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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20212023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
COMMISSION FILE NUMBER: 001-33988
Graphic Packaging Holding Company
(Exact name of registrant as specified in its charter)
Delaware26-0405422
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer identification no.)
1500 Riveredge Parkway, Suite 100
Atlanta,Georgia30328
(Address of principal executive offices)
(Zip Code)

(770) 240-7200
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per shareGPKNew York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

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  No 

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  No

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No 

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

Large accelerated filerAccelerated filerSmaller reporting company
Non-accelerated filer(Do not check if a smaller reporting company)Emerging growth company

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.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes No 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No 

The aggregate market value of voting and non-voting common equity held by non-affiliates at June 30, 20212023 was approximately $5.5$7.3 billion.

As of February 21, 202220, 2024 there were approximately 307,103,551306,053,777 shares of the registrant’s Common Stock, $0.01 par value per share outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant’s definitive Proxy Statement for the 20222024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

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TABLE OF CONTENTS OF FORM 10-K
MINE SAFETY DISCLOSURES
EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 16.FORM 10-K SUMMARY

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INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements regarding the expectations of Graphic Packaging Holding Company (“GPHC” and, together with its subsidiaries, the “Company”), including, but not limited to, startup charges for the new paperboard machine in Kalamazoo, Michigan, the availability of U.S. federal income tax attributes to offset U.S. federal income taxes and the timing related to the Company's future U.S. federal income tax payments, charges for exit activities, capital investment, depreciation and amortization accelerated depreciation related to exit activitiesexpense and pension plan contributions for 2024, in this report constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and its present expectations. These risks and uncertainties include, but are not limited to, the continuing effects of the COVID-19 pandemic on the Company's operations and business, inflation of and volatility in raw material and energy costs, changes in consumer buying habits and product preferences, competition with other paperboard manufacturers and converters, product substitution, the Company’s ability to implement its business strategies, including strategic acquisitions, the Company's ability to successfully integrate acquisitions, productivity initiatives and cost reduction plans, the Company’s debt level, currency movements and other risks of conducting business internationally, and the impact of regulatory and litigation matters, including those that could impact the Company’s ability to utilize its U.S. federal income tax attributes to offset taxable income or U.S. federal income taxes and those that impact the Company's ability to protect and use its intellectual property. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date on which they are made and the Company undertakes no obligation to update such statements, except as may be required by law.


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PART I

ITEM 1.BUSINESS

Overview

Graphic Packaging Holding Company (“GPHC” and, together with its subsidiaries, the “Company”) is committed to providing consumer packaging that makes a world of difference. The Company, is a leading provider of sustainable fiber-basedconsumer packaging solutions for a wide variety of products to food, beverage, foodservice and other consumer products companies. The Companyprovider, operates on a global basis, is one of the largest producers of folding cartons and containers for the packaging of consumer goods and paperboard-based foodservice packaging solutions in the United States ("(“U.S.") and Europe, and holds leading market positions in coatedpaperboard used to produce consumer packaging solutions, including recycled, paperboard ("CRB"), coated unbleached kraft paperboard (“CUK”) and solid bleached sulfate paperboard ("SBS").paperboard.

The Company’s customers include many of the world’s most widely recognized companies and brands with prominent market positions in beverage, food, foodservice and other consumer products. The Company strives to provide its customers with innovative sustainablepaperboard packaging solutions designed to deliverpreferred by consumers. The Company delivers marketing and performance benefits at a competitive cost by capitalizing onto its low-cost paperboard mills and converting plants,customers through its global packaging network, its proprietary carton and packaging designs, and its commitment to quality, service, and service.environmental stewardship.

On January 1, 2018, GPHC, a Delaware corporation, International Paper Company, a New York corporation (“IP”), Graphic Packaging International Partners, LLC, a Delaware limited liability company formerly known as Gazelle Newco LLC and a wholly-owned subsidiary of the Company (“GPIP”), and Graphic Packaging International, LLC, a Delaware limited liability company formerly known as Graphic Packaging International, Inc. and a direct subsidiary of GPIP (“GPIL”), completed a series of transactions pursuant to an agreement dated October 23, 2017, among the foregoing parties (the “Transaction Agreement”). Pursuant to the Transaction Agreement (i) a wholly-owned subsidiary of the Company transferred its ownership interest in GPIL to GPIP; (ii) IP transferred its North America Consumer Packaging (“NACP”) business to GPIP, which was then subsequently transferred to GPIL; (iii) GPIP issued membership interests to IP, and IP was admitted as a member of GPIP; and (iv) GPIL assumed certain indebtedness of IP (the "NACP Combination").

During 2020, GPIP purchased 32.5 million partnership units from IP for $500 million in cash, fully redeeming the 18.2 million partnership units that were required to be redeemed in cash. On February 16, 2021, the Company announced that IP had notified the Company of its intent to exchange additional partnership units. Per an agreement between the parties, on February 19, 2021, GPIP purchased 9.3 million partnership units from IP for $150 million in cash, and IP exchanged 15.3 million partnership units for an equivalent number of shares of GPHC common stock. On May 21, 2021, IP exchanged its remaining 22.8 million partnership units for an equivalent number of shares of GPHC common stock. As required by the parties' agreement, these shares were immediately sold by IP. As a result, IP has no ownership interest remaining in GPIP as of May 21, 2021.









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Acquisitions, Closures, and Dispositions

Over the past five years, theThe Company has successfully completed over tenseveral acquisitions in the past three years and expects to pursue strategic acquisition opportunities in the future as part of its overall growth strategy.

2023

In January 2023, the Company completed the acquisition of Tama Paperboard, LLC (“Tama”), a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million. It is reported within the Paperboard Manufacturing reportable segment. Subsequently, in the second quarter of 2023, the Company closed this facility. For more information, see “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024. Production from these facilities has been consolidated into our existing packaging facilities. For more information, see “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

On September 8, 2023, the Company completed the acquisition of Bell Incorporated (“Bell”) for $264 million, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio. Bell is reported within the Americas Paperboard Packaging reportable segment. For more information, see “Note 4 - Business Combinations” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

During the third quarter of 2023, the Company decided to discontinue its project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus its growth investments in the strategic expansion of coated recycled paperboard capacity. For more information, see “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019. For more information, see “Note 1 - Business Combinations, Exit Activities and Other Special Charges, Net” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

During the second quarter of 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”). The assets and liabilities to be disposed of in connection with this transaction met the held for sale criteria as of June 30, 2022 and each subsequent quarter end through the date of sale. On November 30, 2023, the Company completed the sale of its Russian Operations. For more information, see “Note 19 - Impairment and Divestiture of Russian Business” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

2022

In May 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility. For more information, see “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

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In September 2022, the Company closed its Norwalk, Ohio carton facility, which closure had been announced in March 2022. For more information, see “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

2021

On July 1, 2021, the Company acquired substantially all the assets of Americraft Carton, Inc. (“Americraft”), the largest independent folding carton converteroperator of packaging facilities in North America. The acquisition included seven converting plantspackaging facilities across the United States and is reported within the Americas Paperboard Packaging reportable segment. For more information, see "Note 4 - Business Combinations" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

On November 1, 2021, the Company acquired all the shares of AR Packaging Group AB ("(“AR Packaging"Packaging”), Europe's second largest producer of fiber-basedpaperboard consumer packaging. The acquisition included 30 converting plantspackaging facilities in 13 countries and is reported within the Europe Paperboard Packaging reportable segment. For more information, see "Note 4 - Business Combinations" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.
2020

On January 31, 2020, the Company acquired a folding carton facility from Quad/Graphics, Inc. ("Quad"), a commercial printing company. The converting facility is located in Omaha, Nebraska and is included in the Americas Paperboard Packaging reportable segment. For more information, see "Note 4 - Business Combinations" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

In March 2020, the Company made the decision to close the White Pigeon, Michigan CRB mill and to shut down the PM1 containerboard machine in West Monroe, Louisiana. During the second quarter of 2020, the Company closed the White Pigeon, Michigan CRB mill and shut down the PM1 containerboard machine. For more information, see "Note 18 - Exit Activities" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

On April 1, 2020, the Company acquired the Consumer Packaging Group business from Greif, Inc. ("Greif"), a leader in industrial packaging products and services. The acquisition included seven converting plants across the United States, which are included in the Americas Paperboard Packaging reportable segment. For more information, see "Note 4 - Business Combinations" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

In June 2020, the Company made the decision to close certain converting plants that were acquired from Greif. The Burlington, North Carolina converting facility and the Los Angeles, California converting facility were closed during 2020. For more information, see "Note 18 - Exit Activities" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

2019

On August 1, 2019, the Company acquired substantially all the assets of Artistic Carton Company ("Artistic"), a diversified producer of folding cartons and CRB. The acquisition included two converting plants located in Auburn, Indiana and Elgin, Illinois (included in the Americas Paperboard Packaging reportable segment) and one CRB mill located in White Pigeon, Michigan (included in the Paperboard Mills reportable segment). For more information, see "Note 4 - Business Combinations" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

During 2019, the Company announced its plans to invest in a new CRB paper machine in Kalamazoo, Michigan. At the time of the announcement, the Company expected to close two of its smaller CRB Mills in 2022 in order to remain capacity neutral. During the third quarter of 2021, the Company decided to continue to operate one of the two original smaller CRB mills at least through 2022. For more information, see "Note 18 - Exit Activities" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

Share Repurchases and Dividends

On January 28, 2019, GPHC'sJuly 27, 2023, the Company's board of directors authorized an additional share repurchase program to allow GPHCthe Company to purchase up to $500 million of GPHC'sthe Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the "2019“2023 share repurchase program"program”). AThe previous $250$500 million share repurchase program was authorized on January 10, 201728, 2019 (the "2017“2019 share repurchase program"program”).
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Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price o verover par value allocated between capital in excess of par value and accumulated deficit.

The Company did not repurchase any shares of its common stock under the 2019 share repurchase program for the year ended December 31, 2021.retained earnings.

The following presents GPHC'sthe Company's share repurchases for the years ended December 31, 2020,2023, 2022, and 2019:2021:

Amount repurchased in millionsAmount RepurchasedNumber of Shares RepurchasedAverage Price
2020$316 23,420,010 $13.48 
2019$128 10,191,257 (a)$12.55 
(a) Includes 7,400,171 shares under the 2017 share repurchase program thereby completing that program.
Amount repurchased in millions, except share and per share amountsAmount RepurchasedNumber of Shares RepurchasedAverage Price per Share
2023$54 2,389,224 $22.80 
2022$28 1,315,839 $20.91 
2021$— — $— 

At December 31, 2021, GPHC2023, the Company had approximately $147$565 million of share repurchase authority remainingavailable for additional repurchases under the 2023 and 2019 share repurchase program.programs.

During 20212023, 2022 and 2020,2021, GPHC paid cash dividends of$87 $123 million, $92 million and $85$87 million,, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations.

Products

The Company has three reportable segments as follows:

Paperboard MillsManufacturing, previously referred to as the Paperboard Mills reportable segment, includes the eightseven North American paperboard millsmanufacturing facilities that produce primarily CRB, CUK,unbleached, bleached and SBS,recycled paperboard, which is consumed internally to produce paperboard consumer packaging for the Americas and Europe Packaging segments. The remaining paperboardPaperboard not consumed internally is sold externally to a wide variety of paperboard packaging converters and brokers. The Paperboard Manufacturing segment's Net Sales represent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard Manufacturing segment to reflect the economics of the integration of these segments.

Americas Paperboard Packaging includes paperboard packaging primarily folding cartons, sold primarily to Consumer Packaged Goods ("CPG"consumer packaged goods (“CPG”) companies and cups, lids and food containers sold primarily to foodservice companies and Quick-Service Restaurants ("QSR"quick-service restaurants (“QSR”) serving the food, beverage, and consumer product markets in the Americas.

Europe Paperboard Packaging includes paperboard packaging primarily folding cartons, sold primarily to CPG companies serving the food, beverage and consumer product markets, including healthcare and beauty, primarily in Europe.

The Company operates in three geographic areas: the Americas, Europe and Asia Pacific.

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For reportable segment and geographic area information for each of the last three fiscal years, see "Note 15 - Business Segment and Geographic Area Information" in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data."
Paperboard Packaging

The Company’s paperboard packaging products deliver brand, marketing, sustainability, and performance benefits at a competitive cost. The Company supplies paperboard cartons, carriers and containers designed to protect and hold products while providing:
Convenience through ease of carrying, storage, delivery, dispensing of product, and food preparation for consumers;
A smooth surface printed with high-resolution, multi-color graphic images that help improve brand awareness and visibility of products on store shelves; and
Durability, stiffness and wet and dry tear strength; leak, abrasion and heat resistance; barrier protection from moisture, oxygen, oils and greases, as well as enhanced microwave heating performance.

The Company provides a wide range of sustainableinnovative, paperboard packaging solutions for the following end-use markets:
Beverage, including beer, seltzer, soft drinks, energy drinks, teas, water and juices;
Food, including cereal, desserts, frozen, refrigerated, and microwavable foods and pet food and health/beauty;food;
Prepared food and drinks, including snacks, quick-serve food and drinks for restaurants and food service providers; 
Household products, including dishwasher and laundry detergent, health caretissues and papers;
Air filter frames; and
Healthcare and beauty aids, and tissues and papers; and
• Air filter frames.

aids.


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The Company’s packaging applications meet the needs of its customers for:

Strength Packaging. The Company's products provide sturdiness to meet a variety of packaging, handling, and delivery needs, including tearwet and wetdry tear strength, puncture resistance, durability and compression strength (providing the ability to ship products in their own branded carton and stacking strength to meet store display packaging requirements).

Promotional Packaging. The Company offers a broad range of promotional packaging options that help differentiate its customers’ products in the marketplace. These promotional enhancements improve brand awareness and visibility on store shelves.

Convenience and Cooking Packaging. These packaging solutions improve package usage and food preparation:
Beverage multiple-packaging — multi-packs for beer, soft drinks, energy drinks, teas, water and juices;
Active microwave technologies — packages that improve the heating and browning of foods in the microwave; and
Easy opening and closing features — dispensing features, pour spouts and sealable liners.

Barrier Packaging. The Company provides packages that protect against moisture, temperature (hot and cold), grease, oil, oxygen, sunlight, insects and other potential product-damaging factors.

Paperboard MillsManufacturing and Folding CartonPackaging Operations Facilities

The Company produces paperboard at its mills;manufacturing facilities; prints, cuts, folds, and glues (“converts”) the paperboard into folding cartons, containers and containersother packaging at its converting plants;packaging facilities; and designs and manufactures specialized, proprietary packaging machines that package bottles and cans and, to a lesser extent, non-beverage consumer products. The Company also installs its packaging machines at customer plants and provides support, service and advanced performance monitoring of the machines.

The Company offers a variety of laminated, coated and printed packaging structures that are produced from its CRB, CUKrecycled, unbleached and SBS mills,bleached paperboard grades, as well as other grades of paperboard that are purchased from third-party suppliers.

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Below is the production at each of the Company’s paperboard millsmanufacturing facilities during 2021:2023:

LocationLocationProduct# of Machines2021 Net Tons ProducedLocationPaperboard Product# of Machines2023 Net Tons Produced
West Monroe, LAWest Monroe, LACUK2931,713West Monroe, LAUnbleached2863,482
Macon, GAMacon, GACUK2738,981Macon, GAUnbleached2693,847
Texarkana, TXTexarkana, TXSBS2583,910Texarkana, TXBleached2570,720
Augusta, GAAugusta, GASBS2585,164Augusta, GABleached2521,391
Kalamazoo, MICRB2508,546
Battle Creek, MICRB2219,058
Kalamazoo, MI(a)
Kalamazoo, MI(a)
Recycled2956,276
Middletown, OHMiddletown, OHCRB1178,863Middletown, OHRecycled1156,407
East Angus, QuébecEast Angus, QuébecCRB199,568East Angus, QuébecRecycled190,088
Tama, IA(b)
Tama, IA(b)
Recycled115,407
(a) During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019.
(b) Closed in the second quarter of 2023.

The Company consumes most of its coated boardpaperboard output in its convertingpackaging operations, which is an integral part of the customer value proposition. In 2021,2023, approximately 72%78% of combined mill salespaperboard production of CRB, CUKunbleached, bleached and SBSrecycled paperboard was consumed internally.

CUKUnbleached Paperboard Production. The Company is the largest of four worldwide producers of CUK. CUKunbleached paperboard. Unbleached paperboard is manufactured primarily from pine-based wood fiber and is a specialized high-quality grade of coated paperboard with excellent wet and dry tear strength characteristics and printability for high resolution graphics that make it particularly well-suited for a variety of packaging applications. Both wood and recycled fibers are pulped, formed on paperpaperboard machines, and clay-coated to provide an excellent printing surface for superior quality graphics and appearance characteristics.

SBSBleached Paperboard Production. The Company is one of the largest North American producers of SBS. SBSbleached paperboard. Bleached paperboard is manufactured primarily from bleached pine and hardwood-based wood fiber and is the highest quality paperboard substrate, with excellent wet and dry strength characteristics and superior printability for high-end packaging. Both wood and recycled fibers are pulped, formed on paperpaperboard machines, and clay-coated to provide an excellent printing surface for superior quality graphics and appearance characteristics. SBSBleached paperboard is also coated with resin for wet strength liquid and food packaging end uses. 

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CRBRecycled Paperboard Production. The Company is the largest North American producer of CRB. CRBrecycled paperboard. Recycled paperboard is manufactured entirely from recycled fibers, primarily old corrugated containers (“OCC”), doubled-lined kraft cuttings from corrugated box plants (“DLK”), old newspapers (“ONP”), box cuttings from manufacturing facilities, and box cuttings.office and mixed paper bales. The recycled fibers are re-pulped, formed on paperpaperboard machines, and clay-coated to provide an excellent printing surface for superior quality graphics and appearance characteristics.

The Company converts CRB, CUKrecycled, unbleached and SBS,bleached paperboard, as well as other grades of paperboard, into cartons, containers and containersother packaging for consumer goods products at converting plantspackaging facilities the Company operates in various locations globally, including a converting plantpackaging facility associated with the Company's joint venture in Japan, contract converters and at licensees outside the United States ("U.S."). The converting plantspackaging facilities print, cut, fold and glue paperboard into cartons and containers designed to meet customer specifications.

Joint Venture

The Company through its GPIL subsidiary, is a party to a Japanese joint venture, Rengo Riverwood Packaging, Ltd., in which it holds a 50% ownership interest. The joint venture agreement covers CUKunbleached paperboard supply, use of proprietary carton designs and marketing and distribution of packaging systems.

Sales and Marketing

The Company markets its products principally to multinational beverage, food, Quick-Service Restaurants ("QSR"),quick-service restaurants, health/beauty and other well-recognized consumer productproducts companies. The beverage companies include Anheuser-Busch, Inc., MillerCoors LLC, PepsiCo, Inc. and The Coca-Cola Company, among others. Consumer product customers include Kraft Heinz Company, General Mills, Inc., Nestlé USA, Inc., WK Kellogg Company,Co, Kellanova and Kimberly-Clark Corporation, among others. Quick-Service Restaurants ("QSR")Quick-service restaurant customers include ChickFil-A,Chick-fil-A, McDonald's, Wendy's, Panda Express, Dairy Queen, Chipotle, Panera and KFC and health/KFC. Health/beauty customers include GlaxoSmithKline, Bayer, Johnson & Johnson, Abbott, Novartis, L’Oréal S.A., Proctor and& Gamble, and Colgate. The Company also sells paperboard in the open market to independent and integrated paperboard converters.packaging producers.
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Sales of the Company’s principal products isare primarily accomplished through sales offices in the U.S., Australia, Brazil, China, France, Germany, Italy, Japan, Mexico, Spain, the Netherlands and the United Kingdom, and, to a lesser degree, through broker arrangements with third parties.

During 2021, 20202023, 2022 and 2019,2021, the Company did not have any one customer that represented 10% or more of its net sales.

Competition

Although a relatively small number of large competitors hold a significant portion of the paperboard packaging market, the Company’s business is subject to strong competition. The Company and WestRock Company ("WestRock") are the two major CUKunbleached paperboard producers in the U.S. Internationally, The Klabin Company in Brazil and Stora Enso in Sweden produce similar grades of paperboard.

In non-beverage consumer packaging and foodservice, the Company’s paperboard competes with WestRock's CUK,packaging utilizing unbleached paperboard, as well as CRBrecycled and SBSbleached paperboard from numerous competitors, and, internationally, folding boxboard and white-lined chip. There are a large number of producers in the paperboard markets. Suppliers of paperboard packaging compete primarilywith paperboard and plastic packagers as well as other primary and secondary packaging on the basis of price, strength and printability of their paperboard,packaging materials, quality and customer service.

In beverage packaging, cartons made from CUKunbleached paperboard compete with substitutes such as plastics and corrugated packaging for packaging glass or plastic bottles, cans and other primary containers. Although plastics and corrugated packaging may be priced lower than CUK,unbleached paperboard, the Company believes that cartonspackaging made from CUK offerunbleached paperboard offers advantages over these materials in areas such as recyclability (versus plastic alternatives), design flexibility, distribution, brand awareness, carton designs, package performance and package line speed, sustainability (particularly recyclability) and design flexibility.speed.

Raw Materials

The paperboard packaging produced by the Company comes fromCompany's main raw materials are pine and hardwood trees and recycled fibers. Pine pulpwood, hardwood pulp, paper and recycled fibers (including DLK, OCC and ONP) and energy used in the manufacture of paperboard, as well as poly sheeting, plastic resins and various chemicals used in the coating of paperboard, represent the largest components of the Company’s variable costs of paperboard production.production (other than labor).

For the West Monroe, LA, Macon, GA,Georgia, Texarkana, TX,Texas, and Augusta, GA mills,Georgia paperboard manufacturing facilities, the Company relies on private landowners and the open market for all of its pine and hardwood pulp and recycled fiber requirements, supplemented by clippings that are obtained from its convertingpackaging operations. The Company follows a due diligence process to ensure virgin fiber inputs are sourced from sustainaby managed forests and do not contribute to deforestation or habitat loss for ecosystems with high conservation value. The Company believes that adequate supplies from both private landowners and open market fiber sellers currently are available in close proximity to its paperboard manufacturing facilities to meet its fiber needs at these mills.raw material needs.

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The paperboard grades produced at the Kalamazoo, MI, Battle Creek, MI,Michigan, Middletown, OH,Ohio, Tama, Iowa, and East Angus, Quebec millspaperboard manufacturing facilities are made from 100% recycled fiber. The Company procures its recycled fiber from external suppliers and internal convertingpackaging operations. The market price of each of the various recycled fiber grades fluctuates with supply and demand. The Company’s internal recycled fiber procurement function enables the Company to pay lower prices for its recycled fiber needs given the Company’s highly fragmented supplier base. The Company believes there are adequate supplies of recycled fiber to serve its mills.paperboard manufacturing facilities.

In North America, the Company also convertsutilizes a variety of other paperboard grades in its packaging operations, in addition to paperboard that is supplied to its convertingpackaging operations from its own mills.paperboard manufacturing facilities. The Company purchases such paperboard requirements, including additional CRBrecycled and SBS,bleached paperboard, from outside vendors. The majority of external paperboard purchases are acquired through long-term arrangements with other major industry suppliers. The Company's European converting plantspackaging operations consume CUKunbleached paperboard supplied from the Company's millspaperboard manufacturing facilities and also convertutilize other paperboard grades such as white-lined chip and folding box board purchased from external suppliers.suppliers in its packaging facilities.

Energy

Energy, including natural gas, fuel, oil and electricity, represents a significant portion of the Company’s manufacturing and distribution costs. The Company has entered into contracts designed to manage risks associated with future variability in cash flows and price risk related to future energy cost increases for a portion of its natural gas requirements at its U.S. mills.paperboard manufacturing facilities. The Company’s hedging program for natural gas is discussed in "Note 10 - Financial Instruments, Derivatives and Hedging Activities" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

Seasonality

The Company’s net sales, income from operations and cash flows from operations are subject to moderate seasonality, with demand usually increasing in the late spring through early fall due to increases in demand for beverage and food products.
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Research and Development

The Company’s research and development team works directly with its sales, marketing and consumer insights personnel to understand long-term consumer and retailer trends and create relevant new packaging. These innovative solutions provide customers with differentiated packaging to meet consumer preferences. The Company’s development efforts include, but are not limited to, developing sustainable consumer packaging made from renewable resources, packaging alternatives to replace plastic packaging,packaging; extending the shelf life of customers’ products; reducing production and waste costs; enhancing the heat-managing characteristics of food packaging; improving the sturdiness and compression strength of packaging to allow goods to ship in their own branded container and to meet store display needs; and refining packaging appearance through new printing techniques and materials.

SustainabilityConsumer concerns regarding the growing plastic packaging waste problem represents one of the strongest trends in the packaging industry, and the Company focuses on developing fiber-basedinnovative, sustainable consumer packaging solutions that are more recyclable and help customers achieve their packaging sustainability goals. The Company’s strategy is to combine functionality innovation ofand innovative packaging design with a focus on packaging end of life to create more circular packaging solutions for customers and consumers.

For more information on research and development expenses see "Note 1 - Nature of Business and Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

Patents and Trademarks

As of December 31, 2021,2023, the Company had a large patent portfolio, presently owning, controlling or holding rights to more than 2,7002,900 U.S. and foreign patents, with more than 600850 U.S. and foreign patent applications currently pending. The Company’s patent portfolio consists primarily of patents relating to packaging machinery, manufacturing methods, structural carton designs, active microwave packaging technology and barrier protection packaging. These patents and processes are significant to the Company’s operations and are supported by trademarks such as Boardio™, Fridge Vendor™, IntegraPak™, KeelClip™, MicroFlex-Q™, MicroRite™, Quilt Wave™, Qwik Crisp™, Tite-Pak™, and Z-Flute™. The Company takes significant steps to protect its intellectual property and proprietary rights.

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Human Capital

We believe that the Company’s greatest asset is our workforce. Solving day-to-day operational and business challenges in order to drive positive results for stakeholders requires attracting, developing, and retaining talented individuals with different skills, ideas, and experiences. Our Vision 20252030 outlines how we will be better stewardsleaders in innovation, build a world-class culture, protect our planet, and deliver results for all of our planet, supporters of our people, and allies to our partners, all while generating returns for our stakeholders. Our employees play a crucial role in achieving our Vision 2025 and are guided by our shared values and growth behaviors.

Our people areCulture is one of the pillars of our Vision 20252030 and the safety and wellbeing of our employees is our top priority. Employee engagement is key to a safe and stable workforce. We are putting programs and initiatives in place to drive engagement to the 75% percentile (using the Gallup Q12® framework). In 2023 we conducted an employee engagement survey and we have executed a robust communication plan to ensure each employee hears results and a commitment for action from their leader. Action plans have been developed at the local level in locations around the globe as we strive to further engage employees in a high-performance culture. In order to achieve this, we must attract, develop, and retain our talented workforce by providing opportunities for growth and a conducive atmosphere. Ouremployees. Additionally, our talent acquisition, development, succession and diversity and inclusion strategies are all critical components of theour multi-year plan to focus on our people and our culture.

We are enhancing the capabilities of our workforce as our business and strategy evolve. We have invested in innovation, research and development, and digital capabilities to position us to capture organic sales growth supported by consumer preferences for low impact, recyclable packaging. As our people. Webusiness continues to evolve, we will continue to invest in capability development areas that serve as a competitive advantage for the Company such as GPI University, which launched in 2021 and serves as a platform for all employees to access relevant training and development resources on topics related to technical skills and leadership effectiveness. Also, central to capability development and talent management is challenging our team with new experiences that will enhance their leadership skills and technical capabilities. We will also continuously improve our processes and use technology to promote safety, automate our manufacturing processes, and achieve greater efficiencies utilizing processes such as Lean Six Sigma.

We are evolving the capabilities of our workforce as our business and strategy change. We have invested in innovation, research and development, and digital capabilities to allow us to capture sustainability supported organic growth. As our business continues to change, we will adapt our workforce and invest in our employees to ensure that we have the necessary human capital capabilities in place to support our growth strategy.

As of December 31, 2021,2023, the Company had approximately 25,00023,500 employees worldwide based in 130122 locations in 26 different countries around the world. Approximately 69%68% of our employees are in the United StatesAmericas and 31%32% are in Europe and the rest of the world. Worldwide, approximately 32%Approximately 58% of our employees were represented by labor unions and covered by collective bargaining agreements or covered by works councils in Europe. As of December 31, 2021, 5412023, 550 of the Company’s employees were working under expired contracts, which are currently being negotiated, and none1,015 were covered under collective bargaining agreements that expire within one year. The Company considers its employee relations to be satisfactory.

Employee Health and Safety

Maintaining a safe work environment is vital to the Company, and we are committed to the health, safety and wellness of our employees. Our RecordedTotal Recordable Incident Rate, which is the annual rate of workplace injuries per 100 full-time employees, is approximately 1.18, and we work to maintain a safety1.0, reflecting better performance rating that outperformsthan the industry average. We seekstrive to achieve an injury-free workplace through various safety initiatives and programs.programs, and our Vision 2030 goal is zero life injuries.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our employees, as well as the communities in which we operate, while continuing to service our customers. We quickly implemented remote working, enhanced safety measures for employees continuing critical, on-site work at our facilities such as walk-through temperature scanners, plexiglass barriers between employees, and other methods of encouraging social distancing, and paid employees during necessary quarantines due to COVID-19. We will continue to monitor local COVID-19 conditions and adjust our practices to ensure the health and safety of our employees.
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Diversity and Inclusion

We believe that a diverse and inclusive working environment encourages creativity, innovation, and collaboration and that a diverse and inclusive culture propels our ability to serve our global customers and communities. Our commitment to diversity and inclusion is reflected in the definitions of our core values, which dictate our behavioral norms. In Vision 2030, we have set a goal of 40% ethnic diversity in our U.S. workforce, roughly equal to the diversity in the U.S. population as a whole. We are also committed to increasing women in leadership roles across the organization. At present, approximately one quarter of our senior leaders are women, and our target in Vision 2030 is to reach at least 35%.

The Compensation and Management Development Committee of our Board of Directors annually reviews the processes and practices related to workforce diversity and inclusion programs to ensure continued equitable treatment of all employees and a culture of inclusion. Our goal moving forward is to not only mirror the diversity of the communities where we operate, but also to excel in unlocking the potential that a diverse workforce can generate.

Community Engagement

Building connections between our employees, their families, and our communities creates a more meaningful, fulfilling and enjoyable workplace. Our employees around the world dedicate their time and talents to improve the communities in which we live and work. Driven by our core values, making a difference for our customers, our consumers, and our community is at the root of our community engagement strategy. The Company focuses on three pillars that guide the strategy for our community service activities and philanthropic commitments: (1) putting food on the table, (2) preserving the environment, and (3) investing in education.

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Environmental and Regulatory Matters

The Company is subject to a broad range of foreign, federal, state and local environmental, employee health and safety, and other governmental regulations and employs a team of professionals in order to maintain compliance at each of its facilities. In 2021,2023, the Company spent $9$18 million of capital on projects to maintain compliance with environmental laws, regulations and the Company’s permits granted thereunder. In 20222024 and 2023,2025, the Company estimates it will spend $10$134 million and $47$33 million respectively, for such projects primarily theas a new wastewater treatment system and upgrades to waste water treatment system upgradessystems at the Augusta, Georgia and Texarkana, Texas mills.certain of our paperboard manufacturing facilities. For additional information on such regulation and compliance, see “Environmental Matters” in “Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations” and "Note 14 - Environmental and Legal MattersMatter" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

Climate change is an important global issue that presents both challenges and opportunities for the Company and its communities. Climate change challenges for the Company are likely to be driven by changes in the physical climate where our facilities are located, as well as changes in laws and regulations, including restrictions on greenhouse gas (GHG)(“GHG”) emissions, cap and trade systems, and taxes on GHG emissions, fuel, and energy. Climate change also presents opportunities for the Company as it drives growth in demand for lower-carbon footprint products and manufacturing technologies. We believe the Company is well-positioned to take advantage of opportunities that may arise from increased consumer demand for and/or legislation mandating or incentivizing the use of products and technologies necessary to achieve a lower-carbon, lower-waste economy. Our costs of complying with complex environmental laws and regulations, as well as voluntary certification and disclosure programs, are significant and will continue to be significant for the foreseeable future. These laws and regulations and stakeholder driven voluntary certification and disclosure programs could become more stringent over time, which could result in significant additional compliance costs. Additionally, significant national or state differences in the imposition and enforcement of such laws and regulations could present competitive challenges in a global marketplace. By tracking and taking action to reduce our GHG emissions and energy use through efficiency programs and focused GHG management efforts, we can decrease the potential future impact of these regulatory matters.

The Company’s Core Values underpin our commitment to our stakeholders and our strategy to deliver sustainable, recyclable packaging solutions. Our Vision 20252030 plan outlines our planstargets for how we will growprotecting the Companyenvironment and the returns we expectinclude: achieving our approved 2032 Science Based Targets for Scope 1, 2, and 3 GHG emissions reductions; achieving 90% renewable fuel use in wood fiber paperboard manufacturing facilities; raising our purchased renewable electricity percentage to generate, all while prioritizing50%; and focusing onensuring that 100% of our people and the planet. These goals are designed to position us for sustainably-achieved, long-term earnings growth.purchased forest products come from sustainably managed sources.

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Available Information

The Company’s website is located at http://www.graphicpkg.com. The Company makes available, free of charge through its website, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after such materials are electronically filed or furnished to the Securities and Exchange Commission (the “SEC”). The Company also makes certain investor presentations and access to analyst conference calls, as well as certain environmental, social, and governance information available through its website. The information contained or incorporated into the Company’s website is not a part of this Annual Report on Form 10-K.

The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers like the Company that file electronically with the SEC at http://www.SEC.gov.
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ITEM 1A.    RISK FACTORS

Our operations and financial results could be affected by various risks, many of which are beyond our control. The following risks could affect (and in some cases have affected) the Company's actual results and could cause such results to differ materially from current estimates or expectations:

Industry Risks

The Company's financial results could be adversely impacted if there are significant increases in prices for raw materials, energy, transportation and other necessary supplies and services, and the Company is unable to raise prices or improve productivity to reduce costs.

Increases in the costs of raw materials, including secondary fiber, petroleum-based materials, energy, wood, transportation and other necessary goods and services, could have an adverse effect on the Company's financial results. PaperPaperboard manufacturing processes require significant energy and raw materials, the costs of which are subject to worldwide supply and demand factors, supply chain disruptions that can affect availability and result in increased prices, as well as trade regulations and tariffs.tariffs, GHG emissions-based regulations, and other factors beyond our control. Variations in the cost of energy, which primarily reflect market prices for oil and natural gas, and for raw materials may significantly affect our operating results from period to period. Because negotiated sales contracts and the market largely determine the pricing for itsour products, the Company is at times limited in its ability to raise prices and pass through to its customers any inflationary or other cost increases that the Company may incur.

The Company uses productivity improvements and other initiatives to reduce costs, offset inflation and maintain adequate raw material supplies. These actions include global continuous improvement initiatives that use best-in-class industry methodologies and statistical process control to help design and manage many types of activities, including planning, procurement, production and maintenance. These efforts result not only in cost reductions, but also build resilience in the overall supply chain. The Company's ability to realize anticipated savings from these improvements is subject to significant operational, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. If the Company cannot successfully implement cost savings plans, it may not be able to continue to compete successfully against other manufacturers. In addition, any failure to generate the anticipated efficiencies and savings could adversely affect the Company's financial results.

Changes in consumer buying habits and preferences for products could have an effect on our sales volumes.

Changing consumer dietary habits and preferences have impacted sales growth for many of the food and beverage products the Company packages. Preferences are constantly changing based on, among other factors, convenience, cost and health considerations, as well as environmental and social concerns. If these trends continue and the Company is unable to adapt to the trends, then the Company’s financial results could be adversely affected.

Competition and product substitution could have an adverse effect on the Company's financial results.

The Company competes with other paperboard manufacturers and carton converters,consumer packaging companies, both domestically and internationally.internationally, including paperboard packaging producers. The Company's products compete with those made from other manufacturers' CUK,paperboard, as well as SBS and CRB, and other board substrates. Substitute products includeconsumer packaging made primarily from plastic, shrink film, paper, corrugated containers, biobased materials and other packaging options.materials. Product substitution may occur in response to price, quality and service issues, as well as environmental and social concerns, such as pressure to reduce packaging waste by switching to reusable containers versus single-use packaging options.the use of recycled post-consumer plastic and biobased materials in the production process.

In addition, to the extent the Company’s operations are subject to labor, safety and climate change regulations and requirements not stringently imposed in the states and countries in which our competitors operate, our competitors could gain cost or other competitive advantages. While the Company has long-term relationships with many of its customers, the underlying contracts may be re-bid or renegotiated from time to time, and the Company may not be successful in renewing such contracts on favorable terms or at all. The Company works to maintain market share through efficiency, product innovations and strategic sourcing to its customers; however pricing and other competitive pressures, such as providing the lowest-carbon footprint packaging solution or delivering on GHG emissions reduction targets, may occasionally result in the loss of a customer relationship.

Changes in buying habits and preferences for products by customers and consumers could have an effect on our sales volumes.

Changing dietary habits and preferences have impacted sales growth for many of the food and beverage products the Company packages. Customer and consumer preferences are constantly changing based on, among other factors, the economy, convenience, cost and health considerations, as well as environmental, social concerns and perceptions, such as pressure to reduce packaging waste by switching to reusable containers versus single-use packaging options. If these trends continue and the Company is unable to adapt to them, then the Company’s financial results could be adversely affected.

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Operational Risks

The Company’s operations andCompany could experience material disruptions at our facilities, that could adversely impact the Company's financial results and could increase the cost of insurance and level of deductibles.

Although the Company takes appropriate measures to minimize the risk and effect of material disruptions to the business conducted at our facilities, natural disasters such as hurricanes, tornadoes, heat waves, freezing events, floods, droughts, fire and other extreme weather events, (all of which may be adversely impactedexacerbated by global events outside the Company’s control,climate change), as well as other unexpected disruptions such as the current COVID-19 pandemicunavailability of critical raw materials, power outages and areasequipment breakdowns or failures can reduce production and increase manufacturing costs. These types of political unrest.

As a resultdisruptions, whether caused by climate change or other events, could materially adversely affect our earnings, depending upon the duration of global events such as the current COVID-19 pandemicdisruption and political unrest in eastern Europe and elsewhere, there could be unpredictable disruptionsour ability to shift business to other facilities or find other sources of materials or energy. In addition, given the Company’s operations that could limit production, reduce its future revenues and negatively impact the Company’s financial condition. These global events may result inCompany's integrated supply chain, managing board supply and transportation disruptionsproperly planning for paperboard manufacturing outages and downtime must be integrated with the packaging facilities’ forecasts. Any inability to and from our facilities and affected employees could impact the Company’s ability to operate its facilities and distribute products to its customers in a timely fashion. In addition, these global events may result in extreme volatility and disruptions in the capital and credit markets as well as widespread furloughs and layoffs for workers in the broader economy. This volatility and loss of employment may negatively impact consumer buying habits, whichdo so could adversely affect the Company’sCompany's financial results.
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Table Any losses due to these events may not be covered by our existing insurance policies and may be subject to significant deductibles. The premiums for insurance coverage have recently increased and may continue to increase, along with the level of Contents

The Company's future growth and financial results could be adversely impacted if the Company is unable to identify strategic acquisitions and to successfully integrate the acquired businesses.deductibles.

The Company has made a significant number of acquisitions in recent years, includingPreparedness plans have been developed for vulnerable facilities and detail the AR Packaging acquisition and the NACP Combination, and expects to make additional strategic acquisitionsactions needed in the futureevent of unforeseen events or severe weather. We also obtain insurance coverage to mitigate losses from physical damages and business interruptions. These measures have historically been in place and such activities and associated costs are driven by normal operational preparedness. However, there can be no assurance that such measures will be effective for a particular event that we may experience.

In addition to the possible disruptions to our facilities' production as partdiscussed above, because approximately 62% of its overall growth strategy. Thethe Company's ability to continue to make strategic acquisitionsemployees are represented by unions, the Company could experience disruptions such as work slowdowns or strikes from time to time and to integrate the acquired businesses successfully, including obtaining anticipated cost savings or synergies and expected operating results within a reasonable period of time, is an important factor in the Company's future growth.time. If the Company is unable to properly estimate, account for and realizeprevent prolonged interruptions of the expected revenue and cash flow growth andCompany's operations at any of its' facilities due to slowdowns, strikes or other benefits from its acquisitions,work interruptions, the Company may be requiredexperience a negative impact to spend additional time or money on integration efforts that would otherwise have been spent on the development and expansion of its business.its' financial results.

The Company’s information technology systems could suffer interruptions, failures, unauthorized access, or breaches and our business operations could be disrupted, adversely affecting results of operations and the Company’s reputation.

The Company’s information technology systems, some of which are dependent on services provided by third parties, serve an important role in the operation of the business. These systems could be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, computer viruses or cyber-based attacks. The Company has contingency plans in place to prevent or mitigate the impact of these events, however, if they are not effective on a timely basis, business interruptions could occur which may adversely impact results of operations.

The Company has been, and likely will continue to be, subject to computer hacking, acts of vandalism or theft, malware, ransomware, computer viruses or other malicious codes, phishing, employee error or malfeasance catastrophes, unforeseen events or other cyber-attacks.cyber-attack. To date, the Company has seenexperienced no material impact on our business or operations from these types of attacks or events. Any future significant compromise or breach of data security, whether external or internal, or misuse of customer, associate,employee, supplier or Company data, could result in significant costs, interrupted operations, lost sales, fines, lawsuits, and damage to the Company's reputation. However, theThese ever-evolving threats mean the Company and its third-party service providers and vendors must continually evaluate and adapt their respective systems and processes and overall security environment, as well as those of any companies acquired.business we acquire. There is no guarantee that these measures will be adequate to safeguard against all data security breaches, system compromises or misuses of data.data and insurance may not fully cover the costs of cyber incidents. In addition, the regulatory environment related to information security, data collection and use, and privacy is becoming increasingly rigorous, with new and constantly changing requirements applicable to the Company's business. Compliance with such requirements could also result in additional costs.

The CompanyCompany’s operations and financial results could experience material disruptions at our facilitiesbe adversely impacted by events outside the Company’s control, such as pandemics or increases in the cost of insurance.other global health emergencies, or geopolitical conflicts and other social and political unrest or change.

AlthoughAs a result of events, such as pandemics or other global health emergencies and widespread military and geopolitical conflicts and other social and political unrest in Eastern Europe, Africa and the Company takes appropriate measures to minimize the risk and effect of materialMiddle East, there could be unpredictable disruptions to the business conducted atCompany’s operations that could limit production, reduce its future revenues and negatively impact the Company’s financial condition. These events may result in supply chain and transportation disruptions to and from our facilities natural disasters such as hurricanes, tornadoes and othercould impact the Company’s ability to operate its facilities and distribute products to its customers in a timely or cost-effective fashion. In addition, these events may result in extreme weather events, floods, droughtsvolatility and fires, all of which may be exacerbated by climate change,disruptions in the capital and credit markets as well as other unexpected disruptions such aswidespread furloughs and layoffs for workers in the unavailabilitybroader economy. This volatility and loss of critical raw materials, power outages and equipment breakdowns or failures can reduce production and increase manufacturing costs. These types of disruptions, whether caused by climate change or other events, could materially adversely affect our earnings, depending upon the duration of the disruption and our ability to shift business to other facilities or find other sources of materials or energy. In addition, given the Company's integrated supply chain, managing board supply and properly planning for mill outages and downtime must be integrated with the converting plants’ forecasts. Any inability to do soemployment may negatively impact consumer buying habits, which could adversely affect the Company'sCompany’s financial results. Any losses due

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The Company could be adversely impacted if the Company is unable to these events may not be covered by our existing insurance policies,successfully integrate acquired businesses.

The Company has made a significant number of acquisitions throughout its history and insurance coverageexpects to make additional acquisitions in the future. The Company's ability to integrate the acquired businesses successfully, including obtaining anticipated cost savings or synergies and expected operating results within a reasonable period of time, is an important factor in the Company's future performance. If the Company is unable to realize desired benefits from its acquisitions, the Company may be subjectrequired to significant deductibles. The premiums for insurance coveragespend additional time or money on integration efforts that would otherwise have recently increasedbeen spent on the development and may continue to increase, along with the levelexpansion of deductibles. In addition, the availability of some insurance coverage may decline due to insurance company losses from extensive property damage caused by natural disasters and increased cyber security breaches.its core business.

The Company may not be able to develop and introduce new products and adequately protect its intellectual property and proprietary rights, which could harm its future success and competitive position.

The Company works to increase market share and profitability through product innovation and the introduction of new products. The inability to develop new or better products that satisfy customer and consumer preferences in a timely manner may impact the Company's competitive position. The Company's future success and competitive position also depends, in part, upon its ability to obtain and maintain protection for certain proprietary carton and packaging machine technologies used in its value-added products, particularly those incorporating the Fridge Vendor, IntegraPak, KeelClip, MicroFlex-Q, MicroRite, Opti-Cycle, PaperSeal Slice and PaperSeal Wedge, PaperSeal Shapes, Boardio, Produce Pack, Quilt Wave, Qwik Crisp, Tite-Pak, and Z-Flute technologies. Failure to protect the Company's existing intellectual property rights may result in the loss of valuable technologies or may require itthe Company to license other companies' intellectual property rights. It is possible that any of the patents owned by the Company may be invalidated, rendered unenforceable, circumvented, challenged or licensed to others or any of its pending or future patent applications may not be issued within the scope of the claims sought by the Company, if at all. Further, others may develop technologies that are similar or superior to the Company's technologies, duplicate its technologies or design around its patents, and steps taken by the Company to protect its technologies may not prevent misappropriation of such technologies.

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The Company's capital spending may not achieve the desired benefits, which could adversely impact future financial results.

The Company invests significant amounts of cash each year on capital projects, which have expected returns to the Company. The Company's ability to execute on these projects in order to achieve planned outcomes, including obtaining expected returns and strategic long-term goals within a reasonable period of time, is an important factor in the Company's financial results and commitments to the market. As these investments start up, the Company may experience unanticipated business disruptions and not achieve the desired benefits or timelines. In addition, the Company's acquisitions may require more capital than expected to achieve synergies or expected operating results. Additional spending and unachieved benefits may adversely affect the Company's cash flow and results of operations.

The Company may face a shortage of a skilled workforce at its facilities.workers and key management personnel.

The Company's ability to maintain or expand its business depends on attracting, trainingour ability to attract, develop and retainingretain a skilled workforce.workforce at all levels within our organization, including production employees and key managers. Changing demographics and workforce trends may result in a loss of knowledge and skills as experienced workers retire or resign. The Company may incur higher costs to hire and retain new workers, and the failure to attract and retain sufficient skilled workers may result in operational inefficiencies or require additional capital investments to reduce reliance on labor, which may adversely impact the Company's results.

The Company is subject to the risks of doing business in foreign countries.

The Company has converting plantspackaging facilities and one paper millpaperboard manufacturing facility in 1820 countries outside of the U.S. and sells its products worldwide. For 2021,2023, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 23%30% of the Company’s net sales. The Company’s revenues from foreign sales fluctuate with changes in foreign currency exchange rates. In addition, at December 31, 2023, approximately 27% of the Company's total assets were denominated in currencies other than the U.S. dollar. The Company pursues a currency hedging program in order to reduce the impact of foreign currency exchange fluctuations on financial results. In addition, at December 31, 2021, approximately 30% of the Company's total assets were denominated in currencies other than the U.S. dollar.

The Company is also subject to the following significant risks associated with operating in foreign countries:

Export compliance;

Compliance with and enforcement of environmental, health and safety, and labor laws and data privacy and other regulations of the foreign countries in which the Company operates;

Difficulties moving funds from certain countries back to the U.S.;

Imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; and

Imposition of new or increases in capital investment requirements and other financing requirements by foreign governments.
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Financial Risks

The Company's indebtedness may adversely affect its financial condition and its ability to react to changes in its business.

As of December 31, 2021, theThe Company had an aggregate principal amount of $5,831$5,396 million of outstanding debt.debt as of December 31, 2023.

Because of the Company's debt level, a portion of its cash flows from operations is dedicated to payments on indebtedness and the Company's ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be restricted in the future.

Additionally, the Company’sCompany's Fourth Amended and Restated Credit Agreement (as amended, the “Current Credit Agreement”) and the indentures governing the 4.875% Senior Notes due 2022, 0.821% Senior Notes due 2024, 4.125% Senior Notes due 2024, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 (the “Indentures”), limit the Company's ability to incur additional indebtedness. Additional covenants contained in the Current Credit Agreement and the Indentures may, prohibit or restrict, among other things, restrict the disposalability of the Company to dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase stock, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the incurrenceIndentures, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates. Such restrictions could limit the Company’s ability to respond to changing market conditions, fund its capital spending program, provide for unexpected capital investments or take advantage of additional indebtedness (including guarantees), the incurrence of liens, payment of dividends, share repurchases, the making of acquisitions and other investments and certain other types of transactions.business opportunities. These restrictions could limit the Company’sCompany's flexibility to respond to changing market conditions and competitive pressures. The debt obligations and restrictions may also leave the Company more vulnerable to a downturn in general economic conditions or its business, or unable to carry out capital expenditures that are necessary or important to its growth strategy and productivity improvement programs.

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As of December 31, 2021,2023, approximately 31%20% of the Company’s debt is subject to variable rates of interest and exposes the Company to increased debt service obligations in the event of increased market interest rates.

Legal and Regulatory Risks

The Company is subject to a broad range of foreign, federal, state, and local laws and regulations, including environmental, health and safety, lawssustainability, data privacy, labor and regulations,employment, corruption, tax, and healthcare, and costs to comply with such laws and regulations, or any liability or obligation imposed under new laws or regulations, could negatively impact its financial condition and results of operations.

The Company is subject tomust comply with a broad rangewide variety of foreign, federal, state and local environmental, health and safety laws and regulations, including those governing GHG emissions and other discharges to air, soil and water and the management, treatment and disposal of hazardous substances, the investigation and remediation of contamination resulting from releases of hazardous substances, waste disposal, recycling of packaging, extended producer responsibilities, deforestation risks, and the health and safety of employees. These laws and regulations, particularly those that relate to GHG emissions, are evolving and expected to become more stringent over time, which could result in significant additional compliance costs (such as the installation or modification of emission control equipment), increased costs of purchased energy or other raw materials, increased transportation costs, restrictions on our operations, or additional costs associated with air and water emissions. The Company is tracking and taking actions to reduce our GHG and other air and water emissions to decrease the potential future impact of these regulatory matters. However, the Company cannot currently assess the impact that future emission standards, climate control initiatives, regulation changes and enforcement practices will have on the Company's operations and capital expenditure requirements.

Environmental liabilitiesAdditionally, over the past few years, the number of data privacy laws and obligations mayregulations has increased and become more complex and stringent in the U.S. and internationally. The improper handling and disclosure of or access to personal data in violation of privacy laws and regulations such as the European Union’s General Data Protection Regulation (“GDPR”), the California Privacy Rights Act (“CPRA”), the Virginia Consumer Data Protection Act (“CDPA”), and Canada’s Consumer Privacy Protection Act (“CPPA”) could cause harm to the Company’s reputation, cause loss of consumer confidence, subject the Company to government enforcement actions, or result in significant costs, whichprivate litigation against the Company. Any of these outcomes could negatively impact the Company'sCompany’s financial position,condition and results of operations or cash flows. See "Note 14 - Environmentaloperations. Moreover, with no unifying standards for both U.S. and Legal Matters"international data privacy laws and regulations, the Company could incur additional compliance cost in order to comply with the Noteslarge number of data privacy laws and regulations, which could result in a negative impact to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”the Company’s results of operations.

ITEM 1B.UNRESOLVED STAFF COMMENTS

None.None





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ITEM 1C.    CYBERSECURITY

The Company has cybersecurity incident response policies and procedures for identifying, assessing, and managing material risks arising from cybersecurity incidents, including those arising from third-party service providers. Our cybersecurity program is based on components of the National Institute of Standards and Technology's (“NIST”) Cybersecurity Framework. The Company’s Vice President, Information Security, who has 15 years of experience in information security and has several industry certifications such as Certified Information Security Manager (“CISM”), Certified in Risk and Information Systems Control (“CRISC”), and Certified Information Privacy Professional (“CIPP”), is primarily responsible for managing and assessing cybersecurity risks. The Company uses a number of other internal and external resources to manage its information technology (“IT”) and cybersecurity operations across the Company, including global managed service providers that provide 24/7 support for all of the Company’s key IT systems and consultants who are engaged periodically to assist with the Company’s evaluation of its systems and processes for preventing and mitigating cybersecurity incidents. The Company’s global managed service providers also assess cybersecurity incidents and classify them by severity level in accordance with the Company’s Incident Response Plan, which determines how each cybersecurity incident is managed and communicated. The Incident Response Plan also outlines the procedures that the Company then follows for evaluation and recovery from an incident, including containment of the affected systems, in order to restore our systems to normal operations. To date, the Company has not had a cybersecurity event that materially impacted its operations, financial position or the security of its proprietary data.

Cybersecurity incidents that are deemed Priority 1 (described in the Incident Response Plan as those incidents affecting key operational and financial systems), are reported to certain members of the Company’s Executive Leadership Team including the Chief Executive Officer, Chief Financial Officer, General Counsel and Chief Information Officer (“CIO”) for assessment of the materiality of the incident, which will be made using both quantitative and qualitative analysis to determine an incident’s immediate and reasonably likely future impacts. Cybersecurity incidents that are deemed material, either individually or in aggregate, are reported to the Audit Committee of the Company’s Board of Directors, which has been delegated the responsibility for oversight of cybersecurity risks. The Company also communicates material cybersecurity incidents to the Company’s independent auditors and internal audit team.

Annually the Company conducts an Enterprise Risk Assessment during which management identifies and quantifies risks to the Company’s operations, financial position and strategy, including cybersecurity risks. The conclusions of the annual Enterprise Risk Assessment are shared with the Audit Committee. Working with the CIO and the Vice President, Information Security, the Audit Committee periodically reviews the strategy, priorities, and goals of the cybersecurity program and the CIO and Vice President, Information Security, provide regular updates to the Audit Committee.

ITEM 2.    PROPERTIES

Headquarters

The Company leases its principal executive offices in Atlanta, GA.Georgia.

Operating Facilities

A listing of the principal properties owned or leased and operated by the Company is set forth below. The Company’s buildings are adequate and suitable for the business of the Company and have sufficient capacity to meet current requirements. The Company also leases certain smaller facilities, warehouses and office space throughout the U.S. and in foreign countries from time to time.

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LocationRelated Products or Use of Facility
Mills:Paperboard Manufacturing Facilities:
Augusta, GASBS
Battle Creek, MICRBBleached paperboard
East Angus, QuébecCRBRecycled paperboard
Kalamazoo, MICRBRecycled paperboard
Macon, GACUKUnbleached paperboard
Middletown, OHCRBRecycled paperboard
Tama, IA(a)
Recycled paperboard
Texarkana, TXSBSBleached paperboard
West Monroe, LACUK,Unbleached paperboard, Research and Development
Other:
Atlanta, GA(a)(b)
Headquarters, Research and Development, Packaging Machinery and Design
Clemson, SC(b)
Research and Development
Concord, NH(a)(b)
Research and Development, Design Center
Crosby, MNPackaging Machinery Engineering, Design and Manufacturing
Louisville, CO(a)(b)
Research and Development
Menomonee Falls, WIFoodservice Rebuild Center
(a) Closed in the second quarter of 2023.
(b) Leased facility.
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North American Converting Plants:Packaging Facilities:International Converting Plants:Packaging Facilities:
Atlanta, GA(a)
Monterrey, Mexico(a)
Aachen, GermanyKrakow, Poland
Auburn, IN(d)
New Albany, IN(b)
Auckland, New Zealand(a)
Aachen, Germany
Leeds, United KingdomKanfanar, Croatia
Carol Stream, ILNewton, IA
Auckland, New Zealand(a)
Krakow, Poland
Centralia, ILNorth Portland, ORAugsburg, GermanyLeeds, United Kingdom
Charlotte, NCOmaha, NE
Bardon, United Kingdom(b)
Lund, Sweden(a)(b)
Centralia,
Chicago, IL(a)
North Portland, OROroville, CA(a)
Bawen, Indonesia
Magdeburg, Germany(a)
Charlotte, NCClarksville, TNNorwalk, OHPacific, MOBekasi, IndonesiaMaliaño, Spain
Chicago, ILCobourg, Ontario(a)
Omaha, NEPerry, GA
Berlin, Germany(b)
Masnieres,Masnières, France(a)
Clarksville, TNElgin, ILPineville, NC
Oroville, CA(a)
Bremen, Germany(b)
Melbourne, Australia(a)
Cobourg, OntarioElk Grove, IL(a)(b)
Pacific, MOPittston, PA
Bristol, United Kingdom(e)
Munich, Germany(a)
Elgin, IL
Fort Smith, AR(b)
Perry, GAProsperity, SC
Cambridge, United Kingdom(a)
Newcastle Upon Tyne, United Kingdom(a)
Elk Grove, ILGordonsville, TN(a)(b)
Pineville,Querétaro, Mexico(a)
Cholet, France(a)
Perth, Australia
Grand Rapids, MIRandleman, NC
Cholet, FranceFrankfurt, Germany(a)
Portlaoise, Ireland(a)
Fort Smith, ARGresham, OR(b)(a)
Pittston, PAShelbyville, IL
Coalville,Gateshead, United Kingdom(a)
Poznan, Poland(b)
Gordonsville, TNGroveport, OH(a)
Prosperity, SC
Frankfurt, GermanySioux Falls, SD(a)(b)
Graz, AustriaRequejada, Spain
Grand Rapids, MIHamel, MNSolon, OH
Queretaro, Mexico(a)
Gateshead, United KingdomHalmstad, Sweden(a)
Rotherham, United Kingdom(a)
Irvine, CA
Gresham, ORSt.-Hyacinthe, Québec(a)
Randleman, NCGraz, AustriaHannover, GermanySneek, Netherlands
Hamel,Kalamazoo, MISt. Paul, MNShelbyville, IL
Halmstad, SwedenHighbridge, United Kingdom(a)
St. Gallen, Switzerland(a)
Irvine, CAKendallville, INSolon, OHStaunton, VAHannover, GermanyHoogerheide, Netherlands
St. Petersburg, Russia(a)(d)
Kalamazoo, MIKenton, OH
St.-Hyacinthe, QuébecStone Mountain, GA(a)
Highbridge, United Kingdom(a)
Ibadan, Nigeria
Sydney, Australia(a)
Kendallville, INSt. Paul, MNHoogerheide, NetherlandsTabasalu, Estonia
Kenton, OHStaunton, VAIbadan, NigeriaTibro, Sweden
Kingston Springs, TNSturgis, MIIgualada, Spain
Timashevsk, Russia(a)
Tabasalu, Estonia
Lancaster, TX
Tijuana, Mexico(a)
Ingerois, Finland(a)
Winsford, United Kingdom(a)
Tibro, Sweden
Lawrenceburg, TNTuscaloosa, ALJundiai, Sao Paulo, Brazil
Timashevsk, Russia(d)
Lebanon, TN(a)
Valley Forge, PAKanfanar, Croatia
Winsford, United Kingdom(a)
Lowell, MA
Vancouver, WA(a)
Lumberton, NCVisalia, CA
Marietta, GAWausau, WI
Marion, OHWayne, NJ
Memphis, TN
West Monroe, LA(b)
Mississauga, Ontario(a)(b)(c)
Winnipeg, Manitoba
Mitchell, SDWinston Salem, NC
Monroe, LA(a)
Xenia, OH(a)(c)
Monterrey, Mexico(a)
(a) Leased facility.
(b) Multiple facilities in this location.
(c) Closed in the third quarter of 2023.
(d) Sold in the fourth quarter of 2023.
(e) Multiple facilities in this location which includes a leased facility and an owned facility.
(a) Leased facility.
(b) Multiple facilities in this location.
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ITEM 3.    LEGAL PROCEEDINGS

The Company is a party to a number of lawsuits arising in the ordinary conduct of its business. Although the timing and outcome of these lawsuits cannot be predicted with certainty, the Company does not believe that disposition of these lawsuits will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. See "Note 14 - Environmental and Legal Matters" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

ITEM 4.    MINE SAFETY DISCLOSURES

Not Applicable.














































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EXECUTIVE OFFICERS OF THE REGISTRANT

Pursuant to General Instruction G.(3) of Form 10-K, the following list is included as an unnumbered item in Part I of this Report in lieu of being included in the definitive proxy statement that will be filed within 120 days after December 31, 2021.2023.

Michael P. Doss, 55,57, is the President and Chief Executive Officer of Graphic Packaging Holding Company. He was elected to the Board of Directors on May 20, 2015. Prior to January 1, 2016, Mr. Doss held the position of President and Chief Operating Officer from May 20, 2015 through December 31, 2015 and Chief Operating Officer from January 1, 2014 until May 19, 2015. Prior to these positions he served as the Executive Vice President, Commercial Operations of Graphic Packaging Holding Company. Prior to this Mr. Doss held the position of Senior Vice President, Consumer Packaging Division. Prior to March 2008, he had served as Senior Vice President, Consumer Products Packaging of Graphic Packaging Corporation since September 2006. From July 2000 until September 2006, he was the Vice President of Operations, Universal Packaging Division. Mr. Doss was Director of Web Systems for the Universal Packaging Division prior to his promotion to Vice President of Operations. Since joining Graphic Packaging International Corporation in 1990, Mr. Doss has held positions of increasing management responsibility, including Plant Manager at the Gordonsville, TN and Wausau, WI plants.

Mr. Doss serves on the Board of Directors for the American Forest & Paper Association, the Sustainable Forest Initiative, the Paper Recycling Coalition, the Atlanta Area Council of the Boy Scouts of America, Sealed Air Corporation, Metro Atlanta Chamber of Commerce, and the Woodruff Arts Center.Art Center, American Bird Conservancy and Regal Rexnord Corporation (RRX).

Stephen R. Scherger, 57,59, is the Executive Vice President and Chief Financial Officer of Graphic Packaging Holding Company. From October 1, 2014 through December 31, 2014, Mr. Scherger was the Senior Vice President – Finance. From April 2012 through September 2014, Mr. Scherger served as Senior Vice President, Consumer Packaging Division. Mr. Scherger joined Graphic Packaging Holding Company in April of 2012 from MeadWestvaco Corporation, where he served as President, Beverage and Consumer Electronics. Mr. Scherger was with MeadWestvaco Corporation from 1986 to 2012 and held positions including Vice President, Corporate Strategy; Vice President and General Manager, Beverage Packaging; Vice President and Chief Financial Officer, Papers Group, Vice President Asia Pacific and Latin America, Beverage Packaging, Chief Financial Officer Beverage Packaging and other executive‐level positions.

Maggie Bidlingmaier, 51,53, joined Graphic Packaging Holding Company as the Executive Vice President and President, Americas business unit on January 28, 2022. Maggie was most recently President, Performance Solutions for Invista, a subsidiary of Koch Industries, Inc., where she held several positions and led numerous multimillion-dollar global businesses within the flooring, apparel and airbag fiber segments from 2014 to January 2022.segments. Prior to that, she heldwas Vice President, Surfaces at Invista, following a successful career with Avery Dennison in global sales and marketing roles of increasing responsibility at Avery Dennison from 2007 to 2013.responsibility.

Michael Farrell, 55,57, became the Executive Vice President, Mills Division of Graphic Packaging Holding Company in September 2018. Prior to that, he served as the Senior Vice President, Supply Chain from January to September 2018. Prior to January 2018, Mr. Farrell served as Vice President, Recycled Board Mills of Graphic Packaging International, Inc. and its predecessor companies from January 1, 2013; and Senior Manufacturing Manager of Graphic Packaging International, Inc. from October 28, 2009 until December 31, 2012. From December 11, 2008 until October 27, 2009, Mr. Farrell was the Manufacturing Manager of the West Monroe, Louisiana mill and from September 1, 2006 until December 10, 2008 he was the General Manager of the Middletown, Ohio mill.

Jean-Francois Roche,Elizabeth Spence, 55,44, is the SeniorExecutive Vice President, Sales, of Graphic Packaging Holding Company.Human Resources. She joined the Company on April 1, 2022. Prior to assuming his current position on January 5, 2022, Mr. Roche served as Seniorthis she was Vice President and President, Europe, Middle East,Chief Human Resources Officer at Gypsum Management and Africa from January 2020 to January 2022 andSupply, following her role as Vice President Global Accounts of Graphic Packaging International, LLC from October 2018 through December 2019. From April 2015 through December 2019, Mr. RocheHuman Resources at Assurant. Ms. Spence is a seasoned human resources executive, having also served as the Vice President, Sales, Europe Consumer Products. Mr. Roche joined Graphic Packaging in April 2015 from LGR Packaging where he served as Chief Salesspent time at BellSouth/AT&T and Marketing Officer. Prior to that Mr. Roche spent 25 years at A&R Packaging, a large Scandinavian-based multinational consumer packaging provider, working in positions of increasing responsibility culminating the position of Senior Vice President, Sales and Marketing. Mr. Roche also serves as the President of the European Carton Makers Association, Europe's folding carton industry association.The Coca-Cola Company.

Lauren S. Tashma, 55,57, is the Executive Vice President, General Counsel and Secretary of Graphic Packaging Holding Company. She joined the Company in February 2014. Previously, Ms. Tashma served as Senior Vice President, General Counsel and Secretary of Fortune Brands Home & Security, Inc., where she led the legal, compliance and EHS functions. Prior to that, Ms. Tashma had various roles with Fortune Brands, Inc., including Vice President and Associate General Counsel.

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Joseph P. Yost, 5456, is the Executive Vice President and President, International of Graphic Packaging Holding Company. Prior to January 5, 2022, he served as Executive Vice President and President, Americas. Prior to January 5, 2017, Mr. Yost served as Senior Vice President, Global Beverage and Europe from September 1, 2015 to January 4, 2017, Senior Vice President, Europe from March 1, 2014 to August 31, 2015 and Senior Vice President, European Chief Integration Officer/Chief Financial Officer from February 2013 until February 2014. From 2009 until February 2013, Mr. Yost was the Senior Vice President, Supply Chain of Graphic Packaging Holding Company. From 2006 to 2009, he served as Vice President, Operations Support – Consumer Packaging for Graphic Packaging International, Inc. Mr. Yost has also served in the following positions: Director, Finance and Centralized Services from 2003 to 2006 with Graphic Packaging International, Inc. and from 2000 to 2003 with Graphic Packaging Corporation; Manager, Operations Planning and Analysis – Consumer Products Division from 1999 to 2000 with Graphic Packaging Corporation; and other management positions from 1997 to 1999 with Fort James Corporation.

























































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PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

GPHC’s common stock is traded on the New York Stock Exchange under the symbol “GPK.”

On February 7, 2022,20, 2024, there were approximately 989911 stockholders of record and approximately 54,788126,193 beneficial holders of GPHC's common stock.

During 20212023, 2022 and 2020,2021, GPHC paid cash dividends of$87 $123 million, $92 million and $85$87 million, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations.

On January 28, 2019, the Company's board of directors authorized a share repurchase program to allow the Company to purchase up to $500 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the “2019 share repurchase program”).

On July 27, 2023, the Company's board of directors authorized an additional share repurchase program to allow the Company to purchase up to $500 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the "2019“2023 share repurchase program"program”). The previous $250As of December 31, 2023, the Company had $565 million available for additional repurchases under the 2023 and 2019 share repurchase program was authorized on January 10, 2017 (the "2017 share repurchase program").programs.

Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and accumulated deficit.
The Company did not repurchase any shares of its common stock under the 2019 share repurchase program for the year ended December 31, 2021.

retained earnings.
The following presents GPHC'sthe Company's share repurchases for the years ended December 31, 2020,2023, 2022, and 2019:2021:

Amount repurchased in millions, except share and per share amountsAmount RepurchasedNumber of Shares RepurchasedAverage Price per Share
2023$54 2,389,224 $22.80 
2022$28 1,315,839 $20.91 
2021$— — $— 
Amount repurchased in millionsAmount RepurchasedNumber of Shares RepurchasedAverage Price
2020$316 23,420,010 $13.48 
2019$128 10,191,257 (a)$12.55 
2023
(a) Includes 7,400,171 shares repurchasedOn February 7, 2023, Graphic Packaging International, LLC (“GPIL”), a Delaware limited liability company and a direct subsidiary of Graphic Packaging International Partners, LLC (“GPIP”), a Delaware limited liability company and a wholly-owned subsidiary of the Company entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (the “Third Amendment”). The Third Amendment provides for a future replacement floating interest rate benchmark (the Canadian Overnight Repo Rate Average) to take effect upon the cessation of the Canadian Dollar Offered Rate for Canadian Dollar borrowings under the 2017 share repurchase program, thereby completing that program.domestic revolving credit facility. The Third Amendment also modified the borrowing mechanics for certain term Secured Overnight Financing Rate (“SOFR”) loans under the domestic revolving line of credit.

2022
During the fourth quarter of 2021, pursuantOn November 4, 2022, GPIL entered into Amendment No. 2 to the 2019 share repurchase program, GPHC did not purchase any sharesFourth Amended and Restated Credit Agreement (the “Second Amendment”). The Second Amendment provided for a change in the floating interest rate benchmark for the domestic revolving credit facility and the USD denominated term loans from LIBOR-based to Term SOFR plus 10bps. The Second Amendment also added JSC AR Packaging to the Schedule of its common stock.

2021

Permitted Asset Sales to facilitate the sale of the Company's Russian operations.
On January 14, 2021,November 15, 2022, the Company drew $250 million from the $425 million Incremental Term A-2 Facility (as hereinafter defined)senior secured domestic revolving credit facilities and used the proceeds, together with cash on hand, to redeem its 4.75%4.875% Senior Notes due in 2021.2022.

On March 8, 2021, GPIL completed a private offering of $400 million aggregate principal amount of its 0.821% Senior Secured Notes due 2024 and $400 million aggregate principal amount of its 1.512% Senior Secured Notes due 2026. The net proceeds were used by the Company to repay a portion of the outstanding borrowings under GPIL's term loan credit facilities, which is under its senior secured credit facility.

On April 1, 2021, GPIL entered into the Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) to extend the maturity date of certain of its senior secured term loan facilities and senior secured revolving credit facilities and to amend certain other terms of the agreement, including revised debt covenants and collateral requirements. Under the terms of the agreement, $975 million of the Company’s senior secured term loan facilities remains outstanding. The Company added approximately $400 million to its senior secured revolving credit facilities. $550 million of the senior secured term loan facilities and all of the senior secured revolving credit facility loans continue to bear interest at a floating rate per annum ranging from LIBOR plus 1.25% to LIBOR plus 2.00%, determined using a pricing grid based upon the Company’s consolidated total leverage ratio from time to time, and the maturity for these loans were extended from January 1, 2023 to April 1, 2026. $425 million of the senior secured term loan facilities is a Farm Credit System incremental term loan (the “Incremental Term A-2 Facility”) that bears interest at a fixed rate per annum equal to 2.67% and matures on its originally scheduled maturity date of January 14, 2028. As long as the Incremental Term A-2 Facility is outstanding, GPIL will be eligible to receive an annual patronage credit from the participating banks, which will be paid in cash and stock in the lead member bank. Patronage payable each year is variable and based on the individual financial performance of each of the member banks then participating in the loan.

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On July 22, 2021, GPIL entered into an Incremental Facility Amendment to the Fourth Amended and Restated Credit Agreement for a second Farm Credit System incremental term loan (the “Incremental Term A-3 Facility”). The Incremental Term A-3 Facility is a senior secured term loan in the aggregate principal amount of $250 million maturing on July 22, 2028. The Incremental Term A-3 Facility bears interest at a floating rate ranging from LIBOR plus 1.50% to LIBOR plus 2.25%, determined using a pricing grid based upon GPIL’s consolidated leverage ratio. As long as the Incremental Term A-3 Facility is outstanding, GPIL will be eligible to receive an annual patronage credit from the participating banks, which will be paid in cash and stock in the lead member bank. Patronage payable each year is variable and based on the individual financial performance of each of the member banks then participating in the loan. The Incremental Term A-3 Facility is governed by the same covenants as are set forth in the Fourth Amended and Restated Credit Agreement and is secured by a first priority lien and security interest in certain assets of GPIL.

On July 23, 2021, GPIL entered into Amendment No. 1 to the Fourth Amended and Restated Credit Agreement and the Fourth Amended and Restated Guarantee and Collateral Agreement and Incremental Facility Amendment (the “First Amendment”). The First Amendment provided for a delayed draw term loan facility in an aggregate amount of €210 million and a €25 million increase to the existing Euro-denominated revolving credit facility. The new term loan facility was drawn on October 29, 2021, and bears interest at a floating rate ranging from LIBOR plus 1.125% to LIBOR plus 1.75%, determined using a pricing grid based upon GPIL’s consolidated total leverage ratio from time to time. The new term loan facility is governed by the same covenants as set forth in the Fourth Amended and Restated Credit Agreement and is secured by a first priority lien and security interest in certain assets of GPIL.

On September 29, 2021, GPIL completed a $100 million tax-exempt green bond transaction through the Michigan Strategic Fund’s Private Activity Bond Program (the “Green Bonds”). The Green Bonds are special limited obligations of the Michigan Strategic Fund, as issuer, payable from and secured by a pledge of payments to be made by GPIL under a loan agreement between the Michigan Strategic Fund and GPIL. The Green Bonds mature in 2061 and include a mandatory purchase on October 1, 2026. The Green Bonds were issued at a price of 110.99% and bear interest at an annual rate of 4.0%. The equivalent yield is 1.70%. The net proceeds of $109.5 million were used to fund a portion of its spend on the CRB platform optimization project that includes the construction of a new CRB machine at its Kalamazoo, Michigan mill. The bonds have been designated as Green Bonds primarily because the proceeds were used to finance a solid waste disposal/recycling facility resulting in diversion of waste from landfills. In addition to the solid waste recycling aspect, the project improves the environmental footprint of its CRB mill system through expected reductions in water usage, energy consumption and greenhouse gas emissions.

On October 6, 2021, GPIL entered into a $400 million Incremental Facility Amendment to the Fourth Amended and Restated Credit Agreement (the "Incremental Term A-4 Facility"). The Incremental Term A-4 Facility has a delayed draw feature, and the Company funded the new term loan on October 29, 2021. The Incremental Term A-4 Facility was collateralized by the same assets as GPIL’s Senior Secured Facilities on a pari passu basis. The Incremental Term A-4 Facility bore interest at a floating rate per annum equal to the Base Rate, the Euro currency Rate plus 0.875%, or the Daily Floating LIBOR Rate plus 0.875%, as selected by the Company. The loan was repaid on November 19, 2021 with the proceeds from the 3.75% senior unsecured notes due 2030.

On November 19, 2021, GPIL completed a private offering of $400 million aggregate principal amount of 3.750% senior unsecured notes due 2030 (the “Dollar Notes”) and €290 million aggregate principal amount of 2.625% senior unsecured notes due 2029 (the “Euro Notes”). The net proceeds of the Dollar Notes were used to repay in full the term loan borrowed under the Incremental Term A-4 Loan, which was under its senior secured credit facility. The net proceeds of the Euro Notes were used to repay revolver borrowings outstanding under its senior secured credit facility.

2020

On March 6, 2020, GPIL completed a private offering of $450 million aggregate principal amount of its 3.50% senior unsecured notes due 2028 (the "2028 Senior Notes"). The 2028 Senior Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Exchange Act, as amended. The offering was completed pursuant to a purchase agreement between the Company, GPIL and Field Container Queretaro (USA), L.L.C. and BofA Securities, Inc. as representative of the initial purchasers. The Company received net proceeds of the offering of approximately $443 million, after deducting the initial purchasers' discount and other transaction costs. The net proceeds of the offering were used to repay a portion of the outstanding borrowings under GPIL's revolving credit facility under its senior secured credit facility.

On August 28, 2020, GPIL completed a private offering of $350 million aggregate principal amount of its 3.50% senior unsecured notes due 2029 (the "2029 Senior Notes"). The 2029 Senior Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Exchange Act, as amended. The offering was completed pursuant to a purchase agreement between the Company, GPIL and Field Container Queretaro (USA), L.L.C. and BofA Securities, Inc. as representative of the initial purchasers. The Company received net proceeds of the offering of approximately $345 million, after deducting the initial purchasers' discount and other transaction costs. The net proceeds of the offering were used to repay a portion of the outstanding borrowings under GPIL's revolving credit facility under its senior secured credit facility.


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Total Return to Stockholders

The following graph compares the total returns (assuming reinvestment of dividends) of the common stock of Graphic Packaging Holding Company, the Standard & Poor’s (“S&P”) 500 Stock Index and the Dow Jones (“DJ”) U.S. Container & Packaging Index. The graph assumes $100 invested on December 31, 20162018 in GPHC’s common stock and each of the indices. The stock price performance on the following graph is not necessarily indicative of future stock price performance.

gpk-20211231_g1.jpg9252
12/31/201612/31/201712/31/201812/31/201912/31/202012/31/2021
Graphic Packaging Holding Company$100.00 $126.58 $89.12 $142.43 $148.05 $173.19 
S&P 500 Stock Index100.00 121.83 116.49 153.17 181.35 233.41 
 Dow Jones U.S. Container & Packaging Index100.00 119.02 97.06 124.80 151.18 167.76 

12/31/201812/31/201912/31/202012/31/202112/31/202212/31/2023
Graphic Packaging Holding Company$100.00 $159.82 $166.14 $194.34 $225.18 $253.58 
S&P 500 Stock Index100.00 131.49 155.68 200.37 164.08 207.21 
 Dow Jones U.S. Container & Packaging Index100.00 128.59 155.76 172.84 142.07 152.91 

ITEM 6.    [RESERVED]













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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

This management’s discussion and analysis of financial conditions and results of operations is intended to provide investors with an understanding of the Company’s past performance, financial condition and prospects. The following will be discussed and analyzed:

Overview of Business
Overview of 20212023 Results
Results of Operations
Financial Condition, Liquidity and Capital Resources
Critical Accounting Policies
New Accounting Standards
Business Outlook

A detailed discussion of the fiscal 20212023 year-over-year changes can be found below and a detailed discussion of fiscal 20202022 year-over-year changes can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2022.

OVERVIEW OF BUSINESS

The Company’s objective is to strengthen its position as a leading provider of sustainable fiber-based consumer packaging solutions.made from renewable resources. To achieve this objective, the Company offers customers itsdesigns and delivers sustainable packaging solutions such as cartons, carriers, paperboard cartons,canisters, cups and lids foodservice containers and packaging machines, either as an integrated solution or separately. Cartons, carriers and containers are designed to protect and hold products. Productpreferred by consumers. Packaging offerings include a variety of laminated, coated and printed packaging structures that are produced from the Company’s coated recycled, paperboard ("CRB"), coatedbleached and unbleached kraft paperboard ("CUK") and solid bleached sulfate paperboard ("SBS").paperboard. Innovative designs and combinations of paperboard, films, foils, metallization, holographicsholographic and embossing are customized to the individual needs of the customers.

The Company is implementing strategies (i) to expand market share in its current markets and to identify and penetrate new markets; (ii) to capitalize on the Company’s customer relationships, business competencies, and millspaperboard manufacturing and folding carton assets;packaging facilities; (iii) to develop and market innovative, sustainablepackaging products and applications that benefit from consumer-led sustainability trends; and (iv) to continue to reduce costs by focusing on operational improvements. The Company’s ability to fully implement its strategies and achieve its objectives may be influenced by a variety of factors, many of which are beyond its control, such as inflation of raw material and other costs, which the Company cannot always pass through to its customers, and the effect of overcapacity in the worldwide paperboard packaging industry.

Significant Factors That Impact the Company’s Business and Results of Operations

Impact of Inflation/Deflation. The Company’s cost of sales consists primarily of energy (including natural gas, fuel, oil and electricity), pine and hardwood fiber, chemicals, secondary fibers, purchased paperboard, aluminum foil, ink, plastic films and resins, depreciation expense and labor. Costs increased year over year by $386$175 million in 2021.2023. The higher costs in 20212023 were due to higher labor and benefits ($96 million), other costs, net ($73 million) and commodity inflation costs ($3306 million), labor and benefits ($47 million),. Other costs, net include manufacturing supplies, property taxes, worker's compensation costs and other costs, net ($9 million).insurance costs. Commodity inflation was primarily due to external board ($50 million), mill chemicals ($9138 million), factoring ($36 million), converting chemicals ($7 million) and other costs ($15 million) offset by reduced costs for secondary fiber ($55 million), energy ($40 million), freight ($75 million), secondary fiber ($51 million), energy ($38 million), external board ($34 million), wood ($2827 million), and other costswood ($1318 million).

Because the price of natural gas experiences significant volatility, the Company has entered into contracts designed to manage risks associated with future variability in cash flows caused by changes in the price of natural gas. The Company has entered into natural gas swap contracts to hedge prices for a portion of its expected usage for 2022.2024. Since negotiated sales contracts and the market largely determine the pricing for its products, the Company is at times limited in its ability to raise prices and pass through to its customers any inflationary or other cost increases that the Company may incur.





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The Company’s operations and financial results could be adversely impacted by global events outside of the Company’s control. The Company’s operations and financial results could be adversely impacted by global events outside of the Company’s control, such as pandemics or other global health emergencies, or geopolitical conflicts and other social and political unrest or change. As a result of such global events, there could be unpredictable disruptions to the Company’s operations that could limit production, reduce its future revenues and negatively impact the Company’s financial condition. Global events may result in supply chain and transportation disruptions to and from facilities and affected employees could impact the Company’s ability to operate its facilities and distribute products to its customers in a timely fashion. In addition, these global events may result in extreme volatility and disruptions in the capital and credit markets as well as widespread furloughs and layoffs for workers in the broader economy.

Commitment to Cost Reduction. In light of continuing margin pressure throughout the packaging industry, theThe Company has programs in place that are designed to reduce costs, improve productivity and increase profitability. The Company utilizes a global continuous improvement initiative that uses statistical process control to help design and manage many types of activities, including production and maintenance. This includes a Six Sigma process focused on reducing variable and fixed manufacturing and administrative costs and the use of Lean Sigma principles in manufacturing and supply chain processes.
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The Company’s ability to continue to successfully implement its business strategies and to realize anticipated savings and operating efficiencies is subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. If the Company cannot successfully implement theits strategic cost reductions or other cost savings plans, it may not be able to continue to compete successfully against other manufacturers. In addition, any failure to generate the anticipated efficiencies and savings could adversely affect the Company’s financial results.

Competition and Market Factors. As some products can be packaged in different types of materials, the Company’s sales are affected by competition from other manufacturers’ CRB, CUK, SBS,recycled, bleached and unbleached paperboard, folding box board, and recycled clay-coated news. Additional substitute products also include plastic, shrink film, corrugated containers and corrugated containers.reusables. In addition, while the Company has long-term relationships with many of its customers, the underlying contracts may be re-bid or renegotiated from time to time, and the Company may not be successful in renewing on favorable terms or at all. The Company works to maintain market share through efficiency, product innovation, improved circularity, service and strategic sourcing to its customers; however, pricing and other competitive pressures may occasionally result in the loss of a customer relationship.

In addition, the Company’s sales are driven by consumer buying habits in the markets its customers serve. Recently, theThe Company has seenhistorically reported net organic sales growth drivensupported by its introduction of new packaging products to meet the consumers' desire for recyclable, sustainable consumer packaging solutions and increased at home consumption.solutions. Changes in consumer dietary habits and preferences, increases in the costs of living, unemployment rates, access to credit markets, as well as other macroeconomic factors, may negatively affect consumer spending behavior. New product introductions and promotional activity by the Company’s customers and the Company’s introduction of new packaging productscan also impact its sales.

Debt Obligations. The Company had an aggregate principal amount of $5,831$5,396 million of outstanding debt obligations as of December 31, 2021.2023. This debt has consequences for the Company, as it requires a portion of cash flow from operations to be used for the payment of principal and interest, exposes the Company to the risk of increased interest rates and may restrict the Company’s ability to obtain additional financing. The Covenants in the Company’s Fourth Amended and Restated Credit Agreement (as amended, the “Current Credit Agreement”) and the indentures governing the 4.875% Senior Notes due 2022, 0.821% Senior Notes due 2024, 4.125% Senior Notes due 2024, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 (the “Indentures”) may, among other things, restrict the ability of the Company to dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase stock, pay dividends, make other restricted payments and make acquisitions or other investments. The Current Credit Agreement also requires compliance with a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio. The Company’s ability to comply in future periods with the financial covenants will depend on its ongoing financial and operating performance, which in turn will be subject to many other factors, many of which are beyond the Company’s control. See "Covenant Restrictions"“Covenant Restrictions” in “Financial Condition, Liquidity and Capital Resources” for additional information regarding the Company’s debt obligations.

The debt and the restrictions under the Current Credit Agreement and the Indentures could limit the Company’s flexibility to respond to changing market conditions and competitive pressures. The outstanding debt obligations and the restrictions may also leave the Company more vulnerable to a downturn in general economic conditions or its business, or unable to carry out capital expenditures that are necessary or important to its growth strategy and productivity improvement programs.

OVERVIEW OF RESULTS

This management’s discussion and analysis contains an analysis of Net Sales, Income from Operations and other information relevant to an understanding of the Company's results of operations. On a consolidatedConsolidated basis:

Net Sales in 2021 increased2023 decreased by $596$12 million or 9%0.1%, to $7,156$9,428 million from $6,560$9,440 million in 20202022 due to lower organic sales growth,and lower volume of open market sales, partially offset by higher pricing, new product introductions, the AR Packaging, Americraft, Greif, and Quad acquisitions, higher selling prices,acquisition of Bell, and favorable foreign exchange, partially offset by lower open market volume of our paperboard.exchange.

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Income from Operations in 2021 decreased2023 increased by $117$268 million or 22%30%, to $407$1,174 million from $524$906 million in 2020. Transactions recorded in Business Combinations, Shutdown and Other Special Charges and Exit Activities, Net increased $77 million driven by2022 due to higher charges related to acquisitions. In addition, Income from Operations was negatively impacted in 2021 as compared to 2020 by inflation (primarily commodity and labor and benefits), $21 million of Winter Storm Uri related downtime and mitigation costs in 2021 net of insurance recoveries, lower volumes of our open market sales, and higher depreciation and amortization. Income from Operations was positively impacted in 2021 as compared to 2020 by higher pricing, higher volumes from organic sales growth and acquisitions, cost savings from continuous improvement and other programs, and new product mix,introductions, partially offset by lower levelsopen market volume, lower organic sales, a higher level of planned maintenance and higher levels of market downtime, atand unfavorable commodity inflation and other inflation (primarily labor and benefits). Income from Operations was also reduced by unfavorable foreign exchange, accelerated depreciation related to the uncoated SBS cupstock paperclosure of three smaller recycled paperboard manufacturing facilities, charges and accelerated depreciation related to the closures of multiple packaging facilities, charges and accelerated depreciation related to the Company's decision to decommission its K3 recycled Paperboard machine in 2020.

Kalamazoo, Michigan and charges related to the discontinuation of the Texarkana swing capacity project. Income from Operations also increased due to a reduction in impairment charges in 2023 compared to 2022 related to the sale of its Russian Operations.




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Acquisitions Closures, and Dispositions

On August 1, 2019,In January 2023, the Company acquired substantially allcompleted the assetsacquisition of Artistic,Tama, a diversified producer of folding cartons and CRB. The acquisition included two converting plantsrecycled paperboard manufacturing facility located in Auburn, Indiana and Elgin, Illinois (includedTama, Iowa, from Greif Packaging LLC for approximately $100 million. It is reported within the Paperboard Manufacturing reportable segment. Subsequently, in the Americas Paperboard Packaging reportable segment)second quarter of 2023, the Company closed this facility.

During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and one CRB mill located in White Pigeon, Michigan (included in the Paperboard Mills reportable segment).early 2024. Production from these facilities will be consolidated into our existing packaging network.

On January 31, 2020,September 8, 2023, the Company acquired a folding carton facility from Quad, a commercial printing company. The converting facility is locatedcompleted the acquisition of Bell, adding three packaging facilities in Omaha, NebraskaSioux Falls, South Dakota and is included in the Americas Paperboard Packaging reportable segment.

On April 1, 2020, the Company acquired the Consumer Packaging Group business from Greif, a leader in industrial packaging products and services. The acquisition included seven converting plants across the United States, which are included in the Americas Paperboard Packaging reportable segment.

On July 1, 2021, the Company acquired substantially all the assets of Americraft, the largest independent folding carton converter in North America. The acquisition included seven converting plants across the United States andGroveport, Ohio for $264 million. Bell is reported within the Americas Paperboard Packaging reportable segment.

During the third quarter of 2023, the Company announced its decision to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019.

During the third quarter of 2023, the Company decided to discontinue the project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of coated recycled paperboard capacity.

During 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”). The assets and liabilities to be disposed of in connection with this transaction met the held for sale criteria as of June 30, 2022 and each subsequent quarter end through the date of sale, resulting in cumulative impairment charges of $106 million in 2022 and 2023, including $12 million of goodwill impairment. On November 1, 2021,30, 2023, the Company acquired allcompleted the sharessale of AR Packaging, Europe's second largest producer of fiber-based consumer packaging. The acquisition included 30 converting plantsits Russian Operations.

In May 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility.

In September 2022, the Company closed its Norwalk, Ohio packaging facility, which it had announced to close in 13 countries and is reported within the Europe Paperboard Packaging reportable segment.March 2022.

Share Repurchases and Dividends

On July 27, 2023, the Company's board of directors authorized an additional share repurchase program to allow the Company to purchase up to $500 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the “2023 share repurchase program”). The previous $500 million share repurchase program was authorized January 28, 2019 (the “2019 share repurchase program”).

During 2021, GPHC did not repurchase any2023, the Company repurchased 2,389,224 shares of its outstanding common stock. GPHC had approximately $147stock at an average price of $22.80 under the 2019 share repurchase program. As of December 31, 2023, the Company has $565 million available for additional repurchases under the 2023 and 2019 share repurchase program.programs.

During 2021, GPHC2023, the Company declared cash dividends of $90 million and paid cash dividends of $87$123 million.

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RESULTS OF OPERATIONS
Year Ended December 31,
Year Ended December 31,Year Ended December 31,
In millionsIn millions202120202019In millions202320222021
Net SalesNet Sales$7,156 $6,560 $6,160 
Income from OperationsIncome from Operations$407 $524 $534 
Nonoperating Pension and Postretirement Benefit Income (Expense)(151)(39)
Nonoperating Pension and Postretirement Benefit (Expense) Income
Interest Expense, NetInterest Expense, Net(123)(129)(141)
Income before Income Taxes and Equity Income of Unconsolidated Entity
Income before Income Taxes and Equity Income of Unconsolidated Entity
Income before Income Taxes and Equity Income of Unconsolidated EntityIncome before Income Taxes and Equity Income of Unconsolidated Entity$289 $244 $354 
Income Tax ExpenseIncome Tax Expense(74)(42)(76)
Income before Equity Income of Unconsolidated EntityIncome before Equity Income of Unconsolidated Entity$215 $202 $278 
Equity Income of Unconsolidated EntityEquity Income of Unconsolidated Entity— 
Net IncomeNet Income$216 $203 $278 

20212023 COMPARED WITH 20202022

Net Sales

The components of the change in Net Sales are as follows:
Year Ended December 31,
Variances
 
In millions
2020PriceVolume/MixForeign Exchange2021IncreasePercent Change
Consolidated$6,560 $150 $379 $67 $7,156 $596 %

Year Ended December 31,
Variances
 
In millions
2022PriceVolume/MixForeign Exchange2023DecreasePercent Change
Consolidated$9,440 $556 $(580)$12 $9,428 $(12)(0.1)%

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The Company's Net Sales in 2021 increased2023 decreased by $596$12 million or 9%0.1%, to $7,156$9,428 million from $6,560$9,440 million for the same period in 2020,2022, due to Net Sales of $344 million from the AR Packaging, Americraft, Greif, and Quad acquisitions, higher pricing,lower organic sales growth includingand lower volumes of open market sales. Such decrease was partially offset by higher pricing, new product introductions, and conversions to our paperboard packaging solutions, and favorable foreign exchange, primarily the Euro, Mexican Peso, and British Pound, partially offset by lower open market volume of our paperboard. Favorable foreign currency exchange rates were primarily due to the British Pound, Canadian Dollar Euro, and Australian Dollar.Dollar and the acquisition of Bell in September 2023. Core convertingpackaging volumes were up, primarilylower in global beverage, cereal, dry foods, frozen foods, dairy, convenience, and foodservice packaging, including cups,healthcare, partially offset by declineshigher packaging volumes in dry foodsfoodservice, tissue and cereal.beauty.

Income from Operations

The components of the change in Income from Operations are as follows:
Year Ended December 31,
Variances
In millions2020PriceVolume/MixInflationForeign Exchange
Other (a)
2021DecreasePercent Change
Consolidated$524 $150 $35 $(386)$$83 $407 $(117)(22)%

Year Ended December 31,
Variances
In millions2022PriceVolume/MixInflationForeign Exchange
Other(a)
2023IncreasePercent Change
Consolidated$906 $556 $(204)$(175)$(11)$102 $1,174 $268 30 %
(a) Includes the Company's cost reduction initiatives, planned mill maintenance costs milland market downtime, costs, expenses related to acquisitions and integration activities, exit activities, and shutdown and other special charges.

The Company's Income from Operations for 2021 decreased $1172023 increased $268 million or 22%30%, to $407$1,174 million from $524$906 million for the same period in 2020. Transactions recorded in Business Combinations, Shutdown and Other Special Charges and Exit Activities, Net increased $77 million driven by2022 due to higher charges for acquisitions partially offset by higher charges for exit activities in 2020, including those related to our announced closures of White Pigeon, Michigan, CRB mill and West Monroe, Louisiana, PM1 containerboard machine. In addition, Income from Operations was negatively impacted in 2021 as compared to 2020 by inflation (primarily commodity and labor and benefits), $21 million of Winter Storm Uri related downtime and mitigation costs in 2021 net of insurance recoveries, lower volumes of our open market sales, and higher depreciation and amortization. Income from Operations was positively impacted in 2021 as compared to 2020 by higher pricing, higher volumes from organic sales growth and acquisitions, cost savings from continuous improvement and other programs and new product mix,introductions. The increase was partially offset by lower levels of planned maintenanceopen market volume, lower organic sales, unfavorable commodity inflation and other inflation (primarily labor and benefits), higher levels of maintenance and market downtime, atunfavorable foreign exchange, accelerated depreciation and charges related to the uncoated SBS cupstock paperclosure of three smaller recycled paperboard manufacturing facilities (refer to “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data,” for additional information), accelerated depreciation, charges related to the Company's decision to decommission its K3 recycled paperboard machine in 2020.Kalamazoo, Michigan, and the discontinuation of the Texarkana swing capacity project during the third quarter of 2023. Income from Operations also increased due to a reduction in impairment charges in 2023 compared to 2022 related to the sale of the Company's Russian Operations. Refer to “Note 19 - Impairment and Divestiture of Russian Business” in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data,” for additional information.
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Inflation in 20212023 increased due to higher labor and benefits ($96 million), other costs, net ($73 million) and commodity inflation costs ($3306 million), labor and benefits ($47 million),. Other costs, net include manufacturing supplies, property taxes, worker's compensation costs and other costs, net ($9 million).insurance costs. Commodity inflation was primarily due to external board ($50 million), mill chemicals ($9138 million), factoring ($36 million), converting chemicals ($7 million) and other costs ($15 million), offset by secondary fiber ($55 million), energy ($40 million), freight ($75 million), secondary fiber ($51 million), energy ($38 million), external board ($34 million), wood ($2827 million), and other costswood ($1318 million).

Nonoperating Pension and Postretirement Benefit

Nonoperating Pension and Postretirement Benefit was income of $5 million in 2021 versus an expense of $151 million in 2020. The decrease in expense was due to a settlement charge of $153 million incurred during the first quarter of 2020 associated with the Company's purchase of a group annuity contract that transferred the remaining pension benefit obligation under the largest U.S. Plan of approximately $713 million to an insurance company.

Interest Expense, Net

Interest Expense, Net decreased by $6was $239 million to $123and $197 million in 2021 from $129 million in 2020.2023 and 2022, respectively. Interest Expense, Net decreasedincreased due to lowerhigher interest rates partially offset byand higher debt balances as compared to prior year.balances. As of December 31, 2021,2023, approximately 31%20% of the Company’s total debt was subject to floating interest rates.

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Income Tax Expense

During 2021,2023 and 2022, the Company recognized Income Tax Expense of $74$210 million and $194 million, on Income before Income Taxes of $932 million and Equity Income of Unconsolidated Entity of $289 million. During 2020, the Company recognized Income Tax Expense of $42$716 million, on Income before Income Taxes and Equity Income of Unconsolidated Entity of $244 million.respectively.

The effective tax rate for 2021 is2023 was different from the statutory rate primarily due to a decrease in the Company’s valuation allowances in Sweden, Norway and the Netherlands of $22 million, the establishment of a valuation allowance against the net deferred tax effectassets in Nigeria of income attributable to noncontrolling interests$3 million, as well as tax benefits of $22 million related to U.S. federal, state and foreign income tax credits.

The effective tax rate for 2022 was different from the statutory rate primarily due to impairment charges from the planned sale of the Company’s Russian business that resulted in no corresponding tax benefit in addition to the mix of earnings between foreign and domestic jurisdictions. In addition, during 2021, thejurisdictions, including those with and without valuation allowances. The Company recorded discretealso recognized $10 million of tax expense to recognizerelease the tax rate increasesexpense remaining in Other Comprehensive Income after the United Kingdom and to recognizesettlement of certain swaps during the effects of the Tax Cuts and Jobs Act on executive compensation as a result of IP’s exit from the partnership. The effective tax rate in 2021 is higher thanperiod, which increased the effective tax rate in 2020 primarily due to these discrete tax items as compared to 2020.

The Company utilized its remaining U.S. federal net operating loss carryforwards during 2020. However, as a result of deductions associated with the step up in tax basis of certain assets as a result of International Paper’s exit from the partnership, the Company generated a taxable loss of $574 million during 2021 that can be carried forward for U.S. federal income tax purposes indefinitely. As such, based on the net operating loss generated in 2021 as well as future tax benefits associated with planned capital projects and tax credit carryforwards which are available to offset future U.S. federal income tax, the Company does not expect to be a meaningful U.S. federal cash taxpayer until 2024.rate.

Equity Income of Unconsolidated Entity

Equity Income of Unconsolidated Entity was $1 million in 20212023 and less than $1 million in 20202022 and is related to the Company’s equity investment through its GPIL subsidiary, in the Rengo Riverwood Packaging, Ltd. joint venture.

Segment Reporting

The Company has three reportable segments as follows:

Paperboard MillsManufacturing, previously referred to as the Paperboard Mills reportable segment, includes the eightseven North American paperboard millsmanufacturing facilities that produce primarily CRB, CUK,recycled, unbleached and SBS,bleached paperboard, which is consumed internally to produce paperboard consumer packaging for the Americas and Europe Packaging segments. The remaining paperboardPaperboard not consumed internally is sold externally to a wide variety of paperboard packaging converters and brokers. The Paperboard Mills segmentManufacturing segment's Net Sales representsrepresent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard MillsManufacturing segment to reflect the economics of the integration of these segments.

Americas Paperboard Packaging includes paperboard packaging primarily folding cartons, sold primarily to Consumer Packaged Goods ("CPG"consumer packaged goods (“CPG”) companies and cups, lids and food containers sold primarily to foodservice companies and Quick-Service Restaurants ("QSR"quick-service restaurants (“QSR”) serving the food, beverage, and consumer product markets in the Americas.

Europe Paperboard Packaging includes paperboard packaging, primarily folding cartons, sold primarily to CPG companies serving the food, beverage and consumer product markets including healthcare and beauty products primarily in Europe.

The Company allocates certain millpaperboard manufacturing and corporate costs to the reportable segments to appropriately represent the economics of these segments. The Corporate and Other caption includes the Pacific Rim and Australia operating segments and unallocated corporate and one-time costs.

These segments are evaluated by the chief operating decision maker based primarily on Income from Operations, as adjusted for depreciation and amortization. The accounting policies of the reportable segments are the same as those described in "Note 1 - Nature of Business and Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data."

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Year Ended December 31,
Year Ended December 31,Year Ended December 31,
In millionsIn millions202120202019In millions202320222021
NET SALES:NET SALES:
Paperboard Mills$1,007 $988 $1,095 
Paperboard Manufacturing
Paperboard Manufacturing
Paperboard Manufacturing
Americas Paperboard PackagingAmericas Paperboard Packaging4,996 4,650 4,234 
Europe Paperboard PackagingEurope Paperboard Packaging992 765 689 
Corporate/Other/Eliminations(a)
Corporate/Other/Eliminations(a)
161 157 142 
Corporate/Other/Eliminations(a)
Corporate/Other/Eliminations(a)
TotalTotal$7,156 $6,560 $6,160 
(LOSS) INCOME FROM OPERATIONS:
Paperboard Mills(b)
$(10)$(110)$33 
Americas Paperboard Packaging456 639 478 
Europe Paperboard Packaging82 66 60 
INCOME (LOSS) FROM OPERATIONS:
INCOME (LOSS) FROM OPERATIONS:
INCOME (LOSS) FROM OPERATIONS:
Paperboard Manufacturing(b)(c)
Paperboard Manufacturing(b)(c)
Paperboard Manufacturing(b)(c)
Americas Paperboard Packaging(c)(d)
Europe Paperboard Packaging(c)(e)
Corporate and Other(c)
Corporate and Other(c)
(121)(71)(37)
Corporate and Other(c)
Corporate and Other(c)
TotalTotal$407 $524 $534 
(a) Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments.
(b) Includes accelerated depreciation related to exit activities in 2021, 2020,2023, 2022, and 2019.2021. See “Note 18 - Exit Activities” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information.
(c) Includes expenses related to business combinations, shutdownexit activities and other special charges. See “Note 1 - General Information” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information.
(d) Includes accelerated depreciation related to exit activities in 2023. See “Note 18 - Exit Activities” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information.
(e) Includes impairment charges related to Russia. See “Note 19 - Impairment and exit activities.Divestiture of Russian Business” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” for further information.

20212023 COMPARED WITH 20202022

Paperboard MillsManufacturing

Net Sales increased from prior yeardecreased due to higher selling prices and mixlower open market volume, partially offset by higher pricing.

Income from Operations decreased due to lower open market volume. Lower openvolume, higher levels of maintenance and market volume was primarily duedowntime, accelerated depreciation and charges related to the closure of the White Pigeon, Michigan CRB millthree recycled paperboard manufacturing facilities (refer to “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and shut downSupplementary Data,” for additional information), other inflation (primarily labor and benefits), accelerated depreciation and charges related to the Company's decision to decommission its K3 recycled paperboard machine, and charges related to the discontinuation of the PM1 containerboard machine in West Monroe, Louisiana, both in 2020, and one fewer production and selling day due to leap year.Texarkana swing capacity project. The Company also internalized more paperboard tons.

Loss from Operations decreased due to the impacts ofdecrease was partially offset by higher pricing, productivity improvements, including benefits from capital projects, and higher pricescommodity deflation, primarily secondary fiber, energy, wood and freight partially offset by commodity and other inflation, increased downtime and mitigation costs related to Winter Storm Uri, and lower open market volume. The commodity inflation was primarily due to higher prices for secondary fiber, chemicals, energy, and freight.chemicals.

Americas Paperboard Packaging

Net Sales increased due to acquisitions including Americraft in Q3 2021 and Greif in Q2 2020, higher pricing organic sales growth includingand new product introductions driven by conversions to our paperboardsustainable consumer packaging solutions new product introductions, and favorable foreign currency exchange rates. Higher volumes primarilythe acquisition of Bell in foodservice packaging including cups, beverage markets, dairy products and bakery wereSeptember 2023, partially offset by lower organic sales. Lower packaging volumes in beverage, cereal, dry foods, cereal, tissue,frozen foods, and frozen pizza.dairy were partially offset by higher packaging volumes in foodservice and tissue. In beverage, packaging volumes increaseddecreased in all categories including craft and specialty, big beer, craft beer, specialty beverages and soft drinks.

Income from Operations decreasedincreased due to commodity inflation, other inflation (primarily laborhigher pricing and benefits), downtime and mitigation costs related to Winter Storm Uri, and one fewer selling day due to leap year offset by higher selling prices, cost savings from continuous improvement and other programs, partially offset by commodity inflation and other inflation (primarily labor and benefits), higher levels of maintenance and market downtime and charges related to the timingclosures of annual outages,packaging facilities (refer to “Note 18 - Exit Activities” in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and higher volumes including from organic sales growth and acquisitions.Supplementary Data,” for additional information). The commodity inflation was primarily due to higher prices for freight,external board, chemicals, and factoring, partially offset by lower costs for secondary fiber, energy, freight and external board.wood.

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Europe Paperboard Packaging

Net Sales increased due to the acquisition of AR Packaging on November 1, 2021 as well as higher prices, increased volumes ledpricing, mix, new product introductions driven by beverage and convenience,conversions to our sustainable consumer packaging solutions and favorable foreign currency exchange, ratespartially offset by unfavorable mix.lower organic sales in beverage, convenience, healthcare and food partially offset by higher volumes in foodservice and beauty.

Income from Operations increased due to higher pricing and cost savings throughfrom continuous improvement and other programs, increased volumes, and pricingpartially offset by commodity inflation higherprimarily related to external board, energy and other inflation (primarily labor and benefits costs,benefits), unfavorable foreign currency exchange and lower organic sales. Income from Operations also increased due to a reduction in impairment charges related to the acquisitionsale of AR Packaging on November 1, 2021 includingits Russian operations. Refer to “Note 19 - Impairment and Divestiture of Russian Business” in the amortization of purchased intangibles.Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data,” for additional information.

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Company broadly defines liquidity as its ability to generate sufficient funds from both internal and external sources to meet its obligations and commitments. In addition, liquidity includes the ability to obtain appropriate debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives. Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service commitments.

Liquidity and Capital Resources

The Company's liquidity needs arise primarily fromCompany expects its material cash requirements for the funding of itsnext twelve months will be for: capital expenditures, periodic required income tax payments, periodic interest and debt service payments on its indebtedness,associated debt (as discussed in Note 5), lease agreements which have fixed lease payment obligations (as discussed in Note 6), and minimum purchase commitments (as discussed in Note 13) along with ongoing operating costs, working capital, share repurchases and dividend payments. The Company expects its primary sources of liquidity to be cash flows from sales and operating activities in the normal course of operations and availability from its revolving credit facilities, as needed. The Company expects that these sources will be sufficient to fund our ongoing cash requirements for the foreseeable future, including at least the next twelve months.

Principal and interest payments under the term loan facilities and the revolving credit facilities, together with principal and interest payments on the Company's 4.875% Senior Notes due 2022, 0.821% Senior Notes due 2024, 4.125% Senior Notes due 2024, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 (the “Notes”), represent liquidity requirements for the Company. Based upon current levels of operations, anticipated cost savings and expectations as to future growth, the Company believes that cash generated from operations, together with amounts available under its revolving credit facilities and other available financing sources, will be adequate to permit the Company to meet its debt service obligations, necessary capital expenditure program requirements and ongoing operating costs and working capital needs, although no assurance can be given in this regard. The Company's future financial and operating performance, ability to service or refinance its debt and ability to comply with the covenants and restrictions contained in its debt agreements (see “Covenant Restrictions” below) will be subject to future economic conditions, including conditions in the credit markets, and to financial, business and other factors, many of which are beyond the Company's control, and will be substantially dependent on the selling prices and demand for the Company's products, raw material and energy costs, and the Company's ability to successfully implement its overall business and profitability strategies.

Accounts receivable are stated at the amount owed by the customer, net of an allowance for estimated uncollectible accounts, returns and allowances, and cash discounts. The allowance for doubtful accounts is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible.

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The Company has entered into agreements to sell, on a revolving basis, certain trade accounts receivable to third party financial institutions. Transfers under these agreements meet the requirements to be accounted for as sales in accordance with the Transfers and Servicing topic of the Financial Accounting Standards Board ("FASB"(“FASB”) Accounting Standards Codification (the "Codification"“Codification”). The loss on sale is not material and is included in Other Expense (Income), Net line item onin the Consolidated Statement of Operations. The following table summarizes the activity under these programs for the year ended December 31, 20212023 and 2020,2022, respectively:
Year Ended December 31,
In millions20212020
Receivables Sold and Derecognized$2,947 $2,850 
Proceeds Collected on Behalf of Financial Institutions2,970 2,787 
Net Proceeds (Paid to) Received From Financial Institutions(6)55 
Deferred Purchase Price at December 31(a)
Pledged Receivables at December 31180 201 

Year Ended December 31,
In millions20232022
Receivables Sold and Derecognized$3,696 $3,299 
Proceeds Collected on Behalf of Financial Institutions3,646 3,179 
Net Proceeds Received from Financial Institutions28 152 
Deferred Purchase Price at December 31(a)
— 
Pledged Receivables at December 31150 197 
(a) Included in Other Current Assets on the Condensed Consolidated Balance SheetSheets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure.

The Company participates in supply chain financing arrangements offered by certain customers and has entered into various factoring arrangements that also qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification. For the years ended December 31, 2021 and 2020, the Company sold receivables of approximately $693 million and $368 million, respectively, related to these factoring arrangements.

Receivables sold under all programs subject to continuing involvement, which consist principally of collection services, were approximately $613$770 million and $621$753 million as of December 31, 20212023 and 2020,2022, respectively.


The Company also participates in supply chain financing arrangements offered by certain customers that qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification. As of December 31, 2023 and 2022, the Company sold receivables of $1,136 million and $1,124 million, respectively, related to these arrangements.

The Company has arranged a supplier finance program (“SFP”) with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice. The transactions are at the sole discretion of both the suppliers and financial institution, and the Company is not a party to the agreements and has no economic interest in the supplier’s decision to sell a receivable. The range of payment terms negotiated by the Company with its suppliers is consistent, irrespective of whether a supplier participates in the program. The agreement with the financial intermediary does not require the Company to provide assets pledged as security or other forms of guarantees for the supplier finance program. Amounts due to the Company’s suppliers that elected to participate in the SFP program are included in Accounts Payable on the Company’s Consolidated Balance Sheets and payments made under the SFP program are reflected in Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.

The rollforwards of the Company's outstanding obligations confirmed as valid under its SFP for the years ended December 31, 2023, and 2022, are as follows:

Year Ended December 31,
In millions20232022
Confirmed Obligations Outstanding at the Beginning of the Year$34 $26 
Invoices Confirmed During the Year117127
Confirmed Invoices Paid During the Year(121)(119)
Confirmed Obligations Outstanding at the End of the Year$30 $34 

Non-cash additions to Property, Plant and Equipment, Net included within Accounts Payable on the Company’s Consolidated Balance Sheets were $145 million, $55 million and $169 million as of December 31, 2023, 2022 and 2021, respectively.

Cash Flows
Years Ended December 31,
In millions20232022
Net Cash Provided by Operating Activities$1,144 $1,090 
Net Cash Used in Investing Activities$(1,025)$(435)
Net Cash Used in Financing Activities$(106)$(666)

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Cash Flows
Years Ended December 31,
In millions20212020
Net Cash Provided by Operating Activities$609 $825 
Net Cash Used in Investing Activities$(2,392)$(648)
Net Cash Provided by (Used in) Financing Activities$1,778 $(152)

Net cash provided by operating activities in 20212023 totaled $609$1,144 million, compared to $825$1,090 million in 2020.2022. The decreasefavorable increase was primarilymainly due to an increase in income from operations, offset by higher inventory balances due to inflation and lower other accrued liabilities balances.levels of working capital. Pension contributions in 20212023 and 20202022 were $33$15 million and $19$24 million, respectively. In the first quarter of 2021,2022, the Company made a $14$6 million contribution to its remaining U.S. defined benefit plan by effectively utilizing a portion of the excess balance related to the terminatedits U.S. defined benefit plan.plan terminated in 2020.

Net cash used in investing activities in 20212023 totaled $2,392$1,025 million, compared to $648$435 million in 2020.2022. The Company completed the acquisition of Tama on January 31, 2023 from Greif Packaging LLC for approximately $100 million. The Company also completed the acquisition of Bell for approximately $264 million on September 8, 2023 (including cash acquired of $3 million). For further discussion of the Company's acquired recycled paperboard manufacturing facility and packaging facilities, see “Note 4 - Business Combinations” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” Capital spending was $802$804 million and $646$549 million in 20212023 and 2020,2022, respectively. In 2021,The increase in capital spending was driven by the Company paid $292 million and $1,412 million, netconstruction of cash acquired, for the Americraft and AR Packaging acquisitions, respectively. InCompany's new recycled paperboard manufacturing facility in Waco, Texas. For more information on the prior year,construction of the Company paid $121 million, net of cash acquired, fornew recycled paperboard manufacturing facility in Waco, Texas, refer to the 2020 Acquisitions.Capital Investment section below. Net cash receipts related to the accounts receivable securitization and sale programs were $139 million and $119 million in 2023 and $127 million in 2021 and 2020,2022, respectively.

Net cash provided by financing activities in 2021 totaled $1,778 million, compared to $152 million used in financing activities in 2020.2023 totaled $106 million compared to $666 million in 2022. Current year financing activities include a debt drawing of $425 million Incremental Term A-2 Facility and the use of the proceeds, together with cash on hand, to redeem the 4.75% Senior Notes due in 2021, and a debt drawing of $250 million Incremental Term A-3 Facility. Other current year activities include an offering of $400 million aggregate principal amount of 0.821% Senior Notes due 2024, an offering of $400 million aggregate principal amount of 1.512% Senior Notes due 2026. The net proceeds of $800 million were used by the Company to repay a portion of the outstanding borrowings under GPIL's term loan credit facilities, which are under its senior secured credit facility. Additionally, the Company had an offering of $100 million aggregate principal amount of tax-exempt green bonds, with the net proceeds of $111 million used to reimburse GPIL for a portion of its CRB platform optimization project. Other current year activities include a debt drawing of $400 million Incremental Term A-4 Facility and a debt drawing of €210 million Incremental Euro Term Loan Facility under the Senior Secured Credit Facility due 2026.Additionally, the Company completed the offering of $400 million Senior Notes due in 2030 and used the proceeds to repay the Incremental Term A-4 Facility and €290 million aggregate principal amount of its 2.625% senior unsecured notes due 2029 and used the proceeds to repay revolver borrowings outstanding under its senior secured credit facility. The Company also paid $150 million toward the redemption of IP's ownership interest in GPIP, and $109 million Tax Receivable Agreement (TRA) payment related to IP exit. Additionally, the Company madeincluded borrowings under revolving credit facilities primarily for capital spending, redemptionrepurchase of IP's ownership interestcommon stock of $54 million and payments on debt of $16$26 million. The Company also paid dividends and distributions of $92$123 million and withheld $15$22 million of restricted stock units to satisfy tax withholding obligations related to the payout of restricted stock units. InDuring 2022, the prior year, the Company had a debt offering of $450 million aggregate principal amount of 3.50% Senior Notes due 2028, and a debt offering of $350 million aggregate principal amount of 3.50% Senior Notes due 2029. The Company also paid $500 million toward the redemption of IP's ownership interest in GPIP. The Company also made borrowings under revolving credit facilities primarily for capital spending, repurchase of common stock of $316$28 million and payments on debt of $37$14 million. As further discussed in “Note 5 - Debt” in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” 2022 activities included the redemption of the 4.875% Senior Notes due 2022 of $250 million. The Company also paid dividends and distributions of $103$92 million and withheld $9$18 million of restricted stock units to satisfy tax withholding payments related to the payout of restricted stock units.

Supplemental Guarantor Financial Information

As discussed in “Note 1 - Nature of Business and Summary of Significant Accounting Policies” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” on May 21, 2021, IP exchanged its remaining 22.8 million partnership units for an equivalent number of shares of GPHC common stock. As required by the parties' agreement, these shares were immediately sold by IP. As a result IP has no ownership interest remainingof International Paper Company's final exchange in 2021, the Company currently owns 100% of the outstanding interests in GPIP. GPIP continued to be treated as of May 21, 2021,a partnership for U.S. federal and state income tax purposes despite IP’s exit as a minority partner until September 1, 2022, when, due to an internal restructuring, GPIP became a single member limited liability company, terminating the partnership for income tax purposes. Therefore, GPIL is no longer subject to separate SEC filing requirements. As such, the Company has included Supplemental Guarantor disclosures herein that were previously included in the GPIL SEC filings effective June 30, 2021.filings.

As further discussed in “Note 5 - Debt” in the Notes to Condensed Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data,” the Senior Notes issued by GPIL (the “Issuer”) are guaranteed by certain domestic subsidiaries (the “Subsidiary Guarantors”), which consist of all material 100% owned subsidiaries of GPIL,the issuer other than its foreign subsidiary holding companies, domestic subsidiaries, and in certain instances by the Company (a Parent guarantee) (collectively "the Guarantors"“the Guarantors”). GPIL's remaining subsidiaries (the “Nonguarantor Subsidiaries”) include all of GPIL’s foreign subsidiary holding companies, foreign subsidiaries and immaterial domestic subsidiaries. The Subsidiary Guarantors are jointly and severally, fully and unconditionally liable under the guarantees.

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Other than tax related items, theThe results of operations, assets, and liabilities for GPHC and GPIL are substantially the same. Therefore, the summarized financial information below is presented on a combined basis, consisting of GPILthe Issuer and Subsidiary Guarantors (collectively, the “Obligor Group”), and is presented after the elimination of: (i) intercompany transactions and balances among GPILthe Issuer and Subsidiary Guarantors, and (ii) equity in earnings from and investments in the Nonguarantor Subsidiaries.

In millionsTwelve Months Ended December 31, 20212023
SUMMARIZED STATEMENTS OF OPERATIONS
Net Sales(a)
$5,8477,166 
Cost of Sales4,9735,458 
Income from Operations3031,032 
Net Income185631 
(a) Includes Net Sales to Nonguarantor Subsidiaries of $509$520 million.

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In millionsDecember 31, 20212023
SUMMARIZED BALANCE SHEET
Current assets (excluding intercompany receivable from Nonguarantor)$1,2351,612 
Noncurrent assets5,8886,463 
Intercompany receivables from Nonguarantors1,2581,300 
Current liabilities1,4722,067 
Noncurrent liabilities5,7135,478 

Covenant Restrictions

Covenants contained in the Current Credit Agreement and the Indentures may, among other things, limit the Company's ability to incur additional indebtedness, restrict the ability of the Company to dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase shares, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the indenturesIndentures under which the Notes are issued, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates. Such restrictions, together withas well as disruptions in the credit markets, could limit the Company's ability to respond to changing market conditions, fund its capital spending program, provide for unexpected capital investments or take advantage of business opportunities.

Under the terms of the Current Credit Agreement, the Company must comply with a maximum Consolidated Total Leverage Ratio covenant and a minimum Consolidated Interest Expense Ratio covenant. The Current Credit Agreement, which contains the definitions of these covenants, was filed as an exhibit to the Company's Form 8-K filed on April 1, 2021.

Due to the completion of a material acquisition, theThe Current Credit Agreement requires that the Company maintain a maximum Consolidated Total Leverage Ratio of less than 5.004.25 to 1.00. At December 31, 2021,2023, the Company was in compliance with such covenant and the ratio was 4.392.58 to 1.00.

The Company must also comply with a minimum Consolidated Interest Expense Ratio of 3.00 to 1.00. At December 31, 2021,2023, the Company was in compliance with such covenant and the ratio was 10.857.96 to 1.00.

As of December 31, 2021,2023, the Company's credit was rated BB+ by Standard & Poor's and Ba1 by Moody's Investor Services. Standard & Poor's and Moody's Investor Services' ratings on the Company included a stable outlook.

Capital Investment

The Company’s capital investments in 20212023 were $899$885 million ($802804 million was paid), compared to $651$430 million ($646549 million was paid) in 2020.2022. During 2021,2023, the Company had capital spending of $855$838 million for adding capacity and improving process capabilities, $17$24 million for capital spares and $27$23 million for manufacturing packaging machinery. The increase is primarily driven by the ongoing construction of the Company's new recycled paperboard manufacturing facility in Waco, Texas. For further discussion of the Company's new recycled paperboard manufacturing facility and continued investments made as part of the integration of acquisitions, see “Note 18 - Exit Activities” in the Notes to the Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.” In 2022, the capital investments were primarily due to planned asset upgrades at the U.S.-based paperboard manufacturing facilities, including the now completed recycled paperboard machine in Kalamazoo, Michigan.

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TableInterest is capitalized on assets under construction for one year or longer with an estimated spending of Contents$1 million or more. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. Capitalized interest was $8 million and $5 million as of December 31, 2023 and 2022, respectively.

Environmental Matters

Some of the Company’s current and former facilities are the subject of environmental investigations and remediations resulting from historical operations and the release of hazardous substances or other constituents. Some current and former facilities have a history of industrial usage for which investigation and remediation obligations may be imposed in the future or for which indemnification claims may be asserted against the Company. Also, closures or sales of facilities may necessitate further investigation and may result in remediation at those facilities. The Company has established reserves for those facilities or issues where liability is probable and the costs are reasonably estimable. The Company believes that the amounts accrued for its loss contingencies, and the reasonably possible loss beyond the amounts accrued, are not material to the Company's consolidated financial position, results of operations or cash flows.

For further discussion of the Company’s environmental matters, see "Note 14 - Environmental and Legal Matters" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data."

Contractual Obligations and Commitments

A summary of our contractual obligations and commitments as of December 31, 2021 is as follows:
Payments Due by Period
In millionsTotalLess than 1 Year1-3 Years3-5 YearsMore than 5 Years
Debt Obligations$5,685 $272 $773 $2,134 $2,506 
Operating Leases288 78 105 51 54 
Finance Leases205 17 29 27 132 
Interest Payable833 160 293 216 164 
Purchase Obligations(a)
388 140 141 65 42 
Total Contractual Obligations(b)
$7,399 $667 $1,341 $2,493 $2,898 
(a) Purchase obligations primarily consist of commitments for the purchase of fiber and chip processing along with commitments associated with building the new CRB paper machine in Kalamazoo, Michigan.
(b) Certain amounts included in this table are based on management’s estimates and assumptions about these obligations. Because these estimates and assumptions are necessarily subjective, the obligations the Company will actually pay in the future periods may vary from those reflected in the table.


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International Operations

The Company has packaging facilities and one paperboard manufacturing facility in 20 countries outside of the U.S. and sells its products worldwide. For 2021,2023, before intercompany eliminations, net sales from operations outside of the U.S. represented approximately 23%30% of the Company’s net sales. The Company’s revenues from export sales fluctuate with changes in foreign currency exchange rates. AtIn addition, at December 31, 2021,2023, approximately 30%27% of the Company’sCompany's total assets were denominated in currencies other than the U.S. dollar. The Company has significant operations in countries that use the euro,Euro, British pound sterling, Swedish krona, Polish zloty, the Australian dollar, the Canadian dollar, the MexicanMexico peso or the Japanese yen as their functional currencies. The effect of changes in the U.S. dollar exchange rate against these currencies produced a net currency translation adjustment loss of $28$65 million, which was recorded in Other Comprehensive (Loss) Income for the year ended December 31, 2021.2023. The magnitude and direction of this adjustment in the future depends on the relationship of the U.S. dollar to other currencies. The Company pursues a currency hedging program in order to reduce the impact of foreign currency exchange fluctuations on financial results. See “Financial Instruments” below.

Financial Instruments

The Company pursues a currency hedging program which utilizes derivatives to reduce the impact of foreign currency exchange fluctuations on its consolidated financial results. Under this program, the Company has previously entered into forward exchange contracts in the normal course of business to hedge certain foreign currency denominated transactions. Realized and unrealized gains and losses on these forward contracts are included in the measurement of the basis of the related foreign currency transaction when recorded. The Company also pursues a hedging program that utilizes derivatives designed to manage risks associated with future variability in cash flows and price risk related to future energy cost increases. Under this program, the Company has entered into natural gas swap contracts to hedge a portion of its forecasted natural gas usage for 2022.2024. Realized gains and losses on these contracts are included in the financial results concurrently with the recognition of the commodity consumed. In addition, the Company uses interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan facility. The Company does not hold or issue financial instruments for trading purposes. See “Item 7A., Quantitative and Qualitative Disclosure About Market Risk.”

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

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CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP 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 net sales and expenses during the reporting period. Actual results could differ from these estimates, and changes in these estimates are recorded when known. The critical accounting policies used by management in the preparation of the Company’s consolidated financial statements are those that are important both to the presentation of the Company’s financial condition and results of operations and require significant judgments by management with regard to estimates used. The critical judgments by management relate to pension benefits,acquisitions, future cash flows associated with impairment testing for goodwill and long-lived assets, and deferred income taxes.

Acquisitions

The Company uses the acquisition method of accounting for acquired businesses. Under the acquisition method of accounting, the Company allocated the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Any excess of the estimated fair values of the identifiable net assets over the purchase price is recorded as a gain on bargain purchase. The estimates used to determine the fair value of long-lived assets, such as intangible assets, can be complex and require significant judgments. Therefore, we use information available to us to make fair value determinations and often engage independent valuation specialists, when necessary, to assist in the fair value determination of significant, acquired long-lived assets. The determination of fair value requires estimates about discount rates, growth and retention rates, royalty rates, expected future cash flows and other future events that are judgmental in nature. While we use our best estimates and assumptions as a part of the purchase price allocation process, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we are permitted to record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income. The Company is also required to estimate the useful lives of intangible assets to determine the amount of acquisition-related intangible asset amortization expense to record in future periods. Such useful lives are determined based upon the expected period of future cash flows to be generated by the intangible asset. The Company periodically reviews the estimated useful lives assigned to our intangible assets to determine whether such estimated useful lives continue to be appropriate.

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On November 1, 2021, the Company completed its acquisition of AR Packaging (the “Transaction”“AR Transaction”), through the acquisition of all of the shares of AR Packaging for cash of $1,412 million, net of cash acquired of $75 million. AR Packaging’s results of operations have been included in the Company’s financial results since the acquisition date. The Company allocated the fair value of purchase consideration transferred to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of the acquisition. The Company identified that the acquired assets included customer relationships, which were assigned a fair value of $439 million using a discounted cash flow analysis. During the fourth quarter of 2022, the Company finalized acquisition accounting, which resulted in a decrease of $38 million to customer relationships. Significant assumptions in valuing this asset included the discount rate, annual revenue growth rates, customer attrition rates, projected operating expenses, projected earnings before interest, taxes, depreciation, and amortization ("EBITDA"(“EBITDA”) margins, tax rate, depreciation, contributory asset charge, and future earnings projections among others.Theothers. The Company believes the estimates applied to be based on reasonable assumptions, but which are inherently uncertain. As a result, actual results may differ from the assumptions and judgments used to determine fair value of the assets acquired, which could result in material impairment losses in the future. Additional information regarding our acquisitions is included in "Note 4 - Business Combinations"Combinationsin the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

Pension Benefits

The Company sponsors defined benefit pension plans (the “Plans”) for eligible employees in North America and certain international locations. The funding policy for the U.S. qualified defined benefit plans is to, at a minimum, contribute assets as required by the Internal Revenue Code Section 412. Non qualified defined benefit U.S. plans providing benefits in excess of limitations imposed by the U.S. income tax code are not funded.

The Company’s pension expense for defined benefit pension plans was $11 million in 2021 compared to $167 million in 2020. The 2020 expense includes a $154 million charge associated with the termination and settlement of the Company's largest U.S. plan. Pension expense is calculated based upon a number of actuarial assumptions applied to each of the defined benefit plans.

The weighted average expected long-term rate of return on pension fund assets used to calculate pension expense was 3.59% and 4.12% in 2021 and 2020, respectively. The expected long-term rate of return on pension assets was determined based on several factors, including historical rates of return, input from our pension investment consultants and projected long-term returns of broad equity and bond indices. The Company evaluates its long-term rate of return assumptions annually and adjusts them as necessary.

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The Company determined pension expense using both the fair value of assets and a calculated value that averages gains and losses over a period of years. Investment gains or losses represent the difference between the expected and actual return on assets. As of December 31, 2021, the net actuarial loss was $71 million. These net losses may increase future pension expense if not offset by (i) actual investment returns that exceed the assumed investment returns, or (ii) other factors, including reduced pension liabilities arising from higher discount rates used to calculate pension obligations, or (iii) other actuarial gains, including whether such accumulated actuarial losses at each measurement date exceed the “corridor” determined under the Compensation — Retirement Benefits topic of the FASB Codification. The actuarial loss is amortized over the average remaining life expectancy period of employees expected to receive benefits.

The discount rate used to determine the present value of future pension obligations at December 31, 2021 was based on a yield curve constructed from a portfolio of high-quality corporate debt securities with maturities ranging from 1 year to 30 years. Each year’s expected future benefit payments were discounted to their present value at the spot yield curve rate thereby generating the overall discount rate for the Company’s pension obligations. The weighted average discount rate used to determine the pension obligations was 2.46% and 2.11% in 2021 and 2020, respectively.

The Company’s pension expense is estimated to be approximately $9 million in 2022. The estimate is based on a weighted average expected long-term rate of return of 3.86%, a weighted average discount rate of 2.46% and other assumptions. Pension expense beyond 2021 will depend on future investment performance, the Company’s contribution to the plans, changes in discount rates and other factors related to covered employees in the plans.

If the discount rate assumptions for the Company’s U.S. plans were reduced by 0.25%, pension expense would increase by approximately $1 million and the December 31, 2021 projected benefit obligation would increase approximately $10 million.

The fair value of assets in the Company’s plans was $557 million at December 31, 2021 and $516 million at December 31, 2020. The projected benefit obligations exceed the fair value of plan assets by $70 million and $77 million as of December 31, 2021 and 2020, respectively. The accumulated benefit obligation (“ABO”) exceeded the fair value of plan assets by $64 million and $72 million at the end of 2021 and 2020, respectively.

Goodwill

The Company evaluates goodwill for potential impairment annually as of October 1, as well as whenever events or changes in circumstances suggest that the fair value of a reporting unit may no longer exceed its carrying amount. Potential impairment of goodwill is measured at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. As of October 1, 2021,2023, the Company had seven reporting units, five of which had goodwill.

Periodically, the Company may perform a qualitative impairment analysis of goodwill associated with each of its reporting units to determine if it is more likely than not that the carrying value of a reporting unit exceeded its fair value. If the results of the qualitative analysis of any of the reporting units is inconclusive, or if significant changes in the business have occurred since the last quantitative impairment assessment, the Company will perform a quantitative analysis for those reporting units.

As of October 1, 2021,2023, the Company performed a quantitative impairment test. The quantitative analysis involves calculating the fair value of each reporting unit by utilizing a discounted cash flow analysis based on the Company’s business plans, discounted using a weighted average cost of capital and market indicators of terminal year cash flows based upon a multiple of earnings before interest, taxes, depreciation and amortization ("EBITDA"(“EBITDA”).

Estimating the fair value of the reporting unit involves uncertainties as it requires management to consider a number of factors, including but not limited to, future operating results, business plans, economic projections of revenues and operating margins, estimated future cash flows, and market data and analysis, including market capitalization. Fair value determinations are sensitive to changes in the factors described above. There are inherent uncertainties related to these factors and judgments used to estimate reporting unit fair value and the related analysis of potential goodwill impairment.

The variability of the assumptions that management uses to perform the goodwill impairment test depends on a number of conditions, including uncertainty about future events and cash flows. Accordingly, the Company’s accounting estimates may materially change from period to period due to changing market factors. If the Company had used other assumptions and estimates or if different conditions occur in future periods, future operating results and cash flows could be materially impacted, and judgments and conclusions about the recoverability of goodwill could change. The assumptions used in the goodwill impairment testing process could also be adversely impacted by certain of the risks discussed in “Item 1A., Risk Factors” and thus could result in future goodwill impairment charges.

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The Company performed its annual goodwill impairment tests as of October 1, 2021.2023. The Company concluded that all reporting units with goodwill have a fair value that exceedsexceeded their carrying value, and thus goodwill was not impaired. The discount rate used for each reporting unit ranged from 7.5%8% to 8.0%9%, and we utilized an EBITDAa transaction multiple of 98.0 times to calculate terminal period cash flows. The Foodservice and AustraliaEurope reporting unitsunit had a fair valuesvalue that exceed theirexceeded its respective carrying valuesvalue by 25% and 21%26%, respectively, whereas all other reporting units exceeded by more than 30%90%. If we had concluded that it was appropriate to increase the discount rate we used by 100 basis points to estimate the fair value of our respective reporting units, the fair value of each reporting unit would have continued to exceed its carrying amount. The Foodservice and AustraliaEurope reporting unitsunit had goodwill totaling $43 million and $11 million, respectively.$462 million. The Company does not believe it is likely that there will be material changes in the assumptions or estimates used to calculate the reporting unit fair values.

Recovery of Long-Lived Assets

The Company evaluates the recovery of its long-lived assets by analyzing operating results and considering significant events or changes in the business environment that may have triggered impairment. The Company reviews long-lived assets (including property, plant and equipment and intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of such long-lived assets may not be fully recoverable by undiscounted cash flows. Measurement of the impairment loss, if any, is based on the fair value of the asset, which is determined by an income, cost or market approach.

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Deferred Income Taxes and Potential Assessments

According to the Income Taxes topic of the FASB Codification, a valuation allowance is required to be established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The FASB Codification provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient taxable income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset. The Company has evaluated the need to maintain a valuation allowance for deferred tax assets based on its assessment of whether it is more likely than not that deferred tax benefits would be realized through the generation of future taxable income. Appropriate consideration was given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. In determining whether a valuation allowance is required, many factors are considered, including the specific taxing jurisdiction, the carryforward period, reversals of existing taxable temporary differences, cumulative pretax book earnings, income tax strategies and forecasted earnings for the entities in each jurisdiction.

As of December 31, 2021,2023, the Company has a valuation allowance of $38$37 million against its net deferred tax assets in certain foreign jurisdictions and against domestic deferred tax assets related to certain federal tax credit carryforwards, certain state net operating loss carryforwards and certain state tax credit carryforwards. As of December 31, 2020,2022, a total valuation allowance of $34$57 million was recorded.

As of December 31, 2021,2023, the Company has provided for deferred U.S. income taxes attributable to future withholding tax expense related to the Company's equity investment in the joint venture, Rengo Riverwood Packaging, Ltd. In addition, the Company provided deferred income taxes for future Canadian withholding tax to the extent of excess cash available for distribution after consideration of working capital needs and other debt settlement of its Canadian subsidiary, Graphic Packaging International Canada, ULC. The Company continues to assert that it is permanently reinvested in the cumulative earnings of its Canadian subsidiary in excess of the amount of cash that is on hand and available for distribution after consideration of working capital needs and other debt settlement. Due to the deemed taxation of all post-1986 earnings and profits required by the Act, theThe Company has determined that no deferred tax liability should be recorded related to the outside basis difference of its Canadian subsidiary of approximately $51 million as of December 31, 2021.2023.

The Company has not provided for deferred U.S. income taxes on outside basis differences of approximately $33$92 million in its other international subsidiaries because of the Company’s intention to indefinitely reinvest theseits earnings outside the U.S. The Company’s assertion with respect to these subsidiaries remains unchanged, despite the deemed taxation of all post-1986 earnings and profits required by the Act. The determination of the amount of the unrecognized deferred income tax liability (primarily withholding tax in certain jurisdictions and some state tax)jurisdictions) on the unremitted earnings or any other associated outside basis differences is not practicable because of the complexities associated with the calculation.

The Company has elected to recognize global intangible low-taxed income (“GILTI”) as a period cost as incurred, therefore there are no deferred taxes recognized for basis differences that are expected to impact the amount of the GILTI inclusion upon reversal.

NEW ACCOUNTING STANDARDS

For a discussion of recent accounting pronouncements impacting the Company, see "Note 1 - Nature of Business and Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”

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BUSINESS OUTLOOK

Total capital investment for 20222024 is expected to be in the range of $440 million to $460approximately $950 million.

The Company also expects the following in 2022:2024:

Depreciation and amortization expense of approximately $580between $590 million including pension amortization and excluding $5 million of accelerated depreciation related to exit activities.$610 million.

Pension plan contributions between $10 million and $20 million excluding $6 million reflected as a contribution to the remaining U.S defined benefit plan that effectively utilizes the excess balance related to the terminated U.S. defined benefit plan.million.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company does not trade or use derivative instruments with the objective of earning financial gains on interest or currency rates, nor does it use leveraged instruments or instruments where there are no underlying exposures identified.

Interest Rates

The Company is exposed to changes in interest rates, primarily as a result of its short-term and long-term debt, which include both fixed and floating rate debt. The Company uses interest rate swap agreements effectivelyswaps to fix the LIBORmanage interest rate risks on certainfuture interest payments caused by interest rate changes on its variable rate borrowings.term loan facilities. At December 31, 2021,2023, the Company had active interest rate swap agreements with a notional amount of $200$750 million expiring in January 2022.April 2024.

The table below sets forth interest rate sensitivity information related to the Company’s debt.

Long-Term Debt Principal Amount by Maturity-Average Interest Rate
Expected Maturity Date
Long-Term Debt Principal Amount by Maturity-Average Interest Rate
Expected Maturity Date
Expected Maturity Date
Expected Maturity Date

In millions

In millions

In millions

In millions
20222023202420252026ThereafterTotalFair Value20242025202620272028ThereafterTotalFair Value
Total DebtTotal Debt
Fixed RateFixed Rate$250 $$700 $— $512 $2,256 $3,724 $3,770 
Fixed Rate
Fixed Rate
Average Interest RateAverage Interest Rate4.88 %1.92 %2.24 %2.25 %2.05 %3.42 %
Variable RateVariable Rate$14 $27 $39 $39 $1,583 $250 $1,952 $1,945 
LIBOR+Spread— — — — — 
Variable Rate
Variable Rate
SOFR+Spread


Total Interest Rate Swaps-Notional Amount by Expiration-Average Swap Rate
Expected Maturity Date
 
In millions
20222023202420252026ThereafterTotal
Notional$200 $— $— $— $— $— $200 
Average Pay Rate2.87 %— %— %— %— %— %— %
Average Receive RateLIBOR— — — — — — 
Net Investment Hedge

37

TableOn October 29, 2021 and November 19, 2021, the Company drew the full amount of Contentsthe €210 million delayed draw term loan facility and completed a private offering of €290 million aggregate principal amount of the 2.625% senior unsecured notes due 2029, respectively. The Company designated this Euro-denominated debt as a non-derivative net investment hedge of a portion of our net investment in Euro functional currency denominated subsidiaries to offset currency fluctuations.

Foreign Exchange Rates

The Company also enters into forward exchange contracts to hedge certain other anticipated foreign currency transactions. The purpose of these contracts is to protect the Company from the risk that the eventual functional currency cash flows resulting from anticipated foreign currency transactions will be adversely affected by changes in exchange rates.

During the years ended December 31, 2021 and 2020, there were no amounts reclassified to earnings in connection with forecasted transactions that were no longer considered probable of occurring and there was no amount of ineffectiveness related to changes in the fair value of foreign currency forward contracts. Additionally, there were no amounts excluded from the measure of effectiveness during the years ended December 31, 2021 and 2020.
Derivatives not Designated as Hedges

The Company enters into forward exchange contracts to effectively hedge substantially all receivables resulting from transactions denominated in foreign currencies. The purpose of these forward exchange contracts is to protect the Company from the risk that the eventual functional currency cash flows resulting from the collection of these receivables will be adversely affected by changes in exchange rates. At December 31, 2021,2023, multiple foreign currency forward exchange contracts existed, with maturities ranging up to sixthree months. Those forward currency exchange contracts outstanding at December 31, 2021,2023, when aggregated and measured in U.S. dollars at December 31, 20212023 contractual rates, had net notional amounts totaling $103$131 million. The Company continuously monitors these forward exchange contracts and adjusts accordingly to minimize the exposure.

Deal Contingent Hedge

On May 14, 2021, in connection with the AR Packaging acquisition, the Company entered into deal contingent foreign exchange forward contracts, with no upfront cash cost, to hedge €700 million of the acquisition price. These forward contracts settled October 29, 2021, concurrently withimmediately prior to the acquisition of AR Packaging and are accounted for as derivatives under ASC 815, Derivatives and Hedging. UnrealizedRealized losses of $48 million for the year ended December 31, 2021 resulting from these contracts wereare recognized in Business Combinations, ShutdownExit Activities and Other Special Charges, and Exit Activities, Net onin the Company’s Condensed Consolidated Statements of Operations. For more information, see "Note 11 — Fair Value Measurement1 - General Information" in” of the Notes to Consolidated Financial Statements included herein under “Item 8., Financial Statements and Supplementary Data.”Company's 2021 Annual Report on Form 10-K for the year ended December 31, 2021.

Natural Gas Contracts

The Company has hedged a portion of its expected natural gas usage for 2022.2024. The carrying amountvalue and fair value of the natural gas swap contracts is a net assetliability of $2$7 million as of December 31, 2021.2023. Such contracts are designated as cash flow hedges and are accounted for by deferring the quarterly change in fair value of the outstanding contracts in Accumulated Other Comprehensive Loss in Shareholders’ Equity. The resulting gain or loss is reclassified into Cost of Sales concurrently with the recognition of the commodity consumed.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS
Page
GRAPHIC PACKAGING HOLDING COMPANY
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 20212023
Consolidated Balance Sheets as of December 31, 20212023 and 20202022
ReportsReport of Independent Registered Public Accounting Firms (PricewaterhouseCoopers LLP PCAOB ID No. 238 and Ernst & Young LLP PCAOB ID No. 42)238)

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GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
In millions, except per share amounts202120202019
Net Sales$7,156 $6,560 $6,160 
Cost of Sales6,085 5,460 5,068 
Selling, General and Administrative528 513 512 
Other (Income) Expense, Net(2)
Business Combinations, Shutdown and Other Special Charges, and Exit Activities, Net138 61 38 
Income from Operations407 524 534 
Nonoperating Pension and Postretirement Benefit Income (Expense)(151)(39)
Interest Expense, Net(123)(129)(141)
Income before Income Taxes and Equity Income of Unconsolidated Entity289 244 354 
Income Tax Expense(74)(42)(76)
Income before Equity Income of Unconsolidated Entity215 202 278 
Equity Income of Unconsolidated Entity— 
Net Income$216 $203 $278 
Net Income Attributable to Noncontrolling Interests(12)(36)(71)
Net Income Attributable to Graphic Packaging Holding Company$204 $167 $207 
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic$0.69 $0.60 $0.70 
Net Income Per Share Attributable to Graphic Packaging Holding Company — Diluted$0.68 $0.60 $0.70 

Year Ended December 31,
In millions, except per share amounts202320222021
Net Sales$9,428 $9,440 $7,156 
Cost of Sales7,311 7,610 6,085 
Selling, General and Administrative805 774 528 
Other Expense (Income), Net64 19 (2)
Business Combinations, Exit Activities and Other Special Charges, Net74 131 138 
Income from Operations1,174 906 407 
Nonoperating Pension and Postretirement Benefit (Expense) Income(3)
Interest Expense, Net(239)(197)(123)
Income before Income Taxes and Equity Income of Unconsolidated Entity932 716 289 
Income Tax Expense(210)(194)(74)
Income before Equity Income of Unconsolidated Entity722 522 215 
Equity Income of Unconsolidated Entity— 
Net Income$723 $522 $216 
Net Income Attributable to Noncontrolling Interest— — (12)
Net Income Attributable to Graphic Packaging Holding Company$723 $522 $204 
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic$2.35 $1.69 $0.69 
Net Income Per Share Attributable to Graphic Packaging Holding Company — Diluted$2.34 $1.69 $0.68 

The accompanying notes are an integral part of the consolidated financial statements.


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GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31,Year Ended December 31,Year Ended December 31,
2021
20232023
In millionsIn millionsGraphic Packaging Holding CompanyNoncontrolling InterestTotalIn millionsGraphic Packaging Holding CompanyNoncontrolling InterestTotal
Net IncomeNet Income$204 $12 $216 
Other Comprehensive Income (Loss), Net of TaxOther Comprehensive Income (Loss), Net of Tax
Derivative Instruments
Derivative Instruments
Derivative InstrumentsDerivative Instruments
Pension and Postretirement Benefit PlansPension and Postretirement Benefit Plans45 — 45 
Currency Translation AdjustmentCurrency Translation Adjustment(28)— (28)
Total Other Comprehensive Income, Net of TaxTotal Other Comprehensive Income, Net of Tax22 23 
Total Other Comprehensive Income, Net of Tax
Total Other Comprehensive Income, Net of Tax
Total Comprehensive IncomeTotal Comprehensive Income$226 $13 $239 
Year Ended December 31,Year Ended December 31,
20222022
Net Income
Other Comprehensive Income (Loss), Net of Tax:
Derivative Instruments
Derivative Instruments
Derivative Instruments
Pension and Postretirement Benefit Plans
Currency Translation Adjustment
Total Other Comprehensive Loss, Net of Tax
Total Comprehensive Income (Loss)
Year Ended December 31,2020
In millionsGraphic Packaging Holding CompanyNoncontrolling InterestRedeemable Noncontrolling InterestTotal
Net Income (Loss)$167 $39 $(3)$203 
Year Ended December 31,
Year Ended December 31,
20212021
Net Income
Net Income
Net Income
Other Comprehensive Income (Loss), Net of Tax:Other Comprehensive Income (Loss), Net of Tax:
Derivative Instruments
Derivative Instruments
Derivative InstrumentsDerivative Instruments— 
Pension and Postretirement Benefit PlansPension and Postretirement Benefit Plans100 29 10 139 
Currency Translation AdjustmentCurrency Translation Adjustment17 (1)18 
Total Other Comprehensive Income, Net of TaxTotal Other Comprehensive Income, Net of Tax121 32 162 
Total Comprehensive IncomeTotal Comprehensive Income$288 $71 $$365 
Year Ended December 31,2019
Net Income$207 $55 $16 $278 
Other Comprehensive (Loss) Income, Net of Tax:
Derivative Instruments(6)(1)— (7)
Pension and Postretirement Benefit Plans11 
Currency Translation Adjustment10 — 12 
Total Other Comprehensive Income, Net of Tax12 16 
Total Comprehensive Income$219 $58 $17 $294 

The accompanying notes are an integral part of the consolidated financial statements.
















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GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
In millions, except share and per share amounts20212020
ASSETS
Current Assets:
Cash and Cash Equivalents$172 $179 
Receivables, Net859 654 
Inventories, Net1,387 1,128 
Other Current Assets84 59 
Total Current Assets2,502 2,020 
Property, Plant and Equipment, Net4,677 3,560 
Goodwill2,015 1,478 
Intangible Assets, Net868 437 
Other Assets395 310 
Total Assets$10,457 $7,805 
LIABILITIES
Current Liabilities:
Short-Term Debt and Current Portion of Long-Term Debt$279 $497 
Accounts Payable1,125 825 
Compensation and Employee Benefits211 213 
Interest Payable35 30 
Other Accrued Liabilities399 291 
Total Current Liabilities2,049 1,856 
Long-Term Debt5,515 3,147 
Deferred Income Tax Liabilities579 540 
Accrued Pension and Postretirement Benefits139 130 
Other Noncurrent Liabilities282 292 
SHAREHOLDERS' EQUITY
Preferred Stock, par value $.01 per share; 100,000,000 shares authorized; 0 shares issued or outstanding— — 
Common Stock, par value $.01 per share; 1,000,000,000 shares authorized; 307,103,551 and 267,726,373 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively
Capital in Excess of Par Value2,046 1,715 
Retained Earnings (Accumulated Deficit)66 (48)
Accumulated Other Comprehensive Loss(224)(246)
Total Graphic Packaging Holding Company Shareholders' Equity1,891 1,424 
Noncontrolling Interest416 
Total Equity1,893 1,840 
Total Liabilities and Shareholders' Equity$10,457 $7,805 

December 31,
In millions, except share and per share amounts20232022
ASSETS
Current Assets:
Cash and Cash Equivalents$162 $150 
Receivables, Net835 879 
Inventories, Net1,754 1,606 
Other Current Assets94 71 
Total Current Assets2,845 2,706 
Property, Plant and Equipment, Net4,992 4,579 
Goodwill2,103 1,979 
Intangible Assets, Net820 717 
Other Assets415 347 
Total Assets$11,175 $10,328 
LIABILITIES
Current Liabilities:
Short-Term Debt and Current Portion of Long-Term Debt$764 $53 
Accounts Payable1,094 1,123 
Compensation and Employee Benefits273 295 
Interest Payable63 51 
Other Accrued Liabilities395 411 
Total Current Liabilities2,589 1,933 
Long-Term Debt4,609 5,200 
Deferred Income Tax Liabilities731 668 
Accrued Pension and Postretirement Benefits104 111 
Other Noncurrent Liabilities360 266 
Commitments (Note 13)
SHAREHOLDERS' EQUITY
Preferred Stock, par value $.01 per share; 100,000,000 shares authorized; no shares issued or outstanding— — 
Common Stock, par value $.01 per share; 1,000,000,000 shares authorized; 306,058,815 and 307,116,089 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively
Capital in Excess of Par Value2,062 2,054 
Retained Earnings1,029 469 
Accumulated Other Comprehensive Loss(313)(377)
Total Graphic Packaging Holding Company Shareholders' Equity2,781 2,149 
Noncontrolling Interest
Total Equity2,782 2,150 
Total Liabilities and Shareholders' Equity$11,175 $10,328 

The accompanying notes are an integral part of the consolidated financial statements.
40


GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common StockCapital in Excess of Par Value(Accumulated Deficit) Retained EarningsAccumulated Other Comprehensive (Loss) IncomeNoncontrolling InterestsTotal Equity
In millions, except share amountsSharesAmount
Balances at December 31, 2020267,726,373 $3 $1,715 $(48)$(246)$416 $1,840 
Net Income— — — 204 — 12 216 
Distribution of Membership Interest— — — — — (6)(6)
Other Comprehensive Income (Loss), Net of Tax:
Derivative Instruments— — — — 
Pension and Postretirement Benefit Plans— — — — 45 — 45 
Currency Translation Adjustment— — — — (28)— (28)
Redemption of IP's Ownership Interest38,080,072 — 319 — — (423)(104)
Dividends Declared— — — (90)— — (90)
Investment in Subsidiaries— — — — — 
Recognition of Stock-Based Compensation— — 12 — — — 12 
Issuance of Shares for Stock-Based Awards1,297,106 — — — — — — 
Balances at December 31, 2021307,103,551 $3 $2,046 $66 $(224)$2 $1,893 
Net Income— — — 522 — — 522 
Other Comprehensive Income (Loss), Net of Tax:
Derivative Instruments— — — — — 
Pension and Postretirement Benefit Plans— — — — (9)— (9)
Currency Translation Adjustment— — — — (148)(1)(149)
Repurchase of Common Stock(1,315,839)— (8)(20)— — (28)
Dividends Declared— — — (99)— — (99)
Recognition of Stock-Based Compensation— — 16 — — — 16 
Issuance of Shares for Stock-Based Awards1,328,377 — — — — — — 
Balances at December 31, 2022307,116,089 $3 $2,054 $469 $(377)$1 $2,150 
Net Income— — — 723  — 723 
Other Comprehensive Income (Loss), Net of Tax:
Derivative Instruments— — — — — 
Pension and Postretirement Benefit Plans— — — — (4)— (4)
Currency Translation Adjustment— — — — 65 — 65 
Repurchase of Common Stock(2,389,224)— (14)(40)— — (54)
Dividends Declared— — — (123)— — (123)
Recognition of Stock-Based Compensation— — 22 — — — 22 
Issuance of Shares for Stock-Based Awards1,331,950 — — — — — — 
Balances at December 31, 2023306,058,815 $3 $2,062 $1,029 $(313)$1 $2,782 

The accompanying notes are an integral part of the consolidated financial statements.
41


GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,
In millions202320222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income$723 $522 $216 
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization619 553 489 
Amortization of Deferred Debt Issuance Costs
Deferred Income Taxes22 131 55 
Amount of Postretirement Expense Less Than Funding(5)(18)(24)
Asset Impairment Charges29 96 — 
Other, Net58 15 93 
Changes in Operating Assets and Liabilities, Net of Acquisitions (See Note 4)(308)(218)(229)
Net Cash Provided by Operating Activities1,144 1,090 609 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Spending(781)(522)(775)
Packaging Machinery Spending(23)(27)(27)
Acquisition of Businesses, Net of Cash Acquired(361)— (1,704)
Beneficial Interest on Sold Receivables184 125 130 
Beneficial Interest Obtained in Exchange for Proceeds(45)(6)(11)
Other, Net(5)(5)
Net Cash Used in Investing Activities(1,025)(435)(2,392)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of Common Stock(54)(28)— 
Payments on Debt(26)(14)(16)
Proceeds from Issuance of Debt— — 2,965 
Retirement of Long-Term Debt— (250)(1,626)
Redemption of Noncontrolling Interest— — (150)
Borrowings under Revolving Credit Facilities4,449 3,929 4,485 
Payments on Revolving Credit Facilities(4,314)(4,195)(3,649)
IP Tax Receivable Agreement Payment— — (109)
Debt Issuance Costs— — (27)
Repurchase of Common Stock related to Share-Based Payments(22)(18)(15)
Dividends paid to shareholders and Distributions paid to GPIP Partner(123)(92)(92)
Other, Net(16)12 
Net Cash (Used in) Provided by Financing Activities(106)(666)1,778 
Increase (Decrease) in cash and cash equivalents, including cash classified within assets held for sale13 (11)(5)
Less Cash reclassified to Assets Held for Sale— — 
Effect of Exchange Rate Changes on Cash(1)(6)(2)
Net Increase (Decrease) in Cash and Cash Equivalents12 (22)(7)
Cash and Cash Equivalents at Beginning of Year150 172 179 
Cash and Cash Equivalents at End of Year$162 $150 $172 
Non-cash Investing Activities:
Beneficial Interest Obtained in Exchange for Trade Receivables$141 $118 $121 
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities$70 $52 $118 
Non-cash Financing Activities:
Right-of-Use Assets Obtained in Exchange for New Finance Lease Liabilities$— $42 $11 
Non-cash Exchange of Stock Issuance for Redemption of Noncontrolling Interest$— $— $(652)

The accompanying notes are an integral part of the consolidated financial statements.
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GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Common StockCapital in Excess of Par Value(Accumulated Deficit) Retained EarningsAccumulated Other Comprehensive (Loss) IncomeNoncontrolling InterestsTotal EquityRedeemable Noncontrolling Interest
In millions, except share amountsSharesAmount
Balances at December 31, 2018299,807,779 $3 $1,944 $10 $(379)$439 $2,017 $276 
Net Income— — — 207 — 55 262 16 
Reclassification to Redeemable Noncontrolling Interest for Share Repurchases— — — — — 13 13 (13)
Redeemable Noncontrolling Interest Redemption Value Mark-Up— — (30)— — — (30)30 
Distribution of Membership Interest— — — — — (22)(22)(6)
Other Comprehensive (Loss) Income, Net of Tax:
Derivative Instruments— — — — (6)(1)(7)— 
Pension and Postretirement Benefit Plans— — — — 10 
Currency Translation Adjustment— — — — 10 12 — 
Repurchase of Common Stock(10,191,257)— (55)(73)— — (128)— 
Dividends Declared— — — (88)— — (88)— 
Recognition of Stock-Based Compensation— — 18 — — — 18 — 
Issuance of Shares for Stock-Based Awards630,385 — — — — — — — 
Balances at December 31, 2019290,246,907 $3 $1,877 $56 $(367)$488 $2,057 $304 
Net Income (Loss)— — — 167 — 39 206 (3)
Redeemable Noncontrolling Interest Redemption Value Adjustment— — 12 — — — 12 (12)
Distribution of Membership Interest— — — — — (19)(19)(2)
Other Comprehensive Income, Net of Tax:
Derivative Instruments— — — — — 
Pension and Postretirement Benefit Plans— — — — 100 29 129 10 
Currency Translation Adjustment— — — — 17 19 (1)
Repurchase of Common Stock(23,420,010)— (128)(188)— — (316)— 
Redemption of IP's Ownership Interest— — (87)— — (124)(211)(296)
Tax Effect IP Redemption— — 16 — — — 16 — 
Dividends Declared— — — (83)— — (83)— 
Recognition of Stock-Based Compensation— — 25 — — — 25 — 
Issuance of Shares for Stock-Based Awards899,476 — — — — — — — 
Balances at December 31, 2020267,726,373 $3 $1,715 $(48)$(246)$416 $1,840 $ 
Net Income— — — 204  12 216  
Distribution of Membership Interest— — — — — (6)(6) 
Other Comprehensive Income, Net of Tax:
Derivative Instruments— — — —  
Pension and Postretirement Benefit Plans— — — — 45 — 45  
Currency Translation Adjustment— — — — (28)— (28) 
Redemption of IP's Ownership Interest38,080,072 — 319 — — (423)(104) 
Dividends Declared— — — (90)— — (90)— 
Investment in Subsidiaries— — — — — 
Recognition of Stock-Based Compensation— — 12 — — — 12  
Issuance of Shares for Stock-Based Awards1,297,106 — — — — — —  
Balances at December 31, 2021307,103,551 $3 $2,046 $66 $(224)$2 $1,893 $ 

The accompanying notes are an integral part of the consolidated financial statements.
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GRAPHIC PACKAGING HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
In millions202120202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income$216 $203 $278 
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization489 476 447 
Amortization of Deferred Debt Issuance Costs
Deferred Income Taxes55 (1)53 
Amount of Postretirement Expense (Less) Greater Than Funding(24)147 42 
Other, Net93 13 15 
Changes in Operating Assets and Liabilities, Net of Acquisitions (See Note 3)(229)(19)(174)
Net Cash Provided by Operating Activities609 825 666 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Spending(775)(616)(331)
Packaging Machinery Spending(27)(30)(22)
Acquisition of Businesses, Net of Cash Acquired(1,704)(121)(55)
Beneficial Interest on Sold Receivables130 136 344 
Beneficial Interest Obtained in Exchange for Proceeds(11)(9)(156)
Other, Net(5)(8)(5)
Net Cash Used in Investing Activities(2,392)(648)(225)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of Common Stock— (316)(129)
Payments on Debt(16)(37)(37)
Proceeds from Issuance of Debt2,965 800 300 
Retirement of Long-Term Debt(1,626)— — 
Redemption of Noncontrolling Interest(150)(500)— 
Borrowings under Revolving Credit Facilities4,485 2,614 2,498 
Payments on Revolving Credit Facilities(3,649)(2,597)(2,865)
IP Tax Receivable Agreement Payment(109)— — 
Debt Issuance Costs(27)(14)(5)
Repurchase of Common Stock related to Share-Based Payments(15)(9)(4)
Dividends and Distributions Paid to GPIP Partner(92)(103)(113)
Other, Net12 10 (6)
Net Cash Provided by (Used in) Financing Activities1,778 (152)(361)
EFFECT OF EXCHANGE RATE CHANGES ON CASH(2)
Net (Decrease) Increase in Cash and Cash Equivalents(7)26 82 
Cash and Cash Equivalents at Beginning of Year179 153 71 
CASH AND CASH EQUIVALENTS AT END OF YEAR$172 $179 $153 
Non-cash Investing Activities:
Beneficial Interest Obtained (Sold) in Exchange for Trade Receivables$121 $135 $(69)
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities$118 $71 $73 
Non-cash Financing Activities:
Right-of-Use Assets Obtained in Exchange for New Finance Lease Liabilities$11 $— $16 
Non-cash Exchange of Stock Issuance for Redemption of Noncontrolling Interest$(652)$— $— 

The accompanying notes are an integral part of the consolidated financial statements.
44

Table of Contents

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Graphic Packaging Holding Company (“GPHC” and, together with its subsidiaries, the “Company”) is committed to providing consumer packaging that makes a world of difference. The Company, is a leading provider of sustainable fiber-based consumer packaging solutions for a wide variety of products to food, beverage, foodservice and other consumer products companies. The Companyprovider, operates on a global basis, is one of the largest producers of folding cartons and containers for the packaging of consumer goods and paperboard-based foodservice packaging solutions in the United States ("(“U.S.") and Europe, and holds leading market positions in coated-recycled paperboard ("CRB"), coatedused to produce consumer packaging solutions, including recycled, unbleached kraft paperboard ("CUK") and solid bleached sulfate paperboard ("SBS").paperboard.

The Company’s customers include many of the world’s most widely recognized companies and brands with prominent market positions in beverage, food, foodservice and other consumer products. The Company strives to provide its customers with innovative sustainablepaperboard packaging solutions designed to deliverpreferred by consumers. The Company delivers marketing and performance benefits at a competitive cost by capitalizing onto its low-cost paperboard mills and converting plants,customers through its global packaging network, its proprietary carton and packaging designs, and its commitment to quality, service, and service.

On January 1, 2018, GPHC, a Delaware corporation, International Paper Company, a New York corporation (“IP”), Graphic Packaging International Partners, LLC, a Delaware limited liability company formerly known as Gazelle Newco LLC and a wholly-owned subsidiary of the Company (“GPIP”), and Graphic Packaging International, LLC, a Delaware limited liability company formerly known as Graphic Packaging International, Inc. and a direct subsidiary of GPIP (“GPIL”), completed a series of transactions pursuant to an agreement dated October 23, 2017 among the foregoing parties (the “Transaction Agreement”). Pursuant to the Transaction Agreement (i) a wholly-owned subsidiary of the Company transferred its ownership interest in GPIL to GPIP; (ii) IP transferred its North America Consumer Packaging (“NACP”) business to GPIP, which was then subsequently transferred to GPIL; (iii) GPIP issued membership interests to IP, and IP was admitted as a member of GPIP; and (iv) GPIL assumed certain indebtedness of IP (the "NACP Combination").

During 2020, GPIP purchased 32.5 million partnership units from IP for $500 million in cash, fully redeeming the 18.2 million partnership units that were required to be redeemed in cash. On February 16, 2021, the Company announced that IP had notified the Company of its intent to exchange additional partnership units. Per an agreement between the parties, on February 19, 2021, GPIP purchased 9.3 million partnership units from IP for $150 million in cash, and IP exchanged 15.3 million partnership units for an equivalent number of shares of GPHC common stock. On May 21, 2021, IP exchanged its remaining 22.8 million partnership units for an equivalent number of shares of GPHC common stock. As required by the parties' agreement, these shares were immediately sold by IP. As a result, IP has no ownership interest remaining in GPIP as of May 21, 2021.

In connection with both the February 19, 2021 and May 21, 2021 exchanges, pursuant to elections under Section 754 of the Internal Revenue Code, the Company obtained an increase with respect to the tax basis in the assets of GPIP and certain of its subsidiaries. As a result, payments pursuant to the Tax Receivable Agreement (“TRA”), executed in connection with the formation of GPIP on January 1, 2018, are required. The TRA provides for the payment by the Company to IP of 50% of the present value of any tax benefits projected to be realized by the Company upon IP’s exchange of its membership interest into GPHC stock. As such, the Company recorded TRA liabilities of $43 million and $66 million, for the February 19, 2021 and May 21, 2021 exchanges, respectively. The TRA liabilities were recorded through adjustments to Capital in Excess of Par Value during the first and second quarters of 2021, respectively. In accordance with the terms of the TRA, the Company settled the liability for the February exchange during the third quarter and settled the liability for the May exchange during the fourth quarter of 2021. Additionally, the Company recorded an adjustment through Capital in Excess of Par Value to decrease its net domestic Deferred Tax Liability (“DTL”) by $175 million in connection with both the February and May exchanges. The decrease in the DTL reflects the change in the outside basis difference associated with the Company’s investment in GPIP and includes the impact of the tax basis step up triggered by the exchanges pursuant to Section 754 of the Internal Revenue Code in addition to other changes to book and tax basis as a result of the Company’s increased ownership interest in GPIP.environmental stewardship.

Basis of Presentation and Principles of Consolidation

The Company’s Consolidated Financial Statements include all subsidiaries in which the Company has the ability to exercise direct or indirect control over operating and financial policies. Intercompany transactions and balances are eliminated in consolidation.

The Company through its GPIL subsidiary, is a party to a Japanese joint venture, Rengo Riverwood Packaging, Ltd. in which it holds a 50% ownership interest that is accounted for using the equity method.
45

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) 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 net sales and expenses during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are recorded when known. Estimates are used in accounting for, among other things, pension benefits, retained insurable risks, slow-moving and obsolete inventory, allowance for doubtful accounts, useful lives for depreciation and amortization, impairment testing of goodwill and long-lived assets, fair values related to acquisition accounting, fair value of derivative financial instruments, share based compensation, deferred income tax assets and potential income tax assessments, and loss contingencies.

Cash and Cash Equivalents

Cash and cash equivalents include bank deposits and other marketable securities that are highly liquid with maturities of three months or less.

Accounts Receivable and Allowances

Accounts receivable are stated at the amount owed by the customer, net of an allowance for estimated uncollectible accounts, returns and allowances, and cash discounts. The allowance for doubtful accounts is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible.

43

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The Company has entered into agreements to sell, on a revolving basis, certain trade accounts receivable to third party financial institutions. Transfers under these agreements meet the requirements to be accounted for as sales in accordance with the Transfers and Servicing topic of the Financial Accounting Standards Board ("FASB"(“FASB”) Accounting Standards Codification (the "Codification"“Codification”). The loss on sale is not material and is included in Other (Income) Expense (Income), Net line item onin the Condensed Consolidated StatementStatements of Operations. The following table summarizes the activity under these programs for the year ended December 31, 20212023 and 2020,2022, respectively:

Year Ended December 31,
Year Ended December 31,Year Ended December 31,
In millionsIn millions20212020In millions20232022
Receivables Sold and DerecognizedReceivables Sold and Derecognized$2,947 $2,850 
Proceeds Collected on Behalf of Financial InstitutionsProceeds Collected on Behalf of Financial Institutions2,9702,787Proceeds Collected on Behalf of Financial Institutions3,6463,179
Net Proceeds (Paid to) Received From Financial Institutions(6)55
Net Proceeds Received from Financial Institutions
Deferred Purchase Price at December 31(a)
Deferred Purchase Price at December 31(a)
45
Deferred Purchase Price at December 31(a)
1
Pledged Receivables at December 31Pledged Receivables at December 31180201Pledged Receivables at December 31150197
(a) Included in Other Current Assets on the Condensed Consolidated Balance SheetSheets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure.

Receivables sold under all programs subject to continuing involvement, which consist principally of collection services, were $770 million and $753 million as of December 31, 2023 and 2022, respectively.

The Company also participates in supply chain financing arrangements offered by certain customers and has entered into various factoring arrangements that also qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification. ForAs of December 31, 2023 and 2022, the Company sold receivables of $1,136 million and $1,124 million, respectively, related to these arrangements.

Accounts Payable and Supplier Finance Program

The Company has arranged a supplier finance program (“SFP”) with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice. The transactions are at the sole discretion of both the suppliers and financial institution, and GPHC is not a party to the agreements and has no economic interest in the supplier’s decision to sell a receivable. The range of payment terms negotiated by the Company with its suppliers is consistent, irrespective of whether a supplier participates in the program. The agreement with the financial intermediary does not require GPHC to provide assets pledged as security or other forms of guarantees for the supplier finance program. Amounts due to the Company’s suppliers that elected to participate in the SFP program are included in Accounts Payable on the Consolidated Balance Sheets and payments made under the SFP program are reflected in Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.

The rollforward of the Company's outstanding obligations confirmed as valid under its supplier finance program for the years ended December 31, 20212023 and 2020, the Company sold receivables of $693 million and $368 million respectively, related to these factoring arrangements.2022 are as follows:

Receivables sold under all programs subject
Year Ended December 31,
In millions20232022
Confirmed Obligations Outstanding at the Beginning of the Year$34 $26 
Invoices Confirmed During the Year117127
Confirmed Invoices Paid During the Year(121)(119)
Confirmed Obligations Outstanding at the End of the Year$30 $34 

Non-cash additions to continuing involvement, which consists principally of collection services,Property, Plant and Equipment, Net included within Accounts Payable on the Consolidated Balance Sheets were $613$145 million, $55 million, and $621$169 million as of December 31, 20212023, 2022 and 2020,2021, respectively.

Concentration of Credit Risk

The Company’s cash, cash equivalents, and accounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents are placed with financial institutions that management believes are of high credit quality. Accounts receivable are derived from revenue earned from customers located in the U.S. and internationally and generally do not require collateral. For the years ended December 31, 2021, 2020,2023, 2022, and 2019,2021, no customer accounted for more than 10% of net sales.

44

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Inventories

Inventories are stated at the lower of cost and net realizable value with cost determined based on standard (which approximates actual), average or actual cost. Work in progress and finished goods inventories are valued at the cost of raw material consumed plus direct manufacturing costs (such as labor, utilities and supplies) as incurred and an applicable portion of manufacturing overhead. Inventories are stated net of an allowance for slow-moving and obsolete inventory.


46

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Betterments, renewals and extraordinary repairs that extend the life of the asset are capitalized; other repairs and maintenance charges are expensed as incurred. The Company’s cost and related accumulated depreciation applicable to assets retired or sold are removed from the accounts and the gain or loss on disposition is included in income from operations.

Interest is capitalized on assets under construction for one year or longer with an estimated spending of $1 million or more. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. Capitalized interest was $14$8 million, $7$5 million and $3$14 million for the years ended December 31, 2021, 20202023, 2022 and 2019,2021, respectively.

The Company assesses its long-lived assets, including certain identifiable intangibles, for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. To analyze recoverability, the Company projects future cash flows, undiscounted and before interest, over the remaining life of such assets. If these projected cash flows are less than the carrying amount, an impairment would be recognized, resulting in a write-down of assets with a corresponding charge to earnings. The impairment loss is measured based upon the difference between the carrying amount and the fair value of the assets. The Company assesses the appropriateness of the useful life of its long-lived assets periodically.

Depreciation and Amortization

Depreciation is computed using the straight-line method based on the following estimated useful lives of the related assets:

Buildings40 years
Land improvements15 years
Machinery and equipment3 to 40 years
Furniture and fixtures10 years
Automobiles, trucks and tractors3 to 5 years

Depreciation expense, including the depreciation expense of assets under finance leases, for 2023, 2022 and 2021 2020 and 2019 was $420$528 million, $414$463 million and $388$420 million, respectively.

Intangible Assets

Intangible assets with a determinable life are amortized on a straight-line or accelerated basis over their useful lives. The amortization expense for each intangible asset is recorded in the Consolidated Statements of Operations according to the nature of that asset.

45

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Goodwill is the Company’s only intangible asset not subject to amortization. The following table displays the intangible assets that continue to be subject to amortization and accumulated amortization expense as of December 31, 20212023 and 2020:2022:

December 31, 2021December 31, 2020
December 31, 2023December 31, 2023December 31, 2022


In millions


In millions
Gross Carrying Amount Accumulated Amortization Net Carrying AmountGross Carrying Amount Accumulated AmortizationNet Carrying AmountIn millionsGross Carrying Amount Accumulated Amortization Net Carrying AmountGross Carrying Amount Accumulated AmortizationNet Carrying Amount
Amortizable Intangible Assets:Amortizable Intangible Assets:
Customer Relationships(a)
Customer Relationships(a)
$1,462 $(621)$841 $965 $(556)$409 
Patents, Trademarks, Licenses, and Leases140 (113)27 141 (113)28 
Customer Relationships(a)
Customer Relationships(a)
Non-Compete Agreements(a)
Patents, Trademarks, Licenses, Leases and Developed Technology
TotalTotal$1,602 $(734)$868 $1,106 $(669)$437 
Total
Total
(a) Please see "Note 4-4 - Business Combinations"Combinations for the intangibles acquired with the AR Packaging acquisition.Tama Paperboard, LLC ("Tama”) and Bell Incorporated (“Bell”) acquisitions.

The Company recorded amortization expense for the years ended December 31, 2023, 2022 and 2021 2020 and 2019 of $69$91 million, $62$90 million and $59$69 million, respectively. The Company expects amortization expense for the next five consecutive years to be approximately as follows: $95$89 million, $92$64 million, $90$59 million, $86$57 million, and $86$56 million.

Goodwill

The Company tests goodwill for impairment annually as of October 1, as well as whenever events or changes in circumstances suggest that the estimated fair value of a reporting unit may no longer exceed its carrying amount.

47

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company tests goodwill for impairment at the reporting unit level, which is an operating segment or a level below an operating segment, which is referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. Two or more components of an operating segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics.

Potential goodwill impairment is measured at the reporting unit level by comparing the reporting unit’s carrying amount (including goodwill), to the fair value of the reporting unit. When performing the quantitative analysis, the estimated fair value of each reporting unit is determined by utilizing a discounted cash flow analysis based on the Company’s forecasts, discounted using a weighted average cost of capital and market indicators of terminal year cash flows based upon a multiple of EBITDA. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is considered impaired. In determining fair value, management relies on and considers a number of factors, including but not limited to, future operating results, business plans, economic projections of revenues and operating margins, forecasts including future cash flows, and market data and analysis, including market capitalization. The assumptions used are based on what a hypothetical market participant would use in estimating fair value. Fair value determinations are sensitive to changes in the factors described above. There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment.

Periodically, the Company may perform a qualitative impairment analysis of goodwill associated with each of its reporting units to determine if it is more likely than not that the carrying value of a reporting unit exceeded its fair value. However, the Company performed a quantitative impairment test as of October 1, 2021,2023, and concluded goodwill was not impaired for any of its reporting units.

46

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The following is a rollforward of goodwill by reportable segment:
In millionsPaperboard MillsAmericas Paperboard PackagingEurope Paperboard Packaging
Corporate/Other(a)
Total
Balance at December 31, 2019$507 $897 $60 $14 $1,478 
Acquisition of Businesses— — — — — 
Foreign Currency Effects(1)(1)(1)— 
Balance at December 31, 2020$506 $900 $59 $13 $1,478 
Acquisition of Businesses— 68 475 — 543 
Foreign Currency Effects— — (6)— (6)
Balance at December 31, 2021$506 $968 $528 $13 $2,015 

In millionsPaperboard ManufacturingAmericas Paperboard PackagingEurope Paperboard Packaging
Corporate/Other(a)
Total
Balance at December 31, 2021$506 $968 $528 $13 $2,015 
Acquisition of Businesses— 10 11 — 21 
Impairment of Russian Business(b)
— — (12)— (12)
Foreign Currency Effects— (46)(1)(45)
Balance at December 31, 2022$506 $980 $481 $12 $1,979 
Acquisition of Businesses(c)
59 42 — — 101 
Foreign Currency Effects— 18 (1)23 
Balance at December 31, 2023$565 $1,028 $499 $11 $2,103 
(a) Includes Australia operating segment.

(b)
Relates to the Company's divestiture of its Russian business. Please see "Note 19 - Impairment and Divestiture of Russian Business" for more information.
(c) Represents goodwill related to the Tama and Bell acquisitions.

Retained Insurable Risks

It is the Company’s policy to self-insure or fund a portion of certain expected losses related to group health benefits and workers’ compensation claims. Provisions for expected losses are recorded based on the Company’s estimates, on an undiscounted basis, of the aggregate liabilities for known claims and estimated claims incurred but not reported.

Asset Retirement Obligations

Asset retirement obligations are accounted for in accordance with the provisions of the Asset Retirement and Environmental Obligations topic of the FASB Codification. A liability and asset are recorded equal to the present value of the estimated costs associated with the retirement of long-lived assets where a legal or contractual obligation exists and the liability can be reasonably estimated. The liability is accreted over time and the asset is depreciated over the remaining life of the asset. Upon settlement of the liability, the Company will recognize a gain or loss for any difference between the settlement amount and the liability recorded. Asset retirement obligations with indeterminate settlement dates are not recorded until such time that a reasonable estimate may be made. The Company's asset retirement obligations consist primarily of landfill closure and post-closure costs at certain of our mills.paperboard manufacturing facilities. At December 31, 20212023 and 2020,2022, the Company had liabilities of $12$14 million and $11$13 million, respectively. The liabilities are primarily reflected as Other Noncurrent Liabilities inon the Company's Consolidated Balance Sheets.

48

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

International Currency

The functional currency of the international subsidiaries is usually the local currency for the country in which the subsidiaries own their primary assets. The translation of the applicable currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate during the period. Any related translation adjustments are recorded directly to a separate component of Shareholders’ Equity, unless there is a sale or substantially complete liquidation of the underlying foreign investments. Gains and losses on foreign currency transactions are included in Other Expense (Income) in the Consolidated Statements of Operations, Net for the period in which the exchange rate changes.

The Company pursues a currency hedging program which utilizes derivatives to reduce the impact of foreign currency exchange fluctuations on its consolidated financial results. Under this program, the Company has entered into forward exchange contracts in the normal course of business to hedge certain foreign currency denominated transactions. Realized and unrealized gains and losses on these forward contracts are included in the measurement of the basis of the related foreign currency transaction when recorded.

Revenue Recognition

The Company has 2two primary activities, manufacturing and the converting of paperboard for and into consumer packaging made from renewable resources, from which it generates revenue from contracts with customers. Revenue is disaggregated primarily by geography and type of activity as further explained in "Note 15 - Business Segment and Geographic Area Information." All reportable segments and the Australia and Pacific Rim operating segments recognize revenue under the same method, allocate transaction price using similar methods, and have similar economic factors impacting the uncertainty of revenue and related cash flows.

47

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Revenue is recognized on the Company's annual and multi-year supply contracts when the Company satisfies the performance obligation by transferring control over the product or service to a customer, which is generally based on shipping terms and passage of title under the point-in-time method of recognition. For the years ended December 31, 2021, 20202023, 2022 and 2019,2021, the Company recognized $7,131$9,383 million, $6,537$9,410 million and $6,141$7,131 million, respectively, of revenue from contracts with customers.

The transaction price allocated to each performance obligation consists of the stand-alone selling price, estimates of rebates and other sales or contract renewal incentives, and cash discounts and sales returns ("(“Variable Consideration"Consideration”) and excludes sales tax. Estimates are made for Variable Consideration based on contract terms and historical experience of actual results and are applied to the performance obligations as they are satisfied. Purchases by the Company’s principal customers are manufactured and shipped with minimal lead time, therefore performance obligations are generally satisfied shortly after manufacturing and shipment. The Company uses standard payment terms that are consistent with industry practice.

The Company's contract assets consist primarily of contract renewal incentive payments to customers which are amortized over the period in which performance obligations related to the contract renewal are satisfied. As of December 31, 20212023 and 2020,2022, contract assets were $17$28 million and $15$8 million, respectively. The Company's contract liabilities consist principally of rebates, and as of December 31, 20212023 and 20202022 were $61$60 million and $56$65 million, respectively.

The Company did not have a material amount relating to backlog orders at December 31, 2021 or 2020.

Shipping and Handling

The Company includes shipping and handling costs in Cost of Sales.

Research and Development

Research and development costs, which relate primarily to the development and design of new packaging machines and products and are recorded as a component of Selling, General and Administrative expenses, are expensed as incurred. Expenses for the years ended December 31, 2023, 2022 and 2021 2020 and 2019 were $10$16 million, $10$14 million, and $9$10 million, respectively.

49

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Business Combinations, ShutdownExit Activities and Other Special Charges, and Exit Activities, Net

The following table summarizes the transactions recorded in Business Combinations, ShutdownExit Activities and Other Special Charges, and Exit Activities, Net in the Consolidated Statements of Operations for the year ended December 31:

In millionsIn millions202120202019In millions202320222021
Charges Associated with Business Combinations(a)
Charges Associated with Business Combinations(a)
$84 $(2)$
Shutdown and Other Special Charges33 38 24 
Exit Activities(b)
Exit Activities(b)
21 25 10 
Charges Associated with a Divestiture(c)
Other Special Charges(d)
Other Special Charges(d)
Other Special Charges(d)
TotalTotal$138 $61 $38 
(a) Includes $48 million of unrealized losses resulting from deal contingent foreign exchange forward contracts fromThese costs relate to the Americraft Carton, Inc. (“Americraft”), AR Packaging acquisitionGroup AB (“AR Packaging”), Tama, and the Bell acquisitions (see "Note 11- Fair Value Measurement"4 - Business Combinations”).
(b) Relates to the Company's closures of its three smaller recycled paperboard manufacturing facilities (which includes Tama), the closures of multiple packaging facilities, and the discontinuation of the Texarkana swing capacity project (see “Note 18 - Exit Activities”).
(c) Relates to the sale of the Company's Russian operations (see “Note 19 - Impairment and Divestiture of Russian Business).
(b)(d) RelatesThese costs include $9 million related to the Company's CRB mills, convertingdevaluation of the Nigerian Naira in 2023.

2023

On January 31, 2023, the Company completed the acquisition of Tama, a recycled paperboard manufacturing facility closureslocated in Tama, Iowa. The costs associated with this acquisition were less than $1 million and are included in Charges Associated with Business Combinations in the PM1 containerboard machine exit activities (see table above. For more information, see “"Note 4 - Business Combinations”. Subsequently, in the second quarter of 2023, the Company closed this facility. Charges associated with this project are included in Exit Activities in the table above. For more information, see “Note 18 - Exit Activities"Activities”.

On February 7, 2023, the Company announced an approximately $1 billion investment in a new recycled paperboard manufacturing facility in Waco, Texas. In conjunction with the completion of this project, the Company expects to close two additional smaller recycled paperboard manufacturing facilities in order to strategically expand capacity while lowering costs. Charges associated with these closures are included in Exit Activities in the table above. For more information, see “Note 18 - Exit Activities”.

During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024. Production from these facilities will be consolidated into our existing packaging network. Charges associated with this project are included in Exit Activities in the table above. For more information, see “Note 18 - Exit Activities”.
48

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
On September 8, 2023, the Company completed the acquisition of Bell, an independent packaging company for $264 million, subject to customary working capital adjustments. The acquisition included three packaging facilities located in South Dakota and Ohio and is reported within the Americas Paperboard Packaging reportable segment. Charges Associated with this acquisition are included in Charges Associated with Business Combinations in the table above. For more information, see “Note 4 - Business Combinations”.

During the third quarter of 2023, the Company decided to discontinue its previously announced project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of coated recycled paperboard capacity. Through December 31, 2023, the Company incurred charges of $16 million related to the write-off of assets, which were primarily engineering, permitting, and consulting costs for this project. Charges associated with this project are included in Exit Activities in the table above. For more information, see “Note 18 - Exit Activities”.

During the third quarter of 2023, the Company decided to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019. As of December 31, 2023, the Company incurred charges of $20 million related to the write-off of inventory and accelerated depreciation for the assets included in Costs of Sales in the Company's Consolidated Statements of Operations. The Company expects to incur additional charges of $5 million to $10 million as it relates to the dismantling of the K3 recycled paperboard machine through 2024.

During the second quarter of 2022, the Company began the process of divesting its interest in its two packaging facilities in Russia (the “Russian Operations”). The assets and liabilities to be disposed of in connection with this transaction met the held for sale criteria as of June 30, 2022 and each subsequent quarter end through the date of sale. On November 30, 2023, the Company completed the sale of its Russian Operations. Impairment charges associated with this divestiture are included in Charges Associated with a Divestiture in the table above. For more information, see “Note 19 - Impairment and Divestiture of Russian Business”.

2022

In March 2022, the Company announced its decision to close the Norwalk, Ohio, packaging facility and closed the facility in September 2022. Charges associated with this project are included in Exit Activities in the table above. For more information, see “Note 18 - Exit Activities.

2021

During 2019, the Company announced its plans to invest in a new CRB paperrecycled paperboard machine in Kalamazoo, Michigan. At the time of the announcement, the Company expected to close 2two of its smaller CRB Millsrecycled paperboard manufacturing facilities in 2022 in order to remain capacity neutral. During the third quarter of 2021, the Company decided to continue to operate 1one of the 2two original smaller CRB mills at least through 2022.recycled paperboard manufacturing facilities. In the second quarter 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility. Severance, retention, start-up costs, and other charges associated with this project are included in Exit Activities in the table above. For more information, see "Note 18 - Exit Activities."

During 2019,On May 14, 2021, in connection with the AR Packaging acquisition, the Company began a three-year programentered into deal contingent foreign exchange forward contracts, with no upfront cash cost, to dismantlehedge €700 million of the acquisition price. These forward contracts settled October 29, 2021, immediately prior to the acquisition of AR Packaging and disposeare accounted for as derivatives under ASC 815, Derivatives and Hedging. Unrealized losses of idle and abandoned assets primarily at$48 million for the paperboard mills.year ended December 31, 2021 resulting from these contracts are recognized in Charges related to this program for 2021 and 2020 were $25 million and $14 million, respectively. Charges associatedAssociated with this program are included in Shutdown and Other Special ChargesBusiness Combinations in the table above. For more information, see “Note 10 - Financial Instruments, Derivatives and Hedging Activities.

On July 1, 2021, the Company acquired substantially all the assets of Americraft, Carton Inc. ("Americraft"), the largest remaining independent folding carton converteroperator of packaging facilities in North America for $292 million. The acquisition included 7 converting plantsseven packaging facilities across the United States and is reported within the Americas Paperboard Packaging reportable segment. Charges associated with this acquisition are included in Charges Associated with Business Combinations in the table above. For more information, see "Note 4 - Business Combinations."Combinations”.

On November 1, 2021, the Company acquired all the shares of AR Packaging, Group AB ("AR Packaging"), Europe's second largest producer of fiber-basedpaperboard consumer packaging, for $1,412 million in cash, net of cash acquired of $75 million, subject to customary adjustments.million. The acquisition included 30 converting plantspackaging facilities in 13 countries and is reported within the Europe Paperboard Packaging reportable segment. The costs associated with this acquisition are included in Charges Associated with Business Combinations in the table above. For more information, see "Note 4 - Business Combinations."

2020

On January 31, 2020, the Company acquired a folding carton facility from Quad/Graphics, Inc. ("Quad"), a commercial printing company. The converting facility is located in Omaha, Nebraska and is included in the Americas Paperboard Packaging reportable segment. The Company paid $41 million using existing cash and borrowings under its revolving credit facility. The costs associated with this acquisition are included in Charges Associated with Business Combinations in the table above. During the first quarter of 2021, the acquisition accounting for Quad was finalized. For more information, see "Note 4 - Business Combinations."”.

In March 2020, the Company made the decision to close the White Pigeon, Michigan CRB mill and shut down the PM1 containerboard machine in West Monroe, Louisiana. Charges associated with these projects are included in Exit Activities in the table above. For more information, see "Note 18 - Exit Activities."

On April 1, 2020, the Company acquired the Consumer Packaging Group business from Greif, Inc. ("Greif"), a leader in industrial packaging products and services. The acquisition included 7 converting plants across the United States and will allow the company to increase its mill-to-converting plant integration over time. The Company paid approximately $80 million using existing cash and borrowings under its revolving credit facility. The costs associated with this acquisition are included in Charges Associated with Business Combinations in the table above. During the second quarter of 2021, the acquisition accounting for Greif was finalized. For more information, see "Note 4 - Business Combinations."
50

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In June 2020, the Company made the decision to close certain converting plants that were acquired from Greif. The Burlington, North Carolina converting facility and the Los Angeles, California converting facility were closed during 2020. Charges associated with these projects are included in Exit Activities in the table above. For more information, see "Note 18- Exit Activities."

The Company has established estimated liabilities related to the partial or complete withdrawal from certain multi-employment benefit plans for facilities which have been closed. During the second quarter of 2020, the Company increased its estimated withdrawal liability for these plans by $12 million. During the fourth quarter of 2020, the Company entered into a settlement agreement with one of its closed multi-employment benefit plans and recorded a $4 million reduction in its estimated withdrawal liability for this plan. These items were recorded in Shutdown and Other Special Charges in the table above. For more information, see "Note 8 - Pensions and Other Postretirement Benefits."

During 2020, the Company incurred incremental costs associated with paying payroll to employees during necessary quarantines due to COVID-19. In addition, the Company made one-time payments to front-line production employees and made contributions to local food banks in the communities where our manufacturing operations are located. The charges associated with these costs and payments were recorded in Shutdown and Other Special Charges in the table above.

2019

On August 1, 2019, the Company acquired substantially all the assets of Artistic Carton Company ("Artistic"), a diversified producer of folding cartons and CRB. The acquisition included 2 converting plants located in Auburn, Indiana and Elgin, Illinois (included in the Americas Paperboard Packaging reportable segment) and 1 CRB paperboard mill located in White Pigeon, Michigan (included in the Paperboard Mills reportable segment).

Share Repurchases and Dividends

On January 28, 2019, GPHC'sJuly 27, 2023, the Company's board of directors authorized an additional share repurchase program to allow GPHCthe Company to purchase up to $500 million of GPHC'sthe Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the "2019“2023 share repurchase program"program”). AThe previous $250$500 million share repurchase program was authorized on January 10, 201728, 2019 (the "2017“2019 share repurchase program"program”).

49

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and accumulated deficit.

The Company did not repurchase any shares of its common stock under the 2019 share repurchase program for the year ended December 31, 2021.retained earnings.

The following presents GPHC'sthe Company's share repurchases for the years ended December 31, 20202023, 2022, and 2019:2021:

Amount repurchased in millionsAmount RepurchasedNumber of Shares RepurchasedAverage Price
2020$316 23,420,010 $13.48 
2019$128 10,191,257 (a)$12.55 
(a) Includes 7,400,171 shares under the 2017 share repurchase program thereby completing that program.
Amount repurchased in millions, except share and per share amountsAmount RepurchasedNumber of Shares RepurchasedAverage Price, per Share
2023$54 2,389,224 $22.80 
2022$28 1,315,839 $20.91 
2021$— — $— 

At December 31, 2021, GPHC2023, the Company had $147$565 million remainingavailable for additional repurchases under the 2023 and 2019 share repurchase program.programs.

During 20212023, 2022 and 2020,2021, GPHC paid cash dividends of $123 million, $92 million and $87 million, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and $85 million, respectively.liquidity considerations.

Adoption of New Accounting Standards

In December 2019,September 2022, the FASB issued ASU No. 2019-12,2022-04, Income Taxes (Topic 740)Liabilities - Supplier Finance Programs (Subtopic 405-50): SimplifyingDisclosure of Supplier Finance Program Obligations, which is intended to enhance the Accounting for Income Taxes. This amendment modifies ASC 740transparency of supplier finance programs and requires buyers in a supplier finance program to simplifydisclose sufficient information about the accounting for income taxes. The guidance is effective for fiscal years,program to allow a user of the financial statements to understand the program’s nature, activity during the period, changes from period to period, and interim periods within those fiscal years, beginning after December 15, 2020.potential magnitude. The Company adopted this new guidance duringstandard in the three months ended March 31, 2021. The Company’s adoptionfirst quarter of fiscal 2023 and did not result in any changes in accounting principle upon transition and thetransition. The adoption of this accounting standard did not have an impact toon the Company’s overall financial statements is immaterial.

51

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitationposition, results of the Effects of Reference Rate Reform on Financial Reporting. This standard provides temporary optional expedientsoperations and exceptions for applying GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The ASU can be adopted after its issuance date through December 31, 2022. The Company is currently evaluating the impact of this new accounting guidance.cash flows.

In October 2021, the FASB issued ASU No. 2021-08,Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities. Under the new guidance, the acquirer should determine what contract assets and/or contract liabilities it would have recorded under ASC 606 as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquiree. The recognition and measurement of those contract assets and contract liabilities will likely be comparable to what the acquiree has recorded on its books under ASC 606 as of the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, includingThe Company adopted this standard in an interim period, for any period for which financial statements have not yet been issued. However, adoption in an interim period other than the first quarter of fiscal quarter requires an entity to apply2023 with no material impact on the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance is adopted. The Company is currently evaluating the adoption date of ASU 2021-08 and the impact, if any, adoption will have on itsCompany's financial position and results of operations.

Accounting Standards Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This ASU clarifies that contractual sale restrictions should not be considered in measuring the fair value of equity securities. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods therein, with early adoption permitted. The Company will continue evaluating the impact of this ASU on its disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will continue evaluating the impact of this ASU on its disclosures.

















50

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 2.    SUPPLEMENTAL BALANCE SHEET DATA

The following tables provide disclosure related to the components of certain line items included in our consolidated balance sheets.on the Consolidated Balance Sheets.

Receivables, Net:
In millions20212020
Trade$803 $609 
Less: Allowance(18)(12)
785 597 
Other74 57 
Total$859 $654 

In millions20232022
Trade$739 $825 
Less: Allowance(23)(21)
716 804 
Other119 75 
Total$835 $879 

Inventories, Net by major class:
In millions20212020
Finished Goods$528 $471 
Work in Progress194 133 
Raw Materials473 349 
Supplies192 175 
Total$1,387 $1,128 

In millions20232022
Finished Goods$602 $515 
Work in Progress201 218 
Raw Materials684 645 
Supplies267 228 
Total$1,754 $1,606 

Property, Plant and Equipment, Net:

In millions20232022
Property, Plant and Equipment, at Cost:
Land and Improvements$195 $187 
Buildings(a)
1,122 1,067 
Machinery and Equipment(b)    
7,686 7,383 
Construction-in-Progress657 234 
9,660 8,871 
Less: Accumulated Depreciation(a)(b)
(4,668)(4,292)
Total$4,992 $4,579 
(a) Includes gross assets under finance lease of $146 million and related accumulated depreciation of $31 million as of December 31, 2023, and gross assets under finance lease of $146 million and related accumulated depreciation of $22 million as of December 31, 2022.
(b) Includes gross assets under finance lease of $51 million and related accumulated depreciation of $21 million as of December 31, 2023, and gross assets under finance lease of $51 million and related accumulated depreciation of $16 million as of December 31, 2022.















5251

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment, Net:
In millions20212020
Property, Plant and Equipment, at Cost:
Land and Improvements$175 $137 
Buildings(a)
908 671 
Machinery and Equipment(b)    
6,753 6,082 
Construction-in-Progress882 478 
8,718 7,368 
Less: Accumulated Depreciation(a)(b)
(4,041)(3,808)
Total$4,677 $3,560 
(a) Includes gross assets under finance lease of $114 million and related accumulated depreciation of $13 million as of December 31, 2021, and gross assets under finance lease of $106 million and related accumulated depreciation of $11 million as of December 31, 2020.
(b) Includes gross assets under finance lease of $39 million and related accumulated depreciation of $15 million as of December 31, 2021, and gross assets under finance lease of $36 million and related accumulated depreciation of $9 million as of December 31, 2020.

Other Accrued Liabilities:
In millions20212020
Fair Value of Derivatives, current portion$— $
Unfavorable Supply Agreement— 
Accrued Severance10 
Dividends Payable23 20 
Deferred Revenue29 21 
Accrued Customer Rebates41 40 
Other Accrued Taxes50 57 
Accrued Payables56 38 
Operating Lease Liabilities, current portion73 61 
Other(a)
110 42 
Total$399 $291 

In millions20232022
Operating Lease Liabilities, current portion$62 $66 
Accrued Payables61 66 
Other Accrued Taxes49 51 
Accrued Customer Rebates48 44 
Dividends Payable31 31 
Deferred Revenue30 32 
Income Tax Payable15 
Fair Value of Derivatives, current portion13 12 
Accrued Severance
Unfavorable Supply Agreement
Other(a)
78 97 
Total$395 $411 
(a) Other accrued expenses include several types of expenses such as accrued bonus, external outside services and production costs.

Other Noncurrent Liabilities:
In millions20212020
Deferred Revenue$$
Workers Compensation Reserve
Unfavorable Supply Agreement27 
Multi-employer Plans19 20 
Deferred Compensation21 16 
Operating Lease Liabilities, noncurrent portion193 157 
Other25 56 
Total$282 $292 

In millions20232022
Operating Lease Liabilities, noncurrent portion$189 $184 
FIN48 Liabilities38 
Deferred Compensation30 19 
Multi-Employer Plans17 18 
Workers Compensation Reserve
Deferred Revenue
Unfavorable Supply Agreement
Other68 22 
Total$360 $266 








53

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 3.    SUPPLEMENTAL CASH FLOW INFORMATION

Cash Flow (Used In) Provided by Operations Due to Changes in Operating Assets and Liabilities, net of acquisitions:
In millions202120202019
Receivables, Net$(106)$(216)$(108)
Inventories, Net(80)35 (73)
Other Current Assets(12)(5)(9)
Other Assets(22)(22)(8)
Accounts Payable77 71 (9)
Compensation and Employee Benefits(15)40 13 
Income Taxes(6)(4)
Interest Payable
Other Accrued Liabilities31 
Other Noncurrent Liabilities(72)34 11 
Total$(229)$(19)$(174)

In millions202320222021
Receivables, Net$(39)$(184)$(106)
Inventories, Net(117)(268)(80)
Other Current Assets(15)(12)
Other Assets(19)(1)(22)
Accounts Payable(140)132 77 
Compensation and Employee Benefits(25)87 (15)
Income Taxes(2)(6)
Interest Payable12 16 
Other Accrued Liabilities(22)(11)
Other Noncurrent Liabilities50 11 (72)
Total$(308)$(218)$(229)

52

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Cash paid for interest and cash paid, net of refunds, for income taxes was as follows:
In millions202120202019
Interest$116 $120 $127 
Income Taxes$25 $27 $26 

In millions202320222021
Interest$221 $176 $116 
Income Taxes$157 $43 $25 

NOTE 4.    BUSINESS COMBINATIONS

The Company accounts for acquisitions as business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”).

Bell Incorporated

On September 8, 2023, the Company completed the acquisition of Bell, adding three packaging facilities in Sioux Falls, South Dakota and Groveport, Ohio for $264 million, subject to customary working capital adjustments, using existing cash and borrowings under its revolving credit facility. The acquisition is reported within the Americas Paperboard Packaging reportable segment.

The preliminary purchase price allocation as of December 31, 2023 is as follows:

In millionsAmounts Recognized as of Acquisition Date (as adjusted)
Purchase Price$264 
Cash & Cash Equivalents
Receivables, Net19 
Inventories, Net17 
Property, Plant and Equipment30 
Intangible Assets(a)
161 
Other Assets15 
Total Assets Acquired245 
Current Liabilities11 
Other Noncurrent Liabilities12 
Total Liabilities Assumed23 
Net Assets Acquired222 
Goodwill42 
Purchase Consideration Transferred$264 
(a) Intangible Assets primarily consists of Customer Relationships with a weighted average life of approximately 15 years.

The purchase price has been preliminarily allocated to assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date and is subject to further adjustments in subsequent periods. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, which is expected to be deductible for tax purposes.

Tama Paperboard, LLC

On January 31, 2023, the Company completed the acquisition of Tama, a recycled paperboard manufacturing facility located in Tama, Iowa, from Greif Packaging LLC for approximately $100 million, using existing cash and borrowings under its revolving credit facility.

During the second quarter of 2023, the Company finalized the acquisition accounting adjustments for Tama and the purchase price has been allocated to assets acquired and liabilities assumed based on the fair values as of the acquisition date. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, which is expected to be deductible for tax purposes, and is reported within the Paperboard Manufacturing reportable segment.
53

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Americraft

On July 1, 2021, the Company acquired substantially all of the assets of Americraft. The Company paid approximately $292 million, using existing cash and borrowings under its revolving credit facility. The acquisition included 7 converting plantsseven packaging facilities across the United States.

The purchase price for Americraft has beenwas allocated to assets acquired and liabilities assumed based on the fair values as of the acquisition date and is subject to adjustments in subsequent periods as management finalizes its purchase price allocation, including the third-party valuations.date. Tangible assets and liabilities were valued as of the acquisition date using the indirect and direct methods of the cost approach and intangible assets were valued using a discounted cash flow analysis, which represents a Level 3 measurement. Management believes that the purchase price attributable to goodwill represents the benefits expected as the acquisition was made to continue to expand its product offering, to integrate paperboard from the Company's mills and to further optimize the Company's supply chain footprint. The assigned goodwill, which is deductible for tax purposes, is reported within the Americas Paperboard Packaging reportable segment.
54

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The preliminaryfinal purchase price allocation including immaterial measurement period adjustments, is as follows as of December 31, 2021:follows:

In millionsAmounts Recognized as of Acquisition Date (as adjusted)
Purchase Price$292 
Receivables, Net22 
Inventories, Net3736 
Property, Plant and Equipment, Net12294 
Intangible Assets, Net(a)
5474 
Other Assets
Total Assets Acquired236227 
Current Liabilities1213 
Total Liabilities Assumed1213 
Net Assets Acquired224214 
Goodwill6878 
Total Estimated Fair Value of Net Assets Acquired$292 
(a) Intangible Assets, Net, primarily consists of Customer Relationships with a weighted average life of approximately 15 years.

TheDuring the second quarter of 2022, the Company includedfinalized the results of operations of this acquisition in its Consolidated Statements of Income from the closing date of the acquisition. During 2021, Net Sales and Income from Operationsaccounting for Americraft.

Proforma disclosures were omitted for the Bell, Tama and Americraft acquisition were $108 million and $4 million, respectively.acquisitions as they do not have a significant impact on the Company’s financial results.

AR Packaging

On November 1, 2021, the Company completed the acquisition of AR Packaging, Group AB, Europe's second largest producer of fiber-basedpaperboard consumer packaging, by acquiring all the AR Packaging Group AB shares that were issued and outstanding as of the date of acquisition. The acquisition included 30 converting plantspackaging facilities in 13 countries and enhances the Company’s global scale, innovation capabilities, and value proposition for customers throughout Europe and bordering regions.

The total cash consideration for the AR AcquisitionPackaging acquisition was $1,412 million net of cash acquired of $75 million, paid in Euros through the use of deal contingent, foreign exchange forward contracts, purchased through the use of available borrowing capacity on the Company’s Senior Secured Revolving Credit Facilities and the $400 million Incremental Facility Amendment to the Fourth Amended and Restated Credit Agreement. For more information, see "Note 5 - Debt."

5554

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values as of the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes, and will be reported within the Europe reportable segment. The allocation of purchase price shown below remains preliminary and is subject to further adjustment, pending additional refinement and final completion of valuations, including but not limited to valuations of property and equipment, customer relationships and other intangible assets, and deferred tax liabilities. Goodwill is primarily attributed to synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from duplicative overhead, streamlined operations and enhanced operational efficiency.

In millions
Amounts Recognized as of Acquisition Date(a)
Total Purchase Consideration$1,487 
Cash Acquired75 
Receivables, Net212 
Inventories166 
Other Current Assets12 
Property, Plant and Equipment(b)
529 
Intangible Assets(c)
447 
Other Assets76 
Total Assets Acquired1,517 
Accounts Payable109 
Compensation and Employee Benefits12 
Other Accrued Liabilities101 
Short-Term Debt and Current Portion of Long-Term Debt
Long-Term Debt17 
Deferred Income Tax Liabilities164 
Accrued Pension and Postretirement Benefits50 
Other Noncurrent Liabilities41 
Noncontrolling Interests
Total Liabilities Assumed505 
Net Assets Acquired1,012 
Goodwill475 
Total Estimated Fair Value of Net Assets Acquired$1,487 
(a) The amounts were translated from Euro to USD using the rate at the acquisition date of 1.1539.
(b) Property, Plant and Equipment primarily consists of Machinery and Equipment of $371 million with a weighted average life of approximately 12 years.
(c) Intangible Assets primarily consists of Customer Relationships of $439 million with a weighted average life of approximately 15 years.

The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The fair values of the tangible assets acquired and liabilities assumed were preliminarily determined using the income and cost approaches. In many cases, the determination of the fair values required estimates about discount rates, future expected cash flows and other future events that are judgmental and subject to change. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements (“ASC 820”). Intangible assets consisting of customer relationships, technology, and trade names were valued using thea discounted cash flow analysis. The significant assumptions used to estimate the value of the customer relationships intangible assets included the discount rate, annual revenue growth rates, customer attrition rates, projected operating expenses, projected EBITDA margins, tax rate, depreciation, and contributory asset charge. Management believes that the purchase price attributable to goodwill represents the benefits expected, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from reduction of duplicative overhead, streamlined operations and enhanced operational efficiency. The assigned goodwill, which is not deductible for tax purposes, is reported within the Europe Paperboard Packaging reportable segment.

The final purchase price allocation is as follows:

In millions
Amounts Recognized as of Acquisition Date (as adjusted)(a)
Total Purchase Consideration$1,487 
Cash Acquired75 
Receivables, Net206 
Inventories166 
Other Current Assets12 
Property, Plant and Equipment(b)
556 
Intangible Assets(c)
409 
Other Assets62 
Total Assets Acquired1,486 
Accounts Payable109 
Compensation and Employee Benefits12 
Other Accrued Liabilities99 
Short-Term Debt and Current Portion of Long-Term Debt
Long-Term Debt17 
Deferred Income Tax Liabilities139 
Accrued Pension and Postretirement Benefits55 
Other Noncurrent Liabilities43 
Noncontrolling Interests
Total Liabilities Assumed485 
Net Assets Acquired1,001 
Goodwill486 
Total Estimated Fair Value of Net Assets Acquired$1,487 
(a) The amounts were translated from Euro to USD using the rate at the acquisition date of 1.1539.
(b) Property, Plant and Equipment primarily consists of Machinery and Equipment of $374 million with a weighted average life of approximately 13 years.
(c) Intangible Assets primarily consists of Customer Relationships of $401 million with a weighted average life of approximately 15 years.

During the fourth quarter of 2022, the Company finalized the acquisition accounting for AR Packaging.

The Consolidated Statements of Operations include $1,135 million of Net Sales and $17 million of Loss from Operations for AR Packaging for the year ended December 31, 2022 and $176 million of Net Sales and $8 million of Loss from Operations for the year ended December 31, 2021. The year ended December 31, 2022 included $96 million of impairment charges related to the divestiture of its two packaging facilities in Russia. See “Note 19 - Impairment and Divestiture of Russian business” for further information.

5655

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company believes that the information provides a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities, but the potential for measurement period adjustments exists based on the Company’s continuing review of matters related to the acquisition. The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

Since the acquisition date, the results of operations for AR Packaging of $176 million of revenue and $8 million of operating income have been included within the consolidated statements of income for the twelve months ended December 31, 2021.

The following unaudited pro forma consolidated financial information for the twelve months ended December 31, 2021 combines the results of the Company for the year ended December 31, 2021 and the unaudited results of AR Packaging for the corresponding period through the Acquisition Date, November 1, 2021.

The following unaudited pro forma consolidated financial information for the twelve months ended December 31, 2020 combines the results of the Company for fiscal 2020 and the unaudited results of AR Packaging for the corresponding period. The unaudited pro forma consolidated financial information assumes that the Acquisition, which closed on November 1, 2021, was completed on January 1, 2020 (the first day of fiscal 2020).

The pro forma consolidated financial information has been calculated after applying the Company’s accounting policies and includes adjustments for amortization expense of acquired intangible assets, fair value adjustments for acquired inventory, property, plant and equipment and long-term debt. For fiscal 2020, non-recurring pro forma adjustments directly attributable to the Acquisition included pre-tax amounts of $16 million related to the acquisition accounting effect of inventories acquired and $74 million of transaction costs. The $74 million of transaction costs include the $48 million loss on the forward contracts that the Company used to partially fund the acquisition of AR Packaging. These costs will not effect the Company's income statement beyond 12 months after the acquisition date.

These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the Acquisition actually taken place on January 1, 2020. In addition, these results are not intended to be a projection of future results and do not reflect events that may occur after the Acquisition, including but not limited to revenue enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the Acquisition.

Pro Forma Twelve Months Ended (unaudited)
In millionsDecember 31, 2021December 31, 2020
Revenue$8,096 $7,562 
Net Income (Loss)$293 $94 

2020

On January 31, 2020, the Company acquired a folding carton facility from Quad, a commercial printing company. The converting facility is located in Omaha, Nebraska, close to many of the Company's existing food and beverage customers. The Company paid approximately $41 million using existing cash and borrowings under its revolving credit facility. The purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. The Company recorded $5 million related to identifiable intangible assets (customer relationships with useful lives of fifteen years), $43 million related to net tangible assets (primarily working capital, land/buildings and equipment) and a bargain purchase gain of $7 million as the net fair value of assets acquired and liabilities assumed was greater than the purchase price. During 2020, Net Sales and Loss from Operations for the Quad acquisition were $79 million and $1.0 million, respectively. During the first quarter of 2021, the acquisition accounting for Quad was finalized.

On April 1, 2020, the Company acquired the Consumer Packaging Group business from Greif, Inc., a leader in industrial packaging products and services. The acquisition included 7 converting plants across the United States and will allow the Company to increase its mill-to-converting plant integration over time. The Company paid $80 million using existing cash and borrowings under its revolving credit facility. The purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. The Company recorded $13 million related to identifiable intangible assets (customer relationships with useful lives of fifteen years) and $67 million related to net tangible assets (primarily working capital, land/buildings and equipment). During 2020, Net Sales and Loss from Operations for the Greif acquisition were $165 million and $14 million, respectively. During the second quarter of 2021, the acquisition accounting for the Greif was finalized.

57

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2019

On August 1, 2019, the Company completed the acquisition of Artistic, a diversified producer of folding cartons and CRB. The acquisition included 2 converting plants located in Auburn, Indiana and Elgin, Illinois and 1 CRB paperboard mill located in White Pigeon, Michigan. The Company paid $53 million using existing cash and borrowings under its revolving credit facility. Management believes that the purchase price attributable to goodwill represents the benefits expected as the acquisition was made to continue to integrate paperboard from the Company’s mills, to expand its product offering and to further optimize the Company’s supply chain footprint. During 2019, Net Sales and Income from Operations from the Artistic acquisition were $31 million and $2 million, respectively.

NOTE 5.    DEBT

Short-Term Debt and Current Portion of Long-Term Debt is comprised of the following:
In millions20212020
Short Term Borrowings$$
Current Portion of Finance Lease Obligations
Current Portion of Long-Term Debt263 489 
Total$279 $497 

In millions20232022
Short Term Borrowings$18 $16 
Current Portion of Finance Leases11 
Current Portion of Long-Term Debt(a)
739 26 
Total Short-Term Debt and Current Portion of Long-Term Debt$764 $53 
(a)Includes the 0.821% and 4.125% Senior Notes due 2024.

Short-term borrowings are principally at the Company’s international subsidiaries. The weighted average interest rate on short-term borrowings as of December 31, 20212023 and 20202022 was 6.5% and 4.9%6.2%, respectively.

5856

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Long-Term Debt is comprised of the following:
In millions20212020
Senior Notes with interest payable semi-annually at 4.75%(a)
$— $425 
Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.89%, payable in 2022(a)
250 250 
Senior Notes with interest payable semi-annually at 0.821%, effective rate of 0.83%, payable in 2024(b)
400 — 
Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.15%, payable in 2024(a)
300 300 
Senior Notes with interest payable semi-annually at 1.512%, effective rate of 1.52%, payable in 2026(b)
400 — 
Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.80%, payable in 2027(b)
300 300 
Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.54%, payable in 2028(b)
450 450 
Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.54%, payable in 2029(b)
350 350 
Senior Notes (€290 million) with interest payable semi-annually at 2.625% , effective rate of 2.66%, payable in 2029(b)
330 — 
Senior Notes with interest payable semi-annually at 3.75% , effective rate of 3.80%, payable in 2030(b)
400 — 
Green Bond, net of unamortized premium with interest payable at 4.00%, effective rate of 1.72%, payable in 2026(b)
110 — 
Senior Secured Term Loan A-2 Facility with interest payable quarterly at 2.67%, effective rate of 2.68% payable in 2028(b)
425 — 
Senior Secured Term Loan A-3 Facility with interest payable monthly payable at floating rates (2.10% at December 31, 2021), effective rate of 2.12%, payable in 2028(b)
250 — 
Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (1.86% at December 31, 2021) payable through 2026(b)
543 1,360 
Senior Secured Term Loan Facility (€210 million) with interest payable at various dates at floating rates (1.63% at December 31, 2021) payable through 2026(b)
239 — 
Senior Secured Revolving Credit Facilities with interest payable at floating rates (1.93% at December 31, 2021) payable in 2026(b)(c)
920 84 
Finance Leases and Financing Obligations146 139 
Other
Total Long-Term Debt5,822 3,663 
Less: Current Portion270 494 
Total Long-Term Debt Excluding Current Portion5,552 3,169 
Less: Unamortized Deferred Debt Issuance Costs37 22 
Total$5,515 $3,147 

In millions20232022
Senior Notes with interest payable semi-annually at 0.821%, effective rate of 0.82%, payable in 2024(a)
$400 $400 
Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.13%, payable in 2024(b)
300 300 
Senior Notes with interest payable semi-annually at 1.512%, effective rate of 1.52%, payable in 2026(a)
400 400 
Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.78%, payable in 2027(a)
300 300 
Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.53%, payable in 2028(a)
450 450 
Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.53%, payable in 2029(a)
350 350 
Senior Notes (€290 million) with interest payable semi-annually at 2.625%, effective rate of 2.65%, payable in 2029(a)
321 311 
Senior Notes with interest payable semi-annually at 3.75%, effective rate of 3.79%, payable in 2030(a)
400 400 
Green Bond, net of unamortized premium with interest payable at 4.00%, effective rate of 1.72%, payable in 2026(a)
106 108 
Senior Secured Term Loan A-2 Facility with interest payable quarterly at 2.67%, effective rate of 2.68% payable in 2028(a)
425 425 
Senior Secured Term Loan A-3 Facility with interest payable monthly payable at floating rates (6.57% at December 31, 2023), effective rate of 6.59%, payable in 2028(a)
250 250 
Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (6.32% at December 31, 2023) payable through 2026(a)
508 529 
Senior Secured Term Loan Facility (€206 million) with interest payable at various dates at floating rates (5.23% at December 31, 2023) payable through 2026(a)
227 225 
Senior Secured Revolving Credit Facilities with interest payable at floating rates (6.96% at December 31, 2023) payable in 2026(a)(c)
774 634 
Finance Leases161 170 
Other15 
Total Long-Term Debt Including Current Portion5,378 5,267 
Less: Current Portion746 37 
Total Long-Term Debt Excluding Current Portion4,632 5,230 
Less: Unamortized Deferred Debt Issuance Costs23 30 
Total Long-Term Debt$4,609 $5,200 
(a)Guaranteed by Graphic Packaging International Partners, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“GPIP”) and certain domestic subsidiaries.
(b) Guaranteed by GPHC and certain domestic subsidiaries
(b) Guaranteed by GPIP and certain domestic subsidiariessubsidiaries.
(c) The weighted average effective interest rates for the Company’s Senior Secured Revolving Credit Facilities were 1.63%6.61% and 2.06%3.52% as of December 31, 20212023 and 2020,2022, respectively.

20212023
On February 7, 2023 Graphic Packaging International, LLC, a Delaware limited liability company and a direct subsidiary of GPIP (“GPIL”) entered into Amendment No. 3 to the Fourth Amended and Restated Credit Agreement (the “Third Amendment”). The Third Amendment provides for a future replacement floating interest rate benchmark (the Canadian Overnight Repo Rate Average “CORRA”) to take effect upon the cessation of the Canadian Dollar Offered Rate (“CDOR”) for Canadian Dollar borrowings under the domestic revolving credit facility. The Third Amendment also modified the borrowing mechanics for certain term Secured Overnight Financing Rate (“SOFR”) loans under the domestic revolving line of credit.

On January 14, 2021, the Company drew the $425 million Incremental Term A-2 Facility (as hereinafter defined) and used the proceeds, together with cash on hand, to redeem its 4.75% Senior Notes due in 2021.

On March 8, 2021, GPIL completed a private offering of $400 million aggregate principal amount of its 0.821% Senior Secured Notes due 2024 and $400 million aggregate principal amount of its 1.512% Senior Secured Notes due 2026. The net proceeds were used by the Company to repay a portion of the outstanding borrowings under GPIL's term loan credit facilities, which is under its senior secured credit facility.
5957

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On April 1, 2021, GPIL entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) to extend the maturity date of certain of its senior secured term loan facilities and senior secured revolving credit facilities and to amend certain other terms of the agreement, including revised debt covenants and collateral requirements. Under the terms of the agreement, $975 million of the Company’s senior secured term loan facilities remains outstanding. The Company added approximately $400 million to its senior secured revolving credit facilities. $550 million of the senior secured term loan facilities and all of the senior secured revolving credit facility loans continue to bear interest at a floating rate per annum ranging from LIBOR plus 1.25% to LIBOR plus 2.00%, determined using a pricing grid based upon the Company’s consolidated total leverage ratio from time to time, and the maturity for these loans were extended from January 1, 2023 to April 1, 2026. $425 million of the senior secured term loan facilities, which is a Farm Credit System incremental term loan (the “Incremental Term A-2 Facility Amendment”) continue to bear interest at a fixed rate per annum equal to 2.67% and matures on their originally scheduled maturity date of January 14, 2028. As long as the Incremental Term A-2 Facility Amendment is outstanding,GPIL will be eligible to receive an annual patronage credit from the participating banks, which will be paid in cash and stock in the lead member bank. Patronage payable each year is variable and based on the individual financial performance of each of the member banks then participating in the loan.

2022
On July 22, 2021, GPIL entered into an Incremental Facility Amendment to the Fourth Amended and Restated Credit Agreement for a second Farm Credit System incremental term loan (the “Incremental Term A-3 Facility”). The Incremental Term A-3 Facility is a senior secured term loan in the aggregate principal amount of $250 million maturing on July 22, 2028. The Incremental Term A-3 Facility bears interest at a floating rate ranging from LIBOR plus 1.50% to LIBOR plus 2.25%, determined using a pricing grid based upon GPIL’s consolidated leverage ratio. As long as the Incremental Term A-3 Facility is outstanding, GPIL will be eligible to receive an annual patronage credit from the participating banks, which will be paid in cash and stock in the lead member bank. Patronage payable each year is variable and based on the individual financial performance of each of the member banks then participating in the loan. The Incremental Term A-3 Facility is governed by the same covenants as are set forth in the Fourth Amended and Restated Credit Agreement and is secured by a first priority lien and security interest in certain assets of GPIL.

On July 23, 2021,November 4, 2022, GPIL entered into Amendment No. 1 to the Fourth Amended and Restated Credit Agreement and the Fourth Amended and Restated Guarantee and Collateral Agreement and Incremental Facility Amendment (the “First Amendment”). The First Amendment provided for a delayed draw term loan facility in an aggregate amount of €210 million and a €25 million increase to the existing Euro-denominated revolving credit facility. The new term loan facility was drawn on October 29, 2021, and bears interest at a floating rate ranging from LIBOR plus 1.125% to LIBOR plus 1.75%, determined using a pricing grid based upon GPIL’s consolidated total leverage ratio from time to time. The new term loan facility is governed by the same covenants as set forth in the Fourth Amended and Restated Credit Agreement and is secured by a first priority lien and security interest in certain assets of GPIL.

On September 29, 2021, GPIL completed a $100 million tax-exempt green bond transaction through the Michigan Strategic Fund’s Private Activity Bond Program (the “Green Bonds”). The Green Bonds are special limited obligations of the Michigan Strategic Fund, as issuer, payable from and secured by a pledge of payments to be made by GPIL under a loan agreement between the Michigan Strategic Fund and GPIL. The Green Bonds mature in 2061 and include a mandatory purchase on October 1, 2026. The Green Bonds were issued at a price of 110.99% and bear interest at an annual rate of 4.0%. The equivalent yield is 1.70%. The net proceeds of $109.5 million were used to fund a portion of its spend on the CRB platform optimization project that includes the construction of a new CRB machine at its Kalamazoo, Michigan mill. The bonds have been designated as Green Bonds primarily because the proceeds were used to finance a solid waste disposal/recycling facility resulting in diversion of waste from landfills. In addition to the solid waste recycling aspect, the project improves the environmental footprint of its CRB mill system through expected reductions in water usage, energy consumption and greenhouse gas emissions.

On October 6, 2021, GPIL entered into a $400 million Incremental Facility Amendment2 to the Fourth Amended and Restated Credit Agreement (the "Incremental Term A-4 Facility"“Second Amendment”). The Incremental Term A-4 Facility hasSecond Amendment provided for a delayed draw feature,change in the floating interest rate benchmark for the domestic revolving credit facility and the Company funded the newUSD denominated term loan on October 29, 2021.loans, from LIBOR-based to Term SOFR plus 10bps. The Incremental Term A-4 Facility was collateralized by the same assets as GPIL’s Senior Secured Facilities on a pari passu basis. The Incremental Term A-4 Facility bore interest at a floating rate per annum equalSecond Amendment also added JSC AR Packaging to the Base Rate,Schedule of Permitted Asset Sales to facilitate the Euro currency Rate plus 0.875%, orsale of the Daily Floating LIBOR Rate plus 0.875%, as selected by the Company. The loan was repaid on November 19, 2021 with the proceeds from the 3.75% senior unsecured notes due 2030.

Company's Russian operations.
On November 19, 2021, GPIL completed a private offering of $40015, 2022, the Company drew $250 million aggregate principal amount of 3.750% senior unsecured notes due 2030 (the “Dollar Notes”) and €290 million aggregate principal amount of 2.625% senior unsecured notes due 2029 (the “Euro Notes”). The net proceeds offrom the Dollar Notes were used to repay in full the term loan borrowed under the Incremental Term A-4 Loan, which was under its senior secured domestic revolving credit facility. The netfacilities and used the proceeds, of the Euro Notes were usedtogether with cash on hand, to repay revolver borrowings outstanding underredeem its senior secured credit facility.
60

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2020

On March 6, 2020, GPIL completed a private offering of $450 million aggregate principal amount of its senior unsecured notes due 2028. The4.875% Senior Notes bear interest at an annual rate of 3.50%. The net proceeds were used by the Company to repay a portion of the outstanding borrowings under GPIL's revolving credit facility, which is under its senior secured credit facility.

On August 28, 2020, GPIL completed a private offering of $350 million aggregate principal amount of its senior unsecured notes due 2029. The Senior Notes bear interest at an annual rate of 3.50%. The net proceeds were used by the Company to repay a portion of the outstanding borrowings under GPIL's revolving credit facility, which is under its senior secured credit facility.in 2022.

The following describes the Company's senior secured term loans and revolving credit facilities within the Fourth Amended and Restated Credit Agreement:

Document(a)
ProvisionExpiration
Fourth Amended and Restated Credit Agreement
• Increased the domestic revolving credit facility by $400 million to $1,850 million.
• Increased the European revolving credit facility by €7 million to €145 million.
• Decreased the Japanese revolving credit facility by ¥850 million to ¥1,650 million, and
• Reduced the term loan by approximately $5 million to$550to $550 million. LIBOR plus variable spread (between 125 basis points and 200 basis points) depending on consolidated total leverage ratio.
April 2026
Amendment 1Increased the European revolving credit facility by €25 million to €170 million. Added Incremental EUR Term Loan Facility of €210 million.April 2026
Incremental Term A-2 Facility AmendmentIncremental $425 million term loan facility under the Fourth Amended and Restated Credit Agreement with a delayed draw feature, which was exercised in January 2021.January 2028
Incremental Term A-3 Facility AmendmentIncremental $250 million term loan facility under the Fourth Amended and Restated Credit Agreement, which was exercised in July 2021.July 2028
Second Incremental Term A-4 Facility AmendmentIncremental $400 million term loan facility under the Fourth Amended and Restated Credit Agreement, which was funded in October 2021, and settled in November 2021.November 2021
(a) The Company's obligations under the Fourth Amended and Restated Credit Agreement (as amended by the Incremental Term A-3 Facility Amendment, the First Amendment, and the Incremental Term A-4 Facility Amendment and the Second Amendment (collectively, the “Current Credit Agreement”) are secured by substantially all of the Company's domestic assets.







0
6158

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

At December 31, 2021,2023, the Company and its U.S. and international subsidiaries had the following commitments, amounts outstanding and amounts available under revolving credit facilities:
In millionsTotal CommitmentsTotal OutstandingTotal Available
Senior Secured Domestic Revolving Credit Facility (a)
$1,850 $850 $978 
Senior Secured International Revolving Credit Facilities208 70 138 
Other International Facilities70 18 52 
Total$2,128 $938 $1,168 

In millionsTotal CommitmentsTotal OutstandingTotal Available
Senior Secured Domestic Revolving Credit Facility(a)
$1,850 $774 $1,071 
Senior Secured International Revolving Credit Facilities200 — 200 
Other International Facilities53 24 29 
Total$2,103 $798 $1,300 
(a) In accordance with its debt agreements, the Company's availability under its revolving credit facilities has been reduced by the amount of standby letters of credit issued of $22$5 million as of December 31, 2021.2023. These letters of credit are primarily used as security against its self-insurance obligations and workers' compensation obligations. These letters of credit expire at various dates through early 2023throughout 2024 unless extended.

Long-Term Debt maturities (excluding finance leases and finance obligations)leases) are as follows:
In millions
2022$263 
202333 
2024740 
202539 
20262,095 
After 20262,506 
Total5,676 

In millions
2024$739 
202543 
20261,938 
2027300 
20281,125 
After 20281,072 
Total$5,217 

Covenant Agreements

The CurrentCovenants in the Company's Fourth Amended and Restated Credit Agreement (the “Current Credit Agreement”) and the indentures governing the 4.875% Senior Notes due 2022, 0.821% Senior Notes due 2024, 4.125% Senior Notes due 2024, 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029 and 3.75% Senior Notes due 2030 (the “Indentures”), limit the Company's ability to incur additional indebtedness. Additional covenants contained in the Current Credit Agreement and the Indentures may, among other things, restrict the ability of the Company to dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase stock, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the Indentures, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates. Such restrictions could limit the Company’s ability to respond to changing market conditions, fund its capital spending program, provide for unexpected capital investments or take advantage of business opportunities.

As of December 31, 2021,2023, the Company was in compliance with the covenants in the Current Credit Agreement and the Indentures.

NOTE 6.    LEASES

The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for warehouses, corporate and regional offices, and machinery and equipment. The Company enters into lease contracts ranging from one to 25 years with the majority of leases having terms of three to seven years, many of which include options to extend in various increments. Variable lease costs consist primarily of variable warehousing costs, common area maintenance, taxes, and insurance. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.

As the implicit rate is not readily determinable for most of the Company’s leases agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company's credit spread adjusted for current market factors, including fixed rate swaps, LIBOR,EURIBOR, and foreign currency rates.

6259

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The components of lease costs are as follows:
Year Ended December 31,
In millions20212020
Finance lease costs:
Amortization of right-of-use asset$$
Interest on lease liabilities
Operating lease costs75 72 
Short-term lease costs23 13 
Variable lease costs10 10 
Total lease costs, net124 111 

Year Ended December 31,
In millions20232022
Finance lease costs:
Amortization of right-of-use asset$14 $11 
Interest on lease liabilities
Operating lease costs86 82 
Short-term lease costs29 21 
Variable lease costs14 16 
Total lease costs, net$152 $138 

Supplemental cash flow information related to leases was as follows:
Year Ended December 31,
In millions20212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$76 $72 
Operating cash flows from finance leases
Financing cash flows from finance leases
Right-of-use assets obtained in exchange for lease obligations:
Operating leases118 71 
Finance leases11 — 

Year Ended December 31,
In millions20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$84 $83 
Operating cash flows from finance leases
Financing cash flows from finance leases
Right-of-use assets obtained in exchange for lease obligations:
Operating leases70 52 
Finance leases— 42 


6360

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Supplemental balance sheet information related to leases was as follows:
December 31,
In millions, except lease term and discount rateBalance Sheet Classification20212020
Operating Leases:
     Operating lease right-of-use assetOther Assets$258 $208 
Current operating lease liabilitiesOther Accrued Liabilities$73 $61 
Noncurrent operating lease liabilitiesOther Noncurrent Liabilities193 157 
     Total operating lease liabilities$266 $218 
Finance Leases and Financing Obligations:
Property, Plant and Equipment$153 $142 
Accumulated depreciation(28)(20)
    Property, Plant and Equipment, net$125 $122 
Current finance lease liabilitiesShort-Term Debt and Current Portion of Long-Term Debt$$
Noncurrent finance lease liabilities and financing obligationsLong-Term Debt139 134 
     Total finance lease liabilities and financing obligations$146 $139 
Weighted Average Remaining Lease Term (Years)
     Operating leases65
     Finance leases1516
Weighted Average Discount Rate
     Operating leases2.74 %3.24 %
     Finance leases5.91 %5.60 %

December 31,
In millions, except lease term and discount rateBalance Sheet Classification20232022
Operating Leases:
Operating lease right-of-use assetOther Assets$228 $245 
Current operating lease liabilitiesOther Accrued Liabilities$62 $66 
Noncurrent operating lease liabilitiesOther Noncurrent Liabilities189 184 
Total operating lease liabilities$251 $250 
Finance Leases:
Property, Plant and Equipment$197 $197 
Accumulated depreciation(52)(38)
Property, Plant and Equipment, net$145 $159 
Current finance lease liabilitiesShort-Term Debt and Current Portion of Long-Term Debt$$11 
Noncurrent finance lease liabilitiesLong-Term Debt154 159 
Total finance lease liabilities$161 $170 
Weighted Average Remaining Lease Term (Years):
Operating leases67
Finance leases1616
Weighted Average Discount Rate:
Operating leases4.10 %3.76 %
Finance leases5.17 %5.31 %

Maturities of lease liabilities are as follows:
In millions
Year ending December 31,Operating LeasesFinance Leases
2022$78 $17 
202362 15 
202443 14 
202531 14 
202620 13 
Thereafter54 132 
Total lease payments$288 $205 
    Less imputed interest(22)(69)
Total$266 $136 

In millions
Year ending December 31,Operating LeasesFinance Leases
2024$69 $16 
202556 15 
202643 14 
202734 15 
202821 16 
Thereafter59 165 
Total lease payments$282 $241 
Less imputed interest(31)(80)
Total$251 $161 


6461

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 7.    STOCK INCENTIVE PLANS

The Company has one active equity compensation plan from which new grants may be made, the Graphic Packaging Holding Company 2014 Omnibus Stock and Incentive Compensation Plan (the “2014 Plan”). The 2014 Plan allows for granting shares of stock, options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), restricted stock awards (“RSAs”), and other types of stock-based and cash awards. Awards under the 2014 Plan vest and expire in accordance with terms established at the time of grant. Shares issued pursuant to awards under the 2014 Plan are from GPHC’s authorized but unissued shares. Compensation costs are recognized on a straight-line basis over the requisite service period of the award and are adjusted for actual performance for performance-based awards. As of December 31, 2021,2023, there were 11.68.9 million shares remaining available to be granted under the 2014 Plan.

Stock Awards, Restricted Stock and Restricted Stock Units

Under the 2014 Plan alland related RSU grant agreements, RSUs granted to employees generally vest and become payable in three years from the date of grant. RSUs granted to employees generally contain some combination of service and performance objectives based on various financial targets and relative total shareholder return that must be met for the RSUs to vest. RSUs granted as deferred compensation for non-employee directors are fully vested but not payable until the distribution date elected by the director. RSAsStock awards issued to non-employee directors as part of their compensation for service on the Board are unrestricted on the grant date.

Data concerning RSUs and RSAsStock Awards granted duringin the years ended December 31 is as follows:
202120202019
RSUs — Employees1,680,997 1,655,854 2,187,603 
Weighted-average grant date fair value$16.14 $15.40 $12.37 
Stock Awards — Board of Directors55,055 71,160 74,760 
Weighted-average grant date fair value$17.80 $13.49 $12.84 

202320222021
RSUs — Employees and Non-Employee Directors1,780,345 1,943,769 1,680,997 
Weighted-average grant date fair value$23.74 $20.19 $16.14 
Stock Awards — Board of Directors25,588 34,160 55,055 
Weighted-average grant date fair value$25.01 $20.49 $17.80 

A summary of the changes in the number of unvested RSUs from December 31, 20182020 to December 31, 20212023 is presented below:

RSUsWeighted Average Grant Date Fair Value
Outstanding — December 31, 20184,460,034 $13.27 
Granted(a)
2,187,603 12.37 
Released(900,516)12.00 
Forfeited(187,729)13.66 
Performance adjustment(b)
(499,702)11.57 
Outstanding — December 31, 20195,059,690 $13.27 
Granted(a)
1,655,854 15.40 
Released(1,415,365)12.91 
Forfeited(158,473)14.25 
RSUsRSUsWeighted Average Grant Date Fair Value
Outstanding — December 31, 2020Outstanding — December 31, 20205,141,706 $14.02 
Granted(a)
Granted(a)
1,680,997 16.14 
ReleasedReleased(2,121,203)14.88 
ForfeitedForfeited(359,100)14.39 
Performance adjustment(b)
Performance adjustment(b)
587,461 15.09 
Outstanding — December 31, 2021Outstanding — December 31, 20214,929,861 $14.47 
Granted(a)
Released
Forfeited
Performance adjustment(b)
Outstanding — December 31, 2022
Outstanding — December 31, 2022
Outstanding — December 31, 2022
Granted(a)
Released
Forfeited
Performance adjustment(b)
Outstanding — December 31, 2023
(a) Grant activity for all performance-based RSUs is disclosed at target.
(b) Reflects the number of RSUs paid out above and below target levels based on actual performance measured at the end of the performance period.

62

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The initial value of the service-based RSUs is generally based on the closing market value of GPHC’s common stock on the date of grant.grant, discounted to reflect that the RSUs do not accrue dividends during the vesting period. The 20212023 performance-based RSU grants were valued using a Monte Carlo simulation as the total shareholder return contains a market condition. RSUs are recorded in Shareholders' Equity. The unrecognized expense at December 31, 20212023 is approximately $31$49 million and is expected to be recognized over a weighted average period of 2 years.
65

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The value of stock awards granted to the Company's directors as compensation are based on the market value of GPHC’s common stock on the date of grant. These awards are unrestricted on the date of grant.

During 2023, 2022, and 2021, 2020, and 2019, $27$44 million, $34 million and $22$27 million, respectively, were charged to compensation expense for stock incentive plans and is primarilysuch amounts are included in Selling, General and Administrative expenses in the Consolidated Statements of Operations.

During 2021, 2020,2023, 2022, and 2019,2021, RSUs with an aggregate fair value of $35$54 million, $23$44 million and $11$35 million, respectively, vested and were paid out. The RSUs vested and paid out in 20212023 were granted primarily during 2018.2020.

NOTE 8.    PENSIONS AND OTHER POSTRETIREMENT BENEFITS

DEFINED BENEFIT PLANS

The Company maintains both defined benefit pension plans and postretirement health care plans that provide medical and life insurance coverage to eligible salaried and hourly retired employees in North America and their dependents. The Company maintains international defined benefit pension plans which are either noncontributory or contributory and are funded in accordance with applicable local laws. Pension or termination benefits are based primarily on years of service and the employees’employee's compensation.

Currently, the North American plans are closed to newly-hired employees except as noted below. Effective July 1, 2011, the North American plans were frozen for most salaried and non-union hourly employees and replaced with a defined contribution plan.
During 2018, the Company began the process of terminating its largest U.S. pension plan (the "U.S. Plan"). This included freezing the plan as of December 31, 2018 and spinning off the active participants to the plan established as part of the NACP Combination (the "NACP Plan"). The NACP Plan is open for union and non-union hourly employees of locations that were part of the NACP Combination. During the third quarter of 2019, the Company offered a lump-sum benefit option to certain participants in the U.S. Plan. Lump sum payments of $150 million were paid in the fourth quarter of 2019 and the Company recognized a non-cash settlement charge of $39 million associated with the payouts. In the first quarter of 2020, the Company, using the assets held within the pension trust, purchased a group annuity contract that transferred the remaining pension obligation under the U.S. Plan of approximately $713 million to an insurance company. The Company incurred an additional non-cash settlement charge of $154 million related to this transfer. These non-cash settlement charges relate to Net Actuarial Loss previously recognized in Accumulated Other Comprehensive Loss.

As disclosed in "Note 1 - Nature of Business and Summary of Significant Accounting Policies," during the fourth quarter of 2021, the Company acquired substantially all the shares of AR Packaging. The business combination led to the Company acquiring approximately $53 million in pension benefit obligations and $1 million in pension plan assets.employees.

Pension and Postretirement Expense

The pension and postretirement expenses related to the Company’s plans consisted of the following:
 
 
Pension BenefitsPostretirement Benefits
Year Ended December 31,
In millions202120202019202120202019
Components of Net Periodic Cost:
Service Cost$15 $15 $14 $— $$— 
Interest Cost10 14 46 
Expected Return on Plan Assets(19)(21)(55)— — — 
Amortization of Actuarial Loss (Gain)10 (2)(2)(2)
  Net Curtailment/Settlement Loss— 154 39 — — — 
Net Periodic Cost (Benefit)$11 $167 $54 $(1)$— $(1)

 
 
Pension BenefitsPostretirement Benefits
Year Ended December 31,
In millions202320222021202320222021
Components of Net Periodic Cost:
Service Cost$$14 $15 $— $— $— 
Interest Cost22 12 10 
Expected Return on Plan Assets(23)(21)(19)— — — 
Amortization of Actuarial Loss (Gain)(3)(2)(2)
Net Periodic Cost (Benefit)$13 $$11 $(1)$(1)$(1)

66

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Certain assumptions used in determining the pension and postretirement expenses were as follows:
 Pension BenefitsPostretirement Benefits
Year Ended December 31,
202120202019202120202019
Weighted Average Assumptions:
Discount Rate2.11 %2.69 %4.14 %2.52 %3.22 %4.29 %
Rate of Increase in Future Compensation Levels3.62 %2.36 %2.37 %— — — 
Expected Long-Term Rate of Return on Plan Assets3.59 %4.12 %4.74 %— — — 
Initial Health Care Cost Trend Rate— — — 6.40 %6.65 %9.00 %
Ultimate Health Care Cost Trend Rate— — — 4.50 %4.50 %4.50 %
Ultimate Year— — — 202820282028


 Pension BenefitsPostretirement Benefits
Year Ended December 31,
202320222021202320222021
Weighted Average Assumptions:
Discount Rate4.86 %2.46 %2.11 %5.12 %2.92 %2.52 %
Rate of Increase in Future Compensation Levels3.16 %1.80 %3.62 %— — — 
Expected Long-Term Rate of Return on Plan Assets5.59 %3.86 %3.59 %— — — 
Initial Health Care Cost Trend Rate— — — 7.25 %6.15 %6.40 %
Ultimate Health Care Cost Trend Rate— — — 4.50 %4.50 %4.50 %
Ultimate Year— — — 203220312028

6763

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Funded Status

The following table sets forth the funded status of the Company’s pension and postretirement plans as of December 31:

Pension BenefitsPostretirement Benefits Pension BenefitsPostretirement Benefits
In millionsIn millions2021202020212020In millions2023202220232022
Change in Benefit Obligation:Change in Benefit Obligation:
Benefit Obligation at Beginning of YearBenefit Obligation at Beginning of Year$593 $1,256 $36 $36 
Benefit Obligation at Beginning of Year
Benefit Obligation at Beginning of Year
Service CostService Cost15 15 — 
Interest CostInterest Cost10 14 
Net Actuarial (Gain) Loss(21)62 (3)— 
Net Actuarial Loss (Gain)
Foreign Currency ExchangeForeign Currency Exchange(4)— — 
Settlements— (743)— — 
Benefits Paid
Benefits Paid
Benefits PaidBenefits Paid(19)(20)(1)(2)
AcquisitionAcquisition53 — — — 
Other
Other
Other
Benefit Obligation at End of YearBenefit Obligation at End of Year$627 $593 $33 $36 
Change in Plan Assets:Change in Plan Assets:
Change in Plan Assets:
Change in Plan Assets:
Fair Value of Plan Assets at Beginning of Year
Fair Value of Plan Assets at Beginning of Year
Fair Value of Plan Assets at Beginning of YearFair Value of Plan Assets at Beginning of Year$516 $1,172 $— $— 
Actual Return on Plan AssetsActual Return on Plan Assets28 58 — — 
Employer ContributionsEmployer Contributions33 19 
Foreign Currency ExchangeForeign Currency Exchange(2)— — 
Benefits PaidBenefits Paid(19)(20)(1)(1)
AcquisitionAcquisition— — — 
Settlements— (721)— — 
Other
Other
Other
Fair Value of Plan Assets at End of YearFair Value of Plan Assets at End of Year$557 $516 $— $— 
Plan Assets Less than Projected Benefit ObligationPlan Assets Less than Projected Benefit Obligation$(70)$(77)$(33)$(36)
Amounts Recognized in the Consolidated Balance Sheets Consist of:
Amounts Recognized on the Consolidated Balance Sheets Consist of:
Amounts Recognized on the Consolidated Balance Sheets Consist of:
Amounts Recognized on the Consolidated Balance Sheets Consist of:
Pension Assets
Pension Assets
Pension AssetsPension Assets$43 $21 $— $— 
Accrued Pension and Postretirement Benefits Liability — CurrentAccrued Pension and Postretirement Benefits Liability — Current$(4)$(2)$(3)$(2)
Accrued Pension and Postretirement Benefits Liability — NoncurrentAccrued Pension and Postretirement Benefits Liability — Noncurrent$(109)$(96)$(30)$(34)
Accumulated Other Comprehensive Income:Accumulated Other Comprehensive Income:
Net Actuarial Loss (Gain)Net Actuarial Loss (Gain)$71 $106 $(1)$(1)
Net Actuarial Loss (Gain)
Net Actuarial Loss (Gain)
Prior Service Cost (Credit)Prior Service Cost (Credit)$$$(16)$(15)
Weighted Average Calculations:Weighted Average Calculations:
Discount Rate
Discount Rate
Discount RateDiscount Rate2.46 %2.11 %2.92 %2.52 %4.69 %4.86 %4.96 %5.12 %
Rates of Increase in Future Compensation LevelsRates of Increase in Future Compensation Levels1.80 %3.62 %— — 
Initial Health Care Cost Trend RateInitial Health Care Cost Trend Rate— — 6.15 %6.40 %Initial Health Care Cost Trend Rate— — — 8.50 8.50 %7.25 %
Ultimate Health Care Cost Trend RateUltimate Health Care Cost Trend Rate— — 4.50 %4.50 %Ultimate Health Care Cost Trend Rate— — — 4.45 4.45 %4.50 %
Ultimate YearUltimate Year— — 20312028Ultimate Year— — — 203320332032




6864

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company determined pension expense using both the fair value of assets and a calculated value that averages gains and losses over a period of years. Investment gains or losses represent the difference between the expected and actual return on assets. As of December 31, 2021,2023, the net actuarial loss in accumulated other comprehensive loss was $71$83 million. These net losses may increase future pension expense if not offset by (i) actual investment returns that exceed the assumed investment returns, or (ii) other factors, including reduced pension liabilities arising from higher discount rates used to calculate pension obligations, or (iii) other actuarial gains, including whether such accumulated actuarial losses at each measurement date exceed the “corridor” determined under the Compensation — Retirement Benefits topic of the FASB Codification. For the largest plan, the actuarial loss is amortized over the average remaining service period of employees expected to receive benefits.

The discount rate used to determine the present value of future pension obligations at December 31, 20212023 was based on a yield curve constructed from a portfolio of high-quality corporate debt securities with maturities ranging from 1 year to 30 years. Each year’s expected future benefit payments were discounted to their present value at the spot yield curve rate thereby generating the overall discount rate for the Company’s pension obligations. The weighted average discount rate used to determine the pension obligations was 2.46%4.69% and 2.11%4.86% in 20212023 and 2020,2022, respectively.

The pension net actuarial gainloss of $21$10 million was primarily due to changes in the discount rate of $20 million.rate. The weighted average discount rate at December 31, 20212023 was 2.46%4.69% compared to 2.11%4.86% at December 31, 2020.2022.

Accumulated Benefit Obligation

The accumulated benefit obligation, (“ABO”), for all defined benefit pension plans was $621$491 million and $588$465 million at December 31, 20212023 and 2020,2022, respectively. The projected benefit obligation (“PBO”) and fair value of plan assets where the PBO exceeded plan assets were $383$323 million and $361$311 million at December 31, 2023 and 2022, respectively. The ABO and fair value of plan assets where the ABO exceeded plan assets were $378$319 million and $357$304 million at December 31, 2023 and 2022, respectively.

Employer Contributions

The Company made contributions of $33$15 million and $19$24 million of contributions to its pension plans during 20212023 and 2020,2022, respectively. During 2021,2022, the Company made a $14$6 million contribution to itsthe remaining U.S. defined benefit plan by effectively utilizing a portion of the excess balance related to the terminated U.S. defined benefit plan. For 2022, the Company expects to make a contribution of $6 million by utilizing the excess balance. Excluding this $6 million contribution, for 2022, theplan terminated in 2020. The Company expects to make contributions in the range of $10 million to $20 million to its pension plan.in 2024.

The Company also made postretirement health care benefit payments of $2 million and $1 million during 20212023 and 2020.2022, respectively. For 2022,2024, the Company expects to make approximately $2 million of contributions to its postretirement health care plans.

Pension Assets

The Company’s overall investment strategy is to achieve a mix of investments for long-term growth and near-term benefit payments through diversification of asset types, fund strategies and fund managers. Investment risk is measured on an on-going basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. The plans invest in the following major asset categories: cash, equity securities, fixed income securities, real estate and diversified growth funds. At December 31, 20212023 and 2020,2022, pension investments did not include any direct investments in the Company’s stock or the Company’s debt.

The Company implemented a de-risking or liability driven investment strategy for its U.S.North America. and U.K. pension plans. This strategy moved assets from return seeking (equities) to investments that mirror the underlying benefit obligations (fixed income). 

The weighted average allocation of plan assets and the target allocation by asset category is as follows:
Target20212020
Cash%%%
Equity Securities24 26 24 
Fixed Income Securities48 46 62 
Other Investments27 25 13 
Total100 %100 %100 %

Target20232022
Cash%%%
Equity Securities17 25 26 
Fixed Income Securities78 65 45 
Other Investments25 
Total100 %100 %100 %

The plans’ investment in equity securities primarily includes investments in U.S. and international companies of varying sizes and industries. The strategy of these investments is to 1) exceed the return of an appropriate benchmark for such equity classes and 2) through diversification, reduce volatility while enhancing long term real growth.

65

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The plans’ investment in fixed income securities includes government bonds, investment grade bonds and non-investment grade bonds across a broad and diverse issuer base. The strategy of these investments is to provide income and stability and to diversify the fixed income exposure of the plan assets, thereby reducing volatility.
69

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company’s approach to developing the expected long-term rate of return on pension plan assets is based on fair values and combines an analysis of historical investment performance by asset class, the Company’s investment guidelines and current and expected economic fundamentals.

The following tables set forth, by category and within the fair value hierarchy, the fair value of the Company’s pension assets at December 31, 20212023 and 2020:2022:
Fair Value Measurements at December 31, 2021
 
 
 
 
In millions
TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Net Asset Value at December 31, 2021 (b)
Asset Category:
Cash$19 $17 $$— $
Equity Securities:
Domestic140 13 — 122 
Foreign— — — 
Fixed Income Securities254 19 234 — 
Other Investments:
Real estate— — — 
Liability Driven Investment90 31 59 — — 
Diversified growth fund (a)
39 — 32 — 
Total$557 $80 $321 $33 $123 

Fair Value Measurements at December 31, 2020
Fair Value Measurements at December 31, 2023

In millions

In millions
In millionsIn millionsTotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Net Asset Value at December 31, 2020 (b)
TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Net Asset Value at December 31, 2023(b)
Asset Category:Asset Category:
CashCash$$— $$— $
Cash
Cash
Equity Securities:Equity Securities:
Domestic
Domestic
DomesticDomestic118 12 — 101 
ForeignForeign— — — 
Fixed Income SecuritiesFixed Income Securities319 19 300 — — 
Other Investments:Other Investments:
Real estate23 — 14 — 
Diversified growth fund (a)
Diversified growth fund (a)
43 — 43 — — 
Diversified growth fund(a)
Diversified growth fund(a)
Insurance Contracts
TotalTotal$516 $31 $366 $14 $105 

Fair Value Measurements at December 31, 2022
In millionsTotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Net Asset Value at December 31, 2022(b)
Asset Category:
Cash$15 $10 $$— $
Equity Securities:
Domestic94 — 88 
Foreign— — — 
Fixed Income Securities180 15 165 — — 
Other Investments:
Real estate— — — 
Liability Driven Investment56 35 21 — — 
Diversified growth fund(a)
32 — 24 — 
Insurance Contracts— — — 
Total$397 $72 $201 $33 $91 
(a) The fund invests in a combination of traditional investments (equities, bonds, and foreign exchange), seeking to achieve returns through active asset allocation over a three to five-year horizon.
(b) Investments that are measured at net asset value (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy.

66

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
A reconciliation of fair value measurements of plan assets using significant unobservable inputs (Level 3) is as follows:
In millions20212020
Balance at January 1,$14 $13 
Return on Assets, Net— 
Purchases24 — 
Transfers (Out) / In, Net(7)
Balance at December 31,$33 $14 

In millions20232022
Balance at January 1,$33 $33 
Purchases— 11 
Transfers Out, Net(17)(7)
Foreign Currency Exchange(4)
Balance at December 31,$18 $33 


70

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Estimated Future Benefit Payments

The following represents the Company’s estimated future pension and postretirement health care benefit payments through the year 2031:2033:
In millionsPension PlansPostretirement Health Care Benefits
2022$24 $
202326 
202428 
202530 
202632 
2027— 2031174 10 

In millionsPension PlansPostretirement Health Care Benefits
2024$29 $
202530 
202632 
202733 
202834 
2029— 2033183 

Multi-Employer Plans

Certain of the Company’s employees participate in multi-employer plans that provide both pension and other postretirement health care benefits to employees under union-employer organization agreements.

Estimated liabilities have been established related to the partial or complete withdrawal from certain multi-employment benefit plans for facilities that have been closed. During the second quarter of 2020, the Company increased its estimated withdrawal liability for these plans by $12 million. During the fourth quarter of 2020, the Company entered into a settlement agreement with one of its closed multi-employment benefit plans and recorded a $4 million reduction in its estimated withdrawal liability for this plan. Under the terms of this settlement agreement, the Company paid $17 million in the first quarter of 2021. At December 31, 20212023 and December 31, 2020,2022, the Company has withdrawal liabilities of $19$17 million and $37$18 million, respectively, related to these plans, which is recorded as Compensation and Employee Benefits and Other Noncurrent Liabilities inon the Company's Consolidated Balance Sheets, which represents the Company's best estimate of the expected withdrawal liability.

DEFINED CONTRIBUTION PLANS

The Company provides defined contribution plans for certain eligible employees. The Company’s contributions to the plans are based upon employee contributions, a percentage of eligible compensation, and the Company’s annual operating results. Contributions to these plans for the years ended December 31, 2023, 2022 and 2021 2020 and 2019 were $69$87 million, $62$73 million and $58$69 million, respectively.

NOTE 9.    INCOME TAXES

The U.S. and international components of Income before Income Taxes and Equity Income of Unconsolidated Entity consisted of the following:
Year Ended December 31,
In millions202120202019
U.S.$237 $181 $305 
International52 63 49 
Income before Income Taxes and Equity Income of Unconsolidated Entity$289 $244 $354 













Year Ended December 31,
In millions202320222021
U.S.$852 $683 $237 
International80 33 52 
Income before Income Taxes and Equity Income of Unconsolidated Entity$932 $716 $289 

7167

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The provisions for Income Tax (Expense) Benefit on Income before Income Taxes and Equity Income of Unconsolidated Entity consisted of the following:
Year Ended December 31,
In millions202120202019
Current Expense:
U.S.$(2)$(23)$(10)
International(17)(20)(13)
Total Current$(19)$(43)$(23)
Deferred (Expense) Benefit:
U.S.(57)(8)(48)
International(5)
Total Deferred$(55)$$(53)
Income Tax Expense$(74)$(42)$(76)

Year Ended December 31,
In millions202320222021
Current Expense:
U.S.$(150)$(25)$(2)
International(38)(38)(17)
Total Current$(188)$(63)$(19)
Deferred (Expense) Benefit:
U.S.(49)(137)(57)
International27 
Total Deferred$(22)$(131)$(55)
Income Tax Expense$(210)$(194)$(74)

A reconciliation of Income Tax (Expense) BenefitExpense (Benefit) on Income before Income Taxes and Equity Income of Unconsolidated Entity at the federal statutory rate of 21.0% compared with the Company’s actual Income Tax (Expense) Benefit is as follows:
Year Ended December 31,
In millions2021Percent2020Percent2019Percent
Income Tax Expense at U.S. Statutory Rate$(61)21.0 %$(51)21.0 %$(74)21.0 %
U.S. State and Local Tax Expense(12)4.1 (8)3.2 (12)3.5 
Permanent Items(9)3.2 (1)0.4 (3)0.8 
Provision to Return Adjustments(1.4)(0.9)— — 
Change in Valuation Allowance(1)0.4 (2.9)(5)1.3 
International Tax Rate Differences(3)1.0 (3)1.2 (2)0.5 
Foreign Withholding Tax(2)0.7 (1)0.3 (1)0.2 
Change in Tax Rates(1)0.5 — 0.1 (1)0.3 
U.S. Federal & State Tax Credits13 (4.5)10 (4.0)10 (2.7)
Uncertain Tax Positions(3)1.0 (2)1.0 (2)0.5 
Domestic Minority Interest(0.7)(2.2)14 (3.9)
Deferred Adjustment due to IP Exit(4)1.5 — — — — 
Unrealized FX(1.7)— — — — 
Other(2)0.6 — (0.2)— 0.1 
Income Tax Expense$(74)25.7 %$(42)17.0 %$(76)21.6 %

Year Ended December 31,
In millions2023Percent2022Percent2021Percent
Income Tax Expense at U.S. Statutory Rate$(196)21.0 %$(150)21.0 %$(61)21.0 %
U.S. State and Local Tax Expense(34)3.6 (29)4.1 (12)4.1 
Permanent Items(0.3)(0.3)(9)3.2 
Provision to Return Adjustments(3)0.3 (0.5)(1.4)
Change in Valuation Allowance19 (2.1)(21)2.9 (1)0.4 
Unrealized Foreign Exchange(7)0.8 22 (3.1)(1.7)
International Tax Rate Differences(4)0.5 (6)0.8 (3)1.0 
U.S. Federal & State Tax Credits22 (2.3)(1.3)13 (4.5)
Domestic Minority Interest— — — — (0.7)
Deferred Adjustment due to IP Exit— — — — (4)1.5 
Russia Impairment(3)0.3 (20)2.8 — — 
Tax Effects Released from OCI— — (10)1.4 — — 
Other(6)0.7 (0.6)(8)2.8 
Income Tax Expense$(210)22.5 %$(194)27.2 %$(74)25.7 %

The effective tax rate for 2023 is different from the statutory rate primarily due to a decrease in the Company’s valuation allowances in Sweden, Norway and the Netherlands of $22 million, the establishment of a valuation allowance against certain net deferred tax assets in Nigeria of $3 million, as well as tax benefits of $22 million related to U.S. federal, state and foreign income tax credits. The Company also recognized income tax expense of $7 million related to unrealized foreign currency activity for intercompany loans where the entity’s functional currency and the loan denomination are different than the tax reporting currency (primarily in Sweden).

During 2022, tax expense differs from the amount at the statutory rate by $20 million due to impairment charges from the planned sale of the Company's Russian business that resulted in no corresponding tax benefit and due to the recording of $10 million of tax expense to release the tax expense remaining in Other Comprehensive Income after the settlement of certain swaps. The Company also recognized tax benefits of approximately $22 million related to deferred tax assets and liabilities recognized on unrealized foreign currency activity for intercompany loans where the entity’s functional currency and the loan denomination currency are different than the tax reporting currency (primarily in Sweden). However, a valuation allowance of approximately $25 million was recorded during the year against deferred tax assets in Sweden, including the deferred tax asset related to the unrealized foreign currency activity. Additionally, the Company recorded a tax benefit of approximately $5 million related to the release of a valuation allowance recorded against the net deferred tax assets of its Brazilian subsidiary based on historic earnings.
68

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
As a result of the NACPNorth America Consumer Packaging (“NACP”) Combination, during 2021, federal and state income taxes are not recorded with respect to consolidated domestic earnings attributable to the Company’s minority interest partner, resulting in a difference between the effective tax rate and the statutory tax rate. As a result of decreases in the minority partner's interest during 2021 and 2020, the difference between the effective tax rate and the statutory tax also declined.

In addition, during 2021, the Company recognized tax expense of approximately $4 million related to the remeasurement of deferred tax assets for executive compensation as a result of IP’s exchange of its remaining shares in GPIP during the period and approximately $3 million related to the remeasurement of its net deferred tax liability for its UK subsidiaries due to the statutory tax rate increase enacted during the second quarter.

During 2020, the Company recognized a tax benefit of approximately $8 million attributable to the release of a valuation allowance recorded against the net deferred tax assets of two of its Canadian subsidiaries as a result of internal restructuring. The Company also recognized a tax benefit related to updates to is 2019 financial statement income tax calculations of approximately $2 million primarily due to new guidance in final U.S. Treasury Regulations issued during 2020.

During 2019, the Company recognized tax expense of approximately $5 million associated with the establishment of a valuation allowance against the net deferred tax assets of its Australian subsidiary.
72

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The tax effects of differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities as of December 31 were as follows:
In millions20212020
Deferred Income Tax Assets:
Compensation Based Accruals$$
Net Operating Loss Carryforwards192 40 
Postretirement Benefits
Tax Credits31 19 
Other37 
Valuation Allowance(38)(34)
Total Deferred Income Tax Assets$227 $39 
Deferred Income Tax Liabilities:
Property, Plant and Equipment(108)(21)
Goodwill(3)(3)
Other Intangibles(108)(11)
Investment in Partnership(564)(531)
Net Noncurrent Deferred Income Tax Liabilities$(783)$(566)
Net Deferred Income Tax Liability$(556)$(527)

In millions20232022
Deferred Income Tax Assets:
Compensation Based Accruals$34 $37 
Net Operating Loss Carryforwards74 103 
Postretirement Benefits24 26 
Tax Credits26 
Capitalized Research & Development Costs64 44 
Unrealized Foreign Exchange— 28 
Other89 81 
Valuation Allowance(37)(57)
Total Deferred Income Tax Assets$256 $288 
Deferred Income Tax Liabilities:
Property, Plant and Equipment(672)(661)
Goodwill & Other Intangibles(263)(280)
Other(3)— 
Net Noncurrent Deferred Income Tax Liabilities$(938)$(941)
Net Deferred Income Tax Liability$(682)$(653)

The Company has total deferred income tax assets, excluding valuation allowance, of $265 million and $73 million as of December 31, 2021 and 2020, respectively. The Company has total deferred income tax liabilities of $783 million and $566 million as of December 31, 2021 and 2020, respectively.

As a result of International Paper’s final exchange in 2021, the Company currently owns 100% of the outstanding interests in GPIP. GPIP continues to be treated as a partnership for U.S. federal and state income tax purposes despite International Paper’s exit as a minority partner. Accordingly, as a result of the continuation of the partnership, domestic deferred tax assets and liabilities are not tracked based on the inside basis difference of assets and liabilities held within GPIP. Instead, the Company’s outside basis difference in its partnership investment is recorded as a deferred tax liability and disclosed above. The deferred tax liability primarily relates to differences between book and tax basis in property, plant and equipment and intangibles inside the partnership. During 2021 and 2020, IP redeemed or exchanged its entire interest in the partnership. As a result of the redemptions and exchanges, the Company recorded a decrease in its deferred tax liability in 2021 and 2020 of $175 million and $16 million, respectively, which was recorded through additional paid-in capital.

According to the Income Taxes topic of the FASB Codification, a valuation allowance is required to be established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The FASB Codification provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient pretax income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset. The Company has evaluated the need to maintain a valuation allowance for deferred tax assets based on its assessment of whether it is more likely than not that deferred tax assets will be realized through the generation of future taxable income. Appropriate consideration was given to all available evidence, both positive and negative, in assessing the need for a valuation allowance.

73

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company reviewed its deferred income tax assets as of December 31, 20212023 and 2020,2022, respectively, and determined that it is more likely than not that a portion will not be realized. A valuation allowance of $38$37 million and $34$57 million atas of December 31, 20212023 and 2020,2022, respectively, is maintained on the deferred income tax assets for which the Company has determined that realization is not more likely than not. Of the total valuation allowance at December 31, 2021, $302023, $10 million relates to net deferred tax assets in certainSweden, $24 million relates to net deferred tax assets in various other foreign jurisdictions $1and $3 million relates to credit carryforwards in certain U.S. states as well as U.S. foreign tax credit carryforwards, $5 million relates to tax credit carryforwards in certain states, and the remaining $2 million relates to net operating losses in certain U.S. states.carryforwards. The need for a valuation allowance is made on a jurisdiction-by-jurisdiction basis. As of December 31, 2021,2023, the Company concluded that due to cumulative pretax losses and the lack of sufficient future taxable income of the appropriate character, realization is less thannot more likely than not on the net deferred income tax assets related primarily to the Company’s operations in Australia Brazil, Netherlands, and Norway as well as certain operations in Germany.Germany and Nigeria.

The following table represents a summary of the valuation allowances against deferred tax assets as of and for the three years ended December 31, 2023, 2022, and 2021, 2020, and 2019, respectively:
December 31,
In millions202120202019
Balance Beginning of Period$34 $41 $36 
Adjustments for (Income) and Expenses(7)
Additions (Deductions)— — 
Balance at End of Period$38 $34 $41 

The
In millionsAdditionsDeductions
December 31,Balance at Beginning of PeriodCharged to Costs and ExpensesCharged to Other AccountsCredited to Costs and ExpensesCredited to Other AccountsBalance at End of Period
2023$57 $$$(25)$(2)$37 
202238 29 (8)(3)57 
202134 (3)(1)38 

69

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
During 2023, the Company utilized itsit's remaining U.S. federal net operating loss carryforwards during 2020. However, as a result of deductions associated with the step up in tax basis of certain assets as a result of International Paper’s exit from the partnership, the Company generated a taxable loss of $574 million during 2021 that can be carried forward for U.S. federal income tax purposes indefinitely. Therefore, based on the net operating loss generated in 2021 as well as future tax benefits associated with planned capital projects and tax credit carryforwards, which are available to offset future U.S. federal income tax, the Company does not expect to be a meaningful U.S. federal cash taxpayer until 2024.

carryforwards. The Company's U.S. state net operating loss carryforwards total $587$52 million and expire in various years through 2041.

International net operating loss carryforward amounts total $191$296 million, of which substantially all have no expiration date.

Tax Credit carryforwards total $31$8 million which expire in various years through 2041.2042.

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
In millions202120202019
Balance at January 1,$20 $21 $16 
Additions for Tax Positions of Current Year
Additions for Tax Positions of Prior Years
Reductions for Tax Positions of Prior Years— (4)— 
Balance at December 31,$24 $20 $21 

In millions202320222021
Balance at January 1,$26 $24 $20 
Additions for Tax Positions of Current Year
Additions for Tax Positions of Prior Years
Reductions for Tax Positions of Prior Years(2)(1)— 
Balance at December 31,$34 $26 $24 

At December 31, 2021, $242023, $30 million of the total gross unrecognized tax benefits, if recognized, would affect the annual effective income tax rate. As of December 31, 2021,2023, none of the total gross unrecognized tax benefits recorded are related to indefinite lived deferred tax assets and did not have an impact on total tax expense.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within its global operations in Income Tax Expense. The Company had an immaterial accrual for the payment of interest and penalties at December 31, 2021.2023.

The Company anticipates that $1 millionan immaterial portion of the total unrecognized tax benefits at December 31, 20212023 could change within the next 12twelve months.

The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions and our income tax filings are regularly examined by federal, state and non-U.S. tax authorities. The Company’s 2018 U.S. federal corporate and partnership income tax filings are currently under examination by the Internal Revenue Service. With few exceptions, the Company is no longer subject to U.S. federal, state and local tax examinations for years before 2017.2018.

74

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As of December 31, 2021,2023, the Company has provided for deferred income taxes attributable to future foreign withholding tax expense related to the Company's equity investment in the joint venture, Rengo Riverwood Packaging, Ltd. In addition, Company provides deferred income taxes for future Canadian withholding tax to the extent of excess cash available for distribution after consideration of working capital needs and other debt settlement of its Canadian subsidiary, Graphic Packaging International Canada, ULC. The Company continues to assert that it is permanently reinvested in the cumulative earnings of its Canadian subsidiary in excess of the amount of cash that is on hand and available for distribution after consideration of working capital needs and other debt settlement. Due to the deemed taxation of all post-1986 earnings and profits required by the Act, theThe Company has determined that no deferred tax liability should be recorded related to the outside basis difference of its Canadian subsidiary of approximately $51 million as of December 31, 2021.2023.

The Company has not provided for deferred U.S. income taxes on approximately $33$92 million of its undistributed earnings in other international subsidiaries because of the Company’s intention to indefinitely reinvest these earnings outside the U.S. The Company’s assertion remains unchanged, despite the deemed taxation of all post-1986 earnings and profits required by the Act. The determination of the amount of the unrecognized deferred U.S. income tax liability (primarily withholding tax in certain jurisdictions and some state tax)jurisdictions) on the unremitted earnings or any other associated outside basis difference is not practicable because of the complexities associated with the calculation.

The Company has elected to recognize global intangible low-taxed income (“GILTI”) as period cost as incurred, therefore there are no deferred taxes recognized for basis differences that are expected to impact the amount of the GILTI inclusion upon reversal.

NOTE 10.    FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES

The Company enters into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under the Derivatives and Hedging topic of the FASB Codification and those not designated as hedging instruments under this guidance. The Company uses interest rate swaps, natural gas swap contracts and forward exchange contracts. These derivative instruments are designated as cash flow hedges and, to the extent they are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings but are included in Accumulated Other Comprehensive Loss. These changes in fair value will subsequently be reclassified to earnings, contemporaneously with and offsetting changes in the related hedged exposure and presented in the same line of the income statement expected for the hedged item.

70

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Interest Rate Risk

The Company uses interest rate swaps to manage interest rate risks on future interest payments caused by interest rate changes on its variable rate term loan facility.facilities. Changes in fair value will subsequently be reclassified into earnings as a component of Interest Expense, Net as interest is incurred on amounts outstanding under the term loan facility. facilities.

The following table summarizes the Company's current interest rate swap positions for each period presented as of December 31, 2021:2023:


StartEnd
(In Millions)
Notional Amount
Weighted Average Interest Rate
12/03/201801/01/2022$1202.92%
12/03/201801/04/2022$802.79%
StartEndNotional Amount (In Millions)Weighted Average Interest Rate
04/03/202304/01/2024$7504.71%

These derivative instruments are designated as cash flow hedges and, to the extent they are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’derivatives fair value are not included in current earnings but are included in Accumulated Other Comprehensive Loss. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period it occurs. During 20212023 and 2020,2022, there were no amounts of ineffectiveness. During 2021 and 2020,Additionally, there were no amounts excluded from the measure of effectiveness.

As of December 31, 2021, the Company had interest rate swap positions with a notional value of $200 million, which matured in January 2022. As discussed in "Note 9 - Income Taxes", a $10 million expense was recorded to release the tax expense remaining in Other Comprehensive Income after the settlement of these swaps in the first quarter of 2022.

Commodity Risk

To manage risks associated with future variability in cash flows and price risk attributable to purchases of natural gas, the Company enters into natural gas swap contracts to hedge prices for a designated percentage of its expected natural gas usage. Such contracts are designated as cash flow hedges. The contracts are carried at fair value with changes in fair value recognized in Accumulated Other Comprehensive Loss and resulting gain or loss reclassified into Cost of Sales concurrently with the recognition of the commodity consumed. The Company has hedged approximately 17%65% of its expected natural gas usage for 2022.2024.

During 20212023 and 2020,2022, there were 0no amounts of ineffectiveness related to changes in the fair value of natural gas swap contracts. Additionally, there were no amounts excluded from the measure of effectiveness.



75

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Foreign Currency Risk

The Company enters into forward exchange contracts to manage risks associated with foreign currency transactions and future variability of cash flows arising from those transactions that may be adversely affected by changes in exchange rates. The contracts are carried at fair value with changes in fair value recognized in Accumulated Other Comprehensive Loss and gains/losses related to these contracts are recognized in Other Expense, Net or Net Sales, when appropriate.

At December 31, 2020, multiple forward exchange contracts existed that expired on various dates throughout 2021. Those purchased forward exchange contracts outstanding at December 31, 2020, when aggregated and measured in U.S. dollars at contractual rates at December 31, 2020, had notional amounts totaling $102 million. 

No amounts were reclassified to earnings during 2021 and 2020 in connection with forecasted transactions that were considered probable of not occurring and there was no amount of ineffectiveness related to changes in the fair value of foreign currency forward contracts. Additionally, there were no amounts excluded from the measure of effectiveness during 2021 and 2020.

Derivatives not Designated as Hedges

The Company enters into forward exchange contracts to effectively hedge substantially all of its accounts receivables resulting from sales transactions and intercompany loans denominated in foreign currencies in order to manage risks associated with variability in cash flows that may be adversely affected by changes in exchange rates. At December 31, 20212023 and 2020,2022, multiple foreign currency forward exchange contracts existed, with maturities ranging up to sixthree months. Those foreign currency exchange contracts outstanding at December 31, 20212023 and 2020,2022, when aggregated and measured in U.S. dollars at contractual rates at December 31, 20212023 and 2020,2022, respectively, had net notional amounts totaling $103$131 million and $80$111 million. Unrealized gains and losses resulting from these contracts are recognized in Other Expense (Income), Net and approximately offset corresponding recognized but unrealized gains and losses on the remeasurement of these accounts receivable.

Deal Contingent Hedge

On May 14, 2021, in connection with the AR Packaging acquisition, the Company entered into deal contingent foreign exchange forward contracts, with no upfront cash cost, to hedge €700 million of the acquisition price. These forward contracts settled October 29, 2021, concurrently withimmediately prior to the acquisition of AR Packaging and are accounted for as derivatives under ASC 815, Derivatives and Hedging. UnrealizedRealized losses of $48 million for the year ended December 31, 2021 resulting from these contracts are recognized in Business Combinations, ShutdownExit Activities and Other Special Charges, and Exit Activities, Net onin the Company’s Condensed Consolidated Statements of Operations. For more information, see "Note 11 — Fair Value Measurement1 - General Information."” of the Company's 2021 Annual Report on Form 10-K for the year ended December 31, 2021.

Foreign Currency Movement Effect

For the year ended December 31, 2021, 20202023, 2022 and 20192021 net currency exchange losses(gains)losses included in determining Income from Operations were $3$6 million, $3 million, and $(2)$3 million, respectively.

71

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 11.    FAIR VALUE MEASUREMENT

The Company follows the fair value guidance integrated into the Fair Value Measurements and Disclosures topic of the FASB Codification in regards to financial and nonfinancial assets and liabilities. Nonfinancial assets and nonfinancial liabilities include those measured at fair value in goodwill impairment testing, asset retirement obligations initially measured at fair value, and those assets and liabilities initially measured at fair value in a business combination.

The FASB’s guidance defines fair value, establishes a framework for measuring fair value and expands the fair value disclosure requirements. The accounting guidance applies to accounting pronouncements that require or permit fair value measurements. It indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The guidance defines fair value based upon an exit price model, whereby fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance clarifies that fair value should be based on assumptions that market participants would use, including a consideration of non-performance risk.

Valuation Hierarchy

The Fair Value Measurements and Disclosures topic establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1 inputs — quoted prices (unadjusted) in active markets for identical assets or liabilities.

76

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Level 2 inputs — quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 inputs — unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value.

An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The Company has determined that its financial assets and financial liabilities include derivative instruments which are carried at fair value and are valued using Level 2 inputs in the fair value hierarchy. The Company uses valuation techniques based on discounted cash flow analyses, which reflects the terms of the derivatives and uses observable market-based inputs, including forward rates and uses market price quotations obtained from third party derivatives brokers, corroborated with information obtained from third party pricing service providers.

Fair Value of Financial Instruments

As of December 31, 20212023 and 2020,2022, there has not been any significant impact to the fair value of the Company's derivative liabilities due to its own credit risk. Similarly, there has not been any significant adverse impact to the Company's derivative assets based on evaluation of the Company's counterparties' credit risks. The following table summarizes the fair value of the Company's derivative instruments:
Derivative Assets(a)
Derivative Liabilities(b)
December 31,December 31,
In millions2021202020212020
Derivatives designated as hedging instruments:
Interest rate contracts$— $— $— $
Foreign currency contracts— — — 
Commodity contracts— — 
Total Derivatives$$$— $
(a) Derivative assets of $2 million are included in Other Current Assets asAs of December 31, 20212023 and 2020
(b) DerivativeDecember 31, 2022, the Company had commodity contract derivative liabilities, of $9 million arewhich were included in Other Accrued Liabilities ason the Consolidated Balance Sheets, of December 31, 2020$7 million and $12 million, respectively.

The fair values of the Company’s other financial assets and liabilities at December 31, 20212023 and 20202022 approximately equal the carrying values reported on the Consolidated Balance Sheets except for Long-Term Debt. The fair value of the Company’s Long-Term Debt (excluding finance leases and deferred financing fees) was $5,715$5,039 million and $3,625$4,749 million, as compared to the carrying amounts of $5,676$5,217 million and $3,524$5,097 million as of December 31, 20212023 and 2020,2022, respectively. The fair value of the Company's Total Debt, including the Senior Notes, areis based on quoted market prices (Level 2 inputs). Level 2 valuation techniques for Long-Term Debt are based on quotations obtained from third partyindependent pricing service providers.

72

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Effect of Derivative Instruments

The pre-tax effect of derivative instruments in cash flow hedging relationships onin the Company’s Consolidated Statements of Operations for the year ended December 31, 20212023 and 20202022 is as follows:

Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive LossLocation in Statement of OperationsAmount of (Gain) Loss Recognized in Statement of Operations
Year Ended December 31,Year Ended December 31,
Amount of Loss (Gain) Recognized in Accumulated Other Comprehensive Loss
Amount of Loss (Gain) Recognized in Accumulated Other Comprehensive Loss
Amount of Loss (Gain) Recognized in Accumulated Other Comprehensive Loss
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
In millions
In millions
In millionsIn millions202120202019Location in Statement of Operations202120202019
Commodity ContractsCommodity Contracts$(11)$$$(11)$$(2)
Commodity Contracts
Commodity Contracts
Foreign Currency Contracts
Foreign Currency Contracts
Foreign Currency ContractsForeign Currency Contracts(2)— Other Expense, Net— (1)
Interest Rate Swap AgreementsInterest Rate Swap Agreements— Interest Expense, Net
Interest Rate Swap Agreements
Interest Rate Swap Agreements
TotalTotal$(13)$$$(3)$13 $(2)
Total
Total

At December 31, 2021,2023, the Company expects to reclassify $3$8 million of pre-tax gainloss in the next twelve months from Accumulated Other Comprehensive Loss to earnings, contemporaneously with and offsetting changes in the related hedged exposure. The actual amount that will be reclassified to future earnings may vary from this amount as a result of changes in market conditions.
77

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The (income) losspre-tax effect of derivative instruments not designated as hedging instruments andin the deal contingent hedge on the Company’s Consolidated Statements of Operations for the years ended December 31, 20212023, 2022 and 20202021 is as follows:
In millions202120202019
Foreign Currency ContractsOther Expense, Net$(5)$$(1)
Deal Contingent HedgeBusiness Combinations, Shutdown and Other Special Charges, and Exit Activities, Net$48 $— $— 

In millions202320222021
Foreign Currency ContractsOther Expense (Income), Net$(3)$(9)$(5)
Deal Contingent Foreign Exchange Hedge(a)
Business Combinations, Exit Activities and Other Special Charges, Net$— $— $48 
(a) For more information, see “Note 10 - Financial Instruments, Derivatives and Hedging Activities".

NOTE 12.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of Other Comprehensive Income (Loss) attributable to Graphic Packaging Holding Company are as follows:
Year Ended December 31,
202120202019
 
In millions
Pretax AmountTax Effect
Net Amount(a)
Pretax AmountTax Effect
Net Amount(a)
Pretax AmountTax EffectNet Amount
Derivative Instruments Gain (Loss)$$(2)$$$(1)$$(7)$$(6)
Pension and Postretirement Benefit Plans53 (8)45 126 (26)100 10 (2)
Currency Translation Adjustment(28)— (28)17 — 17 10 — 10 
Other Comprehensive Income (Loss)$32 $(10)$22 $148 $(27)$121 $13 $(1)$12 

Year Ended December 31,
202320222021
 
In millions
Pretax AmountTax EffectNet AmountPretax AmountTax EffectNet AmountPretax AmountTax EffectNet Amount
Derivative Instruments Gain (Loss)$$(1)$$22 $(18)$$$(2)$
Pension and Postretirement Benefit Plans (Loss) Gain(5)(4)(22)13 (9)53 (8)45 
Currency Translation Adjustment Gain (Loss)61 65 (156)(148)(28)— (28)
Other Comprehensive Income (Loss)$60 $$64 $(156)$$(153)$32 $(10)$22 
(a) Amounts exclude impact of noncontrolling interest. See "Note 17 - Changes in Accumulated Other Comprehensive Loss."

73

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The balances of Accumulated Other Comprehensive Loss Attributable to Graphic Packaging Holding Company, net of applicable taxes are as follows:
December 31,
In millions20212020
Accumulated Derivative Instruments Loss$(8)$(13)
Pension and Postretirement Benefit Plans(94)(139)
Currency Translation Adjustment(122)(94)
Accumulated Other Comprehensive Loss$(224)$(246)

December 31,
In millions20232022
Accumulated Derivative Instruments Loss$(1)$(4)
Pension and Postretirement Benefit Plans(107)(103)
Currency Translation Adjustment(205)(270)
Accumulated Other Comprehensive Loss$(313)$(377)

NOTE 13.    COMMITMENTS

The Company has entered into other long-term contracts principally for the purchase of fiber and chip processing along with commitments associated with building thea new CRB paper machinerecycled paperboard manufacturing facility in Kalamazoo, Michigan.Waco, Texas. The minimum purchase commitments extend beyond 2026.2028. At December 31, 2021,2023, total commitments under these contracts were as follows:
In millions
2022$140 
202391 
202450 
202548 
202617 
Thereafter42 
Total$388 

In millions
2024$713 
2025296 
202619 
2027
2028
Thereafter24 
Total$1,069 

78

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 14.    ENVIRONMENTAL AND LEGAL MATTERS

Environmental Matters

The Company is subject to a broad range of foreign, federal, state and local environmental, health and safety laws and regulations, including those governing discharges to air, soil and water, the management, treatment and disposal of hazardous substances, solid waste and hazardous wastes, the investigation and remediation of contamination resulting from historical site operations and releases of hazardous substances, the recycling of packaging and the health and safety of employees. Compliance initiatives could result in significant costs, which could negatively impact the Company’s consolidated financial position, results of operations or cash flows. Any failure to comply with environmental or health and safety laws and regulations or any permits and authorizations required thereunder could subject the Company to fines, corrective action or other sanctions.

Some of the Company’s current and former facilities are the subject of environmental investigations and remediations resulting from historichistorical operations and the release of hazardous substances or other constituents. Some current and former facilities have a history of industrial usage for which investigation and remediation obligations may be imposed in the future or for which indemnification claims may be asserted against the Company. Also, closures or sales of facilities may necessitate further investigation and may result in remediation activities at those facilities.

The Company has established reserves for those facilities or issues where a liability is probable and the costs are reasonably estimable. The Company believes that the amounts accrued for its loss contingencies, and the reasonably possible loss beyond the amounts accrued, are not material to the Company’s consolidated financial position, results of operations or cash flows. The Company cannot estimate with certainty other future compliance, investigation or remediation costs. Some costs relating to historic usage that the Company considers to be reasonably possible of resulting in liability are not quantifiable at this time. The Company will continue to monitor environmental issues at each of its facilities, as well as regulatory developments, and will revise its accruals, estimates and disclosures relating to past, present and future operations, as additional information is obtained.

Legal Matters

The Company is a party to a number of lawsuits arising in the ordinary conduct of its business. Although the timing and outcome of these lawsuits cannot be predicted with certainty, the Company does not believe that disposition of these lawsuits will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

74

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 15.    BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION

The Company has 3three reportable segments as follows:

Paperboard Manufacturing, formerly referred to as the Paperboard Mills reportable segment, includes the 8seven North American paperboard millsfacilities that produce primarily CRB, CUK,recycled, unbleached and SBS,bleached paperboard, which is consumed internally to produce paperboard consumer packaging for the Americas and Europe Packaging segments. The remaining paperboardPaperboard not consumed internally is sold externally to a wide variety of paperboard packaging converters and brokers. The Paperboard Mills segmentManufacturing segment's Net Sales representsrepresent the sale of paperboard only to external customers. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Paperboard MillsManufacturing segment to reflect the economics of the integration of these segments.

Americas Paperboard Packaging includes paperboard packaging primarily folding cartons, sold primarily to Consumer Packaged Goods ("CPG"consumer packaged goods (“CPG”) companies and cups, lids and food containers sold primarily to foodservice companies and Quick-Service Restaurants ("QSR"quick-service restaurants (“QSR”) serving the food, beverage, and consumer product markets in the Americas.

Europe Paperboard Packaging includes paperboard packaging primarily folding cartons, sold primarily to CPG companies serving the food, beverage and consumer product markets, including healthcare and beauty, primarily in Europe.
The Company allocates certain millpaperboard manufacturing and corporate costs to the reportable segments to appropriately represent the economics of these segments. The Corporate and Other caption includes the Pacific Rim and Australia operating segments and unallocated corporate and one-time costs.

These segments are evaluated by the chief operating decision maker based primarily on Income from Operations as adjusted for depreciation and amortization. The accounting policies of the reportable segments are the same as those described above in "Note 1 - Nature of Business and Summary of Significant Accounting Policies."

The Company did not have any one customer who accounted for 10% or more of the Company's net sales during 2021, 20202023, 2022 or 2019.2021.

7975

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Business segment information is as follows:
Year Ended December 31,
In millions202120202019
NET SALES:
Paperboard Mills$1,007 $988 $1,095 
Americas Paperboard Packaging4,996 4,650 4,234 
Europe Paperboard Packaging992 765 689 
Corporate/Other/Eliminations(a)
161 157 142 
Total$7,156 $6,560 $6,160 
(LOSS) INCOME FROM OPERATIONS:
Paperboard Mills(b)
$(10)$(110)$33 
Americas Paperboard Packaging456 639 478 
Europe Paperboard Packaging82 66 60 
Corporate and Other(c)
(121)(71)(37)
Total$407 $524 $534 
CAPITAL EXPENDITURES:
Paperboard Mills$615 $444 $208 
Americas Paperboard Packaging113 120 95 
Europe Paperboard Packaging37 40 35 
Corporate and Other37 42 15 
Total$802 $646 $353 
DEPRECIATION AND AMORTIZATION:
Paperboard Mills$231 $249 $224 
Americas Paperboard Packaging176 163 165 
Europe Paperboard Packaging53 41 37 
Corporate and Other29 23 21 
Total$489 $476 $447 

Year Ended December 31,
In millions202320222021
NET SALES:
Paperboard Manufacturing$1,022 $1,290 $1,007 
Americas Paperboard Packaging6,200 6,015 4,996 
Europe Paperboard Packaging2,024 1,973 992 
Corporate/Other/Eliminations(a)
182 162 161 
Total$9,428 $9,440 $7,156 
INCOME (LOSS) FROM OPERATIONS:
Paperboard Manufacturing(b)(c)
$(23)$45 $(10)
Americas Paperboard Packaging(c)(d)
1,088 800 456 
Europe Paperboard Packaging(c)(e)
127 59 82 
Corporate and Other(c)
(18)(121)
Total$1,174 $906 $407 
CAPITAL EXPENDITURES:
Paperboard Manufacturing$479 $336 $615 
Americas Paperboard Packaging144 131 113 
Europe Paperboard Packaging101 43 37 
Corporate and Other80 39 37 
Total$804 $549 $802 
DEPRECIATION AND AMORTIZATION:
Paperboard Manufacturing(b)
$284 $242 $231 
Americas Paperboard Packaging(d)
186 173 176 
Europe Paperboard Packaging113 109 53 
Corporate and Other36 29 29 
Total$619 $553 $489 
(a) Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments.
(b) Includes accelerated depreciation related to exit activities in 2023, 2022, and 2021 2020, and 2019.(see “Note 18 - Exit Activities”).
(c) Includes expenses related to business combinations, shutdown and other special charges, and exit activities.activities (see “Note 1 - General Information”).
(d) Includes accelerated depreciation related to exit activities in 2023 (see “Note 18 - Exit Activities”).
(e) Includes impairment charges related to Russia. (see “Note 19 - Impairment and Divestiture of Russian Business”).

December 31,
December 31,December 31,
In millionsIn millions202120202019In millions202320222021
ASSETS AT DECEMBER 31:ASSETS AT DECEMBER 31:
Paperboard Mills$3,482 $3,097 $2,912 
Paperboard Manufacturing
Paperboard Manufacturing
Paperboard Manufacturing
Americas Paperboard PackagingAmericas Paperboard Packaging3,682 3,327 3,392 
Europe Paperboard PackagingEurope Paperboard Packaging2,669 746 687 
Europe Paperboard Packaging
Europe Paperboard Packaging
Corporate and OtherCorporate and Other624 635 299 
Corporate and Other
Corporate and Other
TotalTotal$10,457 $7,805 $7,290 


8076

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Business geographic area information is as follows:
Year Ended December 31,
In millions202120202019
NET SALES:
United States$5,543 $5,200 $4,913 
International(a)
1,613 1,360 1,247 
Total$7,156 $6,560 $6,160 

Year Ended December 31,Year Ended December 31,
In millionsIn millions202120202019In millions202320222021
LONG-LIVED ASSETS AT DECEMBER 31:
NET SALES:
United StatesUnited States$3,865 $3,253 $2,976 
United States
United States
International(a)
International(a)
812 307 278 
TotalTotal$4,677 $3,560 $3,254 
Total
Total
In millions202320222021
LONG-LIVED ASSETS AT DECEMBER 31:
United States$4,178 $3,813 $3,865 
International(a)
814 766 812 
Total$4,992 $4,579 $4,677 
(a) Net Sales and long-lived assets of individual countries outside of the United States are not material.

NOTE 16.    EARNINGS PER SHARE
Year Ended December 31,
In millions, except per share data202120202019
Net Income Attributable to Graphic Packaging Holding Company$204 $167 $207 
Weighted Average Shares:
Basic297.1 278.8294.1
Dilutive effect of RSUs0.8 0.8 0.7 
Diluted297.9 279.6 294.8 
Earnings Per Share — Basic$0.69 $0.60 $0.70 
Earnings Per Share — Diluted$0.68 $0.60 $0.70 

Year Ended December 31,
In millions, except per share data202320222021
Net Income Attributable to Graphic Packaging Holding Company$723 $522 $204 
Weighted Average Shares:
Basic308.2 308.8297.1
Dilutive effect of RSUs0.9 0.7 0.8 
Diluted309.1 309.5 297.9 
Earnings Per Share — Basic$2.35 $1.69 $0.69 
Earnings Per Share — Diluted$2.34 $1.69 $0.68 

77

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 17.    CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The following represents changes in Accumulated Other Comprehensive Loss attributable to Graphic Packaging Holding Company by component for the year ended December 31, 2021:2023:
In millionsDerivatives InstrumentsPension and Postretirement Benefit PlansCurrency Translation AdjustmentsTotal
Balance at December 31, 2020$(13)$(139)$(94)$(246)
Other Comprehensive Income (Loss) before Reclassifications43 (28)23 
Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income(a)
(2)— — 
Net Current-period Other Comprehensive Income (Loss)45 (28)23 
Less:
Net Current-period Other Comprehensive Income Attributable to Noncontrolling Interest(1)— — (1)
Balance at December 31, 2021$(8)$(94)$(122)$(224)

In millionsDerivatives InstrumentsPension and Postretirement Benefit PlansCurrency Translation AdjustmentsTotal
Balance at December 31, 2022$(4)$(103)$(270)$(377)
Other Comprehensive (Loss) Income before Reclassifications(21)(6)65 38 
Amounts Reclassified from Accumulated Other Comprehensive Loss(a)
24 — 26 
Net Current-period Other Comprehensive Income (Loss)(4)65 64 
Balance at December 31, 2023$(1)$(107)$(205)$(313)
(a) See following table for details about these reclassifications.


81

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following represents reclassifications out of Accumulated Other Comprehensive Loss for the year ended December 31, 2021:2023:

In millions
Details about Accumulated Other Comprehensive Loss ComponentsAmount Reclassified from Accumulated Other Comprehensive LossAffected Line Item in the Statement Where Net Income is Presented
Derivatives Instruments:
Commodity Contracts$(11)35 Cost of Sales
Foreign Currency ContractsOther (Income) Expense, Net
Interest Rate Swap Agreements(3)Interest Expense, Net
(3)32 Total before Tax
(8)Tax Expense
$(2)24 Total, Net of Tax
Amortization of Defined Benefit Pension Plans:
Actuarial Losses$(a)
Total before Tax
(1)Tax ExpenseBenefit
$Total, Net of Tax
Amortization of Postretirement Benefit Plans:
Actuarial Gains$(2)(3)(a)Total before Tax
Tax Expense
$(2)Total, Net of Tax
Total Reclassifications for the Period$26 Total, Net of Tax
(a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see "Note 8 - Pensions and Other Postretirement Benefits"Benefits).

NOTE 18.    EXIT ACTIVITIES

On February 7, 2023, the Company announced its plan to invest approximately $1 billion in a new recycled paperboard manufacturing facility in Waco, Texas. In conjunction with this project, the Company announced the closure of three smaller recycled paperboard manufacturing facilities to manage capacity while lowering costs. The costs associated with these exit activities are included in the table below for the year ended December 31, 2023.

78

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
In the second quarter of 2023, the Company announced its decision to accelerate the closure of one of these three recycled paperboard manufacturing facilities that is in Tama, Iowa and closed the facility in the second quarter of 2023. The costs associated with this closure are included in the table below for the year ended December 31, 2023.

During 2023, the Company decided to close multiple packaging facilities by the end of 2023 and early 2024. Production from these facilities will be consolidated into our existing packaging network. The costs associated with these exit activities are included in the table below for the year ended December 31, 2023.

During the third quarter of 2023, the Company decided to discontinue the project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of recycled paperboard capacity. The Company incurred charges of $16 million within the Paperboard Manufacturing reportable segment related to the write-off of assets, which were primarily engineering, consulting, and permitting costs for this project. The costs associated with this project are included in the table below for the year ended December 31, 2023.

In March 2022, the Company announced its decision to close the Norwalk, Ohio packaging facility and closed the facility in September 2022. The Company incurred charges associated with this exit activity for post-employment benefits, retention bonuses and incentives, which are included in the Severance Costs and Other line item in the table below for the year ended December 31, 2022.

During 2019, the Company announced its plans to invest in a CRB platform optimization project, which included an investment in a new CRB paperrecycled paperboard machine in Kalamazoo, Michigan. At the time of the announcement, the Company expected to close 2two of its smaller CRB millsrecycled paperboard manufacturing facilities in 2022 in order to remain capacity neutral. During the third quarter of 2021, the Company decided to continue to operate 1one of thesethe two original smaller CRB mills at least throughrecycled paperboard manufacturing facilities. In the second quarter of 2022, the Company closed the Battle Creek, Michigan recycled paperboard manufacturing facility. The Company incurred charges associated with this exit activity for post-employment benefits, retention bonuses and incentives, which are included in the Severance Costs and Other line item in the table below for the year ended December 31, 2022.

In March 2020,During the years ended December 31, 2023, 2022, and 2021, the Company made the decision to close the White Pigeon, Michigan CRB mill and shut down the PM1 containerboard machine in West Monroe, Louisiana. During the second quarter of 2020, the Company closed the White Pigeon, Michigan CRB mill and shut down the PM1 containerboard machine.

In June 2020, the Company made the decision to close certain converting plants that were acquired from Greif. The Burlington, North Carolina converting facility and the Los Angeles, California converting facility were closed during 2020.

The Company accounts for the costs associated with these closures in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets ("ASC 360"), ASC 420, Exit or Disposal Costs Obligations ("ASC 420") and ASC 712 Compensation-Nonretirement Post-Employment Benefits ("ASC 712"). The Company recorded $38$89 million, $17 million and $51$38 million of exit costs, during 2021 and 2020, respectively.respectively, associated with these restructurings. Other costs associated with the start-up of the new CRB paperrecycled paperboard machine will be recorded in the period in which they are incurred. These costs are included in the Corporate and Other caption in "Note 15 - Business Segment and Geographic Area Information."
82

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the costs incurred during 20212023, 2022 and 20202021 related to these restructurings:
Year Ended December 31,
In millionsLocation in Statement of Operations202120202019
Severance costs and other (a)
Business Combinations, Shutdown and Other Special Charges, and Exit Activities, Net$21 $11 $
Accelerated depreciationCost of Sales17 26 
Inventory and asset write-offsBusiness Combinations, Shutdown and Other Special Charges, and Exit Activities, Net— 14 
Total$38 $51 $15 

Year Ended December 31,
In millionsLocation in Statement of Operations202320222021
Severance Costs and Other(a)
Business Combinations, Exit Activities and Other Special Charges, Net$25 $$21 
Asset Write-offs and Start-Up Costs(b)
Business Combinations, Exit Activities and Other Special Charges, Net22 — 
Accelerated DepreciationCost of Sales42 17 
Total$89 $17 $38 
(a)Costs incurred include activities for post-employment benefits, retention bonuses, incentives and professional services. (see “Note 1 - Business Combinations, Exit Activities and Other Special Charges, Net”).
(b) Costs incurred include non-cash write-offs for items such as machinery, supplies and inventory.

The following table summarizes the balance of accrued expenses related to restructuring:

In millionsTotal
Balance at December 31, 2019$
Costs incurred11 
Payments(6)
Balance at December 31, 2020$12 
Costs incurred21 
Payments(20)
Adjustments (a)
(5)
Balance at December 31, 2021$
Costs Incurred
Payments(6)
Adjustments(a)
(2)
Balance at December 31, 2022$
Costs Incurred25 
Payments(4)
Adjustments(a)
(1)
Balance at December 31, 2023$21 
(a) Adjustments related to changes in estimates of severance costs.

In conjunction with
79

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Due to the CRB platform optimization project and closure of Tama in the smaller CRB Mill,second quarter of 2023, the Company currentlyincurred charges within the Paperboard Manufacturing reportable segment for post-employment benefits, retention bonuses and incentives of $3 million, and accelerated depreciation and inventory and asset write-offs of $27 million through December 31, 2023. No further charges or accelerated depreciation are expected related to Tama.

In addition, due to the expected closures of the additional two recycled paperboard manufacturing facilities, the Company incurred charges within the Paperboard Manufacturing reportable segment for post-employment benefits, retention bonuses and incentives of $13 million, and accelerated depreciation and inventory and asset write-offs of $5 million through December 31, 2023. The Company expects to incur total charges associated with these exit activities for post-employment benefits, retention bonuses and incentives in the range of $15$20 million to $20$25 million and for accelerated depreciation and inventory and asset write-offs in the range of $45$15 million to $50$20 million and for start-up chargesthrough 2026.

Due to the expected closures of for the new CRB paper machine of approximately $25 million. Through December 31, 2021,packaging facilities, the Company has incurred cumulative exit activity charges within the Americas Paperboard Packaging and Europe Paperboard Packaging reportable segments for post-employment benefits, retention bonuses and incentives of $15$9 million accelerated depreciation of $45 million, and start-upthrough December 31, 2023. The Company also incurred charges forwithin the new CRB paper machine of $21 million.

For the closures of the White Pigeon, Michigan CRB mill and the shutdown of the PM1 containerboard machine in West Monroe, Louisiana, the Company has incurred cumulative exit activity chargesAmericas Paperboard Packaging reportable segment for post-employment benefits of $2 million and accelerated depreciation and inventory and asset write-offs of $17$10 million through December 31, 2021.2023. The Company does not expectexpects to incur any additional significant coststotal charges relatedassociated with these exit activities for post-employment benefits, retention bonuses and incentives in the range of $10 million to these closures.$15 million and for accelerated depreciation and inventory and asset write-offs in the range of $15 million to $20 million through 2024.

Additionally, the Company has incurred start-up charges within the Paperboard Manufacturing reportable segment for the new recycled paperboard manufacturing facility in Waco of $2 million through December 31, 2023. The Company expects to incur total start-up charges of approximately $25 million to $30 million for the new recycled paperboard manufacturing facility through 2026.

NOTE 19.    IMPAIRMENT AND DIVESTITURE OF RUSSIAN BUSINESS

In the second quarter of 2022, the Company began the process of divesting its interests in its two packaging facilities in Russia (the “Russian Operations”), which met the criteria to be considered a business, through a sale of 100% of the outstanding shares. The assets and liabilities to be disposed of in connection with this transaction met the held for sale criteria as of June 30, 2022 and each subsequent quarter end through the date of sale. During 2022 and 2023, the Company incurred $106 million of impairment losses associated with the Russian Operations including $96 million in 2022, which includes $12 million of goodwill impairment initially recognized in Q2 2022 and $10 million in 2023, all of which are included in the Business Combinations, Exit Activities, and Other Special Charges, Net line in the Consolidated Statement of Operations.

On November 30, 2023, the Company completed the sale to former members of management of its Russian Operations (the "Buyer") for total consideration of $62 million, which was primarily a long-term loan to the Buyer with a maturity date in 2038 (the “Vendor Loan”). Given the current government sanctions and restrictions on movement of currency out of Russia to satisfy payments on the notes, the Company placed a valuation allowance of $48 million against the Vendor Loan receivable. The Vendor Loan, along with the other transaction agreements, grants the Buyer full power to direct the activities that most significantly impact the Russian Operations and economic rights over the Russian Operations, with no power or participating rights granted to the Company. There are, however, security rights in place to protect and facilitate the repayment of the Vendor Loan. Other rights included in the sale are contingent in nature and the Company does not believe such rights have significant value nor do they confer power to Company in evaluating which party is the primary beneficiary of this VIE. We will continue to monitor such rights and their impacts to the Company, if any, in the future. The Company has concluded that it is not the primary beneficiary of the business upon closing of the sale, and the Russian Operations were deconsolidated as of that date. The Vendor Loan, net is included in Other Assets on the Consolidated Balance Sheet. On the date of the sale, the Company recorded a final additional loss on the sale of $4 million, which is recorded in the Business Combinations, Exit Activities, and Other Special Charges, Net line in the Consolidated Statement of Operations. The operating results of the Russian Operations for the eleven months ended November 30, 2023 are included in the Company's Sales and Net Income in the Consolidated Statements of Operations. Total Net Sales and Net Income for the Russian Operations during this time were $90 million and $8 million, respectively.

In addition, the Company historically had an intercompany payable to the Russian Operations. As of the date of the sale, the intercompany payable was converted to an external third-party loan payable (the “Loan Payable”). The Loan Payable will mature in 2037. The Loan Payable totaling $35 million is reflected in the Other Noncurrent Liabilities on the Consolidated Balance Sheet.

NOTE 19.20.    RELATED PARTY TRANSACTIONS

In connection with the NACP Combination, the Company entered into agreements with IPInternational Paper Company, a New York corporation (“IP”) for transition services, fiber procurement fees, and corrugated products and ink supply. Payments to IP for the twelve months ended December 31, 2021 were $4 million for fiber procurement fees and corrugated products were $4 million (related to pass through wood purchases of $81 million) and $13 million respectively. Payments to IP for the twelve months ended December 31, 2020 for fiber procurement fees and corrugated products were $12 million (related to pass through wood purchases of $204 million) and $28 million, respectively. As discussed in "Note 1 - Nature of Business and Summary of Significant Accounting Policies",products. IP has no ownership interest remaining in GPIP as of May 21, 2021.



8380

GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 21.    SUBSEQUENT EVENTS

On February 16, 2024, the Company announced that its Board of Directors declared a quarterly dividend of $0.10 per share of common stock to stockholders of record at the close of business on March 15, 2024. The dividend is payable on April 5, 2024.

On February 20, 2024, the Company entered into a definitive agreement with Clearwater Paper Corporation to sell all of the assets associated with its Augusta, Georgia paperboard manufacturing facility for approximately $700 million in cash. The transaction is expected to close in the second quarter of 2024, subject to regulatory approvals and other customary closing conditions.

81


Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Graphic Packaging Holding Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Graphic Packaging Holding Company and its subsidiaries (the “Company”) as of December 31, 20212023 and 2020,2022, and the related consolidated statements of operations, of comprehensive income, shareholders’of shareholders' equity and of cash flows for each of the twothree years in the period ended December 31, 2021,2023, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2021,2023, based on criteria established inInternal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20212023 and 2020,2022, and the results of its operations and its cash flows for each of the twothree years in the period ended December 31, 20212023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021,2023, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, 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 appearing under Item 9A.Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. 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.

As described inManagement’s Report on Internal Control overOver Financial Reporting, management has excluded Americraft Carton, Inc. and AR Packaging Group ABBell Incorporated (“Bell”) from its assessment of internal control over financial reporting as of December 31, 20212023 because they wereit was acquired by the Company in a purchase business combinationscombination during 2021.2023. We have also excluded Americraft Carton, Inc. and AR Packaging Group ABBell from our audit of internal control over financial reporting. Americraft Carton, Inc. and AR Packaging Group AB areBell is a wholly-owned subsidiariessubsidiary whose total assets and total net salesrevenues excluded from management’s assessment and our audit of internal control over financial reporting represent 1.1%2.4% and 7.3% of total assets, respectively and 1.5% and 2.5% of total net sales,0.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.





2023.

8482


Definition and Limitations of Internal Control over Financial Reporting

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.

Critical Audit Matters

The critical audit mattersmatter communicated below are mattersis a matter arising from the current period audit of the consolidated financial statements that werewas communicated or required to be communicated to the audit committee and that (i) relaterelates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattersmatter below, providing a separate opinionsopinion on the critical audit mattersmatter or on the accounts or disclosures to which they relate.

Acquisition of AR Packaging Group AB – Customer Relationships Intangible Asset Valuation

As described in Notes 1 and 4 to the consolidated financial statements, the Company completed its acquisition of AR Packaging Group AB (“AR Packaging”) for total cash consideration of $1,412 million, net of cash acquired of $75 million on November 1, 2021, which resulted in recording a customer relationships intangible asset of $439 million.As disclosed by management, customer relationships were assigned a fair value using a discounted cash flow analysis. Estimating the fair value involved the use of significant judgments and assumptions by management, including the discount rate, annual revenue growth rates, customer attrition rates, projected operating expenses, projected earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, tax rate, depreciation, contributory asset charge, and future earnings projections, among others.

The principal considerations for our determination that performing procedures relating to the valuation of the customer relationships intangible asset from the AR Packaging acquisition is a critical audit matter are (i) the high degree of auditor judgment and subjectivity in performing procedures related to the fair value of the customer relationships intangible asset due to the significant judgment by management when determining the estimated fair value of the customer relationships intangible asset acquired; (ii) the significant audit effort in evaluating management’s significant assumptions related to the discount rate, annual revenue growth rates, customer attrition rates, projected operating expenses, projected EBITDA margins, tax rate, depreciation, and contributory asset charge; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

85


Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships intangible asset and the development of the significant assumptions related to the discount rate, annual revenue growth rates, customer attrition rates, projected operating expenses, projected EBITDA margins, tax rate, depreciation, and contributory asset charge. These procedures also included, among others (i) reading the purchase agreement; (ii) evaluating management’s accounting related to the business combination; and (iii) testing management’s process for estimating the fair value of the customer relationships intangible asset acquired. Testing management’s process included evaluating the appropriateness of the discounted cash flow analysis, testing the completeness and accuracy of the underlying data provided by management, and evaluating the reasonableness of the significant assumptions related to the discount rate, annual revenue growth rates, customer attrition rates, projected operating expenses, projected EBITDA margins, tax rate, depreciation, and contributory asset charge. Evaluating the reasonableness of the annual revenue growth rates, projected operating expenses, and projected EBITDA margins involved considering the past performance of AR Packaging and economic and industry forecasts. Evaluating the reasonableness of the customer attrition rates involved considering AR Packaging’s historical revenue by customer. Evaluating the reasonableness of the tax rate involved considering the blended state and federal rates for the jurisdictions in which AR Packaging operates. Evaluating the reasonableness of depreciation involved considering the relationship of depreciation to revenue. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow analysis and in evaluating the reasonableness of the significant assumptions related to the discount rate, customer attrition rates, and contributory asset charge.it relates.

Goodwill Impairment Assessment – Foodservice- Europe Reporting Unit

As described in Note 1 to the consolidated financial statements, the Company’s consolidated goodwill balance was $2,015$2,103 million as of December 31, 2021.2023. As disclosed by management, the goodwill associated with the FoodserviceEurope reporting unit was $43$499 million as of December 31, 2021.2023. Management tests goodwill for impairment annually as of October 1, as well as whenever events or changes in circumstances suggest that the estimated fair value of a reporting unit may no longer exceed its carrying amount. AnPotential goodwill impairment charge is recognized formeasured at the amountreporting unit level by whichcomparing the reporting unit’s carrying amount (including goodwill), to the fair value of athe reporting unit exceeds its fair value.unit. When performing the quantitative analysis, the estimated fair value of each reporting unit is determined by utilizing a discounted cash flow analysis based on the Company’s forecasts, discounted using a weighted average cost of capital and market indicators of terminal year cash flows based upon a multiple of EBITDA. In estimating thedetermining fair value of the FoodserviceEurope reporting unit, management relies on and considers a number of factors, including but not limited to, future operating results, business plans, economic projections of revenues and operating margins, estimatedforecasts including future cash flows, and market data and analysis.analysis, including market capitalization.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the FoodserviceEurope reporting unit isare a critical audit matter are (i) the high degree of auditor judgment and subjectivity in performing procedures related to the fair value of the reporting unit due to the significant judgment by management when determining the estimated fair value of the FoodserviceEurope reporting unit; (ii) the significant audit effort in evaluating management’s significant assumptionsassumption related to economic projections of revenues and operating margins and the terminal year EBITDA multiple;margins; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.



















86


Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Company’s FoodserviceEurope reporting unit and the development of the significant assumptionsassumption related to economic projections of revenues and operating margins and the terminal year EBITDA multiple.margins. These procedures also included, among others, testing management’s process for determining the fair value of the FoodserviceEurope reporting unit; evaluating the appropriateness of the discounted cash flow analysis; and evaluating the reasonableness of the significant assumptionsassumption related to economic projections of revenues and operating margins andmargins. Evaluating the terminal year EBITDA multiple. Evaluating assumptionsassumption related to economic projections of revenues and operating margins involved evaluating whether the assumptionsassumption used by management werewas reasonable considering (i) the current and past performance of the FoodserviceEurope reporting unit; (ii) the consistency with external market and industry data; and (iii) whether these assumptions werethis assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow analysis and in evaluating the reasonableness of the terminal year EBITDA multiple significant assumption.

analysis.

/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
February 22, 202221, 2024

We have served as the Company’s auditor since 2020.


8783

Table of Contents
Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Graphic Packaging Holding Company

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations, comprehensive income, shareholders' equity and cash flows of Graphic Packaging Holding Company (the Company) for the year ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.


/s/ Ernst & Young LLP

We served as the Company’s auditor from 2008 to 2020.

Atlanta, Georgia
February 10, 2020


88

Table of Contents
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management has established disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission rules and forms. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management to allow timely decisions regarding required disclosure.

Based on management’s evaluation as of the end of the period covered by this Annual Report on Form 10-K, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)15d15(e) promulgated under the Exchange Act) were effective as of December 31, 2021,2023, the end of the period covered by this Annual Report on Form 10-K.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Exchange Act Rule 13a-15(f). 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. 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 Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations; 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. The Company's management did not include in its assessment the internal controls of Americraft Carton, Inc. ("Americraft") and AR Packaging Group AB ("AR Packaging"Bell Incorporated (“Bell”), which werewas acquired by the Companycompany in business combinations in 20212023 and areis included in the Company'sCompany’s results for the year ended December 31, 2021.2023. As of December 31, 2021,2023, the Americraft and AR Packaging acquisitionsBell acquisition total assets represent 1.1% and 7.3%2.4% of the Company’s consolidated total assets, respectively.assets. Net Sales attributable to the Americraft and AR Packaging acquisitionsBell acquisition represented 1.5% and 2.5%less than 0.6% of the Company’s consolidated Net Sales for the twelve months ended December 31, 2021, respectively.

The Company’s management, under the supervision of and with the participation of the President and Chief Executive Officer and the Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 based on criteria for effective control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment the Company’s management concluded that its internal control over financial reporting was effective as of December 31, 2021.2023.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 20212023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 20212023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION
None.

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ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.




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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to Instruction G(3) to Form 10-K, the information relating to Directors of the Registrant, compliance with Section 16(a) of the Exchange Act, compliance with the Company’s Code of Ethics, and certain other information required by Item 910 is incorporated by reference to the Registrant’s definitive Proxy Statement for the 20222024 Annual Meeting of Stockholders, which is to be filed pursuant to Regulation 14A within 120 days after the end of the Registrant’s fiscal year ended December 31, 2021.2023.

ITEM 11.    EXECUTIVE COMPENSATION
Pursuant to Instruction G(3) to Form 10-K, the information required by Item 11 is incorporated by reference to the Registrant’s definitive Proxy Statement for the 20222024 Annual Meeting of Stockholders, which is to be filed pursuant to Regulation 14A within 120 days after the end of the Registrant’s fiscal year ended December 31, 2021.2023.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND     RELATED STOCKHOLDER MATTERS
Pursuant to Instruction G(3) to Form 10-K, the information required by Item 12 is incorporated by reference to the Registrant’s definitive Proxy Statement for the 20222024 Annual Meeting of Stockholders, which is to be filed pursuant to Regulation 14A within 120 days after the end of the Registrant’s fiscal year ended December 31, 2021.2023.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Pursuant to Instruction G(3) to Form 10-K, the information required by Item 13 is incorporated by reference to the Registrant’s definitive Proxy Statement for the 20222024 Annual Meeting of Stockholders, which is to be filed pursuant to Regulation 14A within 120 days after the end of the Registrant’s fiscal year ended December 31, 2021.2023.


ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES
Pursuant to Instruction G(3) to Form 10-K, the information required by Item 14 is incorporated by reference to the Registrant’s definitive Proxy Statement for the 20222024 Annual Meeting of Stockholders, which is to be filed pursuant to Regulation 14A within 120 days after the end of the Registrant’s fiscal year ended December 31, 2021.2023.


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PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a. Financial statements, financial statement schedule and exhibits filed as part of this report:

1.Consolidated Statements of Operations for each of the three years in the period ended December 31, 20212023

Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 20212023

Consolidated Balance Sheets as of December 31, 2021,2023, and 20202022

Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended December 31, 20212023

Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 20212023

Notes to Consolidated Financial Statements

Reports of Independent Registered Public Accounting FirmsFirm

2.All schedules are omitted as the information required is either included elsewhere in the consolidated financial statements herein or is not applicable.

3.Exhibits to Annual Report on Form 10-K for Year Ended December 31, 2021.2023.
Exhibit
Number
 Description
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4
4.5
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4.6
4.7
4.8
4.9
4.10
4.11
10.1*
GPI U.S. Consolidated Pension Plan Master Document as amended and restated, effective January 1, 2017. Filed as exhibit 10.1 to the Registrant's Annual Report on Form 10-K filed on February 8, 2017 and incorporated herein by reference.
10.2*
10.3*
10.4*
10.5*
10.6*10.3*
10.7*10.4*
10.8*10.5*
10.9*10.6*
10.10Master Services Agreement dated November 29, 2007 by and between Graphic Packaging International, Inc. and Perot Systems Corporation. Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 5, 2007 and incorporated herein by reference.
10.11*10.7*
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10.12*
10.1310.8
10.14*10.9*
10.15*10.10*
10.16
10.17
10.18*
10.19*
10.20*
10.21*10.11*
10.22*10.12*
87


10.23*10.13*
10.24
10.25
10.26
10.27*10.14*
10.28*
10.29*10.15*
10.30*10.16*
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10.31*10.17*
10.32*10.18*
10.33*
Seventh Amendment to the GPI Savings Plan effective as of January 1 2018. Filed as Exhibit 10.54 to the Registrant's Annual Report on Form 10-K filed on February 7, 2018 and incorporated herein by reference.
10.34*
Eighth Amendment to the GPI Savings Plan effective as of January 1, 2018. Filed as Exhibit 10.55 to the Registrant's Annual Report on Form 10-K filed on February 7, 2018 and incorporated herein by reference.
10.35*
10.36*10.19*
10.37*10.20*
10.38
10.3910.21
10.40
10.41
10.42
10.43
10.44
10.45*10.22*
10.4610.23
10.47
10.4810.24
10.4910.25
10.5010.26
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10.5110.27
10.5210.28
88


10.5310.29
10.30*
10.31
10.32
10.33
10.34*
14.1
19.1
21.1
22.1
23.1
24.1
31.1
31.2
32.1
32.2
97.1
101.INSInstance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema
101.CALXBRL Taxonomy Extension Calculation Linkbase
101.DEFXBRL Taxonomy Extension Definition Linkbase
101.LABXBRL Taxonomy Extension Label Linkbase
101.PREXBRL Taxonomy Extension Presentation Linkbase
104Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101).
_____________________
* Executive compensation plan or agreement
















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ITEM 16.    FORM 10-K SUMMARY

None.
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

GRAPHIC PACKAGING HOLDING COMPANY
(Registrant)
/s/ Stephen R. SchergerExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)
February 22, 202221, 2024
Stephen R. Scherger


Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Michael P. DossPresident and Chief Executive Officer
(Principal Executive Officer)
February 22, 202221, 2024
Michael P. Doss
/s/ Stephen R. SchergerExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)
February 22, 202221, 2024
Stephen R. Scherger
/s/ Charles D. LischerSenior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 22, 202221, 2024
Charles D. Lischer



























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POWER OF ATTORNEY

Each of the directors of the Registrant whose signature appears below hereby appoints Stephen R. Scherger and Lauren S. Tashma, and each of them severally, as his or her attorney-in-fact to sign in his or her name and behalf, in any and all capacities stated below, and to file with the Securities and Exchange Commission any and all amendments to this report on Form 10-K, making such changes in this report on Form 10-K as appropriate, and generally to do all such things on their behalf in their capacities as directors and/or officers to enable the Registrant to comply with the provisions of the Securities Exchange Act of 1934, and all requirements of the Securities and Exchange Commission.

SignaturesTitleDate
/s/ Aziz AghiliDirectorFebruary 21, 2024
Aziz Aghili
/s/ Laurie BrlasDirectorFebruary 22, 202221, 2024
Laurie Brlas
/s/ David D. CampbellDirectorFebruary 22, 2022
David D. Campbell
/s/ Paul D. CarricoDirectorFebruary 22, 2022
Paul D. Carrico
/s/ Michael P. DossDirector, President and Chief Executive OfficerFebruary 22, 202221, 2024
Michael P. Doss
/s/ Robert A. HagemannDirectorFebruary 22, 202221, 2024
Robert A. Hagemann
/s/ Philip R. MartensChairman of the BoardFebruary 22, 202221, 2024
Philip R. Martens
/s/ Mary K. RhinehartDirectorFebruary 22, 202221, 2024
Mary K. Rhinehart
/s/ Dean A. ScarboroughDirectorFebruary 22, 202221, 2024
Dean A. Scarborough
/s/ Larry M. VenturelliDirectorFebruary 22, 202221, 2024
Larry M. Venturelli
/s/ Lynn A. WentworthDirectorFebruary 22, 202221, 2024
Lynn A. Wentworth



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