”) identified in the Summary Compensation Table include the following:

Name

Title

William F. Austen

President and Chief Executive Officer

Michael B. Clauer

Senior Vice President and Chief Financial Officer

Fred Stephan

President, Bemis North America

Sheri H. Edison

Senior Vice President, Chief Legal Officer, and Secretary

Timothy S. Fliss

Senior Vice President and Chief Human Resources Officer

The CD&A should be read in conjunction with the applicable compensation tables included later in this document.

2018 Compensation Highlights

As a result of the 2017 Company performance and the Company’s compensation philosophy to align compensation with the middle range of the Total Target Compensation (“TTC”) Comparator Group, the Committee did not adjust base compensation, short-term incentive targets or long-term incentive targets for any of the NEOs in 2018. Consistent with our pay for performance practices, the NEOs received a payout of 74.6 percent of target under the short-term incentive plan for 2018.

Base Salaries

NEOs’ base salaries remained the same from 2017 to 2018, other than Mr. Stephan who received an increase in connection with his promotion to an Executive Officer.

Short-term Cash Incentive

To further incent the Company’s focus on profitable growth, the Committee approved adding Adjusted Net Revenue as a component of the Short-Term Annual Performance-Based Cash Incentive Plan. In 2018, the Bemis Executive Officer Performance Plan (“BEOPP”) incorporated three performance metrics:

·                  Adjusted after-tax return on invested capital (“Adjusted ROIC”), weighted at 50 percent.

·                  Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), weighted at 25 percent.

·                  Adjusted net revenue (“Adjusted Net Revenue”), weighted at 25 percent.

Performance in each of these categories was either at or below the target level, resulting in a 74.6 percent annual cash incentive payout. Actual results compared to target were as follows:

·                  11.7 percent actual result for BEOPP Adjusted ROIC, compared to a target of 11.7 percent.

·                  $584.4 million actual result for BEOPP Adjusted EBITDA, compared to a target of $588 million.

·                  $4,119.2 million actual result for BEOPP Adjusted Net Revenue, compared to a target of $4,163.5 million.

Long-term Incentive

To further promote performance orientation and alignment with shareholder interests, NEOs were granted long-term incentives in the form of share units, 70 percent of which were performance-based share units, and 30 percent of which were time-based share units.

·                  The performance-based share units are measured relative to Bemis’ total shareholder return (“TSR”) versus a comparator group. Actual share unit payout for the 2016 grant, which vested at the end of 2018, was 87.5 percent for relative TSR as compared to target (100 percent).

·                  The weighting of performance-based share units at 70 percent of our long-term incentive awards strongly aligns pay and performance for our Executive Officers.

The following table discloses actual direct compensation paid to our NEOs for the last two fiscal years. As illustrated in this table, our compensation program effectively executes our pay for performance objective.

 

 

Fiscal Year 2017 Actual Compensation

 

 

Fiscal Year 2018 Actual Compensation

 

 

 

Base
Salary
($)

 

Target
Annual
Incentive
($)
(Target %)

 

Actual
Annual
Incentive
($)

 

Long-Term
Incentive
Grant
Value
($)(1)

 

Total Direct
Compensation
($)

 

 

Base
Salary
($)

 

Target
Annual
Incentive
($)
(Target %)

 

Actual
Annual
Incentive
($)

 

Long-Term
Incentive
Grant
Value
($)(2)

 

Total Direct
Compensation
($)

 

William F. Austen

 

1,090,000

 

1,308,000

 

0

 

5,190,037

 

6,280,037

 

 

1,090,000

 

1,308,000

 

962,132

 

5,190,046

 

7,242,178

 

 

 

 

 

120

%

 

 

 

 

 

 

 

 

 

120

%

 

 

 

 

 

 

Michael B. Clauer

 

585,000

 

438,750

 

0

 

1,160,048

 

1,745,048

 

 

585,000

 

438,750

 

322,734

 

1,160,044

 

2,067,778

 

 

 

 

 

75

%

 

 

 

 

 

 

 

 

 

75

%

 

 

 

 

 

 

Fred Stephan(3)

 

 

 

 

 

 

 

 

 

 

 

 

480,137

 

320,973

 

272,197

 

948,981

 

1,701,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

��

 

70

%

 

 

 

 

 

 

Sheri H. Edison

 

480,000

 

288,000

 

0

 

675,034

 

1,155,034

 

 

480,000

 

288,000

 

211,846

 

675,015

 

1,366,861

 

 

 

 

 

60

%

 

 

 

 

 

 

 

 

 

60

%

 

 

 

 

 

 

Timothy S. Fliss

 

383,000

 

229,800

 

0

 

465,042

 

848,042

 

 

383,000

 

229,800

 

169,035

 

465,038

 

1,017,073

 

 

 

 

 

60

%

 

 

 

 

 

 

 

 

 

60

%

 

 

 

 

 

 


(1)The share price used to determine the number of both time-based and performance-based share units was the average closing share price for the last 20 trading days of 2016, or $49.49.

(2)The share price used to determine the number of both time-based and performance-based share units was the average closing share price for the last 20 trading days of 2017, or $47.26.

(3)Mr. Stephan was not an NEO in the proxy statement reporting fiscal 2017 compensation. Upon being promoted to an Executive Officer in May 2018, Mr. Stephan’s base salary increased from $460,000 and he received a short-term incentive target increase from 60 percent to 70 percent.

Compensation Philosophy and Objectives

The Compensation Committee (the “Committee”) has structured the executive compensation program to reward the achievement of specific annual and long-term strategic goals without encouraging undue risk-taking. These programs are reviewed on an annual basis by the Committee to ensure a focus on enhancing shareholder value in the current and forecasted business environments, alignment with goals, and competitive positioning. The key elements of our philosophy are designed to:

·                  Align compensation with shareholder interests;

·                  Attract and retain key leadership talent; and

·                  Motivate individuals to achieve our goals.

Accordingly, the Committee has designed the compensation program to include an appropriate balance of base salary, short-term annual performance-based cash incentives, and long-term incentives in the form of restricted share units, both performance-based and time-based, that align with the key elements listed above.

Our approach is to generally target each element of compensation, as well as the aggregate compensation, for each NEO at or near the 50th percentile of our peers with specific compensation of each NEO ultimately determined by scope of role, performance, key succession planning considerations, retention, and other distinctive factors.

Outlined below are the compensation elements that apply to all Executive Officers.

Compensation Elements

Type of Performance

Performance Period

How Payout
Determined

Most Recent
Performance
Measures

CASH

Base Salary

Short-term focus

NA

Compensation Committee determination

Individual

Annual Cash Incentives

Short-term focus (variable)

1 year

Target established by Compensation Committee

Adjusted EBITDA, Adjusted ROIC, Adjusted Net Revenue

EQUITY

Performance Based Units (70 percent)

Long-term focus (variable)

3 years

Target established by Compensation Committee

Relative TSR

Time Based Units (30 percent)

Long-term focus
(time-based)

3 years

Based on time vesting

None but value changes with share price

TARGET COMPENSATION MIX — 2018

Setting Compensation

The Committee makes all final decisions regarding Executive Officer compensation. The Committee considers the following factors when making compensation decisions:

·                  Job responsibilities and complexities;

·                  Performance, experience, and proficiency in the role;

·                  Comparison to external market data;

·                  Merit increase percentages consistent with other Bemis salaried employees;

·                  Potential and succession planning considerations; and

·                  Recommendations of the CEO and Chief Human Resources Officer.

The Committee uses an independent, outside compensation consultant, Willis Towers Watson, to conduct an external market check as an input into the decision-making process. Willis Towers Watson provided unrelated employee benefit services to the Company during 2018 for which we compensated them $365,000. The Committee has evaluated the independence of Willis Towers Watson based on the six factors determined by the SEC and concluded that no conflict of interest exists that would prevent Willis Towers Watson from independently advising the Committee.

Shareholders voted soundly in favor of our executive compensation program at our 2018 Annual Meeting of Shareholders. Specifically, more than 96 percent of the shares voted at the Annual Meeting of Shareholders in 2018 voted in favor of the compensation paid to our NEOs. In light of the positive result of the “say-on-pay” vote, we made no material changes to our program.

Benchmarking Using Peer Groups

Willis Towers Watson conducted a study in late 2016 (“2016 Study”) to evaluate compensation levels for executives in similar roles to our Executive Officers. The 2016 Study is a thorough benchmarking process that uses two external data sources to evaluate the external competitiveness of total target compensation, including base salaries, target short-term annual performance-based cash incentives (non-equity incentive compensation), and target long-term equity compensation. Due to the Company’s efforts to reduce the overall cost structure in 2017 and 2018, we did not have Willis Towers Watson conduct a new

study in late 2017. Instead, we aged the market information requiredobtained in the 2016 study, consistent with market practice, as a market check for 2018 compensation decisions.

The first data source in developing our peer group is a customized industry specific survey from the Willis Towers Watson Compensation Databank that includes 40 companies (“Survey Comparator Group”) within the industrial manufacturing and consumer products/non-durable industries. This first data source was significantly larger than in the past due to an increase in the number of companies matching the profile as well as a desire to broaden the group of companies included. The second data source is proxy data that includes 21 companies (“Proxy Comparator Group”), including many within the paper and container packaging industry. Companies included in the data from both sources have annual revenue ranging from $1.4 billion to $11.4 billion. For purposes of analyzing compensation, the Committee combines the Survey Comparator Group and the Proxy Comparator Group and refers to them as the TTC Comparator Group.

The Survey Comparator Group included the following 40 companies:

A.O. Smith Corporation

Hanesbrands Inc.

Nortek Holdings Inc.

Terex Corporation

Ball Corporation

Harley-Davidson, Inc.

Nu Skin Enterprises, Inc.

Timken Company

BorgWarner, Inc.

Hasbro, Inc.

Oshkosh Corporation

Toro Company

Brembo S.P.A.

IDEX Corporation

Owens Corning

Tupperware Brands Corporation

Canadian National Railway Company

Kennametal Inc.

PVH Corp.

USG Corporation

Columbia Sportswear Company

Kinross Gold Corporation

Rockwell Automation, Inc.

Visteon Corporation

Cooper Standard Holdings Inc.

Mattel, Inc.

Scotts Miracle-Gro Company

Vulcan Materials Company

Domtar Corporation

Meritor, Inc.

Sealed Air Corporation

Weyerhaeuser Company

Donaldson Company

Mettler-Toledo International

Sonoco Products Company

Worthington Industries

Federal-Mogul Corporation

Newmont Mining Corporation

SPX FLOW, Inc.

Xylem, Inc.

This group of companies has median revenue of $3.5 billion and the revenue at the 75th percentile is $6.2 billion, which places our 2016 revenue between the median and the 75th percentile.

The Proxy Comparator Group included the following 21 companies:

Albemarle Corporation

Graphic Packaging Holding Company

RPM International, Inc.

AptarGroup, Inc.

Greif, Inc.

Sealed Air Corporation

Ashland Inc.

Minerals Technologies, Inc.

Sensient Technologies Corporation

Avery Dennison Corporation

NewMarket Corporation

Silgan Holdings Inc.

Ball Corporation

Owens-Illinois, Inc.

Sonoco Products Company

Berry Global, Inc.

Packaging Corp. of America

The Valspar Corporation

Crown Holdings, Inc.

PolyOne Corporation

WestRock Company

This group of companies has a median revenue of $4.8 billion and the revenue at the 25th percentile is $3.6 billion, which places our 2016 revenue between the 25th percentile and the median.

The 2016 Study revealed the following important facts as it relates to our executive compensation program:

·                  Competitive pay levels were similar in both data sources.

·                  The executive compensation as a whole for each Executive Officer is also within 20 percent of the median for similarly situated officers; however, the percentile varies by Executive Officer.

Compensation Committee Review and Approval

Using the results of the 2016 Study, the Committee then consulted with Willis Towers Watson regarding recommended compensation adjustments, consistent with market trends and Bemis’ philosophy and affordability. Based on this analysis, the Committee approved freezing all Executive Officers’ compensation from 2017 to 2018.

We believe the design of our compensation program aligns with creating long-term shareholder value and is integral to attract and retain the executive talent necessary to meet our objectives. Additional comments regarding our compensation program are highlighted below.

EXECUTIVE COMPENSATION ELEMENTS

As noted above, the standard elements of our compensation program consist of: base salary, short-term annual performance-based cash incentives, long-term equity incentives, and retirement and other benefit plans. In addition to the annual compensation elements listed above, we have double-trigger “change of control” agreements with our Executive Officers that provide for the payment of compensation and benefits in the event of termination following a change of control (see Potential Payments Upon Termination table).

Base Salary

Base salary is a guaranteed component of annual cash compensation that attracts and retains our Executive Officers. We target base salary at or near the middle range of our TTC Comparator Group. Mr. Stephan was promoted to an Executive Officer in May 2018, at which time his base salary increased from $460,000 to $490,000. All other Executive Officer base salaries remained the same from 2017 to 2018.

Short-Term Annual Performance-Based Cash Incentives (Non-Equity)

The BEOPP is designed to provide incentives to our Executive Officers to produce a superior shareholder return. Amounts paid under the terms of the 2018 BEOPP were intended to qualify as performance-based compensation, within the meaning of Section 162(m) of the Internal Revenue Code as in effect prior to the recent tax reform legislation.

The following components are part of our 2018 short-term incentive program:

·                  No discretion for individual performance;

·                  No discretion by the Committee once the goal criteria is determined, other than the ability to exercise negative discretion;

·                  Target award is a percentage of base salary; and

·                  Payout is based on three components: Adjusted ROIC result as compared to goal (“Adjusted ROIC Goal”), Adjusted EBITDA result as compared to goal (“Adjusted EBITDA Goal”), and Adjusted Net Revenue result as compared to goal (“Adjusted Net Revenue Goal”).

Each Executive Officer’s target percentage is established by the Committee based on the middle range of the TTC Comparator Group benchmarking data and other factors previously discussed. That percent of annual base salary then becomes the target award. The attainment of the predetermined Adjusted ROIC Goal determines payment of 50 percent of the target award. The attainment of the predetermined Adjusted EBITDA Goal determines payment of 25 percent of the target award. The attainment of the predetermined Adjusted Net Revenue Goal determines payment for the remaining 25 percent of the target award. The Committee sets the goals at the beginning of the year to exclude certain unusual or non-recurring factors that may occur during the year.

Mr. Stephan was promoted to an Executive Officer in May 2018, at which time his annual short-term incentive plan changed from the management incentive plan to the BEOPP and his annual short-term incentive target increased from 60 percent to 70 percent. All other Executive Officer annual short-term incentive targets remained the same from 2017 to 2018.

BEMIS EXECUTIVE OFFICER PERFORMANCE PLAN COMPONENTS

ROIC Component

The Committee determined that for 2018, the Adjusted ROIC Goal was 11.7 percent, which was equal to the Adjusted ROIC goal in our 2018 annual operating plan. If this goal was achieved, each Executive Officer would receive 100 percent of the target award for this metric. If the Adjusted ROIC result was less than 10.7 percent, no award would be paid. If the Adjusted ROIC result was at least 12.2 percent, the plan would pay two-times the target award for this metric.

EBITDA Component

The Committee determined that for 2018, the Adjusted EBITDA Goal was $588 million, consistent with the 2018 operating plan. If this goal was achieved, each Executive Officer would receive 100 percent of the target award for this metric. If the Adjusted EBITDA was less than $560.2 million, no award would be paid. At $605 million, the BEOPP would pay two times the target award for this metric.

Net Revenue Component

The Committee determined that for 2018, the Adjusted Net Revenue Goal would be greater than the 2018 operating plan resulting in a target of $4,163.5 million. If this goal was achieved, each Executive Officer would receive 100 percent of the target award for this metric. If the Adjusted Net Revenue was less than $4,163.5 million, no award would be paid. At $4,244.3 million, the BEOPP would pay two times the target award for this metric.

The BEOPP funding scales below indicate the ranges of payouts for Adjusted ROIC, Adjusted EBITDA, and Adjusted Net Revenue:

Results that Impacted 2018 Compensation

In 2018, we achieved 11.7 percent BEOPP Adjusted ROIC performance (BEOPP Adjusted ROIC is calculated using a fixed 24 percent tax rate), resulting in a 100 percent payout for half of each NEO’s target award. BEOPP Adjusted ROIC is defined as adjusted net operating profit after tax divided by the sum of debt, less cash, plus equity. Adjusted net operating profit excludes special one-time items that are reported publicly and identified in our quarterly financial statements.

We achieved BEOPP Adjusted EBITDA of $584.4 million, resulting in a 94.2 percent payout for the EBITDA portion of each NEO’s target award. Adjustments to EBITDA exclude special one-time items that are reported publicly and identified in our quarterly financial statements. For purposes of calculating BEOPP Adjusted EBITDA for compensation, budgeted currency rates were used.

We achieved BEOPP Adjusted Net Revenue of $4,119.2 million, resulting in no payout for the Net Revenue portion of each NEO’s target award. BEOPP Adjusted Net Revenue is calculated based on budgeted currency rates and adjusted for pass through of raw material inflation or deflation.

The result was a 74.6 percent short-term incentive payout for 2018.

Long-Term Incentive Compensation (Equity)

The Bemis Company, Inc. 2014 Stock Incentive Plan (the “2014 Plan”) provides for issuance of equity awards in the form of restricted share units. The Committee uses median peer group benchmark data to determine the target value of restricted share units awarded to our Executive Officers annually, which is positioned at the middle range of our TTC Comparator Group. The number of target restricted share units awarded is determined by dividing the value by a fixed share price (calculated using the average closing share price for the last 20 trading days of the prior fiscal year). The long-term incentive compensation provides the opportunity to acquire meaningful equity ownership and has proven to be submittedcritical to attract, incentivize and retain Executive Officers, in responsealignment with shareholders’ best interests.

Target restricted share units awarded in 2018 are split between performance-based share units which represent 70 percent of the units awarded and time-based share units which represent the other 30 percent of the units awarded.

2018 LONG-TERM INCENTIVE MIX

FOR EXECUTIVE OFFICERS

Award Provisions — 70 Percent Performance-Based Share Units

Payout of performance-based share units is determined by relative TSR against the TSR Comparator Group. The TSR Comparator Group used to calculate this item2016 long-term incentive grant, payable following the end of 2018, consisted of public companies in the S&P 500 Industrials sector.

Performance-based share units are earned on the basis of our TSR measured over a three-year period, relative to our TSR Comparator Group. As it is omitted becausepossible that there will be no payout under the performance-based share units, these awards are completely “at-risk” compensation:

·                  TSR reflects share price appreciation and reinvestment of dividends;

·                  Share price appreciation is measured as the difference between the beginning market price and the ending market price of the shares:

·                  Beginning market price equals the average closing price on the 20 trading days immediately preceding the performance period; and

·                  Ending market price equals the average closing price on the last 20 trading days of the performance period;

·                  Share units are paid out in a range of 0 percent to 200 percent of target;

·                  Dividend equivalents on restricted share units are accrued and will be distributed at the same time and in the same proportion as the shares of common stock to which they relate; and

·                  Share units are paid out linearly between the 25th percentile and 55th percentile. Similarly, the share units are paid out linearly between the 55th percentile and the 75th percentile.

·                  Example: If we perform at a 40th percentile rank, each NEO would receive the number of shares equal to 75 percent of the target award. Further, in order to pay out at the 100 percent target, we must perform above the median of our TSR Comparator Group at the 55th percentile.

The performance-based share units payout chart below indicates the range of payouts:

PERFORMANCE-BASED SHARE UNITS

PAYOUT CHART

Award Provisions — 30 Percent Time-Based Share Units

As described above, time-based share units cliff vest after three years.

Accounting Value of Performance-Based Share Units

The accounting value of performance-based share units utilized in the compensation tables that follow reflects the number of units expected to vest based on the probable outcome determined in accordance with FASB ASC Topic 718. In 2018, the accounting value of each performance-based share unit was 116 percent of the value of each time-based share unit; the value of each NEO’s long-term incentive award was therefore more heavily weighted towards performance-based shares, as reflected in the compensation tables. As a result, 73 percent of the value of each NEO’s long-term incentive award is attributable to performance-based share units.

Results that Impacted 2018 Compensation

Our TSR performance of 11 percent resulted in a percentile rank of 47.5 versus the TSR Comparator Group for the January 1, 2016 through December 31, 2018 performance period. This percentile ranking resulted in a 87.5 percent payout for 2016 performance-based grants.

Retirement and Other Benefits

The available core benefits are the same for all United States employees and Executive Officers and include medical, pharmacy, dental, wellness, disability coverage, and life insurance. In addition, the Bemis 401(k) savings plans, Bemis Investment Incentive Plan (“BIIP”) and our retirement plans provide a reasonable level of retirement income. These plans are generally available to all salaried United States employees, including Executive Officers. We also offer a non-qualified supplemental retirement plan, which provides certain additional retirement benefits, including benefits that cannot be provided through the qualified plan due to various Internal Revenue Service limits. Certain Executive Officers also have accumulated benefits under various Bemis pension plans. Our salaried defined benefit pension plans were amended in September 2013 to freeze all further benefit accruals as of December 31, 2013. The cost of employee benefits is partially borne by the employee, including each Executive Officer.

Perquisites

There are no material perquisites for Executive Officers, including NEOs. Executive Officers do not receive any gross-up adjustments related to income tax for perquisites except for tax reimbursements provided to all employees who participate in our relocation program.

2019 Changes and Definitive Transaction Agreement with Amcor

As a result of improved Company performance in 2018, the Company’s compensation philosophy to align compensation with the middle range of the TTC Comparator Group, and NEOs’ salaries remaining unchanged for two years, the Committee approved a base compensation increase of 3 percent for all Executive Officers in 2019, consistent with market practice. No adjustments were made to short-term incentive targets or long-term incentive targets for any of the Executive Officers.

On August 6, 2018, we announced that our Board of Directors, along with the Board of Directors of Amcor Limited (“Amcor”), unanimously approved a definitive proxy statement containingagreement (the “Agreement”) under which Bemis will combine with Amcor in an all-stock combination (the “Merger”).

The Merger will be effected at a fixed exchange ratio of 5.1 Amcor shares for each share of our stock, resulting in Amcor and Bemis shareholders owning approximately 71 percent and 29 percent of the combined company, respectively. Closing of the Merger is conditional upon the receipt of regulatory approvals, approval by both Amcor and Bemis shareholders, and satisfaction of other customary conditions. Subject to the satisfaction of the conditions to closing, we expect the Merger to close in the second quarter of calendar year 2019.

Due to the pending Merger at the time when the Committee was evaluating compensation for fiscal 2019, the Committee determined to keep compensation levels the same for Executive Officers, except for the base salary increases described above.  In addition, due to restrictions under the Agreement that precluded us from granting additional equity awards for the long-term incentive component of our executive compensation, the Committee instead approved long-term incentive awards for all Executive Officers and other eligible employees in the form of awards that payout in cash and vest solely based on time instead of performance metrics.  A pro-rated amount of the award will pay out upon the closing of the Merger, based on the number of days from January 1, 2019 to the date of closing divided by 1,095 days. The remaining amount of the awards will be forfeited, and it is expected that Amcor will grant the Executive Officers who continue their employment with Amcor after the closing a long-term incentive award consistent with such informationawards granted by Amcor to its other similarly-situated employees.

In addition, in connection with the execution of the Agreement, the Committee approved retention bonus awards for all Executive Officers, other than Mr. Austen and Mr. Clauer.  The retention bonus award will vest and be paid on the one-year anniversary of the closing, subject to the Executive Officer’s continued employment through such date, or such earlier termination of the Executive Officer’s employment by us other than for misconduct or non-performance. As a condition to receiving the retention bonus payment, the Executive Officer must sign and not rescind a general release of claims against us, and not be in breach of any confidentiality, non-competition, non-solicitation or assignment of intellectual property rights obligations under any applicable agreement with us.

Executive Officer Incentive Compensation Recovery Policy

The Company’s Executive Officer Incentive Compensation Recovery Policy (“Clawback Policy”) requires Bemis Executive Officers to reimburse the Company for all or a portion of cash incentive awards that were paid with respect to any fiscal year in which the following factors are present:

·                  A financial restatement is required due to material noncompliance with reporting requirements;

·                  The cash incentive award was determined based on financial results that were subject to the restatement; and

·                  A smaller award would have been paid based upon the restated financial results.

All demands for repayment are subject to Committee discretion based on the facts of the situation. The Clawback Policy is intended to prevent intentional manipulation of Company financial results.

Executive and Director Share Ownership Guidelines

We have established guidelines that require all Executive Officers and Directors to own a minimum number of Bemis shares to emphasize the importance of linking the interests of Executive Officers, Directors, and shareholders. Our share ownership requirement for the CEO is a market value equal to five times the CEO’s annual base salary. Our share ownership requirement for all other Executive Officers is a market value equal to three times their annual base salary. Our share ownership requirement for Directors is four times their annual cash retainer.

Each Executive Officer and Director is expected to achieve the ownership target within five years from the date of election as an Executive Officer or Director. All Named Executive Officers and Directors already meet the guidelines or were on track to meet the guidelines within the specified time if long-term incentive awards had been granted in the form of equity in 2019.

Each Executive Officer is required to hold, for a period of not less than three years from the date of share acquisition, one-half of the net number of shares issued pursuant to our equity compensation plans. This restriction expires after the three-year period or upon termination or retirement. In addition, Executive Officers and Directors are prohibited by our Securities Trading and Information Disclosure Policy from hedging or pledging their shares.

Risk Assessment

As part of their ongoing engagement, Willis Towers Watson routinely provides advice on a variety of topics that helps the Committee to avoid excessive compensation risk. In addition, during 2017 the Company conducted its own compensation risk management assessment of the company-wide incentive practices. The Company has concluded that the risks associated with compensation policies and practices were not reasonably likely to have a material adverse effect on the Company. No changes were made to our executive compensation program in 2018 that would materially impact the risk assessment.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code (the “Code”) precludes us from taking a federal income tax deduction for compensation paid in excess of $1 million to our “covered employees” (which as of 2018 includes the CEO, CFO and our three other most highly-compensated executive officers). Prior to 2018, this deduction limitation did not apply to qualified “performance-based” compensation and a company’s CFO was not considered to be fileda “covered employee”.  A “covered employee” now includes any person who served as our CEO or CFO at any time during a taxable year, as well as any person identified as a covered employee of the Company in 2017 or any subsequent year. Consequently, compensation paid in 2018 and later years to our NEOs in excess of $1 million will not be deductible unless it qualifies for transitional relief applicable to certain binding, written performance-based compensation arrangements that were in place as of November 2, 2017.

Despite these new limits on the deductibility of performance-based compensation, the Committee continues to believe that a significant portion of our executives’ compensation should be tied to the Company’s performance and that shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation are not restricted, even though some compensation awards may have resulted in the past, and are expected to result in the future, in non-deductible compensation expense to the Company.

Compensation Committee Report

The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement.

The Compensation Committee:

David S. Szczupak, Chair
Katherine C. Doyle

Guillermo Novo
Holly A. Van Deursen

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised entirely of the independent Directors listed above. No member of the Compensation Committee is a current, or during 2018 was a former officer or employee of the Company or any of its subsidiaries. During 2018, no member of the Compensation Committee had a relationship that must be described under the SEC rules relating to disclosure of related person transactions. In 2018, none of our Executive Officers served on the board of directors or compensation committee of any entity that had one or more of its Executive Officers serving on the Board or the Compensation Committee of the Company.

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2018

Name and Principal Position

 

Year

 

Salary
($)

 

Stock
Awards
($)

 

Non-Equity
Incentive Plan
Compensation
($)

 

Change in
Pension
Value and Non-
Qualified
Deferred
Compensation
Earnings
($)

 

All Other
Compensation
($)

 

Total
($)

 

 

 

 

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

 

 

William F. Austen,

 

2018

 

1,090,000

 

5,822,382

 

962,132

 

(184,946

)

41,161

 

7,730,729

 

President and Chief Executive Officer

 

2017

 

1,090,000

 

5,483,988

 

 

 

40,849

 

28,166

 

6,643,003

 

 

2016

 

1,015,000

 

4,925,199

 

781,103

 

225,585

 

40,202

 

6,987,089

 

Michael B. Clauer,

 

2018

 

585,000

 

1,301,378

 

322,734

 

 

 

23,441

 

2,232,553

 

Senior Vice President and Chief Financial Officer

 

2017

 

585,000

 

1,225,750

 

 

 

 

 

27,177

 

1,837,927

 

 

2016

 

550,000

 

1,006,570

 

264,536

 

 

 

31,691

 

1,852,797

 

Fred Stephan,

 

2018

 

480,137

 

1,064,601

 

272,197

 

 

 

20,413

 

1,837,348

 

President, Bemis North America(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sheri H. Edison,

 

2018

 

480,000

 

757,255

 

211,846

 

 

 

22,590

 

1,471,691

 

Senior Vice President, Chief Legal Officer and Secretary

 

2017

 

480,000

 

713,266

 

 

 

 

 

25,006

 

1,218,272

 

 

2016

 

466,500

 

704,117

 

179,500

 

 

 

21,975

 

1,372,092

 

Timothy S. Fliss,

 

2018

 

383,000

 

521,697

 

169,035

 

 

 

21,003

 

1,094,735

 

Senior Vice President and Chief Human Resources Officer

 

2017

 

383,000

 

491,382

 

 

 

 

 

25,095

 

899,477

 

 

2016

 

372,000

 

485,035

 

143,138

 

 

 

20,669

 

1,020,842

 


(1)Reflects actual base salary paid in 2018.

(2)Reflects the grant date fair value of share units granted in the fiscal year, calculated in accordance with FASB ASC Topic 718.  Time-based share units and performance-based share units vest after a three-year period.  Time-based share units are valued at the number of units granted multiplied by the grant date closing price.  Performance-based share units are valued using a Monte Carlo simulation pursuant to FASB ASC Topic 718. For grants made in 2018, the accounting value of each performance-based share unit was 116 percent of the value of each time-based share unit.  Assuming that the performance-based share units vest at the maximum performance level, the grant date fair value of the 2018 performance-based share units at the grant date using the 1/2/18 share price of $47.81 would be: Mr. Austen-$7,350,596; Mr. Clauer-$1,642,943; Mr. Stephan-$1,344,035; Ms. Edison-$956,009; and Mr. Fliss-$658,631.

(3)The amounts in this column reflect cash awards paid under the BEOPP, which is discussed in further detail in the Compensation Discussion and Analysis. The amount disclosed for Mr. Stephan includes $102,843 of short-term cash incentives paid that was attributable to the portion of the year prior to his promotion to an Executive Officer.

(4)The amounts in this column reflect the actuarial increase in the present value of the Named Executive Officers’ benefits under all established pension plans as well as any above market earnings on non-qualified deferred compensation plans.  Interest rate and mortality rate assumptions used are consistent with those shown in our financial statements.  Mr. Austen is the only Named Executive Officer who participates in the Company’s defined benefit pension plan.  See 2018 Pension Benefits for more detailed information.

(5)The amounts in this column include a sum of all other compensation as reported in the following table of All Other Compensation.

(6)Mr. Stephan was promoted to an Executive Officer in May 2018.

All Other Compensation

Name

 

Year

 

401k Match
BIIP
($)

 

Life Insurance
($)

 

Perquisites
($)

 

Total
($)

 

 

 

 

 

(a)

 

 

 

(b)

 

 

 

William F. Austen

 

2018

 

19,250

 

7,379

 

14,532

 

41,161

 

Michael B. Clauer

 

2018

 

19,250

 

4,191

 

 

 

23,441

 

Fred Stephan

 

2018

 

19,250

 

1,163

 

 

 

20,413

 

Sheri H. Edison

 

2018

 

19,250

 

3,340

 

 

 

22,590

 

Timothy S. Fliss

 

2018

 

19,250

 

1,753

 

 

 

21,003

 


(a)The Bemis Investment Incentive Plan (BIIP) 401(k) is available to all eligible salaried and non-union hourly employees, including all Executive Officers.  Participants contribute by making pre-tax employee contributions that are then matched by the Company in Bemis shares.  The match is 100 percent of the employee contributions up to a 7 percent maximum match of eligible compensation.   Participants are vested after three years of service.

(b)The $14,532 amount relates entirely to personal use of aircraft that was provided by the Company.

Grants of Plan Based Awards in 2018

 

 

 

 

Award

 

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards

 

Estimated Future Payouts
Under Equity Incentive Plan
Awards

 

All Other Stock
Awards: Number

 

Grant Date

 

 

 

Eff Grant

 

(Approval)

 

Threshold

 

Target

 

Max

 

Threshold

 

Target

 

Max

 

of Shares of Stock

 

Fair Market

 

Name

 

Date

 

Date

 

($)

 

($)

 

($)

 

(#)

 

(#)

 

(#)

 

Units (#)

 

Value ($)

 

 

 

 

 

 

 

 

 

(1)

 

 

 

 

 

(2)

 

 

 

(2)

 

(3)

 

William F. Austen

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

 

 

 

 

 

 

32,946

 

1,575,148

 

 

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

38,437

 

76,873

 

153,746

 

 

 

4,247,233

 

 

 

 

 

 

 

654,000

 

1,308,000

 

2,616,000

 

 

 

 

 

 

 

 

 

 

 

Michael B. Clauer

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

 

 

 

 

 

 

7,364

 

352,073

 

 

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

8,591

 

17,182

 

34,364

 

 

 

949,306

 

 

 

 

 

 

 

219,375

 

438,750

 

877,500

 

 

 

 

 

 

 

 

 

 

 

Fred Stephan

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

 

 

 

 

 

 

4,761

 

227,623

 

 

 

05/02/18

 

05/02/18

 

 

 

 

 

 

 

 

 

 

 

 

 

1,263

 

60,384

 

 

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

5,555

 

11,109

 

22,218

 

 

 

613,772

 

 

 

05/02/18

 

05/02/18

 

 

 

 

 

 

 

1,474

 

2,947

 

5,894

 

 

 

162,822

 

 

 

 

 

 

 

160,486

 

320,973

 

641,945

 

 

 

 

 

 

 

 

 

 

 

Sheri H. Edison

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

 

 

 

 

 

 

4,285

 

204,866

 

 

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

4,999

 

9,998

 

19,996

 

 

 

552,390

 

 

 

 

 

 

 

144,000

 

288,000

 

576,000

 

 

 

 

 

 

 

 

 

 

 

Timothy S. Fliss

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

 

 

 

 

 

 

2,952

 

141,135

 

 

 

01/02/18

 

11/01/17

 

 

 

 

 

 

 

3,444

 

6,888

 

13,776

 

 

 

380,562

 

 

 

 

 

 

 

114,900

 

229,800

 

459,600

 

 

 

 

 

 

 

 

 

 

 


(1)The Bemis Executive Officer Performance Plan (BEOPP) is an annual, non-equity cash incentive program.  The BEOPP provides the formula for calculating the annual non-equity incentive-based compensation, subject to the Committee’s oversight and approval.  Each Named Executive Officer has a target award opportunity that is assigned as a percentage of annual base pay.  These annual target awards range from 60 percent of annual base pay to 120 percent of annual base pay (as determined by the Committee).  The short-term, non-equity incentive plan’s measurement for payout is adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) results against target, adjusted Return on Invested Capital (ROIC) results against target, and adjusted Net Revenue results against target.  The payout is determined by adjusted EBITDA, adjusted ROIC, and adjusted Net Revenue performance, respectively, utilizing a performance scale (see BEOPP Funding Scale in Compensation Discussion and Analysis).  The maximum payout under this plan is $3,000,000. Mr. Stephan joined the BEOPP on May 1, 2018 at which time he received a short-term incentive target increase from 60 percent to 70 percent.

(2)Reflects the issuance of restricted equity units to the Named Executive Officers.  Time-based share units and performance-based share units vest after a three-year period, subject to accelerated vesting for retirement eligible participants.  Retirement eligible participants for 2018 include: Mr. Austen, Mr. Clauer, Ms. Edison, and Mr. Fliss. The share price used to determine the number of both time-based and performance-based share units granted on 1/2/18 was the average closing share price for the last 20 trading days of December 2017, or $47.26.  The maximum payout for the performance-based share units is two times the target for achieving 75 percent of TSR in comparison to the TSR Comparator Group while achieving the 25th percentile of TSR in comparison to the TSR Comparator Group yields a 50 percent payout.  Below the 25th percentile achievement yields no payout.  All restricted equity units vest in the event of an Executive Officer’s death or disability and in the event of a change of control, with performance-based share units vesting at the target.  In addition, any Executive Officer who retired at or after the age 55 will vest in a prorated amount of the units determined based on the number of months of the vesting or performance period while the Executive Officer was employed.  Upon being promoted to an Executive Officer in May 2018, Mr. Stephan received an additional 2,947 performance-based share units and 1,263 time-based share units.

(3)Grant date fair market value for the time-based share units is the number of units, multiplied by the closing market price on 1/2/18, which was $47.81.  Grant date fair market value for the performance-based share units is determined using the Monte Carlo simulation in accordance with FASB ASC Topic 718.  The accounting value of each performance-based share unit was 116 percent of the value of each time-based share unit.

Outstanding Equity Awards at 2018 Fiscal Year End

 

 

Stock Awards

 

 

 

(1)

 

(2)

 

(1)

 

(2)

 

Name

 

Number of Shares or
Units of Stock That
Have Not Vested
(#)

 

Market Value of
Shares or Units of
Stock That Have
Not Vested
($)

 

Equity Incentive Plan Awards:
Number of Unearned Shares, Units
or Other Rights That Have Not
Vested
(#)

 

Equity Incentive Plan Awards:
Market or Payout Value of
Unearned Shares, Units or Other
Rights That Have Not Vested
($)

 

William F. Austen

(3)

31,653

 

1,452,873

 

 

 

 

 

 

 

 

(4)

32,946

 

1,512,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

73,857

 

3,390,036

 

 

 

 

 

 

 

 

(6)

76,873

 

3,528,471

 

Michael B. Clauer

(3)

7,075

 

324,743

 

 

 

 

 

 

 

 

(4)

7,364

 

338,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

16,508

 

757,717

 

 

 

 

 

 

 

 

(6)

17,182

 

788,654

 

Fred Stephan

(7)

4,575

 

209,993

 

 

 

 

 

 

 

 

(8)

6,024

 

276,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9)

10,673

 

489,891

 

 

 

 

 

 

 

 

(10)

14,056

 

645,170

 

Sheri H. Edison

(3)

4,117

 

188,970

 

 

 

 

 

 

 

 

(4)

4,285

 

196,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

9,606

 

440,915

 

 

 

 

 

 

 

 

(6)

9,998

 

458,908

 

Timothy S. Fliss

(3)

2,836

 

130,172

 

 

 

 

 

 

 

 

(4)

2,952

 

135,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

6,618

 

303,766

 

 

 

 

 

 

 

 

(6)

6,888

 

316,159

 


(1)Reflects outstanding time-based share units and performance-based share units that vest after a three-year period. The performance-based share units will vest on 12/31/2019 and 12/31/2020 based on our TSR performance relative to our TSR Comparator Group.  Dividend equivalents are accrued and paid out when the share units fully vest.

(2)Market value of share units is determined by multiplying the number of units by the 12/31/2018 Bemis closing share price of $45.90.

(3)Number of time-based share units awarded on 1/3/2017. The units will vest on 12/31/2019.

(4)Number of time-based share units awarded on 1/2/2018. The units will vest on 12/31/2020.

(5)Number of performance-based share units awarded on 1/3/2017 that would be earned based on achieving target level of performance.

(6)Number of performance-based share units awarded on 1/2/2018 that would be earned based on achieving target level of performance.

(7)Number of time-based share units awarded on 2/20/2017 that will vest on 12/31/2019.

(8)Number of time-based share units awarded on 1/2/2018 and 5/2/2018 that will vest on 12/31/2020.

(9)Number of performance-based share units awarded on 2/20/2017 that will vest on 12/31/2019.

(10)Number of performance-based share units awarded on 1/2/2018 and 5/2/2018 that will vest on 12/31/2020.

Option Exercises and Stock Vested in 2018

 

 

Stock Awards

 

Name

 

Number of Shares
Acquired on Vesting
(#)

 

Value Realized on
Vesting
($)

 

 

 

(1)

 

 

 

William F. Austen

 

31,334

 

1,431,337

(2)

 

 

63,974

 

3,196,141

(3)

Michael B. Clauer

 

6,404

 

292,535

(2)

 

 

13,075

 

653,227

(3)

Fred Stephan

 

23,700

 

1,082,616

(2)

 

 

 

 

 

 

Sheri H. Edison

 

4,480

 

204,646

(2)

 

 

9,146

 

456,934

(3)

Timothy S. Fliss

 

3,086

 

140,968

(2)

 

 

6,300

 

314,748

(3)


(1)The figures represent the number of shares that vested during 2018 for each Named Executive Officer.  Dollar amount represents the share closing price on the date of vesting multiplied by the number of units vested for time-based shares.

(2)Time-based share units vested 12/31/2018 and distributed on 1/2/2019 to the Named Executive Officer.

(3)Performance-based share units vested during 2018 and distributed on 2/6/2019 to the Named Executive Officer.

2018 Pension Benefits

The table below shows the present value of accumulated benefits payable to each of the Named Executive Officers, including the number of years of service credited to each Named Executive Officer, under each of the Retirement Plans and Supplemental Retirement Plans, determined using interest rate and mortality rate assumptions described below. The pension plans included in this table are frozen as of December 31, 2013.  Any employee hired after January 1, 2005 is not eligible to participate in any of the Bemis Defined Benefit Retirement Programs.

Name

 

Plan Name

 

Number of Years
Credited Service
(#)

 

Present Value
of Accumulated
Benefit
($)

 

Payments
During Last
Fiscal Year
($)

 

 

 

(1)(2)

 

 

 

(3)

 

 

 

William F. Austen

 

Bemis Retirement Plan

 

5.80

 

219,360

 

 

 

 

 

Bemis Supplemental Retirement Plan

 

5.80

 

777,955

 

 

 

 

 

Bemis Supplemental Retirement Plan for Senior Officers

 

13.80

 

4,139,945

 

 

 

 

 

TOTAL

 

 

 

5,137,260

 

 

 

Key Assumptions(3)

 

12/31/2018

 

12/31/2017

 

Discount Rate

 

4.25%

 

3.75%

 

Expected Retirement Age

 

Earliest unreduced age

 

Earliest unreduced age

 

Pre-Retirement Decrements

 

None

 

None

 

Post-Retirement Mortality

 

RP 2014 adjusted to 2006

 

RP 2014 adjusted to 2006

 

Mortality Projection Scale

 

MP 2018 Generational

 

MP 2017 Generational

 

Form of Payment

 

 

 

 

 

BRP

 

Single Life Annuity

 

Single Life Annuity

 

Supplemental

 

Lump Sum

 

Lump Sum

 

SERP

 

Lump Sum

 

Lump Sum

 

Lump Sum Assumptions

 

 

 

 

 

Interest

 

3.00%

 

3.00%

 

Mortality

 

IRS 2019 Applicable Mortality Table

 

IRS 2018 Applicable Mortality Table

 


(1)Bemis Retirement Plan (BRP) and Bemis Supplemental Retirement Plan (Supplemental Plan) - Both the BRP and the Supplemental Plan are non-contributory defined benefit plans with an offset for Social Security, which provide benefits determined primarily by final average salary and years of service. Final average salary is determined by using the highest five consecutive years of earnings out of the last fifteen.  Eligible earnings include regular annual base compensation plus any annual non-equity cash incentive earned.  The benefit formula is 50 percent of the final average salary, less 50 percent of the estimated Social Security benefit.  Benefits are generally accrued over a 30-year period.  The Supplemental Plan is a non-qualified defined benefit “excess” plan that provides an additional benefit which would have been provided under the BRP but for the limitations imposed by IRC Section 415 (maximum benefits) and IRC Section 401(a)(17) (maximum compensation).  The provisions of the Supplemental Plan generally mirror the BRP, except the Supplemental Plan provides for a present value lump sum payment option, while the BRP does not.  The only Named Executive Officer that meets the eligibility requirements for early retirement as of December 31, 2018 is Mr. Austen.  Early retirement eligibility is age 55 with 10 years of service.  The early retirement benefits for Mr. Austen equals the normal retirement benefit, reduced by 5 percent each year from age 66 to age 61, then reduced 4 percent each year to age 55.  The BRP and Supplemental Plans are frozen as of December 31, 2013; therefore, no additional benefits will be earned under these plans after December 31, 2013.

(2)Similar to the BRP and Supplemental Plan, the total benefits under the Bemis Supplemental Retirement Plan for Senior Officers (SERP) is 50 percent of final average earnings, less 50 percent of the estimated Social Security benefit, then offset by the BRP and Supplemental Plan benefit amounts.  However, unlike the BRP and the Supplemental Plan, benefits under the SERP accrue over a 20-year period.  In addition, final average earnings are calculated using the highest five years during the last 15, whether or not they are consecutive.  Benefits under the SERP vest upon attainment of age 50 with 20 years of service, or when combined age and service totals 75 or more.  The early retirement eligibility is the same as the vesting eligibility notes above, except that the Senior Officer cannot commence payment prior to age 55.  The SERP has no early retirement reductions and a present value lump sum form of payment is offered.  The SERP is frozen as of December 31, 2013; therefore, no additional benefits will be earned under this plan after December 31, 2013.

(3)All assumptions used to calculate the present value of accumulated benefits under the BRP, Supplemental Plan and the SERP, are the same as those used in our financial statements as of December 31, 2018, except for the assumed retirement age.  The assumed retirement age has been changed to reflect the earliest unreduced age under the SERP.  Lump sums under the Supplemental Plan and the SERP were calculated assuming a 3 percent lump sum interest rate and the IRS 2019 Applicable Mortality Table.

Potential Payments upon Termination, Including Following Change of Control for 2018

The following table describes the potential payments and benefits under the Company’s compensation and benefit plans and arrangements to which the Named Executive Officers would be entitled to upon termination of employment, including following a change of control. Except for certain terminations following a change of control of the Company as described below, there are no other agreements, arrangements or plans that entitle Executive Officers to severance, perquisites, or other enhanced benefits upon termination of their employment. Any agreement to provide such payments or benefits to a terminating Executive Officer (other than following a change of control) would be at the discretion of the Compensation Committee.

The amounts shown below for change of control and certain terminations of employment following a change of control reflect payments and benefits under the Management Agreements in connection with any change of control. The amounts shown below do not give effect to other specific arrangements specific to the Merger with Amcor, which are described above under “Executive Compensation Discussion & Analysis — 2019 Changes and Definitive Transaction Agreement with Amcor” and below under “Management Agreements — Arrangements due to Definitive Transaction Agreement with Amcor.”

Name

 

Event

 

Cash
Severance
Payment
(salary,
bonus, etc.)
($)

 

Incremental
Pension Benefit
(present value)
($)

 

Continuation
of Medical/
Welfare
Benefits
(present value)
($)

 

Acceleration
and
Continuation
of Equity
Awards
($)

 

Excise
Tax
Adjustment
($)

 

 

 

 

 

 

(1)

 

 

 

(2)

 

 

William F. Austen

 

Death and disability

 

 

 

 

 

 

 

10,275,111

 

 

 

 

(3) Voluntary termination

 

 

 

 

 

 

 

5,125,858

 

 

 

 

(3) Voluntary retirement

 

 

 

 

 

 

 

5,125,858

 

 

 

 

(3) Involuntary termination

 

 

 

 

 

 

 

5,125,858

 

 

 

 

Involuntary termination for cause Change of control

 

 

 

 

 

 

 

10,275,111

 

 

 

 

(4) Involuntary or constructive termination after change of control

 

15,506,660

 

 

 

158,301

 

 

 

11,554,685

Michael B. Clauer

 

Death and disability

 

 

 

 

 

 

 

2,297,101

 

 

 

 

(3) Voluntary termination

 

 

 

 

 

 

 

1,145,701

 

 

 

 

(3) Voluntary retirement

 

 

 

 

 

 

 

1,145,701

 

 

 

 

(3) Involuntary termination

 

 

 

 

 

 

 

1,145,701

 

 

 

 

Involuntary termination for cause Change of control

 

 

 

 

 

 

 

2,297,101

 

 

 

 

(5) Involuntary or constructive termination after change of control

 

3,126,000

 

 

 

71,011

 

 

 

 

Sheri H. Edison

 

Death and disability

 

 

 

 

 

 

 

1,336,670

 

 

 

 

(3) Voluntary termination

 

 

 

 

 

 

 

666,680

 

 

 

 

(3) Voluntary retirement

 

 

 

 

 

 

 

666,680

 

 

 

 

(3) Involuntary termination

 

 

 

 

 

 

 

666,680

 

 

 

 

Involuntary termination for cause Change of control

 

 

 

 

 

 

 

1,336,670

 

 

 

 

(5) Involuntary or constructive termination after change of control

 

2,340,000

 

 

 

96,144

 

 

 

 

Timothy S. Fliss

 

Death and disability

 

 

 

 

 

 

 

920,864

 

 

 

 

(3) Voluntary termination

 

 

 

 

 

 

 

459,290

 

 

 

 

(3) Voluntary retirement

 

 

 

 

 

 

 

459,290

 

 

 

 

(3) Involuntary termination

 

 

 

 

 

 

 

459,290

 

 

 

 

Involuntary termination for cause Change of control

 

 

 

 

 

 

 

920,864

 

 

 

 

(5) Involuntary or constructive termination after change of control

 

1,859,800

 

 

 

78,504

 

 

 

 

Fred Stephan

 

Death & Disability

 

 

 

 

 

 

 

1,682,354

 

 

 

 

(3) Voluntary termination

 

 

 

 

 

 

 

 

 

 

 

 

(3) Voluntary retirement

 

 

 

 

 

 

 

 

 

 

 

 

(3) Involuntary termination

 

 

 

 

 

 

 

 

 

 

 

 

Involuntary termination for cause Change of control

 

 

 

 

 

 

 

1,682,354

 

 

 

 

(5) Involuntary or constructive termination after change of control

 

1,960,000

 

 

 

81,157

 

 

 

 


(1)Vested pension benefits, if any, for the Named Executive Officers are not listed in this table because they are already provided under Pension Benefits.

(2)The Acceleration and Continuation of Equity Awards column for a change of control includes the value of all currently non-vested equity units outstanding at 2018 fiscal year-end from the Outstanding Equity Awards Table, including both time and performance-based awards (assuming performance-based awards vest at target levels).

(3)The Acceleration and Continuation of Equity Awards column for voluntary termination, voluntary retirement, and involuntary termination includes payouts that are pursuant to the terms of the Plan, assuming a 100 percent payout at Target for performance-based share units.

(4)Involuntary or constructive termination after change of control: provides salary, bonus, and an excise tax adjustment. The cash column represents three (3) times the annual base salary, three (3) times the greater of the current bonus target or the highest bonus paid to the Named Executive Officer during the previous five (5) calendar years, a cash payment equal to the value of the 2018 restricted share award made to the Named Executive Officer, and three (3) times the benefit costs calculated at thirty (30) percent of base pay. The continuation of medical/welfare benefits column represents the estimated cost for Bemis’ portion of health, welfare and life insurance cost for a three (3) year period.

(5)Involuntary or constructive termination after change of control: provides salary, and bonus (no tax gross-up due to elimination of this benefit as of 1/1/2009). The cash column represents two (2) times the annual base salary, two (2) times the greater of the current bonus target or the highest bonus paid to the Named Executive Officer during the previous five (5) calendar years, and two (2) times the benefit costs calculated at thirty (30) percent of base pay. The continuation of medical/welfare benefits column represents the estimated cost for Bemis’ portion of health, welfare and life insurance cost for a two (2) year period.

MANAGEMENT AGREEMENTS

We have Management Agreements (“Agreements”) with the SecuritiesExecutive Officers that become effective only upon a change of control event. A change of control event is deemed to have occurred if (i) any person acquires or becomes a beneficial owner, directly or indirectly, of our securities representing 20 percent or more of our voting securities or 20 percent or more of our outstanding Common Stock, (ii) incumbent directors and Exchange Commissiondirectors elected or nominated by the Board cease to constitute a majority of the Board, (iii) consummation of a merger, unless the beneficial owners of our voting securities and outstanding Common Stock beneficially own more than 80 percent of the voting securities and outstanding Common Stock of the surviving corporation in substantially the same proportions, (iv) shareholder approval of a complete liquidation or dissolution of the Company or sale or other disposition of all or substantially all of the assets of the Company unless the beneficial owners of our voting securities and outstanding Common Stock beneficially own more than 80 percent of the voting securities and outstanding Common Stock of the surviving corporation, or (v) the Company enters into a letter of intent or agreement in principle relating to one of the foregoing change of control events that ultimately results in such a change of control event, or a tender or exchange offer or proxy contest is commenced which ultimately results in such a change of control event. If, in connection with a change of control event, an Executive Officer is terminated involuntarily or constructively involuntarily terminated (a “Qualifying Event”), such Executive Officer will be entitled:

(a)         To immediately receive from us or our successor, a lump-sum cash payment in an amount equal to two times (or three times for Executive Officers elected before 2008) the sum of (1) the executive’s annual salary for the previous year, or, if higher, the executive’s annual salary in effect immediately prior to the change of control event; (2) the executive’s target bonus for the current year, or, if higher, the highest annual bonus received by the executive during the previous five years; and (3) the estimated value of fringe benefits and perquisites;

(b)         To immediately receive from us or our successor (for Executive Officers elected before 2007), a lump-sum cash payment in an amount equal to the executive’s most recent annual grant of equity units multiplied by the value of a share of our common stock on the day immediately prior to the change of control event; and

(c)          For two years (or three years for Executive Officers elected before 2008) after the “Involuntary Termination” or “Constructive Involuntary Termination”, to participate in any health, disability, and life insurance plan or program in which the executive was entitled to participate immediately prior to the change of control event; but notwithstanding anything to the contrary above, the executive will not be entitled to benefits under subparagraphs (a), (b) or (c) above for any time following the executive’s sixty-fifth (65th) birthday.

For purposes of the Agreements, “Involuntary Termination” means a termination by us of the executive’s employment that is not a termination for “Cause” and that is not on account of the death or disability of the executive.

“Constructive Involuntary Termination” means any of the following events: (1) reduction of the executive’s title, duties, responsibilities, or authority, other than for Cause or disability; (2) reduction of the executive’s annual base salary; (3) reduction of the aggregate benefits under our pension, profit sharing, retirement, life insurance, medical, health and accident, disability, bonus and incentive plans, and other employee benefit plans and arrangements or reduction of the number of paid

vacation days to which the executive is entitled; (4) we fail to obtain assumption of the Agreement by any successor; (5) we require the executive to perform his primary duties at a location that is more than 25 miles further from his primary residence than the location at which he performs his primary duties on the effective date of the Agreement; or (6) a termination of employment with us by the executive after any of the other occurrences listed.

“Cause” means, and is limited to, (1) willful and gross neglect of duties by the executive that has not been substantially corrected within 30 days after his receipt from us of written notice describing the neglect and the steps necessary to substantially correct it, or (2) an act or acts committed by the executive constituting a felony and substantially detrimental to us or our reputation.

In 2008, new Management Agreements were approved for all incoming Executive Officers. These agreements provide for two (2) years of payments (versus the previously executed Management Agreements that provide for three (3) years of payments) and provide no additional payments for any restricted share unit awards. Effective January 1, 2009, the Compensation Committee eliminated the Internal Revenue Code Section 280G excise tax adjustments from payments due under new Management Agreements.

Arrangements due to Definitive Transaction Agreement with Amcor

The Management Agreements described above govern any change of control transaction.  Specific to the Merger with Amcor, certain additional arrangements have been put in place that have payment triggers tied to the Merger, such as the 2019 long-term incentive awards and retention bonus awards described above.  In addition, Amcor has made provisional offers of employment to all Executive Officers, other than Mr. Austen and Mr. Clauer, for employment with the combined company that have been accepted by these Executive Officers. These offers provide for annual compensation (base salary, annual cash bonus, long-term incentives and other benefits) that Amcor believes to be commensurate with the roles the executives would assume with the combined company. These offers preserve the Executives Officers’ eligibility for the existing retention bonus arrangements and provide for the settlement of the Executive Officers’ existing Management Agreements in return for comparable payments at or after closing. The offer letters with two Executive Officers who may experience a Qualifying Event provide for termination of the Executive Officer’s Management Agreement in exchange for certain payments and potential payments in an aggregate amount that is comparable to the severance benefits that would have been payable upon a Qualifying Event under the Management Agreement before any reduction to avoid an excise tax.

Mr. Austen and Mr. Clauer may enter into consulting arrangements with Amcor pursuant to which they will be available to provide limited transition services, if required and as requested by Amcor, for a brief period of time following closings.

Pursuant to the Agreement, Amcor agreed to provide, for a period of one year after the closing, certain benefits to any Bemis employees who continue with the combined company, including (i) base salary or hourly wage and short-term cash incentive bonus opportunity that, in each case, is no less than the base pay or hourly wage and short-term cash incentive bonus opportunity paid or made available to the continuing employee prior to the closing, (ii) subject to certain exceptions, a total direct compensation opportunity for 2019 that is substantially similar to the applicable continuing employee’s total direct compensation for 2018, (iii) severance benefits that are no less favorable to the applicable continuing employee than those applicable immediately prior to the closing and (iv) group employee benefits that are substantially similar in the aggregate to the group employee benefits provided to the continuing employees immediately prior to the closing.

CEO PAY RATIO

We are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of Mr. Austen, our Chief Executive Officer (“CEO”):

For 2018:

·                   the annual total compensation of our median employee was $45,084; and

·                   the annual total compensation of our CEO, as reported in the Summary Compensation Table included on page 22 of this proxy statement, was $7,730,729.

Based on this information for fiscal year 2018, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was approximately 171:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation 14AS-K.

We identified our median employee based on fiscal 2018 annual base compensation (salary and hourly wages) for all employees within 120 days after December 31, 2016our organization (including global full-time, part-time and temporary employees), other than our CEO, who were employed on October 1, 2018. More than one employee had the same annual base compensation. To select an employee from this group, we calculated total compensation as defined for purposes of the Summary Compensation Table for each employee in the group and such informationselected the median employee.

When calculating annual total compensation of the median employee, we included all elements of compensation included in the Summary Compensation Table, including base pay, shift differential, overtime, bonus, 401(k) match, perquisites and similar other compensation elements.

2018 Director Compensation

Director compensation is expressly incorporated hereinapproved by reference.the Compensation Committee. The Committee determines appropriate pay levels in reliance on the expertise of, and data supplied by, Willis Towers Watson. The components of Director pay include cash or shares in lieu of cash, share awards, and an additional cash payment and share award for Non-Executive Chairman of the Board (or Independent Lead Director, if applicable) and for Directors who serve as Chairs on the Committees. For 2018, annual board compensation remained the same as 2017, consisting of $95,000 in cash or shares in lieu of cash and restricted stock unit awards valued at $130,000. In addition, the Committee Chairs received a payment of cash or shares in lieu of cash in the amount of $18,000. Director Manganello received an annual fee of $95,000 and restricted stock unit awards valued at $95,000 for services as Non-Executive Chairman of the Board.

The table below reflects shares granted for the term beginning at the 2018 Annual Shareholder Meeting.

Name

 

Fees Earned or
Paid in Cash
($)

 

Stock
Awards
($)

 

All Other
Compensation
($)

 

Total
($)

 

 

 

 

 

(1)

 

 

 

 

 

Katherine C. Doyle

 

95,000

 

132,937

 

 

 

227,937

 

Ronald J. Floto(3)

 

32,102

 

 

 

 

 

32,102

 

Adele M. Gulfo(2)

 

 

 

228,032

 

 

 

228,032

 

David S. Haffner

 

101,082

 

132,937

 

 

 

234,020

 

Timothy M. Manganello

 

190,000

 

230,053

 

 

 

420,053

 

William L. Mansfield(2)(3)

 

 

 

32,132

 

 

 

32,132

 

Arun Nayar

 

113,000

 

132,937

 

 

 

245,937

 

Guillermo Novo(4)

 

75,472

 

132,937

 

 

 

208,409

 

Marran H. Ogilvie(4)

 

75,472

 

132,937

 

 

 

208,409

 

David T. Szczupak(2)

 

 

 

239,914

 

 

 

239,914

 

Holly A. Van Deursen

 

113,000

 

132,937

 

 

 

245,937

 

Philip G. Weaver

 

109,300

 

132,937

 

 

 

242,237

 

George W. Wurtz III(4)

 

75,472

 

132,937

 

 

 

208,409

 

Robert H. Yanker(2)(4)

 

 

 

208,507

 

 

 

208,507

 


(1)



Each Director elected at the 2018 Annual Meeting of Shareholders was granted Restricted Stock Units (RSUs) for 3,095 shares with a grant date fair value computed in accordance with FASB ASC Topic 718 of $130,021 (3,095 shares multiplied by the stock closing price on 5/3/18 or $42.01).  These RSUs will have a one-year vesting period and will vest in full on the earlier of the first anniversary of the date of grant or at the next Annual Meeting of Shareholders.  Any Director whose service terminates prior to an Annual Meeting of Shareholders will vest in a prorated number of share units for the portion of the year served.

(2)Directors Gulfo, Mansfield, Szczupak, and Yanker elected to receive their entire annual retainer in the form of Bemis shares in lieu of cash.

(3)Directors Floto and Mansfield retired from the Board on May 3, 2018.

(4)Directors Novo, Ogilvie, Wurtz, and Yanker were appointed to the Board effective March 16, 2018.

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSAND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

Equity compensation plans as of December 31, 20162018 were as follows:

 

 

Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights

 

Weighted-average
exercise price of
outstanding options,
warrants and rights

 

Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

 

Plan Category

 

(a)

 

(b)

 

(c)

 

Equity compensation plans approved by security holders

 

1,166,757

(1)

N/A

(2)

1,290,386

(3)

Equity compensation plans not approved by security holders

 

 

N/A

 

 

Total

 

1,166,757

(1)

N/A

(2)

1,290,386

(3)


(1)

  
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
 
Weighted-average
exercise price of
outstanding options,
warrants and rights
 
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
 
Plan Category (a) (b) (c) 
Equity compensation plans approved by security holders 1,622,467
(1)N/A(2)2,448,067
(3)
Equity compensation plans not approved by security holders 
 N/A 
 
Total 1,622,467
(1)N/A(2)2,448,067
(3)

(1)Includes restricted stock units.
(2)Restricted stock units do not have an exercise price.
(3)      Includes restricted stock units.

(2)      Restricted stock units do not have an exercise price.

(3)May be issued as options or restricted stock units.


The additional information required to be submitted in response to this item is omitted because a definitive proxy statement containing such information is expected to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after issued as options or restricted stock units.

December 31, 2016, and such information is expressly incorporated herein by reference.


ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
TRANSACTIONS WITH RELATED PERSONS

Our Board of Directors has approved a written policy whereby the Audit Committee must approve any transaction with a related person, as defined in Item 404 of Regulation S-K (“Related Person Transaction”), before commencement of such transaction; provided, however, that if the transaction is identified after it commences, it shall be brought to the Audit Committee for ratification. The Related Person Transaction should be presented to the Audit Committee by an Executive Officer requesting that the Audit Committee consider the Related Person Transaction at its next meeting. The Executive Officer presenting the transaction must advise the Audit Committee of all material terms of the transaction.

The Audit Committee has delegated authority to the Audit Committee Chairman to, upon request of an Executive Officer, approve Related Person Transactions if they arise between Audit Committee meetings. The Chairman may take any action with respect to such Related Person Transaction that the Audit Committee would be authorized to take, or, in his or her discretion, require that the matter be brought before the full Audit Committee. Any action taken by the Chairman shall be reported to the Audit Committee at its next regularly scheduled meeting.

Standards for Approval of Transactions

The Audit Committee will analyze the following factors, in addition to any other factors the Committee deems appropriate, in determining whether to approve a Related Person Transaction:

·                   Whether the terms of the transaction are fair;

·                   Whether the transaction is material to us;

·                   The role the related person has played in arranging the Related Person Transaction;

·                   The structure of the Related Person Transaction; and

·                   The interests of all related persons in the Related Person Transaction.

A Related Person Transaction will only be approved by the Audit Committee if the Audit Committee determines that the Related Person Transaction is beneficial to us and the terms of the Related Person Transaction are fair.

Approval Process

The Audit Committee may, in its sole discretion, approve or deny any Related Person Transaction. Approval of a Related Person Transaction may be conditioned upon us and the related person taking any or all of the following additional actions, or any other actions that the Audit Committee deems appropriate:

·                   Requiring the related person to resign from, or change position within, an entity that is involved in the Related Person Transaction;

·                   Assuring that the related person will not be directly involved in negotiating the terms of the Related Person Transaction or in the ongoing relationship between us and the other persons or entities involved in the Related Person Transaction;

·                   Limiting the duration or magnitude of the Related Person Transaction;

·                   Requiring that information requiredabout the Related Person Transaction be documented and that reports reflecting the nature and amount of the Related Person Transaction be delivered to be submittedthe Audit Committee on a regular basis;

·                   Requiring that we have the right to terminate the Related Person Transaction by giving a specified period of advance notice; or

·                   Appointing a Company representative to monitor various aspects of the Related Person Transaction.

In the case of any transaction for which ratification is sought, the Audit Committee may require amendment or termination of the transaction, or implementation of the above actions, if the Audit Committee does not ratify the transaction.

Transactions with Related Persons during Fiscal Year 2018

Item 404 of Regulation S-K requires that we disclose any transactions between us and any related persons, as defined by Item 404, in response to this item is omitted becausewhich the amount involved exceeds $120,000 and in which any related party had or will have a definitive proxy statement containing such information is expected to be filed withdirect or indirect material interest. During fiscal year 2018, there were no Related Person Transactions meeting the Securities and Exchange Commission pursuant torequirements of Item 404 of Regulation 14A within 120 days after S-K.

December 31, 2016, and such information is expressly incorporated herein by reference.


ITEM 14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information requiredfollowing table presents aggregate fees for professional audit services rendered by PricewaterhouseCoopers LLP (“PwC”) for the audit of the Company’s annual financial statements for the years ended December 31, 2018 and 2017, and fees billed for other services rendered by PwC during those periods.

 

 

2018

 

2017

 

Audit Fees(1)

 

$

3,464,508

 

$

3,356,806

 

Audit-Related Fees(2)

 

214,900

 

152,203

 

Tax Fees(3)

 

132,066

 

95,457

 

Other Fees(4)

 

973,300

 

738,395

 

TOTAL FEES

 

$

4,784,774

 

$

4,342,861

 


(1)Audit Fees — These are fees for professional services performed by PwC for the integrated audits of the Company’s annual financial statements and reviews of financial statements included in the Company’s 10-Q filings and services that are normally provided in connection with statutory and regulatory filings or engagements.

(2)Audit-Related Fees — These are fees for the assurance and related services performed by PwC that are reasonably related to the performance of the audit or review of the Company’s financial statements.  For 2018, this included amounts related to the adoption of the lease accounting standard.  For 2017, the fees primarily related to additional work for the adoption of the revenue recognition standard.

(3)Tax Fees — These are fees for professional services performed by PwC with respect to tax compliance, tax advice and tax planning. This includes review and/or preparation of certain foreign tax returns and tax consulting.

(4)Other Fees — The 2018 and 2017 fees paid to PwC were primarily for transaction due diligence.

The Audit Committee approved all audit and non-audit services provided to the Company by PwC in accordance with its policy, prior to management engaging the auditor for that purpose.  The Committee’s current practice is to consider for pre-approval quarterly all audit and non-audit services that management recommends to be submitted in responseprovided by PwC.  In making its recommendation to this itemappoint PwC as the Company’s independent registered public accounting firm, the Audit Committee has considered whether the provision of the non-audit services rendered by PwC is omitted because a definitive proxy statement containing such information is expected to be filedcompatible with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2016, and such information is expressly incorporated herein by reference.

maintaining that firm’s independence.



PART  IV

ITEM 15 — EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Pages in
Original Filing

Pages in Form 10-K

(a) Financial Statements, Financial Statement Schedule, and Exhibits

(1) Financial Statements

Management’s Responsibility Statement

35

Report of Independent Registered Public Accounting Firm

36

Consolidated Statement of Income

37

Consolidated Statement of Comprehensive Income

38

Consolidated Balance Sheet

39

Consolidated Statement of Cash Flows

40

Consolidated Statement of Equity

41

Notes to Consolidated Financial Statements

42

(2) Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts and Reserves

82

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

(3) Exhibits

72

Exhibit

Description

Form of Filing

All

2

(a)

Transaction Agreement, dated as of August 6, 2018, by and among the Registrant, Amcor Limited, Arctic Jersey Limited and Arctic Corp. Certain schedules and exhibits have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. (Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K dated August 6, 2018. (File No. 1-5277)).

Incorporated by Reference

3

(a)

Restated Articles of Incorporation of the Registrant, as amended (Incorporated by reference to Exhibit 3(a) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. (File No. 1-5277)).

Incorporated by Reference

3

(b)

By-Laws of the Registrant, as amended through October 7, 2016. Incorporated by reference to Exhibit 3(ii) to the Registrant’s Current Report on Form 8-K dated October 7, 2016. (File No. 1-5277)).

Incorporated by Reference

4

(a)

Form of Indenture dated as of June 15, 1995, between the Registrant and U.S. Bank Trust National Association (formerly known as First Trust National Association), as Trustee. Copies of constituent instruments defining rights of holders of long-term debt of the Registrant and subsidiaries, other schedules are omitted because theythan the Indenture specified herein, are not applicable orfiled herewith, pursuant to Instruction (b)(4)(iii)(A) to Item 601 of Regulation S-K, because the required information is shown intotal amount of securities authorized under any such instrument does not exceed 10% of the financial statements or notes thereto.total assets of the Registrant and subsidiaries on a consolidated basis. The registrant hereby agrees that it will, upon request by the SEC, furnish to the SEC a copy of each such instrument. (Incorporated by reference to Exhibit 4(a) to the Registrant’s Current Report on Form 8-K dated June 30, 1995 (File No. 1-5277)).

Incorporated by Reference

4

(b)

Form of 3.100% Note due 2026 Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 15, 2016. (File No. 1-5277)).

Incorporated by Reference

(3)  Exhibits

10

(a)

Amendment No. 2 to Third Amended and Restated Credit Agreement, dated as of July 22, 2016, by and among the Registrant, the Borrowing Subsidiaries party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, and various financial institutions. (Incorporated by reference to Exhibit 10 to the Registrant’s Current Report on Form 8-K dated July 22, 2016 (File No. 1-5277)).

Incorporated by Reference

The

10

(b)

Bemis Deferred Compensation Plan, as amended effective January 1, 2009.* (Incorporated by reference to Exhibit Index is incorporated herein10(p) to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-5277)).

Incorporated by reference.Reference

10

(c)

Bemis Company, Inc. Supplemental Retirement Plan, Amended and Restated as of January 1, 2014.* (Incorporated by reference to Exhibit 10(c) to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-5277)).

Incorporated by Reference

10

(d)

Bemis Company, Inc. Supplemental Retirement Plan for Senior Officers, Amended and Restated as of January 1, 2014.* (Incorporated by reference to Exhibit 10(d) to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-5277)).

Incorporated by Reference

10

(e)

Bemis Company, Inc. 2014 Stock Incentive Plan.* (Incorporated by reference to Exhibit B to the Registrant’s Definitive Proxy Statement filed with the SEC on March 18, 2014 (File No. 1-5277)).

Incorporated by Reference

10

(f)

Bemis Supplemental BIPSP (As amended effective January 1, 2014).* (Incorporated by reference to Exhibit 10(f) to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-5277)).

Incorporated by Reference

10

(g)

Bemis Company, Inc. Long Term Deferred Compensation Plan, Amended and Restated as of August 4, 1999.* (Incorporated by reference to Exhibit 10(g) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-5277)).

Incorporated by Reference

10

(h)

Bemis Company, Inc. Form of Management Contract with Principal Executive Officers.* (Incorporated by reference to Exhibit 10(c) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (File No. 1-5277)).

Incorporated by Reference

10

(i)

Bemis Company, Inc. 1997 Executive Officer Performance Plan, as amended effective May 7, 2015.* (Incorporated by reference to Exhibit A to the Registrant’s Definitive Additional Materials filed with the SEC on April 3, 2015 (File No. 1-5277)).

Incorporated by Reference

10

(j)

Bemis Company, Inc. Form of Management Contract with Principal Executive Officers Effective January 1, 2009.* (Incorporated by reference to Exhibit 10(t) to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-5277)).

Incorporated by Reference

10

(k)

Agreement, dated as of March 16, 2018, by and among the Registrant, Starboard Value LP and the additional parties thereto. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated March 16, 2018 (File No. 1-5277)).

Incorporated by Reference

10

(l)

Bemis Company, Inc. Form of Retention Agreement with Certain Executive Officers.* (Incorporated by reference to Exhibit 10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 1-5277)).

Incorporated by Reference

21

Subsidiaries of the Registrant. (Previously filed as Exhibit 21 to the Original Filing).

Previously Filed with Original Filing




ITEM 16 — FORM 10-K SUMMARY
None.


23

 

 

Consent of PricewaterhouseCoopers LLP (Previously filed as Exhibit 23 to the Original Filing).

 

Previously Filed with Original Filing

 

 

 

 

 

 

31

.1

 

Rule 13a-14(a)/15d-14(a) Certification of CEO (Previously filed as Exhibit 31.1 to the Original Filing).

 

Previously Filed with Original Filing

 

 

 

 

 

 

31

.2

 

Rule 13a-14(a)/15d-14(a) Certification of CFO (Previously filed as Exhibit 31.2 to the Original Filing).

 

Previously Filed with Original Filing

 

 

 

 

 

 

31

.3

 

Rule 13a-14(a)/15d-14(a) Certification of CEO.

 

Filed Electronically

 

 

 

 

 

 

31.

.4

 

Rule 13a-14(a)/15d-14(a) Certification of CFO.

 

Filed Electronically

 

 

 

 

 

 

32

 

 

Section 1350 Certification of CEO and CFO (Previously filed as Exhibit 32 to the Original Filing).

 

Previously Filed with Original Filing

 

 

 

 

 

 

101

 

 

Interactive data files. (Previously filed as Exhibit 101 to Original Filing.)

 

Previously Filed with Original Filing



SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BEMIS COMPANY, INC.

By

By

/s/ Michael B. Clauer

By

 /s/

/s/ Jerry S. Krempa

Michael B. Clauer, Senior Vice President and Chief Financial Officer

Jerry S. Krempa, Vice President and Chief Accounting Officer

Date February 17, 2017

Date February 17, 2017

Date March 21, 2019

Date March 21, 2019

37

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons (including a majority of the Board of Directors) on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Michael B. Clauer/s/ Jerry S. Krempa
Michael B. Clauer, Senior Vice President and Chief Financial OfficerJerry S. Krempa, Vice President and Chief Accounting Officer
Date February 17, 2017Date February 17, 2017
/s/ William F. Austen/s/ Ronald J. Floto
William F. Austen, Director, President, and Chief Executive OfficerRonald J. Floto, Director
Date February 17, 2017
Date February 17, 2017
/s/ Adele M. Gulfo/s/ David S. Haffner
Adele M. Gulfo, DirectorDavid S. Haffner, Director
Date February 17, 2017Date February 17, 2017
/s/ Timothy M. Manganello/s/ William L. Mansfield
Timothy M. Manganello, Chairman of the BoardWilliam L. Mansfield, Director
Date February 17, 2017Date February 17, 2017
/s/ Arun Nayar/s/ Edward N. Perry
Arun Nayar, DirectorEdward N. Perry, Director
Date February 17, 2017Date February 17, 2017
/s/ David T. Szczupak/s/ Holly A. Van Deursen
David T. Szczupak, DirectorHolly A. Van Deursen, Director
Date February 17, 2017Date February 17, 2017
/s/ Philip G. Weaver
Philip G. Weaver, Director
Date February 17, 2017


Exhibit Index
Exhibit Description Form of Filing
3
(a) Restated Articles of Incorporation of the Registrant, as amended. (1) Incorporated by Reference
3
(b) By-Laws of the Registrant, as amended through October 7, 2016. (2) Incorporated by Reference
4
(a) Form of Indenture dated as of June 15, 1995, between the Registrant and U.S. Bank Trust National Association (formerly known as First Trust National Association), as Trustee. Copies of constituent instruments defining rights of holders of long-term debt of the Company and subsidiaries, other than the Indenture specified herein, are not filed herewith, pursuant to Instruction (b)(4)(iii)(A) to Item 601 of Regulation S-K, because the total amount of securities authorized under any such instrument does not exceed 10% of the total assets of the Company and subsidiaries on a consolidated basis. The registrant hereby agrees that it will, upon request by the SEC, furnish to the SEC a copy of each such instrument. (3) Incorporated by Reference
4
(b) Form of 3.100% Note due 2026. (12) Incorporated by Reference
10
(a) Amendment No. 2 to Third Amended and Restated Credit Agreement, dated as of July 22, 2016, by and among the Company, the Borrowing Subsidiaries party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, and various financial institutions. (5) Incorporated by Reference
10
(b) Bemis Deferred Compensation Plan, as amended Effective January 1, 2009.* (6) Incorporated by Reference
10
(c) Bemis Company, Inc. Supplemental Retirement Plan, Amended and Restated as of as of January 1, 2014.* (11) Incorporated by Reference
10
(d) Bemis Company, Inc. Supplemental Retirement Plan for Senior Officers, Amended and Restated as of January 1, 2014.* (11) Incorporated by Reference
10
(e) Bemis Company, Inc. 2014 Stock Incentive Plan,* (4) Incorporated by Reference
10
(f) Bemis Supplemental BIPSP (As amended effective January 1, 2014).* (11) Incorporated by Reference
10
(g) Bemis Company, Inc. Long Term Deferred Compensation Plan, Amended and Restated as of August 4, 1999.* (7) Incorporated by Reference
10
(h) Bemis Company, Inc. Form of Management Contract with Principal Executive Officers.* (8) Incorporated by Reference
10
(i) Bemis Company, Inc. 1997 Executive Officer Performance Plan, as amended effective May 7, 2015.* (9) Incorporated by Reference
10
(j) Bemis Company, Inc. Form of Management Contract with Principal Executive Officers Effective January 1, 2009.* (10) Incorporated by Reference
21
  Subsidiaries of the Registrant. Filed Electronically
23
  Consent of PricewaterhouseCoopers LLP. Filed Electronically
31
.1 Rule 13a-14(a)/15d-14(a) Certification of CEO. Filed Electronically
31
.2 Rule 13a-14(a)/15d-14(a) Certification of CFO. Filed Electronically
32
  Section 1350 Certification of CEO and CFO. Filed Electronically
101
  Interactive data files. Filed Electronically


Footnotes to Exhibit Index

*Management contract, compensatory plan or arrangement filed pursuant to Rule 601(b)(10)(iii)(A) of Regulation S-K under the Securities Exchange Act of 1934.
(1)Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (File No. 1-5277).
(2)Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2016 (File No. 1-5277).
(3)Incorporated by reference to the Registrant’s Current Report on Form 8-K dated June 30, 1995 (File No. 1-5277).
(4)Incorporated by reference to Exhibit B to the Registrant’s Definitive Proxy Statement filed with the SEC on March 18, 2014 (File No. 1-5277).
(5)Incorporated by reference to the Registrant’s Current Report on Form 8-K dated July 22, 2016 (File No. 1-5277).
(6)Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-5277).
(7)Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-5277).
(8)Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (File No. 1-5277).
(9)Incorporated by reference to Exhibit A to the Registrant’s Definitive Additional Materials filed with the SEC on April 3, 2015 (File No. 1-5277).
(10)Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-5277).
(11)Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-5277).
(12)Incorporated by reference to the Registrant's Current Report on Form 8-K dated September 15, 2016 (File No. 1-5277).





SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in millions)
  Balance at Additions       Foreign     Balance
Year Ended Beginning Charged to       Currency     at Close
December 31, of Year Profit & Loss   Write-offs   Impact Other   of Year
RESERVES FOR DOUBTFUL ACCOUNTS, SALES RETURNS, DISCOUNTS, AND ALLOWANCES
2016 $18.0
 $27.5
   $(28.1)   $0.1
 $0.7
 (3) $18.2
2015 21.0
 27.5
   (28.3)   (2.2) 
   18.0
2014 30.7
 24.6
   (23.5) (1) (2.2) (8.6) (4) 21.0
                   
VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS
2016 $42.0
 $(1.1) (2) $
   $(0.6) $
   $40.3
2015 47.9
 (3.8) (2) 
   (2.1) 
   42.0
2014 42.1
 12.3
 (2) (3.5)   (3.0) 
   47.9

(1) Net of $0.5 million, and $0.1 million collections on accounts previously written off, respectively.
(2) Represents charge to profit and loss, net of valuation allowance reversals, if any.
(3) Reserve accruals related to acquisition of the SteriPack operations.
(4) Reserve accruals related to Pressure Sensitive Materials business and Paper Packaging Division which were divested.



72