Mail Stop 4561
April 13, 2006
Steven C. Voorhees
Senior Vice President and
Chief Financial Officer
Rock-Tenn Company
504 Thrasher St.
Norcross, GA 30071
Re: Rock-Tenn Company
Form 10-K for the Fiscal Year Ended
September 30, 2005
Filed December 19, 2005
Form 10-Q for the Quarterly Period Ended
December 31, 2005
Form 8-K Filed January 26, 2006
File No. 001-12613
Dear Mr. Voorhees:
We have reviewed the above referenced filings and have the
following comments. Please note that we have limited our review
to
the matters addressed in the comments below. We may ask you to
provide us with supplemental information so we may better
understand
your disclosure. Please be as detailed as necessary in your
explanation. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-Q For the Quarterly Period Ended December 31, 2005
Note 8. Share-Based Compensation, page 9
1. We note in your disclosure regarding the adoption of SFAS
123(R)
that you chose the modified prospective method. We also note in
your
disclosure your statement that the financial statements for prior
periods have been restated. Tell us why you restated the prior
period financial statements if you chose to use the modified
prospective method of adopting SFAS 123(R) and provide us with the
detail of the amounts recorded.
2. We also note that you adopted SFAS 123(R) in the interim period
ended December 31, 2005. Please tell us your consideration for
the
disclosure requirements of SAB No. 107, Section H, Question 1
which
includes all disclosures required by paragraphs A240-242 of
Statement
123R. In this regard, tell us specifically how you considered
including the disclosures required by paragraphs A240(b)(2) as it
relates to nonvested options. If you determine that you have not
provided the required disclosures of this bulletin, tell us how
you
intend to comply with this bulletin.
Form 8-K filed January 26, 2006
3. We note your use of the non-GAAP measure, "Credit Agreement
EBITDA" in the Form 8-K noted above which excludes a number of
items.
Tell us how you considered Question 8 of Frequently Asked
Questions
Regarding the Use of Non-GAAP Financial Measures to include the
following disclosures:
* the manner in which management uses the non-GAAP measure to
conduct
or evaluate its business;
* the economic substance behind management`s decision to use such
a
measure;
* the material limitations associated with use of the non-GAAP
financial measure as compared to the use of the most directly
comparable GAAP financial measure;
* the manner in which management compensates for these limitations
when using the non-GAAP financial measure; and
* the substantive reasons why management believes the non-GAAP
financial measure provides useful information to investors.
In this regard, we believe you should further enhance your
disclosures to comply with Item 10(e)(1)(i)(C) and (D) of
Regulation
S-K and Question 8 of the related FAQ to demonstrate the
usefulness
of your non-GAAP financial measures which excludes a number of
items,
especially since these measures appear to be used to evaluate
performance. Your current disclosure states that this non-GAAP
measure is used to evaluate financial condition and provides a
more
complete understanding of financial condition and liquidity.
Please
note that a measure of liquidity should be reconciled to cash
flows
from operations rather than net income and if you believe this
non-
GAAP measure is a measure of liquidity, tell us how you considered
reconciling this non-GAAP measure to cash flows from operations.
Additionally, your statement that the non-GAAP measure provides a
more complete understanding of your financial condition and
liquidity
appears to imply that GAAP financial measures are not complete
measures of financial condition and liquidity.
4. Additionally, tell us specifically what types of charges,
including the specific amounts, are included in "additional
permitted
charges" in your calculation of "Credit Agreement EBITDA."
* * * * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T. You
may wish to provide us with marked copies of any amendment to
expedite our review. Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information. Detailed cover letters greatly facilitate
our
review. Please understand that we may have additional comments
after
reviewing any amendment and your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Patrick Gilmore at (202) 551-3406, Thomas
Ferraro at (202) 551-3225 or me at (202) 551-3730 if you have
questions regarding comments on the financial statements and
related
matters.
Sincerely,
Kathleen Collins
Accounting Branch Chief
Steven C. Voorhees
Rock-Tenn Company
April 13, 2006
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