Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 19, 2020 | |
Cover [Abstract] | ||
Document type | 10-Q | |
Document quarterly report | true | |
Document period end date | Sep. 30, 2020 | |
Document transition report | false | |
Entity file number | 001-33988 | |
Entity registrant name | Graphic Packaging Holding Co | |
Entity incorporation, state or country code | DE | |
Entity tax identification number | 26-0405422 | |
Entity address, address line one | 1500 Riveredge Parkway, Suite 100 | |
Entity address, city or town | Atlanta | |
Entity address, state or province | GA | |
Entity address, postal zip code | 30328 | |
City area code | 770 | |
Local phone number | 240-7200 | |
Title of 12(b) security | Common Stock, $0.01 par value per share | |
Trading symbol | GPK | |
Security exchange name | NYSE | |
Entity current reporting status | Yes | |
Entity interactive data current | Yes | |
Entity filer category | Large Accelerated Filer | |
Entity small business | false | |
Entity emerging growth company | false | |
Entity shell company | false | |
Entity common stock, shares outstanding | 270,783,150 | |
Entity central index key | 0001408075 | |
Amendment flag | false | |
Document fiscal year focus | 2020 | |
Document fiscal period focus | Q3 | |
Current fiscal year end date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net Sales | $ 1,697.7 | $ 1,581.6 | $ 4,907.8 | $ 4,640.3 |
Cost of Sales | 1,442.2 | 1,315.2 | 4,069.4 | 3,820 |
Selling, General and Administrative | 126.3 | 131.3 | 394.1 | 387.8 |
Other Expense, Net | 1.1 | 4.2 | 2.2 | 7.1 |
Business Combinations and Shutdown and Other Special Charges, Net | 9 | 8.2 | 48.2 | 24.3 |
Income from Operations | 119.1 | 122.7 | 393.9 | 401.1 |
Nonoperating Pension and Postretirement Benefit Income (Expense) | 0.2 | 0 | (150.8) | (0.1) |
Interest Expense, Net | (32) | (35.9) | (96.4) | (106.4) |
Income before Income Taxes and Equity Income of Unconsolidated Entity | 87.3 | 86.8 | 146.7 | 294.6 |
Income Tax Expense | (8.3) | (16.9) | (21.2) | (60.9) |
Income before Equity Income of Unconsolidated Entity | 79 | 69.9 | 125.5 | 233.7 |
Equity Income of Unconsolidated Entity | 0.3 | 0.1 | 0.7 | 0.5 |
Net Income | 79.3 | 70 | 126.2 | 234.2 |
Net Income Attributable to Noncontrolling Interest | (15.6) | (17.9) | (23.1) | (60.4) |
Net Income Attributable to Graphic Packaging Holding Company | $ 63.7 | $ 52.1 | $ 103.1 | $ 173.8 |
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic (in dollars per share) | $ 0.23 | $ 0.18 | $ 0.37 | $ 0.59 |
Net Income Per Share Attributable to Graphic Packaging Holding Company — Diluted (in dollars per share) | $ 0.23 | $ 0.18 | $ 0.36 | $ 0.59 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Graphic Packaging Holding Company | ||||
Net Income Attributable to Graphic Packaging Holding Company | $ 63.7 | $ 52.1 | $ 103.1 | $ 173.8 |
Other Comprehensive Income, Net of Tax: | ||||
Derivative Instruments | 5.5 | 6.8 | (4.8) | |
Pension and Postretirement Benefit Plans | 0.8 | 1.1 | 114.4 | 3.2 |
Currency Translation Adjustment | 23.8 | (14.6) | (10.9) | (13.3) |
Other Comprehensive Income (Loss), Net of Tax | 30.1 | (13.5) | 110.3 | (14.9) |
Total Comprehensive Income | 93.8 | 38.6 | 213.4 | 158.9 |
Noncontrolling Interest | ||||
Net Income (Loss) Attributable to Nonredeemable Noncontrolling Interest | 13.6 | 13.8 | 26.3 | 46.6 |
Other Comprehensive Income (Loss), Net of Tax: | ||||
Derivative Instruments | 1.1 | 1.5 | (1.4) | |
Pension and Postretirement Benefit Plans | 0.1 | 0.3 | 32.5 | 0.9 |
Currency Translation Adjustment | 4.3 | (3.1) | (3.1) | (2.8) |
Total Other Comprehensive Income, Net of Tax | 5.5 | (2.8) | 30.9 | (3.3) |
Total Comprehensive Income | 19.1 | 11 | 57.2 | 43.3 |
Redeemable Noncontrolling Interest | ||||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | 2 | 4.1 | (3.2) | 13.8 |
Other Comprehensive Income (Loss), Net Of Tax | ||||
Derivative Instruments | 0 | (0.1) | (0.4) | |
Pension and Postretirement Benefit Plans | 0 | 0.1 | 9.5 | 0.3 |
Currency Translation Adjustment | 0.3 | (0.9) | (0.5) | (0.9) |
Total Other Comprehensive Income (Loss), Net of Tax | 0.3 | (0.8) | 8.9 | (1) |
Total Comprehensive Income | 2.3 | 3.3 | 5.7 | 12.8 |
Total | ||||
Net Income (Loss), Including Portion Attributable to Redeemable Noncontrolling Interest | 79.3 | 70 | 126.2 | 234.2 |
Other Comprehensive Income (Loss), Net of Tax | ||||
Derivative Instruments | 6.6 | 8.2 | (6.6) | |
Pension and Postretirement Benefit Plans | 0.9 | 1.5 | 156.4 | 4.4 |
Currency Translation Adjustment | 28.4 | (18.6) | (14.5) | (17) |
Total Other Comprehensive Loss, Net of Tax | 35.9 | (17.1) | 150.1 | (19.2) |
Total Comprehensive Income | $ 115.2 | $ 52.9 | $ 276.3 | $ 215 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and Cash Equivalents | $ 55.5 | $ 152.9 |
Receivables, Net | 743.4 | 504.5 |
Inventories, Net | 1,153.8 | 1,095.9 |
Other Current Assets | 65.7 | 52.3 |
Total Current Assets | 2,018.4 | 1,805.6 |
Property, Plant and Equipment, Net | 3,437.4 | 3,253.8 |
Goodwill | 1,469.9 | 1,477.9 |
Intangible Assets, Net | 447.8 | 477.3 |
Other Assets | 308.5 | 275.3 |
Total Assets | 7,682 | 7,289.9 |
Current Liabilities: | ||
Short-Term Debt and Current Portion of Long-Term Debt | 495.8 | 50.4 |
Accounts Payable | 738.5 | 716.1 |
Compensation and Employee Benefits | 193.4 | 168.4 |
Other Accrued Liabilities | 292 | 263.8 |
Total Current Liabilities | 1,719.7 | 1,198.7 |
Long-Term Debt | 3,196.9 | 2,809.9 |
Deferred Income Tax Liabilities | 529 | 511.8 |
Accrued Pension and Postretirement Benefits | 106.7 | 140.4 |
Other Noncurrent Liabilities | 295.8 | 266.8 |
Redeemable Noncontrolling Interest (Note 13) | 0 | 304.3 |
SHAREHOLDERS’ EQUITY | ||
Preferred Stock, par value $0.01 per share; 100,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common Stock, par value $0.01 per share; 1,000,000,000 shares authorized; 272,545,029 and 290,246,907 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 2.7 | 2.9 |
Capital in Excess of Par Value | 1,732.4 | 1,876.7 |
(Accumulated Deficit) Retained Earnings | (52) | 56.4 |
Accumulated Other Comprehensive Loss | (255.5) | (365.8) |
Total Graphic Packaging Holding Company Shareholders' Equity | 1,427.6 | 1,570.2 |
Noncontrolling Interest | 406.3 | 487.8 |
Total Equity | 1,833.9 | 2,058 |
Total Liabilities and Shareholders' Equity | $ 7,682 | $ 7,289.9 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 272,545,029 | 290,246,907 |
Common stock, shares outstanding (in shares) | 272,545,029 | 290,246,907 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interests | |
Beginning Balance (in shares) at Dec. 31, 2018 | 299,807,779 | ||||||
Beginning balance at Dec. 31, 2018 | $ 2,018.5 | $ 3 | $ 1,944.4 | $ 10 | $ (377.9) | $ 439 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 73.5 | 57.9 | 15.6 | ||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Derivative Instruments | (0.5) | (0.4) | (0.1) | ||||
Pension and Postretirement Benefit Plans | 1.4 | 1.2 | 0.2 | ||||
Currency Translation Adjustment | 4.8 | 3.9 | 0.9 | ||||
Repurchase of Common Stock (in shares) | [1] | (5,033,426) | |||||
Repurchase of Common Stock | [1] | (59.5) | $ (0.1) | (27.2) | (32.2) | ||
Dividends Declared | (22.1) | (22.1) | |||||
Reclassification of Redeemable Noncontrolling Interest for Share Repurchases | (6.7) | (6.7) | |||||
Distribution of Membership Interest | (5) | (5) | |||||
Recognition of Stock-Based Compensation, Net | 0.9 | 0.9 | |||||
Issuance of Shares for Stock-Based Awards (in shares) | 530,196 | ||||||
Ending Balance (in shares) at Mar. 31, 2019 | 295,304,549 | ||||||
Ending balance at Mar. 31, 2019 | 2,005.3 | $ 2.9 | 1,918.1 | 13.6 | (373.2) | 443.9 | |
Beginning Balance (in shares) at Dec. 31, 2018 | 299,807,779 | ||||||
Beginning balance at Dec. 31, 2018 | 2,018.5 | $ 3 | 1,944.4 | 10 | (377.9) | 439 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income Attributable to Graphic Packaging Holding Company | 173.8 | ||||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Repurchase of Common Stock (in shares) | (3,729,361) | ||||||
Repurchase of Common Stock | (50.1) | (20.2) | (29.9) | ||||
Ending Balance (in shares) at Sep. 30, 2019 | 290,244,799 | ||||||
Ending balance at Sep. 30, 2019 | 2,034.6 | $ 2.9 | 1,901.4 | 45.1 | (392.8) | 478 | |
Beginning Balance (in shares) at Mar. 31, 2019 | 295,304,549 | ||||||
Beginning balance at Mar. 31, 2019 | 2,005.3 | $ 2.9 | 1,918.1 | 13.6 | (373.2) | 443.9 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 81 | 63.8 | 17.2 | ||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Derivative Instruments | (5.7) | (4.4) | (1.3) | ||||
Pension and Postretirement Benefit Plans | 1.3 | 0.9 | 0.4 | ||||
Currency Translation Adjustment | (3.2) | (2.6) | (0.6) | ||||
Repurchase of Common Stock (in shares) | (1,428,470) | ||||||
Repurchase of Common Stock | (18.3) | (7.7) | (10.6) | ||||
Dividends Declared | (22.1) | (22.1) | |||||
Reclassification of Redeemable Noncontrolling Interest for Share Repurchases | 19.1 | 19.1 | |||||
Distribution of Membership Interest | (6.4) | (6.4) | |||||
Recognition of Stock-Based Compensation, Net | 5.9 | 5.9 | |||||
Issuance of Shares for Stock-Based Awards (in shares) | 94,327 | ||||||
Issuance of Shares for Stock-Based Awards | 0 | ||||||
Ending Balance (in shares) at Jun. 30, 2019 | 293,970,406 | ||||||
Ending balance at Jun. 30, 2019 | 2,056.9 | $ 2.9 | 1,916.3 | 44.7 | (379.3) | 472.3 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 65.9 | 13.8 | |||||
Net Income Attributable to Graphic Packaging Holding Company | 52.1 | ||||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Pension and Postretirement Benefit Plans | 1.4 | 1.1 | 0.3 | ||||
Currency Translation Adjustment | (17.7) | (14.6) | (3.1) | ||||
Dividends Declared | (21.8) | (21.8) | |||||
Distribution of Membership Interest | (5.3) | (5.3) | |||||
Recognition of Stock-Based Compensation, Net | 5.3 | 5.3 | |||||
Issuance of Shares for Stock-Based Awards (in shares) | 3,754 | ||||||
Issuance of Shares for Stock-Based Awards | 0 | ||||||
Ending Balance (in shares) at Sep. 30, 2019 | 290,244,799 | ||||||
Ending balance at Sep. 30, 2019 | $ 2,034.6 | $ 2.9 | 1,901.4 | 45.1 | (392.8) | 478 | |
Beginning Balance (in shares) at Dec. 31, 2019 | 290,246,907 | 290,246,907 | |||||
Beginning balance at Dec. 31, 2019 | $ 2,058 | $ 2.9 | 1,876.7 | 56.4 | (365.8) | 487.8 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | (14.5) | (12.7) | (1.8) | ||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Derivative Instruments | (1.3) | (1) | (0.3) | ||||
Pension and Postretirement Benefit Plans | 145.7 | 113.3 | 32.4 | ||||
Currency Translation Adjustment | (56) | (46) | (10) | ||||
Repurchase of Common Stock (in shares) | [2] | (9,667,034) | |||||
Repurchase of Common Stock | [2] | (124.4) | $ (0.1) | (52.6) | (71.7) | ||
Dividends Declared | (21.1) | (21.1) | |||||
Redeemable Noncontrolling Interest Redemption Value Adjustment | 18.1 | 18.1 | |||||
Tax Effect of IP Redemption | 6.8 | 6.8 | |||||
Distribution of Membership Interest | (4.6) | (4.6) | |||||
Recognition of Stock-Based Compensation, Net | 3.6 | 3.6 | |||||
Issuance of Shares for Stock-Based Awards (in shares) | 788,561 | ||||||
Issuance of Shares for Stock-Based Awards | 0 | ||||||
Ending Balance (in shares) at Mar. 31, 2020 | 281,368,434 | ||||||
Ending balance at Mar. 31, 2020 | $ 2,010.3 | $ 2.8 | 1,852.6 | (49.1) | (299.5) | 503.5 | |
Beginning Balance (in shares) at Dec. 31, 2019 | 290,246,907 | 290,246,907 | |||||
Beginning balance at Dec. 31, 2019 | $ 2,058 | $ 2.9 | 1,876.7 | 56.4 | (365.8) | 487.8 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income Attributable to Graphic Packaging Holding Company | 103.1 | ||||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Redeemable Noncontrolling Interest Redemption Value Adjustment | 12.2 | ||||||
Reclassification of Redeemable Noncontrolling Interest for Share Repurchases | $ (296.1) | ||||||
Ending Balance (in shares) at Sep. 30, 2020 | 272,545,029 | 272,236,844 | |||||
Ending balance at Sep. 30, 2020 | $ 1,833.9 | $ 2.7 | 1,732.4 | (52) | (255.5) | 406.3 | |
Beginning Balance (in shares) at Mar. 31, 2020 | 281,368,434 | ||||||
Beginning balance at Mar. 31, 2020 | 2,010.3 | $ 2.8 | 1,852.6 | (49.1) | (299.5) | 503.5 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 66.6 | 52.1 | 14.5 | ||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Derivative Instruments | 3 | 2.3 | 0.7 | ||||
Pension and Postretirement Benefit Plans | 0.3 | 0.3 | |||||
Currency Translation Adjustment | 13.9 | 11.3 | 2.6 | ||||
Repurchase of Common Stock (in shares) | (2,622,283) | ||||||
Repurchase of Common Stock | (33.1) | (14.3) | (18.8) | ||||
Dividends Declared | (21.3) | (21.3) | |||||
Redeemable Noncontrolling Interest Redemption Value Adjustment | (5.4) | (5.4) | |||||
Distribution of Membership Interest | (5.6) | (5.6) | |||||
Recognition of Stock-Based Compensation, Net | 7.9 | 7.9 | |||||
Issuance of Shares for Stock-Based Awards (in shares) | 93,381 | ||||||
Issuance of Shares for Stock-Based Awards | 0 | ||||||
Ending Balance (in shares) at Jun. 30, 2020 | 278,839,532 | ||||||
Ending balance at Jun. 30, 2020 | 2,036.6 | $ 2.8 | 1,840.8 | (37.1) | (285.6) | 515.7 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 77.3 | 63.7 | 13.6 | ||||
Net Income Attributable to Graphic Packaging Holding Company | 63.7 | ||||||
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Derivative Instruments | 6.6 | 1.1 | |||||
Pension and Postretirement Benefit Plans | 0.9 | 0.8 | 0.1 | ||||
Currency Translation Adjustment | 28.1 | 23.8 | 4.3 | ||||
Repurchase of Common Stock (in shares) | (6,607,221) | ||||||
Repurchase of Common Stock | (94.1) | $ (0.1) | (36) | (58) | |||
Dividends Declared | (20.6) | (20.6) | |||||
Redeemable Noncontrolling Interest Redemption Value Adjustment | (0.5) | (0.5) | |||||
Reclassification of Redeemable Noncontrolling Interest for Share Repurchases | (210.9) | (87.4) | (123.5) | ||||
Tax Effect of IP Redemption | 9.2 | 9.2 | |||||
Distribution of Membership Interest | (5) | (5) | |||||
Recognition of Stock-Based Compensation, Net | 6.3 | 6.3 | |||||
Issuance of Shares for Stock-Based Awards (in shares) | 4,533 | ||||||
Issuance of Shares for Stock-Based Awards | $ 0 | ||||||
Ending Balance (in shares) at Sep. 30, 2020 | 272,545,029 | 272,236,844 | |||||
Ending balance at Sep. 30, 2020 | $ 1,833.9 | $ 2.7 | $ 1,732.4 | $ (52) | (255.5) | $ 406.3 | |
Other Comprehensive (Loss) Income, Net of Tax: | |||||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax, Parent | $ 5.5 | ||||||
[1] | Includes 33,263 shares repurchased but not yet settled as of March 31, 2019. | ||||||
[2] | Includes 410,400 shares repurchased but not yet settled as of March 31, 2020. (b) Includes 14,436 shares repurchased but not yet settled as of June 30, 2020. (c) Includes 308,185 shares repurchased but not yet settled as of September 30, 2020. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - shares | 3 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Shares repurchased but not yet settled (in shares) | 308,185 | 14,436 | 410,400 | 33,263 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 126.2 | $ 234.2 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation and Amortization | 356.5 | 337.8 |
Deferred Income Taxes | (6.4) | 34 |
Amount of Postretirement Expense Greater Than Funding | 145.2 | 0.6 |
Other, Net | 30.9 | 18.4 |
Changes in Operating Assets and Liabilities | (263.2) | (324.3) |
Net Cash Provided by Operating Activities | 389.2 | 300.7 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital Spending | (402.6) | (213.1) |
Packaging Machinery Spending | (23.1) | (16.8) |
Acquisition of Businesses, Net of Cash Acquired | (120.6) | (52.9) |
Beneficial Interest on Sold Receivables | 85.6 | 320.3 |
Beneficial Interest Obtained in Exchange for Proceeds | (7.4) | (155.4) |
Other, Net | (8.8) | (3.5) |
Net Cash Used in Investing Activities | (476.9) | (121.4) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of Common Stock | (247.3) | (128.8) |
Payments on Debt | (27.4) | (27.4) |
Redemption of Noncontrolling Interest | (500) | 0 |
Proceeds from Issuance of Debt | 800 | 300 |
Borrowings under Revolving Credit Facilities | 2,180.5 | 1,970.7 |
Payments on Revolving Credit Facilities | (2,122.3) | (2,216) |
Repurchase of Common Stock related to Share-Based Payments | (9) | (4.1) |
Debt Issuance Costs | (11.6) | (5) |
Dividends and Distributions Paid to GPIP Partner | (80.4) | (87) |
Other, Net | 10 | (3.2) |
Net Cash Used in Financing Activities | (7.5) | (200.8) |
Effect of Exchange Rate Changes on Cash | (2.2) | (0.3) |
Net Decrease in Cash and Cash Equivalents | (97.4) | (21.8) |
Cash and Cash Equivalents at Beginning of Period | 152.9 | 70.5 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 55.5 | 48.7 |
Non-cash Investing and Financing Activities: | ||
Beneficial Interest Obtained in Exchange for Trade Receivables | 103 | |
Beneficial Interest Obtained (Sold) in Exchange for Trade Receivables | (91.7) | |
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities | 54.9 | 49.3 |
Right-of-Use Assets Obtained in Exchange for New Finance Lease Liabilities | $ 0 | $ 15.5 |
General Information
General Information | 3 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Information | GENERAL INFORMATION Nature of Business and Basis of Presentation 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 paper-based packaging solutions for a wide variety of products to food, beverage, foodservice and other consumer products companies. The Company operates on a global basis, is one of the largest producers of folding cartons in the United States ("U.S.") and holds leading market positions in coated-recycled paperboard ("CRB"), coated unbleached kraft paperboard ("CUK") and solid bleached sulfate paperboard ("SBS"). 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 packaging solutions designed to deliver marketing and performance benefits at a competitive cost by capitalizing on its low-cost paperboard mills and converting facilities, its proprietary carton and packaging designs, and its commitment to quality 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 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 2019 and 2018, GPIP repurchased 20.8 million partnership units from GPI Holding, which increased IP's ownership interest in GPIP from 20.5% at January 1, 2018 to 21.6% at December 31, 2019. GPI Holding distributed proceeds of such transaction up to the Company which used the proceeds to repurchase 20.8 million shares of its common stock pursuant to its share repurchase programs. On January 28, 2020, the Company announced that IP had notified the Company of its intent to begin the process of reducing its ownership interest in GPIP. Per the agreement between the parties, on January 29, 2020, GPIP purchased 15.1 million partnership units from IP for $250 million in cash. As a result, IP's ownership interest in GPIP decreased from 21.6% to 18.3% as of January 29, 2020. On August 10, 2020, the Company announced that IP had notified the Company of its intent to exchange additional partnership units. Per the agreement between the parties, on August 13, 2020, GPIP purchased 17.4 million partnership units from IP for $250 million in cash, which included full redemption of the remaining 3.1 million partnership units that were required to be redeemed in cash. As a result, IP's ownership interest in GPIP decreased to 14.5% as of August 13, 2020. Unless otherwise negotiated by the parties, IP's next opportunity to exchange their partnership units begins 180 days from the August 13, 2020 purchase date and is limited to the lesser of $250 million or 25% of the units owned immediately following the initial transaction, subject to a minimum. IP will have further opportunities to exchange their partnership units beginning 180 days after each purchase date. The Company may choose to satisfy these exchanges using shares of its common stock, cash, or a combination thereof. The Company’s Condensed 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. In the Company’s opinion, the accompanying Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the interim periods. The Company’s year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all the information required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with GPHC’s Form 10-K for the year ended December 31, 2019. In addition, the preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates and changes in these estimates are recorded when known. Revenue Recognition The Company has two primary activities, the manufacturing and converting of paperboard, from which it generates revenue from contracts with customers. Revenue is disaggregated primarily by geography and type of activity as further explained in " Note 11-Segments. " 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. 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 three months ended September 30, 2020 and 2019, the Company recognized $1,691.2 million and $1,577.6 million, respectively, of revenue from contracts with customers. For the nine months ended September 30, 2020 and 2019, the Company recognized $4,891.1 million and $4,627.2 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") 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 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 September 30, 2020 and December 31, 2019, contract assets were $16.9 million and $24.3 million, respectively. The Company's contract liabilities consist principally of rebates, and as of September 30, 2020 and December 31, 2019 were $44.8 million and $49.6 million, respectively. The Company did not have a material amount relating to backlog orders at September 30, 2020 or December 31, 2019. Accounts Receivable and Allowances 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") Accounting Standards Codification (the "Codification"). The loss on sale is not material and is included in Other Expense, Net on the Condensed Consolidated Statement of Operations. The following table summarizes the activity under these programs for the nine months ended September 30, 2020 and 2019, respectively: Nine Months Ended September 30, In millions 2020 2019 Receivables Sold and Derecognized $ 2,077.2 $ 2,033.1 Proceeds Collected on Behalf of Financial Institutions 2,029.0 1,660.0 Net Proceeds Received From Financial Institutions 37.0 37.9 Deferred Purchase Price at September 30 (a) 9.6 4.9 Pledged Receivables at September 30 267.4 93.1 (a) Included in Other Current Assets 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 consists principally of collection services, at September 30, 2020 and December 31, 2019, were approximately $606 million and $562 million, respectively. 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 nine months ended September 30, 2020 and 2019, the Company sold receivables of approximately $238 million and $129 million, respectively, related to these factoring arrangements. Capital Allocation Plan During the first nine months of 2020, the Company's board of directors declared three regular quarterly dividends of $0.075 per share of common stock to shareholders of record as follows: Date Declared Record Date Payment Date February 20, 2020 March 15, 2020 April 5, 2020 May 20, 2020 June 15, 2020 July 5, 2020 July 23, 2020 September 15, 2020 October 5, 2020 On January 28, 2019, 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 share repurchase program"). The previous $250 million share repurchase program was authorized on January 10, 2017 (the "2017 share repurchase program"). During the first nine months of 2020, the Company repurchased 18,896,538 shares of its common stock at an average price of $13.31, under the 2019 share repurchase program. During the nine months ended September 30, 2019, the Company repurchased 10,191,257 shares of its common stock at an average price of $12.55, which completed the 2017 share repurchase program. As of September 30, 2020, the Company has approximately $211 million available for additional repurchases under the 2019 share repurchase program. Business Combinations and Shutdown and Other Special Charges, Net The following table summarizes the transactions recorded in Business Combinations and Shutdown and Other Special Charges, Net in the Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, In millions 2020 2019 2020 2019 Charges Associated with Business Combinations $ 0.9 $ 0.6 $ (3.1) $ 3.2 Shutdown and Other Special Charges 3.7 4.6 29.9 18.1 Exit Activities (a) 4.4 3.0 21.4 3.0 Total $ 9.0 $ 8.2 $ 48.2 $ 24.3 (a) Relates to the Company's CRB mills, converting facility closures and the PM1 containerboard machine exit activities (see " Note 15 — Exit Activities" ). 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. During the second quarter of 2020, the Company recorded a bargain purchase gain of $6.6 million as the net fair value of assets acquired and liabilities assumed was greater than the purchase price. The gain associated with this acquisition is included in Charges Associated with Business Combinations in the table above. For more information, see " Note 3 — 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. During the second quarter of 2020, the Company closed the White Pigeon, Michigan CRB mill and shut down the PM1 containerboard machine. Charges associated with these projects are included in Exit Activities in the table above. For more information, see " Note 15 — 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 seven converting facilities across the United States which are included in 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 3 — Business Combinations ." In June 2020, the Company made the decision to close certain converting facilities that were acquired from Greif. The Burlington, North Carolina converting facility and the Los Angeles, California converting facility were closed in the third quarter of 2020. Charges associated with the shutdown of these converting facilities are included in Exit Activities in the table above. For more information, see " Note 15 — 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 $12.2 million, which was recorded in Shutdown and Other Special Charges in the table above. For more information, see " Note 6 — Pensions and Other Postretirement Benefits ." During the second quarter of 2020, the Company made one-time payments to front-line production employees and made contributions to local food banks in every community with our manufacturing operations. The charges associated with these 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 two converting facilities located in Auburn, Indiana and Elgin, Illinois (included in the Americas Paperboard Packaging reportable segment) and one CRB paperboard mill located in White Pigeon, Michigan (included in the Paperboard Mills reportable segment). Charges associated with this acquisition are included in Charges Associated with Business Combinations in the table above. For more information, see " Note 3 — Business Combinations ." On September 24, 2019, the Company announced its plan to invest approximately $600 million in a new CRB paper machine in Kalamazoo, Michigan. In conjunction with the completion of this project, the Company currently expects to close two of its smaller CRB Mills in 2022 in order to remain capacity neutral. Charges associated with this project are included in Exit Activities in the table above. For more information, see " Note 15 — Exit Activities ." During 2019, the Company began a three-year program to dismantle and dispose of idle and abandoned assets primarily at the paperboard mills. Expected charges for this program are approximately $40 million. Charges associated with this program are included in Shutdown and Other Special Charges in the table above. Adoption of New Accounting Standards Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model (known as the "current expected credit loss model") that is based on expected losses rather than incurred losses. The adoption of this standard did not have a material impact on the Company's financial position, results of operations and cash flows. Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . This amendment modifies the disclosure requirements on fair value measurements. The adoption of this standard did not have a material impact on the Company's financial disclosures. Effective January 1, 2020, the Company adopted ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU broadens the scope of Accounting Standards Codification ("ASC") 350-40 with an updated definition of a hosting arrangement and clarifies certain aspects of accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The adoption of this standard did not have a material impact on the Company's financial position, results of operations and cash flows. Accounting Standards Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20); Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans . This amendment removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. The guidance is effective for fiscal years ending after December 15, 2020 and would be applied on a retrospective basis. The Company is currently evaluating the impact this guidance will have on its related disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This amendment modifies ASC 740 to simplify the accounting for income taxes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the impact of this new guidance. |
Inventories, Net
Inventories, Net | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | INVENTORIES, NET Inventories, Net by major class: In millions September 30, 2020 December 31, 2019 Finished Goods $ 448.2 $ 434.8 Work in Progress 147.2 123.4 Raw Materials 380.6 370.0 Supplies 177.8 167.7 Total $ 1,153.8 $ 1,095.9 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS 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 has been allocated to assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. The Company recorded $4.7 million related to identifiable intangible assets (customer relationships with useful lives of fifteen years), $42.8 million related to net tangible assets (primarily working capital, land/buildings and equipment) and a bargain purchase gain of $6.6 million as the net fair value of assets acquired and liabilities assumed was greater than the purchase price. During 2020, Net Sales and Income from Operations for the Quad acquisition were $58.5 million and $0.6 million, respectively. 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 seven converting facilities 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 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 adjustments in subsequent periods once the third-party valuations are finalized. The Company recorded $13.2 million related to identifiable intangible assets (customer relationships with useful lives of fifteen years) and $66.9 million related to net tangible assets (primarily working capital, land/buildings and equipment). During 2020, Net Sales and Loss from Operations for the Consumer Packaging Group acquisition were $116.6 million and $5.1 million, respectively. As disclosed in " Note 1 — General Information ," the Company completed the Artistic acquisition in 2019. The Company paid approximately $53 million for the Artistic acquisition using existing cash and borrowings under its revolving credit facility. During the first quarter of 2020, the acquisition accounting for Artistic was finalized. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DEBT On March 6, 2020, GPIL completed a private offering of $450.0 million aggregate principal amount of its senior unsecured notes due 2028. 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. On August 28, 2020, GPIL completed a private offering of $350.0 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. Long-Term Debt is comprised of the following: In millions September 30, 2020 December 31, 2019 Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.55%, payable in 2029 $ 350.0 $ — Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.55%, payable in 2028 450.0 — Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.82%, payable in 2027 300.0 300.0 Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.16%, payable in 2024 300.0 300.0 Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.90%, payable in 2022 250.0 250.0 Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.76%, payable in 2021 425.0 425.0 Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (1.62% at September 30, 2020) payable through 2023 1,368.8 1,396.1 Senior Secured Revolving Facilities with interest payable at floating rates (1.52% at September 30, 2020) payable in 2023 113.2 52.8 Finance Leases and Financing Obligations 140.7 134.2 Other 5.1 5.4 Total Long-Term Debt 3,702.8 2,863.5 Less: Current Portion 484.7 41.1 3,218.1 2,822.4 Less: Unamortized Deferred Debt Issuance Costs 21.2 12.5 Total $ 3,196.9 $ 2,809.9 At September 30, 2020, the Company and its U.S. and international subsidiaries had the following commitments, amounts outstanding and amounts available under revolving credit facilities: In millions Total Total Total Available Senior Secured Domestic Revolving Credit Facility (a) $ 1,450.0 $ 20.0 $ 1,409.3 Senior Secured International Revolving Credit Facility 185.5 93.2 92.3 Other International Facilities 54.7 16.2 38.5 Total $ 1,690.2 $ 129.4 $ 1,540.1 (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 $20.7 million as of September 30, 2020. These letters of credit are primarily used as security against the Company's self-insurance obligations and workers’ compensation obligations. These letters of credit expire at various dates through 2020 and 2021 unless extended. The Third Amended and Restated Credit Agreement dated as of January 1, 2018 and the Amended and Restated Term Loan Agreement dated as of January 1, 2018 (collectively, the "Credit Agreement"), the 4.75% Senior Notes due 2027, the 3.50% Senior Notes due 2028 and the 3.50% Senior Notes due 2029 are guaranteed by GPIP and certain domestic subsidiaries. The 4.75% Senior Notes due 2021, 4.875% Senior Notes due 2022 and 4.125% Senior Notes due 2024 are guaranteed by GPHC and certain domestic subsidiaries. The Credit Agreement and the indentures governing the 4.75% Senior Notes due 2021, 4.875% Senior Notes due 2022, 4.125% Senior Notes due 2024, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028 and 3.50% Senior Notes due 2029 (the "Indentures") limit the Company's ability to incur additional indebtedness. Additional covenants contained in the 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 September 30, 2020, the Company was in compliance with the covenants in the Credit Agreement and the Indentures. |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | 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”). Under the 2014 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and other types of stock-based and cash awards. Awards under the 2014 Plan generally vest and expire in accordance with terms established at the time of grant. Shares issued pursuant to awards under the 2014 Plan are from the Company’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. Stock Awards, Restricted Stock and Restricted Stock Units Under the 2014 Plan, all RSUs generally vest and become payable in three years from 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. Stock awards granted to non-employee directors as part of their compensation for service on the Board are unrestricted on the grant date. Data concerning RSUs granted in the first nine months of 2020 is as follows: RSUs Weighted Average RSUs — Employees 1,648,026 $ 15.40 Stock Awards — Board of Directors 71,160 $ 13.49 During the nine months ended September 30, 2020 and 2019, $26.8 million and $16.1 million, respectively, were charged to compensation expense for stock incentive plans. During the nine months ended September 30, 2020 and 2019, 0.8 million and 0.6 million shares were issued, respectively. The shares issued were primarily related to RSUs granted during 2017 and 2016, respectively. |
Pensions and Other Postretireme
Pensions and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pensions and Other Postretirement Benefits | PENSIONS AND OTHER POSTRETIREMENT BENEFITS 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 employee's compensation. In the first quarter of 2020, the Company purchased a group annuity contract using the assets held within the pension trust that transferred the remaining pension obligation under its largest U.S. pension plan of approximately $713 million to an insurance company. The Company incurred an additional non-cash settlement charge of $152.5 million related to this transfer. These non-cash settlement charges relate to Net Actuarial Loss previously recognized in Accumulated Other Comprehensive Loss. Pension and Postretirement Expense The pension and postretirement expenses related to the Company’s plans consisted of the following: Pension Benefits Postretirement Health Care Benefits Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, In millions 2020 2019 2020 2019 2020 2019 2020 2019 Components of Net Periodic Cost: Service Cost $ 3.7 $ 3.5 $ 11.5 $ 10.5 $ 0.1 $ 0.1 $ 0.4 $ 0.4 Interest Cost 2.8 11.5 10.5 34.5 0.2 0.3 0.7 0.9 Administrative Expenses — — 0.2 0.2 — — — — Expected Return on Plan Assets (4.1) (13.6) (15.7) (41.1) — — — — Net Settlement Loss — — 152.5 — — — — — Amortization: Prior Service Credit — — — — (0.1) (0.1) (0.2) (0.2) Actuarial Loss (Gain) 1.4 2.5 4.1 7.6 (0.4) (0.6) (1.3) (1.8) Net Periodic Cost (Benefit) $ 3.8 $ 3.9 $ 163.1 $ 11.7 $ (0.2) $ (0.3) $ (0.4) $ (0.7) Employer Contributions The Company made contributions of $16.0 million and $8.2 million to its pension plans during the first nine months of 2020 and 2019, respectively. The Company expects to make contributions in the range of $15 million to $20 million for the full year 2020. During 2019, the Company made $11.3 million of contributions to its pension plans. The Company made postretirement health care benefit payments of $1.5 million and $2.2 million during the first nine months of 2020 and 2019, respectively. The Company estimates its postretirement health care benefit payments for the full year 2020 to be approximately $3 million. During 2019, the Company made postretirement health care benefit payments of $1.2 million. Multi-Employer Plans 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 $12.2 million, which was recorded in Business Combinations and Shutdown and Other Special Charges in the Consolidated Statements of Operations, to reflect the Company's best estimate of the expected withdrawal liability. The estimated liability of $42.1 million related to these plans is recorded as Compensation and Employee Benefits and Other Noncurrent Liabilities in the Company's Consolidated Balance Sheets. For more information regarding the Company's multi-employer plans, see " Note 8 - Pension and Other Post Retirement Benefits " of the Notes to Consolidated Financial Statements of the Company's 2019 Form 10-K. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurement | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Fair Value Measurement | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT 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. For more information regarding the Company’s financial instruments and fair value measurement, see “ Note 10 — Financial Instruments, Derivatives and Hedging Activities ” and “ Note 11 — Fair Value Measurement ” of the Notes to the Consolidated Financial Statements of the Company’s 2019 Form 10-K. 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. 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. The following table summarizes the Company's current interest rate swap positions for each period presented as of September 30, 2020: Start End (In Millions) Weighted Average Interest Rate 04/03/2018 10/01/2020 $150.0 2.36% 12/03/2018 01/01/2022 $120.0 2.92% 12/03/2018 01/04/2022 $80.0 2.79% During the first nine months of 2020 and 2019, there were no amounts of ineffectiveness related to changes in the fair value of interest rate swap agreements. Additionally, there were no amounts excluded from the measure of effectiveness. 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 69%, 37%, and 10% of its expected natural gas usage for the remainder of 2020 and all of 2021 and 2022, respectively. During the first nine months of 2020 and 2019, there were no 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. 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 September 30, 2020, multiple forward exchange contracts existed that expire on various dates through the remainder of 2020. Those purchased forward exchange contracts outstanding at September 30, 2020 and December 31, 2019, when aggregated and measured in U.S. dollars at contractual rates at September 30, 2020 and December 31, 2019, had notional amounts totaling $20.0 million and $87.6 million, respectively. No amounts were reclassified to earnings during the first nine months of 2020 or during 2019 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. 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 September 30, 2020 and December 31, 2019, multiple foreign currency forward exchange contracts existed, with maturities ranging up to three months. Those foreign currency exchange contracts outstanding at September 30, 2020 and December 31, 2019, when aggregated and measured in U.S. dollars at contractual rates at September 30, 2020 and December 31, 2019, had net notional amounts totaling $86.4 million and $77.4 million, respectively. Unrealized gains and losses resulting from these contracts are recognized in Other Expense, Net and approximately offset corresponding recognized but unrealized gains and losses on the remeasurement of these accounts receivable. Fair Value of Financial Instruments The Company’s derivative instruments are carried at fair value. The Company has determined that the inputs to the valuation of these derivative instruments are Level 2 in the fair value hierarchy. Level 2 inputs are defined as 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. The Company uses valuation techniques based on discounted cash flow analyses, which reflect the terms of the derivatives and use observable market-based inputs, including forward rates, and uses market price quotations obtained from independent derivatives brokers, corroborated with information obtained from independent pricing service providers. As of September 30, 2020, 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) September 30, December 31, September 30, December 31, In millions 2020 2019 2020 2019 Derivatives designated as hedging instruments: Interest rate contracts $ — $ — $ 7.6 $ 6.6 Foreign currency contracts 0.1 — 0.5 1.5 Commodity contracts 5.7 — — 3.4 Total Derivatives $ 5.8 $ — $ 8.1 $ 11.5 (a) Derivative assets of $5.8 million are included in Other Current Assets as of September 30, 2020. (b) Derivative liabilities of $6.2 million and $8.5 million are included in Other Accrued Liabilities as of September 30, 2020 and December 31, 2019, respectively. Derivative liabilities of $1.9 million and $3.0 million are included in Other Noncurrent Liabilities as of September 30, 2020 and December 31, 2019, respectively. The fair values of the Company’s other financial assets and liabilities at September 30, 2020 and December 31, 2019 approximately equal the carrying values reported on the Condensed 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 $3,627.0 million and $2,788.6 million as compared to the carrying amounts of $3,562.1 million and $2,729.3 million as of September 30, 2020 and December 31, 2019, respectively. The fair value of the Company’s Total Debt, including the Senior Notes, is based on quoted market prices (Level 2 inputs). Level 2 valuation techniques for Long-Term Debt are based on quotations obtained from independent pricing service providers. Effect of Derivative Instruments The pre-tax effect of derivative instruments in cash flow hedging relationships on the Company’s Condensed Consolidated Statements of Operations is as follows: Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive Loss Location in Statement of Operations Amount of (Gain) Loss Recognized in Statement of Operations Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, In millions 2020 2019 2020 2019 2020 2019 2020 2019 Commodity Contracts $ (7.5) $ (0.2) $ (15.9) $ 2.5 Cost of Sales $ (1.4) $ (0.5) $ (6.8) $ (0.4) Foreign Currency Contracts 1.4 (0.6) (1.2) (1.5) Other (Income) Expense, Net (0.3) (0.2) (0.9) (0.9) Interest Rate Swap Agreements — 0.5 5.9 6.3 Interest Expense, Net 2.2 0.3 5.1 0.4 Total $ (6.1) $ (0.3) $ (11.2) $ 7.3 $ 0.5 $ (0.4) $ (2.6) $ (0.9) The effect of derivative instruments not designated as hedging instruments on the Company’s Condensed Consolidated Statements of Operations is as follows: Three Months Ended September 30, Nine Months Ended September 30, In millions 2020 2019 2020 2019 Foreign Currency Contracts Other (Income) Expense, Net $ (1.7) $ 1.9 $ (2.1) $ 3.3 Accumulated Derivative Instruments (Loss) Income The following is a rollforward of pre-tax Accumulated Derivative Instruments (Loss) Income which is included in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2020: In millions Balance at December 31, 2019 $ (10.9) Reclassification to Earnings (2.6) Current Period Change in Fair Value 11.3 Balance at September 30, 2020 $ (2.2) At September 30, 2020, the Company expects to reclassify $1.2 million of pre-tax losses 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. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Substantially all of the Company’s operations are held through its majority investment in GPIP, a subsidiary that is classified as a partnership for U.S. income tax purposes and is generally not subject to domestic income tax expense. As a result, the consolidated financial statements exclude the domestic tax effect of the earnings attributable to the noncontrolling partner’s interest in GPIP. During the nine months ended September 30, 2020 and 2019, the Company recognized Income Tax Expense of $21.2 million and $60.9 million, respectively, on Income before Income Taxes and Equity Income of Unconsolidated Entity of $146.7 million and $294.6 million, respectively. The effective tax rate for the nine months ended September 30, 2020 and 2019 is lower than the statutory rate primarily due to the tax effect of income attributable to noncontrolling interests as well as the mix and levels of earnings between foreign and domestic tax jurisdictions. In addition, during the nine months ended September 30, 2020, the Company recorded discrete benefits of $7.6 million and $4.1 million related to the release of valuation allowances against the net deferred tax assets of two of its wholly owned subsidiaries in Canada as a result of tax planning and the tax effect of tax credit and other provision to return adjustments related to the 2019 U.S. federal income tax return, respectively. As of December 31, 2019, the Company had approximately $34.5 million of Net Operating Losses (“NOLs”) for U.S. federal income tax purposes which may be used to offset future taxable income. Based on these NOLs, other tax attributes, tax benefits associated with planned capital projects, and the anticipated reduction in IP's investment in GPIP, the Company does not expect to be a meaningful U.S. federal cash taxpayer until 2024. |
Environmental and Legal Matters
Environmental and Legal Matters | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Environmental and Legal Matters | 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, 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 historic 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 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. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS In connection with the NACP Combination, the Company entered into agreements with IP for transition services, fiber procurement fees and corrugated products and ink supply. Payments to IP for the nine months ended September 30, 2020 for fiber procurement fees and corrugated products were $9.2 million (related to pass through wood purchases of approximately $154 million ) and $21.7 million , respectively. There were no payments to IP for transition services during the nine months ended September 30, 2020. Payments to IP for the nine months ended September 30, 2019 for transition services, fiber procurement fees and corrugated products and ink supply were $0.1 million, $8.6 million (related to pass through wood purchases of approximately $178 million) and $19.7 million, respectively. In addition, approximately $3 million of payments were made for purchases unrelated to these agreements for the nine months ended September 30, 2019. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company has three reportable segments as follows: Paperboard Mills includes the eight North American paperboard mills which produce CRB, CUK, and SBS, which is consumed internally to produce paperboard packaging for the Americas and Europe Paperboard Packaging segments. The remaining paperboard is sold externally to a wide variety of paperboard packaging converters and brokers. The Paperboard Mills segment 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 Mills 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") companies, and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants ("QSR"), all 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 in Europe. The Company allocates certain mill 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 - General Information. " Segment information is as follows: Three Months Ended Nine Months Ended September 30, September 30, In millions 2020 2019 2020 2019 NET SALES: Paperboard Mills $ 240.9 $ 279.2 $ 744.0 $ 833.9 Americas Paperboard Packaging 1,214.8 1,091.1 3,491.9 3,176.6 Europe Paperboard Packaging 193.9 171.0 553.7 522.0 Corporate/Other/Eliminations (a) 48.1 40.3 118.2 107.8 Total $ 1,697.7 $ 1,581.6 $ 4,907.8 $ 4,640.3 (LOSS) INCOME FROM OPERATIONS: Paperboard Mills $ (34.4) $ 10.7 $ (92.6) $ 19.2 Americas Paperboard Packaging 140.5 112.2 492.4 363.1 Europe Paperboard Packaging 15.5 8.6 48.2 43.3 Corporate and Other (b) (2.5) (8.8) (54.1) (24.5) Total $ 119.1 $ 122.7 $ 393.9 $ 401.1 DEPRECIATION AND AMORTIZATION: Paperboard Mills $ 63.6 $ 54.0 $ 189.6 $ 162.6 Americas Paperboard Packaging 40.2 39.9 120.3 124.5 Europe Paperboard Packaging 10.6 11.5 29.7 35.1 Corporate and Other 6.1 5.1 16.9 15.6 Total $ 120.5 $ 110.5 $ 356.5 $ 337.8 (a) Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments. (b) Includes expenses related to business combinations, exit activities, idle and abandoned assets and shutdown and other special charges. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Three Months Ended Nine Months Ended September 30, September 30, In millions, except per share data 2020 2019 2020 2019 Net Income Attributable to Graphic Packaging Holding Company $ 63.7 $ 52.1 $ 103.1 $ 173.8 Weighted Average Shares: Basic 277.0 292.9 281.9 295.2 Dilutive Effect of RSUs 0.7 0.8 0.8 0.7 Diluted 277.7 293.7 282.7 295.9 Earnings Per Share — Basic $ 0.23 $ 0.18 $ 0.37 $ 0.59 Earnings Per Share — Diluted $ 0.23 $ 0.18 $ 0.36 $ 0.59 |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Noncontrolling Interest | REDEEMABLE NONCONTROLLING INTEREST For information regarding the Company's Redeemable Noncontrolling Interest, see " Note 15 — Redeemable Noncontrolling Interest " of the Notes to Consolidated Financial Statements of the Company's 2019 Form 10-K. On January 28, 2020, the Company announced that IP had notified the Company of its intent to begin the process of reducing its ownership interest in GPIP. Per the agreement between the parties, on January 29, 2020, GPIP purchased 15.1 million partnership units from IP for $250 million in cash. As a result, IP's ownership interest in GPIP decreased from 21.6% to 18.3% as of January 29, 2020. On August 6, 2020, the Company announced that IP had notified the Company of its intent to exchange additional partnership units. Per the agreement between the parties, on August 13, 2020, GPIP purchased 17.4 million partnership units from IP for $250 million in cash, which included all of the remaining portion of IP's redeemable ownership interest that was required to be redeemed for cash. As a result, IP's ownership interest in GPIP decreased to 14.5% as of August 13, 2020. At September 30, 2020, the redeemable noncontrolling interest was determined as follows: In millions Balance at December 31, 2019 $ 304.3 Net Loss Attributable to Redeemable Noncontrolling Interest (3.2) Other Comprehensive Income, Net of Tax 8.9 Redemption of IP's Ownership Interest (296.1) Redeemable Noncontrolling Interest Redemption Value Adjustment (12.2) Distributions of Membership Interest (1.7) Balance at September 30, 2020 $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in the components of Accumulated Other Comprehensive Loss attributable to GPHC for the nine months ended September 30, 2020 are as follows: In millions, net of tax Derivatives Instruments Pension and Postretirement Benefit Plans Currency Translation Adjustments Total Balance at December 31, 2019 $ (16.6) $ (238.5) $ (110.7) $ (365.8) Other Comprehensive Income (Loss) before Reclassifications 10.3 32.1 (14.5) 27.9 Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income into the Condensed Consolidated Statement of Operations, Net of Tax (a) (2.1) 124.3 — 122.2 Total Other Comprehensive Income (Loss), Net of Tax 8.2 156.4 (14.5) 150.1 Less: Other Comprehensive (Income) Loss Attributable to Noncontrolling Interest (b) (1.4) (42.0) 3.6 (39.8) Balance at September 30, 2020 $ (9.8) $ (124.1) $ (121.6) $ (255.5) (a) See following table for details about these reclassifications. (b) Includes amounts related to redeemable noncontrolling interest which are separately classified outside of permanent equity in the mezzanine section of the Condensed Consolidated Balance Sheets. The following represents reclassifications out of Accumulated Other Comprehensive Loss for the nine months ended September 30, 2020: In millions Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Statement Where Net Income is Presented Derivatives Instruments: Commodity Contracts $ (6.8) Cost of Sales Foreign Currency Contracts (0.9) Other Expense, Net Interest Rate Swap Agreements 5.1 Interest Expense, Net (2.6) Total before Tax 0.5 Tax Expense $ (2.1) Net of Tax Amortization of Defined Benefit Pension Plans: Actuarial Losses 156.6 (a) 156.6 Total before Tax (31.1) Tax Benefit $ 125.5 Net of Tax Amortization of Postretirement Benefit Plans: Prior Service Credits $ (0.2) (a) Actuarial Gains (1.3) (a) (1.5) Total before Tax 0.3 Tax Expense $ (1.2) Net of Tax Total Reclassifications for the Period $ 122.2 (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see “ Note 6 — Pensions and Other Postretirement Benefits "). |
Exit activities
Exit activities | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Exit activities | EXIT ACTIVITIES During 2019, the Company announced its plans to invest approximately $600 million in a new CRB paper machine in Kalamazoo, Michigan. In conjunction with the completion of this project, the Company currently expects to close two of its smaller CRB Mills in 2022 in order to remain capacity neutral. 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. 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 facilities that were acquired from Greif. The Burlington, North Carolina converting facility and the Los Angeles, California converting facility were closed during the third quarter of 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"). During the nine months ended September 30, 2020, the Company recorded $42.1 million of exit costs. The Company did not record any exit costs during the nine months ended September 30, 2019. Other costs associated with the start up of the new CRB paper machine will be recorded in the period in which they are incurred. These costs are included in the Corporate and Other caption in " Note 11 - Segment Information ." The following table summarizes the costs incurred related to these restructurings: Three Months Ended September 30, Nine Months Ended September 30, In millions Location in Statement of Operations 2020 Severance costs and other (a) Business Combinations and Shutdown and Other Special Charges, Net $ 1.3 $ 8.3 Accelerated depreciation Cost of Sales 4.7 20.7 Inventory and asset write-offs Business Combinations and Shutdown and Other Special Charges, Net 3.1 13.1 Total $ 9.1 $ 42.1 (a) Costs incurred include activities for post-employment benefits, retention bonuses, incentives and professional services. The following table summarizes the balance of accrued expenses related to restructuring: In millions Balance at December 31, 2019 $ 7.1 Costs incurred 9.1 Payments (4.5) Adjustments (a) (0.8) Balance at September 30, 2020 $ 10.9 (a) Adjustments related to changes in estimates of severance costs. In conjunction with the closure of the two smaller CRB Mills in 2022, the Company currently expects to incur exit activity charges for post-employment benefits, retention bonuses and incentives in the range of $15 million to $20 million and for accelerated depreciation and inventory and asset write-offs in the range of $50 million to $60 million. Through September 30, 2020, the Company has incurred cumulative exit activity charges for post-employment benefits, retention bonuses and incentives of $11.4 million and accelerated depreciation and inventory and asset write-offs of $21.6 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 charges for post-employment benefits of $2.3 million and accelerated depreciation and inventory and asset write-offs of $15.8 million through September 30, 2020. The Company does not expect to incur any additional significant costs charges related to these closures. For the closure of the facilities acquired from Greif, the Company has incurred cumulative exit activity charges for post-employment benefits of $1.4 million and for accelerated amortization of operating lease assets of $3.6 million. The Company does not expect to incur any additional significant costs charges related to these closures. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSOn October 15, 2020, GPIL entered into a new $425 million term loan with member banks of the Farm Credit System. The term loan has a delayed draw feature, and the Company expects to fund the new term loan in January 2021. The Company will use the proceeds to refinance its 2021 4.75% bond issuance which becomes callable at par on January 15, 2021. The new term loan is collateralized by the same assets as GPIL’s Senior Secured Facilities on a pari pasu basis. The new term loan will bear interest at a fixed rate of 2.67% due quarterly, matures in seven |
General Information (Policies)
General Information (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | The Company’s Condensed 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. |
Basis of Accounting | In the Company’s opinion, the accompanying Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the interim periods. The Company’s year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with instructions to Form 10-Q and Rule 10-01 of Regulation S-X and do not include all the information required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with GPHC’s Form 10-K for the year ended December 31, 2019. |
Use of Estimates | In addition, the preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates and changes in these estimates are recorded when known. |
Revenue Recognition | The Company has two primary activities, the manufacturing and converting of paperboard, from which it generates revenue from contracts with customers. Revenue is disaggregated primarily by geography and type of activity as further explained in " Note 11-Segments. " 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. 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 three months ended September 30, 2020 and 2019, the Company recognized $1,691.2 million and $1,577.6 million, respectively, of revenue from contracts with customers. For the nine months ended September 30, 2020 and 2019, the Company recognized $4,891.1 million and $4,627.2 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") 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 payment terms that are consistent with industry practice. |
Adoption of New Accounting Standards and Accounting Standards Not Yet Adopted | Adoption of New Accounting Standards Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model (known as the "current expected credit loss model") that is based on expected losses rather than incurred losses. The adoption of this standard did not have a material impact on the Company's financial position, results of operations and cash flows. Effective January 1, 2020, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . This amendment modifies the disclosure requirements on fair value measurements. The adoption of this standard did not have a material impact on the Company's financial disclosures. Effective January 1, 2020, the Company adopted ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU broadens the scope of Accounting Standards Codification ("ASC") 350-40 with an updated definition of a hosting arrangement and clarifies certain aspects of accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The adoption of this standard did not have a material impact on the Company's financial position, results of operations and cash flows. Accounting Standards Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20); Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans . This amendment removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. The guidance is effective for fiscal years ending after December 15, 2020 and would be applied on a retrospective basis. The Company is currently evaluating the impact this guidance will have on its related disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This amendment modifies ASC 740 to simplify the accounting for income taxes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the impact of this new guidance. |
General Information (Tables)
General Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of the Agreements for Purchasing and Servicing of Receivables | The following table summarizes the activity under these programs for the nine months ended September 30, 2020 and 2019, respectively: Nine Months Ended September 30, In millions 2020 2019 Receivables Sold and Derecognized $ 2,077.2 $ 2,033.1 Proceeds Collected on Behalf of Financial Institutions 2,029.0 1,660.0 Net Proceeds Received From Financial Institutions 37.0 37.9 Deferred Purchase Price at September 30 (a) 9.6 4.9 Pledged Receivables at September 30 267.4 93.1 (a) Included in Other Current Assets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure. |
Schedule of Restructuring and Other Special Charges | The following table summarizes the transactions recorded in Business Combinations and Shutdown and Other Special Charges, Net in the Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, In millions 2020 2019 2020 2019 Charges Associated with Business Combinations $ 0.9 $ 0.6 $ (3.1) $ 3.2 Shutdown and Other Special Charges 3.7 4.6 29.9 18.1 Exit Activities (a) 4.4 3.0 21.4 3.0 Total $ 9.0 $ 8.2 $ 48.2 $ 24.3 (a) Relates to the Company's CRB mills, converting facility closures and the PM1 containerboard machine exit activities (see " Note 15 — Exit Activities" ). |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, Net by major class | Inventories, Net by major class: In millions September 30, 2020 December 31, 2019 Finished Goods $ 448.2 $ 434.8 Work in Progress 147.2 123.4 Raw Materials 380.6 370.0 Supplies 177.8 167.7 Total $ 1,153.8 $ 1,095.9 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-Term Debt is comprised of the following: In millions September 30, 2020 December 31, 2019 Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.55%, payable in 2029 $ 350.0 $ — Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.55%, payable in 2028 450.0 — Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.82%, payable in 2027 300.0 300.0 Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.16%, payable in 2024 300.0 300.0 Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.90%, payable in 2022 250.0 250.0 Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.76%, payable in 2021 425.0 425.0 Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (1.62% at September 30, 2020) payable through 2023 1,368.8 1,396.1 Senior Secured Revolving Facilities with interest payable at floating rates (1.52% at September 30, 2020) payable in 2023 113.2 52.8 Finance Leases and Financing Obligations 140.7 134.2 Other 5.1 5.4 Total Long-Term Debt 3,702.8 2,863.5 Less: Current Portion 484.7 41.1 3,218.1 2,822.4 Less: Unamortized Deferred Debt Issuance Costs 21.2 12.5 Total $ 3,196.9 $ 2,809.9 |
Schedule of Revolving Credit Facilities | At September 30, 2020, the Company and its U.S. and international subsidiaries had the following commitments, amounts outstanding and amounts available under revolving credit facilities: In millions Total Total Total Available Senior Secured Domestic Revolving Credit Facility (a) $ 1,450.0 $ 20.0 $ 1,409.3 Senior Secured International Revolving Credit Facility 185.5 93.2 92.3 Other International Facilities 54.7 16.2 38.5 Total $ 1,690.2 $ 129.4 $ 1,540.1 (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 $20.7 million as of September 30, 2020. These letters of credit are primarily used as security against the Company's self-insurance obligations and workers’ compensation obligations. These letters of credit expire at various dates through 2020 and 2021 unless extended. |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Data concerning RSUs and stock awards granted | Data concerning RSUs granted in the first nine months of 2020 is as follows: RSUs Weighted Average RSUs — Employees 1,648,026 $ 15.40 Stock Awards — Board of Directors 71,160 $ 13.49 |
Pensions and Other Postretire_2
Pensions and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of pension and postretirement expenses | The pension and postretirement expenses related to the Company’s plans consisted of the following: Pension Benefits Postretirement Health Care Benefits Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, In millions 2020 2019 2020 2019 2020 2019 2020 2019 Components of Net Periodic Cost: Service Cost $ 3.7 $ 3.5 $ 11.5 $ 10.5 $ 0.1 $ 0.1 $ 0.4 $ 0.4 Interest Cost 2.8 11.5 10.5 34.5 0.2 0.3 0.7 0.9 Administrative Expenses — — 0.2 0.2 — — — — Expected Return on Plan Assets (4.1) (13.6) (15.7) (41.1) — — — — Net Settlement Loss — — 152.5 — — — — — Amortization: Prior Service Credit — — — — (0.1) (0.1) (0.2) (0.2) Actuarial Loss (Gain) 1.4 2.5 4.1 7.6 (0.4) (0.6) (1.3) (1.8) Net Periodic Cost (Benefit) $ 3.8 $ 3.9 $ 163.1 $ 11.7 $ (0.2) $ (0.3) $ (0.4) $ (0.7) |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of interest rate swap positions | The following table summarizes the Company's current interest rate swap positions for each period presented as of September 30, 2020: Start End (In Millions) Weighted Average Interest Rate 04/03/2018 10/01/2020 $150.0 2.36% 12/03/2018 01/01/2022 $120.0 2.92% 12/03/2018 01/04/2022 $80.0 2.79% |
Fair value of derivative instruments | The following table summarizes the fair value of the Company’s derivative instruments: Derivative Assets (a) Derivative Liabilities (b) September 30, December 31, September 30, December 31, In millions 2020 2019 2020 2019 Derivatives designated as hedging instruments: Interest rate contracts $ — $ — $ 7.6 $ 6.6 Foreign currency contracts 0.1 — 0.5 1.5 Commodity contracts 5.7 — — 3.4 Total Derivatives $ 5.8 $ — $ 8.1 $ 11.5 (a) Derivative assets of $5.8 million are included in Other Current Assets as of September 30, 2020. (b) Derivative liabilities of $6.2 million and $8.5 million are included in Other Accrued Liabilities as of September 30, 2020 and December 31, 2019, respectively. Derivative liabilities of $1.9 million and $3.0 million are included in Other Noncurrent Liabilities as of September 30, 2020 and December 31, 2019, respectively. |
Pre-tax effect of derivative instruments designated as hedges | The pre-tax effect of derivative instruments in cash flow hedging relationships on the Company’s Condensed Consolidated Statements of Operations is as follows: Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive Loss Location in Statement of Operations Amount of (Gain) Loss Recognized in Statement of Operations Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, In millions 2020 2019 2020 2019 2020 2019 2020 2019 Commodity Contracts $ (7.5) $ (0.2) $ (15.9) $ 2.5 Cost of Sales $ (1.4) $ (0.5) $ (6.8) $ (0.4) Foreign Currency Contracts 1.4 (0.6) (1.2) (1.5) Other (Income) Expense, Net (0.3) (0.2) (0.9) (0.9) Interest Rate Swap Agreements — 0.5 5.9 6.3 Interest Expense, Net 2.2 0.3 5.1 0.4 Total $ (6.1) $ (0.3) $ (11.2) $ 7.3 $ 0.5 $ (0.4) $ (2.6) $ (0.9) |
Pre-tax effect of derivative instruments not designated as hedges | The effect of derivative instruments not designated as hedging instruments on the Company’s Condensed Consolidated Statements of Operations is as follows: Three Months Ended September 30, Nine Months Ended September 30, In millions 2020 2019 2020 2019 Foreign Currency Contracts Other (Income) Expense, Net $ (1.7) $ 1.9 $ (2.1) $ 3.3 |
Rollforward of pre-tax derivative Accumulated Other Comprehensive Loss | The following is a rollforward of pre-tax Accumulated Derivative Instruments (Loss) Income which is included in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2020: In millions Balance at December 31, 2019 $ (10.9) Reclassification to Earnings (2.6) Current Period Change in Fair Value 11.3 Balance at September 30, 2020 $ (2.2) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information is as follows: Three Months Ended Nine Months Ended September 30, September 30, In millions 2020 2019 2020 2019 NET SALES: Paperboard Mills $ 240.9 $ 279.2 $ 744.0 $ 833.9 Americas Paperboard Packaging 1,214.8 1,091.1 3,491.9 3,176.6 Europe Paperboard Packaging 193.9 171.0 553.7 522.0 Corporate/Other/Eliminations (a) 48.1 40.3 118.2 107.8 Total $ 1,697.7 $ 1,581.6 $ 4,907.8 $ 4,640.3 (LOSS) INCOME FROM OPERATIONS: Paperboard Mills $ (34.4) $ 10.7 $ (92.6) $ 19.2 Americas Paperboard Packaging 140.5 112.2 492.4 363.1 Europe Paperboard Packaging 15.5 8.6 48.2 43.3 Corporate and Other (b) (2.5) (8.8) (54.1) (24.5) Total $ 119.1 $ 122.7 $ 393.9 $ 401.1 DEPRECIATION AND AMORTIZATION: Paperboard Mills $ 63.6 $ 54.0 $ 189.6 $ 162.6 Americas Paperboard Packaging 40.2 39.9 120.3 124.5 Europe Paperboard Packaging 10.6 11.5 29.7 35.1 Corporate and Other 6.1 5.1 16.9 15.6 Total $ 120.5 $ 110.5 $ 356.5 $ 337.8 (a) Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments. (b) Includes expenses related to business combinations, exit activities, idle and abandoned assets and shutdown and other special charges. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Three Months Ended Nine Months Ended September 30, September 30, In millions, except per share data 2020 2019 2020 2019 Net Income Attributable to Graphic Packaging Holding Company $ 63.7 $ 52.1 $ 103.1 $ 173.8 Weighted Average Shares: Basic 277.0 292.9 281.9 295.2 Dilutive Effect of RSUs 0.7 0.8 0.8 0.7 Diluted 277.7 293.7 282.7 295.9 Earnings Per Share — Basic $ 0.23 $ 0.18 $ 0.37 $ 0.59 Earnings Per Share — Diluted $ 0.23 $ 0.18 $ 0.36 $ 0.59 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interest (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Summary of Redeemable Noncontrolling Interest | At September 30, 2020, the redeemable noncontrolling interest was determined as follows: In millions Balance at December 31, 2019 $ 304.3 Net Loss Attributable to Redeemable Noncontrolling Interest (3.2) Other Comprehensive Income, Net of Tax 8.9 Redemption of IP's Ownership Interest (296.1) Redeemable Noncontrolling Interest Redemption Value Adjustment (12.2) Distributions of Membership Interest (1.7) Balance at September 30, 2020 $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of changes in Accumulated Other Comprehensive Loss | The changes in the components of Accumulated Other Comprehensive Loss attributable to GPHC for the nine months ended September 30, 2020 are as follows: In millions, net of tax Derivatives Instruments Pension and Postretirement Benefit Plans Currency Translation Adjustments Total Balance at December 31, 2019 $ (16.6) $ (238.5) $ (110.7) $ (365.8) Other Comprehensive Income (Loss) before Reclassifications 10.3 32.1 (14.5) 27.9 Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income into the Condensed Consolidated Statement of Operations, Net of Tax (a) (2.1) 124.3 — 122.2 Total Other Comprehensive Income (Loss), Net of Tax 8.2 156.4 (14.5) 150.1 Less: Other Comprehensive (Income) Loss Attributable to Noncontrolling Interest (b) (1.4) (42.0) 3.6 (39.8) Balance at September 30, 2020 $ (9.8) $ (124.1) $ (121.6) $ (255.5) (a) See following table for details about these reclassifications. (b) Includes amounts related to redeemable noncontrolling interest which are separately classified outside of permanent equity in the mezzanine section of the Condensed Consolidated Balance Sheets. |
Reclassification out of Accumulated Other Comprehensive Loss | The following represents reclassifications out of Accumulated Other Comprehensive Loss for the nine months ended September 30, 2020: In millions Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Statement Where Net Income is Presented Derivatives Instruments: Commodity Contracts $ (6.8) Cost of Sales Foreign Currency Contracts (0.9) Other Expense, Net Interest Rate Swap Agreements 5.1 Interest Expense, Net (2.6) Total before Tax 0.5 Tax Expense $ (2.1) Net of Tax Amortization of Defined Benefit Pension Plans: Actuarial Losses 156.6 (a) 156.6 Total before Tax (31.1) Tax Benefit $ 125.5 Net of Tax Amortization of Postretirement Benefit Plans: Prior Service Credits $ (0.2) (a) Actuarial Gains (1.3) (a) (1.5) Total before Tax 0.3 Tax Expense $ (1.2) Net of Tax Total Reclassifications for the Period $ 122.2 (a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see “ Note 6 — Pensions and Other Postretirement Benefits "). |
Exit activities (Tables)
Exit activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes the costs incurred related to these restructurings: Three Months Ended September 30, Nine Months Ended September 30, In millions Location in Statement of Operations 2020 Severance costs and other (a) Business Combinations and Shutdown and Other Special Charges, Net $ 1.3 $ 8.3 Accelerated depreciation Cost of Sales 4.7 20.7 Inventory and asset write-offs Business Combinations and Shutdown and Other Special Charges, Net 3.1 13.1 Total $ 9.1 $ 42.1 (a) Costs incurred include activities for post-employment benefits, retention bonuses, incentives and professional services. |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the balance of accrued expenses related to restructuring: In millions Balance at December 31, 2019 $ 7.1 Costs incurred 9.1 Payments (4.5) Adjustments (a) (0.8) Balance at September 30, 2020 $ 10.9 (a) Adjustments related to changes in estimates of severance costs. |
General Information - Narrative
General Information - Narrative (Details) shares in Millions | Aug. 13, 2020USD ($)shares | Apr. 01, 2020facility | Jan. 29, 2020USD ($)shares | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | [1] | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | [2] | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019shares | Jan. 28, 2020 | Jan. 01, 2018 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||||
Shares repurchased (in shares) | shares | 17.4 | 15.1 | 20.8 | ||||||||||||
Cash paid for repurchase of common stock | $ | $ 250,000,000 | $ 250,000,000 | $ 94,100,000 | $ 33,100,000 | $ 124,400,000 | $ 18,300,000 | $ 59,500,000 | $ 50,100,000 | |||||||
Shares required to be redeemed in cash | shares | 3.1 | ||||||||||||||
Number of converting facilities | facility | 7 | ||||||||||||||
International Paper Company | |||||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||||
Number of days after exchange | 180 days | ||||||||||||||
Dollar limit per unit exchange (lesser of) | $ | $ 250,000,000 | ||||||||||||||
Percentage limit per unit exchange (lesser of) | 25.00% | ||||||||||||||
International Paper Company | |||||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||||
IP's ownership interest in GPIP | 14.50% | 18.30% | 21.60% | 21.60% | 20.50% | ||||||||||
[1] | Includes 410,400 shares repurchased but not yet settled as of March 31, 2020. (b) Includes 14,436 shares repurchased but not yet settled as of June 30, 2020. (c) Includes 308,185 shares repurchased but not yet settled as of September 30, 2020. | ||||||||||||||
[2] | Includes 33,263 shares repurchased but not yet settled as of March 31, 2019. |
General Information - Revenue R
General Information - Revenue Recognition (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)revenue_generating_activity | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of revenue generating activities | revenue_generating_activity | 2 | ||||
Net sales | $ 1,691.2 | $ 1,577.6 | $ 4,891.1 | $ 4,627.2 | |
Contract assets | 16.9 | 16.9 | $ 24.3 | ||
Contract liabilities | $ 44.8 | $ 44.8 | $ 49.6 |
General Information - Accounts
General Information - Accounts Receivable and Allowances (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Receivables Sold and Derecognized | $ 2,077.2 | $ 2,033.1 | |
Proceeds Collected on Behalf of Financial Institutions | 2,029 | 1,660 | |
Net Proceeds Received From Financial Institutions | 37 | 37.9 | |
Deferred Purchase Price at June 30 | 9.6 | 4.9 | |
Pledged Receivables at September 30 | 267.4 | 93.1 | |
Receivables sold | 238 | $ 129 | |
Amount transferred subject to continuing involvement | $ 606 | $ 562 |
General Information - Capital A
General Information - Capital Allocation Plan (Details) - USD ($) | Oct. 05, 2020 | Aug. 13, 2020 | Jul. 23, 2020 | May 20, 2020 | Apr. 05, 2020 | Feb. 20, 2020 | Jan. 29, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jan. 28, 2019 | Jan. 10, 2017 |
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Cash dividends paid (in dollars per share) | $ 0.075 | |||||||||||
Share repurchase program, authorized amount | $ 250,000,000 | |||||||||||
Shares repurchased (in shares) | 17,400,000 | 15,100,000 | 20,800,000 | |||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 211,000,000 | |||||||||||
Cash dividends declared (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.075 | |||||||||
Subsequent Event | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Cash dividends paid (in dollars per share) | $ 0.075 | |||||||||||
Share Repurchase Program 2019 | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Share repurchase program, authorized amount | $ 500,000,000 | |||||||||||
2017 Share Repurchase Program | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Shares repurchased (in shares) | 18,896,538 | 10,191,257 | ||||||||||
Share price (in dollars per share) | $ 13.31 | $ 12.55 |
General Information - Business
General Information - Business Combinations and Shutdown and Other Special Charges, Net (Details) $ in Millions | Apr. 01, 2020facility | Jan. 31, 2020USD ($) | Aug. 01, 2019millfacility | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)mill | Sep. 30, 2019USD ($) | Dec. 31, 2022USD ($)mill | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||||||||
Charges Associated with Business Combinations | $ 0.9 | $ 0.6 | $ (3.1) | $ 3.2 | ||||||
Shutdown and Other Special Charges | 3.7 | 4.6 | 29.9 | 18.1 | ||||||
Exit Activities | 4.4 | 3 | 21.4 | 3 | ||||||
Total | 9 | $ 8.2 | $ 48.2 | $ 24.3 | ||||||
Number of converting facilities | facility | 7 | |||||||||
Increase in multi-employer plan withdrawal obligation | 12.2 | $ 12.2 | ||||||||
Number of mills to be closed | mill | 2 | |||||||||
Number of facilities acquired | facility | 2 | |||||||||
Length of program to dismantle and dispose of abandoned assets | 3 years | |||||||||
Artistic Carton Company | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of mills acquired | mill | 1 | |||||||||
Quad/Graphics, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Bargain purchase gain | $ 6.6 | $ 6.6 | ||||||||
Paperboard Mills | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected costs associated with closures | $ 40 | $ 40 | ||||||||
Forecast | Facility Closing | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of mills to be closed | mill | 2 | |||||||||
Forecast | Construction in Progress | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Investment in new CRB Mill | $ 600 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 448.2 | $ 434.8 |
Work in Progress | 147.2 | 123.4 |
Raw Materials | 380.6 | 370 |
Supplies | 177.8 | 167.7 |
Total | $ 1,153.8 | $ 1,095.9 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Millions | Apr. 01, 2020USD ($)facility | Jan. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||
Purchase price of business acquisition | $ 120.6 | $ 52.9 | ||||
Number of converting facilities | facility | 7 | |||||
Quad/Graphics, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price of business acquisition | $ 41 | |||||
Identifiable tangible assets | 42.8 | |||||
Bargain purchase gain | 6.6 | $ 6.6 | ||||
Net sales from acquisition | 58.5 | |||||
Income (loss) from acquisition | (0.6) | |||||
Quad/Graphics, Inc. | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 4.7 | |||||
Useful life | 15 years | |||||
Consumer Packaging Group | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price of business acquisition | $ 80 | |||||
Identifiable tangible assets | $ 66.9 | |||||
Number of converting facilities | facility | 7 | |||||
Net sales from acquisition | 116.6 | |||||
Income (loss) from acquisition | $ 5.1 | |||||
Consumer Packaging Group | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable intangible assets | $ 13.2 | |||||
Useful life | 15 years | |||||
Artistic Carton Company | ||||||
Business Acquisition [Line Items] | ||||||
Total payments to acquire business | $ 53 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Sep. 30, 2020 | Mar. 06, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 3,562,100,000 | $ 2,729,300,000 | |
Senior Notes | Senior Notes due 2028 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 450,000,000 | ||
Long-term debt | $ 450,000,000 | 0 | |
Stated interest rate | 3.50% | 3.50% | |
Senior Notes | Senior Notes due 2029 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 350,000,000 | ||
Long-term debt | $ 350,000,000 | 0 | |
Stated interest rate | 3.50% | 3.50% | |
Senior Notes | Senior Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 300,000,000 | 300,000,000 | |
Stated interest rate | 4.75% | ||
Senior Notes | Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 300,000,000 | 300,000,000 | |
Stated interest rate | 4.125% | ||
Senior Notes | Senior Notes due 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 250,000,000 | 250,000,000 | |
Stated interest rate | 4.875% | ||
Senior Notes | Senior Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 425,000,000 | $ 425,000,000 | |
Stated interest rate | 4.75% |
Debt - Long-Term Debt (Details)
Debt - Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Mar. 06, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 3,562.1 | $ 2,729.3 | |
Finance Leases and Financing Obligations | 140.7 | 134.2 | |
Other | 5.1 | 5.4 | |
Total Long-Term Debt | 3,702.8 | 2,863.5 | |
Less: Current Portion | 484.7 | 41.1 | |
Long-term Debt, Gross And Finance Lease Liability | 3,218.1 | 2,822.4 | |
Less: Unamortized Deferred Debt Issuance Costs | 21.2 | 12.5 | |
Total | 3,196.9 | 2,809.9 | |
Senior Notes | Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.55%, payable in 2029 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 350 | 0 | |
Stated interest rate | 3.50% | 3.50% | |
Effective interest rate | 3.55% | ||
Senior Notes | Senior Notes with interest payable semi-annually at 3.50%, effective rate of 3.55%, payable in 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 450 | 0 | |
Stated interest rate | 3.50% | 3.50% | |
Effective interest rate | 3.55% | ||
Senior Notes | Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.82%, payable in 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 300 | 300 | |
Stated interest rate | 4.75% | ||
Effective interest rate | 4.82% | ||
Senior Notes | Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.16%, payable in 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 300 | 300 | |
Stated interest rate | 4.125% | ||
Effective interest rate | 4.16% | ||
Senior Notes | Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.90%, payable in 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 250 | 250 | |
Stated interest rate | 4.875% | ||
Effective interest rate | 4.90% | ||
Senior Notes | Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.76%, payable in 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 425 | 425 | |
Stated interest rate | 4.75% | ||
Effective interest rate | 4.76% | ||
Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,368.8 | 1,396.1 | |
Interest rate at period end | 1.62% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 113.2 | $ 52.8 | |
Interest rate at period end | 1.52% |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facilities (Details) | Sep. 30, 2020USD ($) |
Line of Credit Facility [Line Items] | |
Total Commitments | $ 1,690,200,000 |
Total Outstanding | 129,400,000 |
Total Available | 1,540,100,000 |
Senior Secured Domestic Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Total Commitments | 1,450,000,000 |
Total Outstanding | 20,000,000 |
Total Available | 1,409,300,000 |
Standby letters of credit issued | 20,700,000 |
Senior Secured International Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Total Commitments | 185,500,000 |
Total Outstanding | 93,200,000 |
Total Available | 92,300,000 |
Other International Facilities | |
Line of Credit Facility [Line Items] | |
Total Commitments | 54,700,000 |
Total Outstanding | 16,200,000 |
Total Available | $ 38,500,000 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($)compensation_planshares | Sep. 30, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of active equity compensation plans | compensation_plan | 1 | |
Recognized share-based compensation expense | $ | $ 26.8 | $ 16.1 |
Share-based compensation issued (in shares) | shares | 0.8 | 0.6 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years |
Stock Incentive Plans - Data Co
Stock Incentive Plans - Data Concerning RSUs Granted (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Employees | RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU grants during period (in shares) | shares | 1,648,026 |
Weighted Average Grant Date Fair Value Per Share (in dollars per share) | $ / shares | $ 15.40 |
Board of Directors | Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU grants during period (in shares) | shares | 71,160 |
Weighted Average Grant Date Fair Value Per Share (in dollars per share) | $ / shares | $ 13.49 |
Pensions and Other Postretire_3
Pensions and Other Postretirement Benefits - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||
Transfer of remaining pension benefit obligation to annuity | $ 713,000,000 | ||||||
Non-cash settlement charge | $ 152,500,000 | ||||||
Increase in multi-employer plan withdrawal obligation | $ 12,200,000 | $ 12,200,000 | |||||
Estimated liability for withdrawal from multi-employer plans | $ 42,100,000 | $ 42,100,000 | |||||
Pension Benefits | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Company's contributions to its pension plans | 16,000,000 | $ 8,200,000 | $ 11,300,000 | ||||
Pension Benefits | Minimum | Forecast | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Company's contributions to its pension plans | $ 15,000,000 | ||||||
Pension Benefits | Maximum | Forecast | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Company's contributions to its pension plans | 20,000,000 | ||||||
Postretirement Health Care Benefits | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Benefit payments | $ 1,500,000 | $ 2,200,000 | $ 1,200,000 | ||||
Postretirement Health Care Benefits | Forecast | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Benefit payments | $ 3,000,000 |
Pensions and Other Postretire_4
Pensions and Other Postretirement Benefits - Pension and Postretirement Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Pension Benefits | ||||
Components of Net Periodic Cost: | ||||
Service Cost | $ 3.7 | $ 3.5 | $ 11.5 | $ 10.5 |
Interest Cost | 2.8 | 11.5 | 10.5 | 34.5 |
Administrative Expenses | 0 | 0 | 0.2 | 0.2 |
Expected Return on Plan Assets | (4.1) | (13.6) | (15.7) | (41.1) |
Net Settlement Loss | 0 | 0 | 152.5 | 0 |
Defined Benefit Plan, Additional Information [Abstract] | ||||
Prior Service Credit | 0 | 0 | 0 | 0 |
Actuarial Loss (Gain) | 1.4 | 2.5 | 4.1 | 7.6 |
Net Periodic Cost (Benefit) | 3.8 | 3.9 | 163.1 | 11.7 |
Postretirement Health Care Benefits | ||||
Components of Net Periodic Cost: | ||||
Service Cost | 0.1 | 0.1 | 0.4 | 0.4 |
Interest Cost | 0.2 | 0.3 | 0.7 | 0.9 |
Administrative Expenses | 0 | 0 | 0 | 0 |
Expected Return on Plan Assets | 0 | 0 | 0 | 0 |
Net Settlement Loss | 0 | 0 | 0 | 0 |
Defined Benefit Plan, Additional Information [Abstract] | ||||
Prior Service Credit | (0.1) | (0.1) | (0.2) | (0.2) |
Actuarial Loss (Gain) | (0.4) | (0.6) | (1.3) | (1.8) |
Net Periodic Cost (Benefit) | $ (0.2) | $ (0.3) | $ (0.4) | $ (0.7) |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurement - Interest Rate Risk (Details) | Sep. 30, 2020USD ($) |
Interest Swap Position One | |
Derivative [Line Items] | |
Notional amount | $ 150,000,000 |
Weighted Average Interest Rate | 2.36% |
Interest Swap Position Two | |
Derivative [Line Items] | |
Notional amount | $ 120,000,000 |
Weighted Average Interest Rate | 2.92% |
Interest Swap Position Three | |
Derivative [Line Items] | |
Notional amount | $ 80,000,000 |
Weighted Average Interest Rate | 2.79% |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurement - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | ||||||
Fair value of long-term debt | $ 2,788,600,000 | $ 3,627,000,000 | ||||
Carrying value of long-term debt | 2,729,300,000 | 3,562,100,000 | ||||
Anticipated reclassification of loss to earnings in the next twelve months | 1,200,000 | |||||
Derivatives designated as hedging instruments: | Instruments in a Cash Flow Hedging Relationship | Interest Rate Swap Agreements | ||||||
Derivative [Line Items] | ||||||
Amounts excluded from effectiveness | 0 | $ 0 | ||||
Amounts excluded from the measure of effectiveness | 0 | 0 | ||||
Derivatives designated as hedging instruments: | Instruments in a Cash Flow Hedging Relationship | Commodity Contracts | ||||||
Derivative [Line Items] | ||||||
Amounts excluded from effectiveness | 0 | 0 | ||||
Amounts excluded from the measure of effectiveness | 0 | 0 | ||||
Derivatives designated as hedging instruments: | Instruments in a Cash Flow Hedging Relationship | Foreign currency contracts | ||||||
Derivative [Line Items] | ||||||
Amounts excluded from effectiveness | 0 | 0 | ||||
Amounts excluded from the measure of effectiveness | 0 | 0 | ||||
Amounts forecasted and reclassified into earnings no longer probable | 0 | $ 0 | ||||
Notional amount | $ 87,600,000 | $ 20,000,000 | ||||
Derivative Contracts Not Designated as Hedging Instruments | Maximum | ||||||
Derivative [Line Items] | ||||||
Foreign currency forward exchange contract term | 3 months | 3 months | ||||
Derivative Contracts Not Designated as Hedging Instruments | Foreign currency contracts | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 77,400,000 | $ 86,400,000 | ||||
Forecast | Instruments in a Cash Flow Hedging Relationship | Commodity Contracts | ||||||
Derivative [Line Items] | ||||||
Percentage of expected natural gas usage hedged | 69.00% | 10.00% | 37.00% |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurement - Fair value of derivatives (Details) - Derivatives designated as hedging instruments: - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 5.8 | $ 0 |
Derivative Liabilities | 8.1 | 11.5 |
Interest Rate Swap Agreements | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Derivative Liabilities | 7.6 | 6.6 |
Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0.1 | 0 |
Derivative Liabilities | 0.5 | 1.5 |
Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 5.7 | 0 |
Derivative Liabilities | 0 | 3.4 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 5.8 | |
Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 6.2 | 8.5 |
Other Noncurrent Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 1.9 | $ 3 |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurement - Effect of Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive Loss | $ (6.1) | $ (0.3) | $ (11.2) | $ 7.3 |
Amount of (Gain) Loss Recognized in Statement of Operations | 0.5 | (0.4) | (2.6) | (0.9) |
Commodity Contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive Loss | (7.5) | (0.2) | (15.9) | 2.5 |
Foreign Currency Contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive Loss | 1.4 | (0.6) | (1.2) | (1.5) |
Interest Rate Swap Agreements | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Accumulated Other Comprehensive Loss | 0 | 0.5 | 5.9 | 6.3 |
Cost of Sales | Commodity Contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Statement of Operations | (1.4) | (0.5) | (6.8) | (0.4) |
Other (Income) Expense, Net | Foreign Currency Contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Statement of Operations | (0.3) | (0.2) | (0.9) | (0.9) |
Foreign Currency Contracts | (1.7) | 1.9 | (2.1) | 3.3 |
Interest Expense, Net | Interest Rate Swap Agreements | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of (Gain) Loss Recognized in Statement of Operations | $ 2.2 | $ 0.3 | $ 5.1 | $ 0.4 |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurement - Pretax Derivative Accumulated Other Comprehensive Loss (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Cumulative Changes in Derivative Net Gain (Loss) [Roll Forward] | |
Beginning balance | $ 2,058 |
Ending balance | 1,833.9 |
Graphic Packaging Holding Company, Derivative Instruments | |
Cumulative Changes in Derivative Net Gain (Loss) [Roll Forward] | |
Beginning balance | (10.9) |
Reclassification to Earnings | (2.6) |
Current Period Change in Fair Value | 11.3 |
Ending balance | $ (2.2) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||||
Income Tax Expense | $ (8.3) | $ (16.9) | $ (21.2) | $ (60.9) | |
Income before income taxes and equity income of unconsolidated entity | $ 87.3 | $ 86.8 | 146.7 | $ 294.6 | |
Foreign Subsidiaries | |||||
Operating Loss Carryforwards [Line Items] | |||||
Discrete tax benefit for release of valuation allowance on deferred tax assets | 7.6 | ||||
Tax Year 2019 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Provision to return adjustments for 2019 tax return | $ 4.1 | ||||
Domestic Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforward | $ 34.5 |
Related Party Transactions (Det
Related Party Transactions (Details) - NACP Combination - International Paper Company - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Fiber Procurement And Corrugated Products | ||
Related Party Transaction [Line Items] | ||
Payments to suppliers | $ 9.2 | $ 8.6 |
Wood | ||
Related Party Transaction [Line Items] | ||
Payments to suppliers | 154 | 178 |
Transition Services | ||
Related Party Transaction [Line Items] | ||
Payments to suppliers | 0.1 | |
Ink Supply | ||
Related Party Transaction [Line Items] | ||
Payments to suppliers | $ 21.7 | 19.7 |
Unrelated To Agreements | ||
Related Party Transaction [Line Items] | ||
Payments to suppliers | $ 3 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020paperboard_millsegment | |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 3 |
Number of North American paperboard mills | paperboard_mill | 8 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
NET SALES: | $ 1,691.2 | $ 1,577.6 | $ 4,891.1 | $ 4,627.2 |
NET SALES: | 1,697.7 | 1,581.6 | 4,907.8 | 4,640.3 |
(LOSS) INCOME FROM OPERATIONS: | 119.1 | 122.7 | 393.9 | 401.1 |
DEPRECIATION AND AMORTIZATION: | 120.5 | 110.5 | 356.5 | 337.8 |
Corporate/Other/Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES: | 48.1 | 40.3 | 118.2 | 107.8 |
(LOSS) INCOME FROM OPERATIONS: | (2.5) | (8.8) | (54.1) | (24.5) |
DEPRECIATION AND AMORTIZATION: | 6.1 | 5.1 | 16.9 | 15.6 |
Paperboard Mills | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES: | 240.9 | 279.2 | 744 | 833.9 |
(LOSS) INCOME FROM OPERATIONS: | (34.4) | 10.7 | (92.6) | 19.2 |
DEPRECIATION AND AMORTIZATION: | 63.6 | 54 | 189.6 | 162.6 |
Americas Paperboard Packaging | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES: | 1,214.8 | 1,091.1 | 3,491.9 | 3,176.6 |
(LOSS) INCOME FROM OPERATIONS: | 140.5 | 112.2 | 492.4 | 363.1 |
DEPRECIATION AND AMORTIZATION: | 40.2 | 39.9 | 120.3 | 124.5 |
Europe Paperboard Packaging | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
NET SALES: | 193.9 | 171 | 553.7 | 522 |
(LOSS) INCOME FROM OPERATIONS: | 15.5 | 8.6 | 48.2 | 43.3 |
DEPRECIATION AND AMORTIZATION: | $ 10.6 | $ 11.5 | $ 29.7 | $ 35.1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net Income Attributable to Graphic Packaging Holding Company | $ 63.7 | $ 52.1 | $ 103.1 | $ 173.8 |
Weighted Average Shares: | ||||
Basic (shares) | 277 | 292.9 | 281.9 | 295.2 |
Dilutive effect of RSUs (shares) | 0.7 | 0.8 | 0.8 | 0.7 |
Diluted (shares) | 277.7 | 293.7 | 282.7 | 295.9 |
Earnings Per Share - Basic (in dollars per share) | $ 0.23 | $ 0.18 | $ 0.37 | $ 0.59 |
Earnings Per Share - Diluted (in dollars per share) | $ 0.23 | $ 0.18 | $ 0.36 | $ 0.59 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Redeemable Noncontrolling Interest, Equity, Rollforwad [Roll Forward] | ||||||||
Beginning Balance | $ 304.3 | $ 304.3 | ||||||
Net Loss Attributable to Redeemable Noncontrolling Interest | (3.2) | |||||||
Other Comprehensive Income, Net of Tax | $ 0.3 | $ (0.8) | 8.9 | $ (1) | ||||
Redemption of IP's Ownership Interest | (210.9) | $ 19.1 | $ (6.7) | (296.1) | ||||
Redeemable Noncontrolling Interest Redemption Value Adjustment | 0.5 | $ 5.4 | $ (18.1) | (12.2) | ||||
Distributions of Membership Interest | (1.7) | |||||||
Ending Balance | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) - Schedule of Changes in AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | $ 2,036.6 | $ 2,056.9 | $ 2,058 | $ 2,018.5 |
Other Comprehensive Income (Loss) before Reclassifications | 27.9 | |||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 122.2 | |||
Total Other Comprehensive Income (Loss), Net of Tax | 150.1 | |||
Net Current-period Other Comprehensive Loss (Income) Attributable to Noncontrolling Interest | 35.9 | (17.1) | 150.1 | (19.2) |
Ending balance | 1,833.9 | 2,034.6 | 1,833.9 | 2,034.6 |
Accumulated Other Comprehensive (Loss) Income | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (285.6) | (379.3) | (365.8) | (377.9) |
Ending balance | (255.5) | $ (392.8) | (255.5) | $ (392.8) |
Derivatives Instruments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (16.6) | |||
Ending balance | (9.8) | (9.8) | ||
Pension and Postretirement Benefit Plans | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (238.5) | |||
Ending balance | (124.1) | (124.1) | ||
Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Beginning balance | (110.7) | |||
Ending balance | $ (121.6) | (121.6) | ||
Derivatives Instruments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Other Comprehensive Income (Loss) before Reclassifications | 10.3 | |||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | (2.1) | |||
Total Other Comprehensive Income (Loss), Net of Tax | 8.2 | |||
Pension and Postretirement Benefit Plans | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Other Comprehensive Income (Loss) before Reclassifications | 32.1 | |||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 124.3 | |||
Total Other Comprehensive Income (Loss), Net of Tax | 156.4 | |||
Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Other Comprehensive Income (Loss) before Reclassifications | (14.5) | |||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 0 | |||
Total Other Comprehensive Income (Loss), Net of Tax | (14.5) | |||
Derivatives Instruments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Net Current-period Other Comprehensive Loss (Income) Attributable to Noncontrolling Interest | (1.4) | |||
Pension and Postretirement Benefit Plans | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Net Current-period Other Comprehensive Loss (Income) Attributable to Noncontrolling Interest | (42) | |||
Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Net Current-period Other Comprehensive Loss (Income) Attributable to Noncontrolling Interest | 3.6 | |||
Total | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Net Current-period Other Comprehensive Loss (Income) Attributable to Noncontrolling Interest | $ (39.8) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive (Loss) - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | $ 1,442.2 | $ 1,315.2 | $ 4,069.4 | $ 3,820 |
Other Expense, Net | 1.1 | 4.2 | 2.2 | 7.1 |
Prior Service Credits | 0.2 | 0 | (150.8) | (0.1) |
Total before Tax | 87.3 | 86.8 | 146.7 | 294.6 |
Tax Expense | 8.3 | 16.9 | 21.2 | 60.9 |
Net of Tax | $ 79.3 | $ 70 | 126.2 | $ 234.2 |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net of Tax | (122.2) | |||
Reclassification out of Accumulated Other Comprehensive Income | Derivatives Instruments | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before Tax | 2.6 | |||
Tax Expense | 0.5 | |||
Net of Tax | 2.1 | |||
Reclassification out of Accumulated Other Comprehensive Income | Derivatives Instruments | Commodity Contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of Sales | (6.8) | |||
Reclassification out of Accumulated Other Comprehensive Income | Derivatives Instruments | Foreign Currency Contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other Expense, Net | (0.9) | |||
Reclassification out of Accumulated Other Comprehensive Income | Derivatives Instruments | Interest Rate Swap Agreements | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest Expense, Net | 5.1 | |||
Reclassification out of Accumulated Other Comprehensive Income | Pension and Postretirement Benefit Plans | Pension Benefit Plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Actuarial (Losses) Gains | 156.6 | |||
Total before Tax | (156.6) | |||
Tax Expense | (31.1) | |||
Net of Tax | (125.5) | |||
Reclassification out of Accumulated Other Comprehensive Income | Pension and Postretirement Benefit Plans | Postretirement Benefits Plan | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Prior Service Credits | (0.2) | |||
Actuarial (Losses) Gains | (1.3) | |||
Total before Tax | 1.5 | |||
Tax Expense | 0.3 | |||
Net of Tax | $ 1.2 |
Exit Activities (Details)
Exit Activities (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)mill | Sep. 30, 2019USD ($) | Dec. 31, 2022USD ($)mill | |
Restructuring Cost and Reserve [Line Items] | |||||
Number of mills to be closed | mill | 2 | ||||
Exit activities charges incurred | $ 4.4 | $ 3 | $ 21.4 | $ 3 | |
Construction in Progress | Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Investment in new CRB Mill | $ 600 | ||||
One-time Termination Benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Recorded exit costs to date | 42.1 | 42.1 | |||
One-time Termination Benefits | Burlington, North Carolina Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected costs associated with closures | 1.4 | 1.4 | |||
One-time Termination Benefits | Minimum | Two CRB Mills | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected costs associated with closures | 15 | 15 | |||
One-time Termination Benefits | Maximum | Two CRB Mills | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected costs associated with closures | $ 20 | 20 | |||
Facility Closing | Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of mills to be closed | mill | 2 | ||||
Facility Closing | Two CRB Mills | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accelerated depreciation related to plant closure | 21.6 | ||||
Exit activities charges incurred | 11.4 | ||||
Facility Closing | White Pigeon and West Monroe | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accelerated depreciation related to plant closure | 15.8 | ||||
Exit activities charges incurred | 2.3 | ||||
Facility Closing | Minimum | Two CRB Mills | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accelerated depreciation related to plant closure | 50 | ||||
Facility Closing | Minimum | Burlington, North Carolina Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accelerated depreciation related to plant closure | 3.6 | ||||
Facility Closing | Maximum | Two CRB Mills | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accelerated depreciation related to plant closure | $ 60 |
Exit activities - Restructuring
Exit activities - Restructuring and Related Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Total | $ 9.1 | $ 42.1 |
Special Charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Inventory and asset write-offs | 3.1 | 13.1 |
Special Charges | One-time Termination Benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs and other | 1.3 | 8.3 |
Cost of Sales | Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Accelerated depreciation | $ 4.7 | $ 20.7 |
Exit activities - Schedule of R
Exit activities - Schedule of Restructuring Reserve by Type of Cost (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 7.1 |
Costs incurred | 9.1 |
Payments | (4.5) |
Adjustments | (0.8) |
Ending balance | $ 10.9 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 15, 2020 | Sep. 30, 2020 |
Senior Notes due 2021 | Senior Notes | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 4.75% | |
Subsequent Event | Farm Credit System Term Loan | Secured Debt | Graphic Packaging International, LLC | ||
Subsequent Event [Line Items] | ||
Incremental term loan | $ 425,000,000 | |
Stated interest rate | 2.67% | |
Term of loan | 7 years |