SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1994 Commission File Number 1-566
GREIF BROS. CORPORATION
(Exact name of registrant as specified in its charter)
State of Delaware 31-4388903
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
621 Pennsylvania Avenue, Delaware, Ohio 43015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 614-363-1271
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange on
Title of each class which registered
Class "A" common stock Chicago Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act:
None
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months , and (2) has been subject to such filing
requirements for the past 90 days.
Yes X . No .
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the close of the period covered by this report:
Class A Common Stock 5,436,586 shares
Class B Common Stock 6,654,174 shares
Documents Incorporated by Reference
Document Incorporated into
Portions of Annual Report to Shareholders Part I, Part II, Part IV
for year ended October 31, 1994
PART I
Item 1. Business
Information on the nature, type of business and industry segments,
contained on pages 22 and 23 in the Company's 1994 Annual Report to
Shareholders, is incorporated in the Form 10-K Annual Report.*
<TABLE>
Item 2. Properties
The following are the Company's principal locations and products manufactured.
<CAPTION>
Location Products Manufactured
<S> <C>
Alabama
Cullman Steel drums and machine shop
Good Hope Research center
Mobile Fibre drums
Arkansas
Batesville (1) Fibre drums
California
Commerce (2) Corrugated honeycomb
Fontana Steel drums
LaPalma Fibre drums
Morgan Hill Fibre drums
Sacramento General office
Stockton Corrugated honeycomb and wood cut stock
Georgia
Macon Corrugated honeycomb
Tucker Fibre drums
Illinois
Blue Island Fibre drums
Chicago Steel drums
Joliet Steel drums
Northlake Fibre drums and plastic drums
Posen Corrugated honeycomb
Indiana
Albany (3) Corrugated containers
*Except as specifically indicated herein, no other data appearing in the
Company's 1994 Annual Report to Shareholders is deemed to be filed as part
of this Form 10-K Annual Report.
Item 2. Properties (continued)
Location Products Manufactured
Kansas
Winfield Steel drums
Kansas City (4) Steel drums
Kansas City (5) Fibre drums
Kentucky
Louisville Wood cut stock
Louisiana
St. Gabriel Steel drums and plastic drums
Maryland
Sparrows Point Steel drums
Massachusetts
Mansfield Fibre drums
Westfield Fibre drums
Worcester Plywood reels
Michigan
Eaton Rapids Corrugated sheets
Grand Rapids Corrugated sheets
Taylor Fibre drums
Wayne Corrugated containers
Minnesota
Minneapolis Fibre drums
Rosemount Multiwall bags
St. Paul Tight cooperage
St. Paul (6) General office
Mississippi
Durant Plastic products
Jackson (7) General office
Missouri
Kirkwood Fibre drums
Nebraska
Omaha Multiwall bags
Item 2. Properties (continued)
Location Products Manufactured
New Jersey
Edison (8) General office
Rahway Fibre drums and plastic drums
Spotswood Fibre drums
Springfield (9) National accounts sales office
Teterboro Fibre drums
Phillipsburg Plywood reels
New York
Buffalo Fibre drums
Lindenhurst (10) Research center
Niagara Falls Steel drums
Syracuse Fibre drums and steel drums
Amherst (11) General office
North Carolina
Bladenboro Steel drums
Charlotte Fibre drums
Concord Corrugated sheets
Ohio
Caldwell Steel drums
Canton (12) Corrugated containers
Cleveland (13) Corrugated containers
Delaware Principal office
Fostoria Corrugated containers
London (14) Corrugated containers
Massillon Recycled containerboard
Hebron Plastic products and containers
Tiffin Corrugated containers
Youngstown Steel drums
Zanesville Corrugated containers and sheets
Oregon
White City Laminated panels
Pennsylvania
Chester Fibre drums
Darlington Fibre drums and plastic drums
Hazleton Corrugated honeycomb
Reno (15) Corrugated containers
Stroudsburg Rims and drum hardware
Washington Corrugated containers and sheets
Item 2. Properties (continued)
Location Products Manufactured
Tennessee
Kingsport Fibre drums
Memphis Steel drums
Texas
Angleton Steel drums
Fort Worth Fibre drums
LaPorte Fibre drums, steel drums and plastic drums
Waco Corrugated honeycomb
Virginia
Amherst Containerboard
Washington
Woodland Corrugated honeycomb and wood cut stock
West Virginia
New Martinsville Corrugated containers
Weston Corrugated containers
Wisconsin
Sheboygan Fibre drums
Canada
Belleville, Ontario Fibre drums and plastic products
Bowmanville, Ontario Spiral tubes
Fort Frances, Ontario Spiral tubes
Fruitland, Ontario Drum hardware and machine shop
LaSalle, Quebec Fibre drums and steel drums
Lloydminster, Alberta Steel drums, fibre drums and plastic drums
Maple Grove, Quebec Pallets
Milton, Ontario Fibre drums
Niagara Falls, Ontario General office
Stoney Creek, Ontario Steel drums
<FN>
Note: All properties are held in fee except as noted below.
</TABLE>
Exceptions:
(1) Lease expires March 31, 1997
(2) Lease expires March 30, 1995
(3) Lease expires January 31, 1998
(4) Lease expires June 30, 1995
(5) Lease expires March 31, 1999
(6) Lease expires December 31, 1994
(7) Lease expires May 31, 1995
(8) Lease expires May 31, 1998
Item 2. Properties (concluded)
(9) Lease expires September 7, 1997
(10) Lease expires December 31, 2000
(11) Lease expires December 31, 1996
(12) Lease expires March 31, 1998
(13) Lease expires November 30, 1995
(14) Lease expires April 30, 1997
(15) Lease expires October 31, 1995
The Company also owns in fee a substantial number of scattered timber
tracts comprising approximately 319,000 acres in the states of
Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi and
Virginia and the provinces of Nova Scotia, Ontario and Quebec in
Canada.
Item 3. Legal Proceedings
The Company has no pending material legal proceedings.
From time to time, in the business in which the Company operates,
various legal proceedings arise from either the Federal, State or Local levels
involving environmental sites to which the Company has shipped directly or
indirectly small amounts of toxic waste such as paint solvents, etc. The
Company, to date, has been classified as a "de minimis" participant and, as
such, has not been subject, in any instance, to material sanctions or
sanctions greater than $100,000.
In addition, also from time to time, but infrequently, the Company
has been cited for inadvertent violations of environmental regulations.
Except for the following situation, none of these violations involve or are
expected to involve sanctions of $100,000 or more.
Currently, the Company's only exposure which may exceed $100,000
relates to a pollution situation at its Strother Field plant in Winfield,
Kansas. A feasibility study and a remedial plan proposed by the Kansas
Department of Health and Environment has set forth estimated remedial costs
which could expose the Company to approximately $3,000,000 in expense under
the most extreme assumptions. If the Company ultimately is required to incur
this expense, a significant portion would be paid over 10 years. The Kansas
site involves underwater pollution and certain soil pollution was found to
exist on the Company's property. The estimated costs of the remedy currently
preferred by the Kansas Authority for the soil pollution on the Company's land
represents approximately $2,000,000 of the estimated $3,000,000 in expense.
The final remedies have not been selected and the proposed plan is
presently open for public comment. In an effort to reduce its exposure for
soil pollution, the Company, believing the soil pollution has been unduly
magnified and is not based upon sufficient exploratory data, has undertaken
further engineering borings and analysis to attempt to define a more confined
soil area subject to the proposed remediation.
Due to the uncertainty surrounding this instance, the Company
believes that the range of potential liability cannot be reasonably estimated,
accordingly no reserve has been recorded as of October 31, 1994.
Item 4. Submission of Matters to a Vote of Security Holders
There have been no matters submitted to a vote of security holders.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
The following information contained in the 1994 Annual Report to
Shareholders is incorporated by reference in this Form 10-K Annual Report:*
Information concerning the principal market on which the Registrant's
common stock is traded, high and low sales price of this stock for each
quarterly period during the last two fiscal years and number of shareholders
is contained on page 21 of the 1994 Annual Report to Shareholders.
The Company generally pays five dividends of varying amounts during
its fiscal year computed on the basis described in Note 4, page 18 of the 1994
Annual Report to Shareholders. The annual dividends paid for the last three
fiscal years are contained on page 15.
Item 6. Selected Financial Data
The 5-year selected financial data, contained on page 22 of the 1994
Annual Report to Shareholders, is incorporated in this Form 10-K Annual
Report.*
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following information contained in the 1994 Annual Report to
Shareholders is incorporated by reference in this Form 10-K Annual Report:*
Management's Discussion and Analysis of Liquidity and
Capital Resources and Results of Operations - pages
24 and 25.
Item 8. Financial Statements and Supplementary Data
The following information contained in the 1994 Annual Report to
Shareholders is incorporated by reference in this Form 10-K Annual Report:*
The consolidated financial statements and the report
thereon of Price Waterhouse LLP dated November 30, 1994 -
pages 14 through 20.
The selected quarterly financial data - page 21.
*Except as specifically indicated herein, no other data appearing in
the Company's 1994 Annual Report to Shareholders is deemed to be filed as part
of this Form 10-K Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
There has not been a change in the Company's principal independent
auditors and there were no matters of disagreement on accounting and financial
disclosure.
<TABLE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The following information relates to Directors of the Company:
<CAPTION>
Year first
Date present Other positions became
Name term expires and offices held Director
<S> <C> <C> <C>
Michael J. Gasser (Note: All Directors See response below. 1991
are elected annually
John C. Dempsey (A) for the ensuing year See response below. 1946
and serve until their
Allan Hull (B) successors are elec- See response below. 1947
ted and qualify. The
Robert C. Macauley (C) annual meeting is See response below. 1979
held on the fourth
Charles R. Chandler (D) Monday of February.) See response below. 1987
Paul H. DeCoster (E) None. 1993
J Maurice Struchen (F) None. 1993
</TABLE>
(A)John C. Dempsey (age 80) has been a full time officer of the Company for
more than the last five years. In the current year, he retired from the
Company, but retains the position of Chairman Emeritus of the Board of
Directors.
(B)Allan Hull is and has been, for more than the past five years, a partner
and practicing attorney with Hull and Hull, Legal Counsel, Cleveland, Ohio.
See below for present positions with the Company.
(C)Robert C. Macauley (age 71) has been, for more than the past five years,
the Chief Executive Officer of Virginia Fibre Corporation. He is a member
of the Compensation Committee. He is also a director for W. R. Grace & Co.
(D)Charles R. Chandler (age 59) has been, for more than the past five years,
the President and Chief Operating Officer of Virginia Fibre Corporation. He
is a member of the Executive and Audit Committees.
(E)Paul H. DeCoster (age 61) has been, for more than the past five years, a
partner in the law firm Jackson and Nash. He is a member of the
Compensation and Audit Committees.
Item 10. Directors and Executive Officers of the Registrant (continued)
(F)J Maurice Struchen (age 74) has been, for more than the past five years,
the retired former Chairman of the Board and Chief Executive Officer of
Society Corporation. He is a member of the Compensation and Audit
Committees. He is also a director for Society Corporation and Forest City
Enterprises, Inc.
Mr. Gasser, for more than the past five years, has been a full-time
officer of the Company (see below).
The following information relates to Executive Officers of the Company
(elected annually):
<TABLE>
<CAPTION>
Year first
became
Executive
Name Age Positions and Offices Officer
<S> <C> <C> <C>
Michael J. Gasser 43 Chairman of the Board of 1988
Directors and Chief
Executive Officer, member
of the Executive and
Finance Committees
Allan Hull 81 Director, Vice President, 1964
General Counsel, member
of the Executive Com-
mittee
John P. Berg 74 President, member of the 1972
Finance Committee and
General Manager of Norco
and West Coast Divisions
Lloyd D. Baker 61 Vice President and Chairman 1975
of the Finance Committee
Leonard W.
Berkheimer 60 Vice President 1990
Michael M. Bixby 51 Vice President 1980
Herbert L.
Carpenter, Jr. 72 Vice President, General 1976
Manager of Raible Division
and Director of Research
and Development
Richard R. Caron 62 Vice President 1990
John P. Conroy 65 Vice President and Secretary 1991
Item 10. Directors and Executive Officers of the Registrant (continued)
Year first
became
Executive
Name Age Positions and Offices Officer
Edward L. Dean 59 Vice President 1985
Dwight L. Dexter 43 Vice President 1990
Richard E. Gerstner 46 Vice President 1990
Harrison C.
Golway, Jr. 65 Vice President 1985
C. J. Guilbeau 47 Vice President 1986
Thomas A. Haire 46 Vice President 1991
James A. Hale 54 Vice President 1990
Ralph A. Kelley 73 Vice President and General 1976
Manager of Seymour &
Peck Division
Jerry D. Kidd 59 Vice President 1992
Dennis J. Kuhn 71 Vice President 1980
Anthony Lanza 78 Vice President 1991
Sally W. Messner 58 Vice President 1993
Gail T. Randich 60 Vice President 1991
Lawrence A.
Ratcliffe 53 Vice President and Director 1991
of Industrial Relations
John S. Ries 52 Vice President 1994
James T. Robinson 52 Vice President 1990
Harley G. Sasse 49 Vice President 1990
Alvis H. Snipes 89 Vice President 1947
Robert G. Straley 43 Vice President and General 1990
Manager of East Coast Division
Item 10. Directors and Executive Officers of the Registrant (continued)
Year first
became
Executive
Name Age Positions and Offices Officer
Kenneth R. Swanson 54 Vice President 1990
Ronald L.
Waterman, Sr. 55 Vice President 1989
Jeffrey C. Wood 42 Vice President 1992
Russell J. Rehark 83 Treasurer and member of 1972
the Finance Committee
</TABLE>
Except as indicated below, each Executive Officer has served in his
present capacity for at least five years.
Mr. Leonard W. Berkheimer was elected Vice President in 1990.
During the last five years he has been General Manager of Fibre Drum
Operations - East Coast Division.
Mr. Richard R. Caron was elected Vice President in 1990. During the
last five years he has been General Sales Manager - National Accounts.
Mr. Dwight L. Dexter was elected Vice President in 1990. During the
last five years he has been Sales Manager for National Accounts.
Mr. Richard E. Gerstner was elected Vice President in 1990. During
the last five years he has served as General Manager - Steel Drum Operations -
East Coast Division and continues to serve in this capacity.
Mr. James A. Hale was elected Vice President in 1990. During the
last five years he has served as an industrial engineer for the East Coast
Division.
Mr. James T. Robinson was elected Vice President in 1990. During
the last five years he has been a Sales Manager for the East Coast Division
and continues to serve in this capacity.
Mr. Harley G. Sasse was elected Vice President in 1990. During the
last five years he has been General Sales Manager for the Norco and West Coast
Divisions.
Mr. Robert G. Straley was elected Vice President in 1990. During
the last five years he has served as General Manager for the East Coast
Division.
Mr. Kenneth R. Swanson was elected Vice President in 1990. During
the last five years he has been General Manager - Quality Excellence Program.
Item 10. Directors and Executive Officers of the Registrant (concluded)
Mr. John P. Conroy was elected Vice President in 1991. During 1994
Mr. Conroy was elected Secretary. Prior to 1994, he was Assistant Secretary.
Mr. Conroy has been a member of the Administrative Committee since 1972.
Mr. Thomas A. Haire was elected Vice President in 1991. During the
last five years he has been manager of the research facility located in
Lindenhurst, New York and continues to serve in this capacity.
Mr. Anthony Lanza was elected Vice President in 1991. During the
last five years he has been General Manager - Steel Drum Operations for the
Seymour & Peck Division.
Mr. Gail T. Randich was elected Vice President in 1991. During the
last five years he has served as Manager - Midwest Operations - Seymour & Peck
Division. Mr. Randich continues to serve in this capacity.
Mr. Lawrence A. Ratcliffe was elected Vice President in 1991.
During 1994, Mr. Ratcliffe became Director of Industrial Relations. Prior to
1994, he served as Assistant Director of Industrial Relations.
Mr. Jerry D. Kidd was elected Vice President in 1992. During the
last five years he has served as division purchasing manager for the Norco
Division. Mr. Kidd continues to serve in this capacity.
Mr. Jeffrey C. Wood was elected Vice President in 1992. Prior to
that time he has served as a divisional fleet manager for the East Coast
Division. Mr. Wood now performs this service in a corporate capacity. In
1994, Mr. Wood was elected to the Administrative Committee.
Mrs. Sally W. Messner was elected Vice President in 1993. During
the last five years she has served as tax manager for the Corporation. She
continues to serve in this capacity.
Mr. John S. Ries was elected Vice President in 1994. During the
last five years he has been the Division Controller for the Norco and West
Coast Divisions and continues to serve in this capacity.
<TABLE>
Item 11. Executive Compensation
<CAPTION> Deferred All
Name and Position Year Salary Bonus Compensation Other
<S> <C> <C> <C> <C> <C>
Michael J. Gasser 1994 $143,166 $99,999
Chairman
Chief Executive 1993 $110,040 $35,000
Officer
1992 $102,304 $30,000
John C. Dempsey 1994 $155,964 $56,996
Chairman Emeritus
1993 $155,964 $92,176
1992 $155,964 $90,369
Robert C. Macauley 1994 $356,750 $90,172 $40,593 $445,410
Director
Chief Executive
Officer of 1993 $353,550 $104,782 $33,990 $146,520
Virginia Fibre
Corporation 1992 $341,151 $73,612 $34,932 $499,500
Charles R. Chandler1994 $414,421 $94,952 $218,411 $52,794
Director
President of 1993 $423,308 $126,013 $201,670 $21,294
Virginia Fibre
Corporation 1992 $408,519 $83,160 $168,253 $23,310
John P. Berg 1994 $140,004 $93,844
President
1993 $132,766 $88,532
1992 $125,892 $86,796
Ralph A. Kelley 1994 $107,760 $32,436
Vice President
1993 $103,116 $30,600
1992 $97,740 $30,000
Item 11. Executive Compensation (continued)
Deferred All
Name and Position Year Salary Bonus Compensation Other
Elmer A. Reitz 1994 $64,000* $76,570*
Executive Vice
President 1993 $96,000 $86,683
1992 $103,101 $84,983
<FN>
*Mr. Reitz passed away in August, 1994.
</TABLE>
For many years, the Board of Directors has voted bonuses to
employees, acting within its complete discretion, based upon the progress of
the Company, and upon the contributions of the particular employees to that
progress, and upon individual merit, which determines, in the action of the
Board, the bonus a specific employee may receive, if any.
Mr. Robert C. Macauley, Chairman and Chief Executive Officer of
Virginia Fibre Corporation, on August 1, 1986, entered into an employment
agreement with Virginia Fibre Corporation, principally providing for (a) the
employment of Mr. Macauley as Chairman and
Chief Executive Officer for a term of 10 years, (b) the agreement of Mr.
Macauley to devote his time, attention, skill and effort to the performance
of his duties as an officer and employee of Virginia Fibre Corporation, and (c)
the fixing of minimum basic salary during such period of
Item 11. Executive Compensation (continued)
employment at $175,000 per year. During the 1992 fiscal year, the employment
contract with Mr. Macauley was amended to increase the original term to 18 years
and to increase the minimum basic salary during the remainder of the employment
period to $275,000 per year.
Mr. Charles R. Chandler, President and Chief Operating Officer of
Virginia Fibre Corporation, on August 1, 1986, entered into an employment
agreement with Virginia Fibre Corporation, principally providing for (a) the
employment of Mr. Chandler as President and Chief Operating Officer for a
term of 15 years, (b) the agreement of Mr. Chandler to devote all of his time,
attention, skill and effort to the performance of his duties as an officer and
employee of Virginia Fibre Corporation, and (c) the fixing of minimum basic
salary during such period of employment at $150,000 per year. During the 1988
fiscal year the employment contract of Mr. Chandler was amended to increase the
minimum basic salary during the remainder of the employment period to
$275,000 per year. During the 1992 fiscal year, the employment contract with
Mr. Chandler was amended to give Mr. Chandler the right to extend his
employment beyond the original term for up to 5 additional years.
Effective during fiscal 1993, no Directors' fees are paid to Directors
who are full-time employees of the Company or its subsidiary companies.
Directors who are not employees of the Company receive $19,200 per year plus
$500 for each audit and compensation meeting that they attend.
Supplemental to the pension benefits, Virginia Fibre Corporation has
deferred compensation contracts with Robert C. Macauley and Charles R.
Chandler. These contracts are designed to supplement the Company's defined
benefit pension plan only if the executive retires under such pension plan at
or after age 65, or if the executive becomes permanently disabled before
attaining age 65. No benefit is paid to the executive under this contract if
death preceeds retirement. The deferred compensation is payable to the
executive or his spouse for a total period of 15 years.
Under the above Deferred Compensation Contracts, the annual amounts
payable to the executive or his surviving spouse are diminished by the amounts
receivable under the Virginia Fibre Corporation's defined benefit pension plan.
Mr. Macauley's estimated accrued benefit from the Deferred Compensation Contract
is $78,608 per year for 10 years and $52,405 per year for an additional 5
years. Mr. Chandler's estimated accrued benefit from the Deferred Compensation
Contract is $184,061 per year for 10 years and $122,707 per year for an
additional 5 years.
The dollar amount in the all other category is the compensation
attributable to the 1991 Virginia Fibre Corporation stock option plan to certain
key Virginia Fibre Corporation employees. This amount is the difference between
the option price and the value attributable to the stock based upon the
performance of Virginia Fibre Corporation.
In 1991, the shareholders of Virginia Fibre Corporation approved non-
incentive (as defined in the Internal Revenue Code) stock options to Mr. Robert
C. Macauley to purchase up to 135,000 shares of common stock of Virginia Fibre
Corporation at a price of $31.26 per share. The options are exercisable for a
period of 15 years from the date of the option.
Item 11. Executive Compensation (continued)
In addition to the above, Mr. Macauley and Mr. Charles R. Chandler were
issued incentive stock options to purchase shares of Virginia Fibre Corporation
stock. Mr. Macauley has the option to purchase up to 15,000 shares of Virginia
Fibre Corporation stock at an option price, $35.00, which is not less than 110%
of the fair market value of such stock at the time the option is granted.
Mr. Chandler has the option to purchase up to 22,050 shares of Virginia
Fibre Corporation stock at a price of $31.26 per share.
No options were exercised during 1994, 1993 or 1992 by Mr. Macauley or
Mr. Chandler.
<TABLE>
DEFINED BENEFIT PENSION TABLE
Annual Benefit for Years of Service
<CAPTION>
Remuneration 15 20 25 30
<S> <C> <C> <C> <C>
$160,000 $27,640 $36,853 $46,067 $55,280
$150,000 $25,890 $34,520 $43,150 $51,780
$140,000 $24,140 $32,187 $40,233 $48,280
$130,000 $22,390 $29,843 $37,317 $44,780
</TABLE>
<TABLE>
<CAPTION>
Name of individual Remuneration used Estimated
or number of Credited Years for Calculation of annual benefits
persons in group of service Annual Benefit under retirement plan
<S> <C> <C> <C>
Michael J. Gasser 15 $77,944 $11,142
John C. Dempsey 45 $151,549 $37,879
John P. Berg 37 $116,285 $36,358
Ralph A. Kelley 54 $89,497 $30,604
Elmer A. Reitz 50 $107,614 $36,945
Charles R. Chandler 22 $219,224 $48,229
Robert C. Macauley 22 $219,224 $48,229
</TABLE>
The registrant's pension plan is a defined benefit pension plan with
benefits based upon the average of the ten consecutive highest-paying years of
salary compensation (excluding bonuses) and upon years of credited service up to
30 years.
The annual retirement benefits under the defined benefit pension plan
of the registrant's subsidiary, Virginia Fibre Corporation, are calculated at 1%
per year based upon the average of the five highest out of the last ten years of
salary compensation.
Item 11. Executive Compensation (continued)
None of the pension benefits described in this item are subject to
offset because of the receipt of Social Security benefits or otherwise.
The annual compensation for Mr. Macauley and Mr. Chandler is reviewed
annually by the compensation committee of the Board of Directors of Virginia
Fibre Corporation, made up of primarily outside members of that Board and is
based primarily on the performance of Virginia Fibre Corporation.
The annual compensation for Michael J. Gasser, Chairman of the Board
and Chief Executive Officer of the Registrant, is reviewed annually by the
Compensation Committee of the Board of Directors. Mr. Gasser's salary is based
primarily on the performance of Greif Bros. Corporation.
The Compensation Committee, made up primarily of outside directors,
reviews the total compensation paid to Mr. Gasser and other executive officers.
Members of the Compensation Committee are:
Paul H. DeCoster
Robert C. Macauley
J Maurice Struchen
Item 11. Executive Compensation (concluded)
The following graph compares the Registrant's stock performance to that
of the Standard and Poor's 500 Index and its industry group (Peer Index). This
graph, in the opinion of management, would not be free from the claim that it
fails to fully and accurately represent the true value of the Company.
<TABLE>
STOCK PERFORMANCE CHART
<CAPTION>
S&P 500
Year GBC Stock Index Peer Index
<S> <C> <C> <C>
1989 100 100 100
1990 67 89 69
1991 83 115 118
1992 86 123 120
1993 94 137 102
1994 105 139 126
<FN>
The Peer Index is comprised of the paper containers index and paper and forest
products index as shown in the Standard & Poor's Statistical Services Guide.
</TABLE>
<TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following ownership is as of December 12, 1994:
<CAPTION>
Class of Type of Number of Percent
Name and Address stock ownership shares of class
<S> <C> <C> <C> <C>
Naomi C. Dempsey Class B Record and 3,021,618 45.41%
782 W. Orange Road Beneficially
Delaware, Ohio
Naomi C. Dempsey, Trustee Class B See (1) below 831,520 12.50%
John C. Dempsey Class B Record and 240,000 3.60%
621 Pennsylvania Avenue Beneficially
Delaware, Ohio
Macauley & Company Class B Record and 1,200,000 18.04%
161 Cherry Street Beneficially
New Canaan, Connecticut
<FN>
(1) Held by Naomi C. Dempsey as successor trustee in the Naomi A. Coyle
Trust. John C. Dempsey is the beneficial owner of these shares.
</TABLE>
<TABLE>
The following information regarding directors is as of December 12,
1994:
<CAPTION>
Title and Percent of Class
Name Class A %
<S> <C> <C>
Charles R. Chandler 200 -0-%
Paul H. DeCoster 200 -0-%
Michael J. Gasser -0- -0-%
Allan Hull -0- -0-%
Robert C. Macauley -0- -0-%
J Maurice Struchen -0- -0-%
</TABLE>
<TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
(concluded)
<CAPTION>
Title and Percent of Class
Name Class B %
<S> <C> <C>
Charles R. Chandler 2,000 .03%
Paul H. DeCoster -0- -0-%
Michael J. Gasser 5,899 .09%
Allan Hull 74,800 1.12%
Robert C. Macauley 1,200,000 18.04%
J Maurice Struchen 1,000 .02%
</TABLE>
In addition to the above referenced shares, Messrs. Gasser, Hull and
Baker serve as Trustees of the Greif Bros. Corporation Employees' Retirement
Income Plan, which holds 61,876 shares of Class A Common Stock and 38,440 shares
of Class B Common Stock. The Trustees, accordingly, share voting power in these
shares.
The Class A Common Stock has no voting power, except when four quarterly
cumulative dividends upon the Class A Common Stock are in arrears.
Each class of the following equity securities are owned or controlled by
management (i.e. all Directors and Officers) as of December 12, 1994:
<TABLE>
<CAPTION>
Title of Amount Percent
class of stock beneficially owned of class
<S> <C> <C>
Class A 9,972 0.18%
Class B 1,350,785 20.30%
</TABLE>
Item 13. Certain Relationships and Related Transactions
The law firm of Hull & Hull received $301,990 in fees for legal services
to the Corporation plus reimbursement of out-of-pocket expenses of $32,619. Mr.
Allan Hull, attorney-at-law, is Vice President, General Counsel, member of the
Executive Committee and a Director of Greif Bros. Corporation and a partner in
the firm of Hull & Hull.
Item 13. Certain Relationships and Related Transactions (concluded)
A subsidiary of the Company annually contributes money to a world-wide
relief organization. The founder and chairman of this non-profit organization
is also the founder and chairman of the subsidiary company and is a director of
the Registrant. During 1994 the subsidiary company contributed approximately
$1,200,000 to this organization.
The information concerning the indebtedness of Officers and Directors is
included in Schedule II, pages 26 through 30, in this Form 10-K Annual Report.
<TABLE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
<CAPTION>
Page in
Annual Report *
(1)Financial Statements:
<S> <C>
Consolidated Balance Sheets at October
31, 1994 and 1993 14
Consolidated Statements of Income for the
three years ended October 31, 1994 15
Consolidated Statements of Earnings Retained
for Use in the Business for the three
years ended October 31, 1994 15
Consolidated Statements of Cash Flows
for the three years ended October 31, 1994 16
Notes to Consolidated Financial Statements 17-20
Report of Independent Accountants 20
Selected Quarterly Financial Data (unaudited) 21
</TABLE>
* Incorporated by reference from the indicated pages of the 1994 Annual
Report to Shareholders.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(concluded)
(2)Financial Statement Schedules:
Report of Independent Accountants on Financial Statement
Schedules
Marketable Securities - Other Security Investments
(Schedule I)
Amounts Receivable from Related Parties and Underwriters,
Promoters and Employees Other Than Related Parties
(Schedule II)
Consolidated Properties, Plants and Equipment (Schedule V)
Consolidated Accumulated Depreciation, Depletion and
Amortization of Properties, Plants and Equipment (Schedule VI)
Consolidated Valuation and Qualifying Accounts and
Reserves (Schedule VIII)
Consolidated Supplementary Income Statement
Information (Schedule X)
(3)Exhibits:
No.
(13.) 1994 Annual Report to Shareholders
(21.) Subsidiaries of the Registrant
(b)Reports on Form 8-K
(1)No reports on Form 8-K have been filed during
the last quarter of fiscal 1994.
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
The individual financial statements of the Registrant have been omitted
since the Registrant is primarily an operating company and all subsidiaries
included in the consolidated financial statements, in the aggregate, do not
have minority equity interests and/or indebtedness to any person other than the
Registrant or its consolidated subsidiaries in amounts which exceed 5% of total
consolidated assets at October 31, 1994, excepting indebtedness incurred in the
ordinary course of business which is not in default.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GREIF BROS. CORPORATION
(Registrant)
Date January 18, 1995 By
John K. Dieker
Assistant Controller
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Michael J. Gasser Charles R. Chandler
Chairman of the Board of Directors Member of the Board of Directors
Paul H. DeCoster Allan Hull
Member of the Board of Directors Member of the Board of Directors
Robert C. Macauley J Maurice Struchen
Member of the Board of Directors Member of the Board of Directors
Each of the above signatures is affixed as of January 18, 1995.
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors
of Greif Bros. Corporation
Our audits of the consolidated financial statements referred to in
our report dated November 30, 1994 appearing on page 20 of the 1994 Annual
Report to Shareholders of Greif Bros. Corporation, (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the Financial Statement
Schedules listed in Item 14 (a) (2) of this Form 10-K. In our opinion, these
Financial Statement Schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
PRICE WATERHOUSE LLP
Columbus, Ohio
November 30, 1994
<TABLE>
SCHEDULE I
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
MARKETABLE SECURITIES
OTHER SECURITY INVESTMENTS
<CAPTION>
Amount at which each
portfolio of equity
Number of shares security issues and
or units - each other security
Name of issuer and principal amount issue carried in the
title of each issueof bonds and notes balance sheet
Marketable securities:
<S> <C> <C>
U. S. Treasury Notes $ 2,000,000 $ 2,043,760
Government of Canada
Securities 19,731,000 21,926,139
$21,731,000 $23,969,899 (A)
<FN>
(A) At cost plus accrued interest, which approximates market.
</TABLE>
<TABLE>
SCHEDULE II
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
Year ended October 31, 1992:
<CAPTION>
Balance at Balance at
Beginning Amount End of
Name of Debtor Period Proceeds Collected Period
<S> <C> <C> <C> <C>
Lloyd D. Baker $ 98,490 $ -0- $ 7,442 $ 91,048
Michael M. Bixby 254,000 -0- 21,000 233,000
Edward M. Bobula 82,000 240,000 50,000 272,000
Glenn D. Bramlett 290,000 -0- -0- 290,000
Dwight L. Dexter 171,337 -0- 6,529 164,808
Michael J. Gasser 82,400 200,864 6,867 276,397
C. J. Guilbeau -0- 200,000 1,349 198,651
James A. Hale -0- 182,500 84,684 97,816
Philip R. Metzger 111,607 -0- 5,377 106,230
Howard S. Miller 70,000 -0- -0- 70,000
Thomas V. Parker -0- 135,300 19,420 115,880
Gerald L. Payne -0- 100,000 6,068 93,932
Lawrence A. Ratcliffe 82,842 -0- 4,252 78,590
John Saldate 191,822 962 32,344 160,440
William B. Sparks 111,929 -0- -0- 111,929
Ralph V. Stoner, Jr. -0- 250,000 -0- 250,000
Ralph V. Stoner, Sr. 163,000 -0- 20,000 143,000
J. William Weller 93,988 -0- 4,441 89,547
Jeffrey C. Wood -0- 174,000 -0- 174,000
$1,803,415 $1,483,626 $269,773 $3,017,268
</TABLE>
<TABLE>
SCHEDULE II
(continued)
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
Year ended October 31, 1993:
<CAPTION>
Balance at Balance at
Beginning Amount End of
Name of Debtor Period Proceeds Collected Period
<S> <C> <C> <C> <C>
Lloyd D. Baker $ 91,048 $ -0- $ 7,603 $ 83,445
Michael M. Bixby 233,000 -0- 6,000 227,000
Edward M. Bobula 272,000 -0- -0- 272,000
Glenn D. Bramlett 290,000 -0- -0- 290,000
Dwight L. Dexter 164,808 -0- 6,728 158,080
Michael J. Gasser 276,39 -0- 19,828 256,569
C. J. Guilbeau 198,651 -0- 5,496 193,155
James A. Hale 97,816 -0- 3,835 93,981
Philip R. Metzger 106,230 -0- 5,540 100,690
Howard S. Miller 70,000 -0- -0- 70,000
Thomas V. Parker 115,880 -0- 4,492 111,388
Gerald L. Payne 93,932 -0- 7,990 85,942
Todd W. Prasher -0- 149,217 3,878 145,339
Lawrence A. Ratcliffe 78,590 -0- 4,381 74,209
John Saldate 160,440 -0- 3,682 156,758
William R. Shew -0- 275,000 110,000 165,000
William B. Sparks 111,929 -0- -0- 111,929
Ralph V. Stoner, Jr. 250,000 -0- 25,000 225,000
Ralph V. Stoner, Sr. 143,000 -0- 143,000 -0-
J. William Weller 89,547 -0- 4,576 84,971
Jeffrey C. Wood 174,000 -0- 52,504 121,496
$3,017,268 $424,217 $414,533 $3,026,952
</TABLE>
<TABLE>
SCHEDULE II
(continued)
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
Year ended October 31, 1994:
<CAPTION>
Balance at Balance at
Beginning Amount End of
Name of Debtor Period Proceeds Collected Period
<S> <C> <C> <C> <C>
Lloyd D. Baker $ 83,445 $ -0- $ 7,768 $ 75,677
Michael M. Bixby 227,000 -0- 6,000 221,000
Edward M. Bobula 272,000 -0- 272,000 -0-
Glenn D. Bramlett 290,000 -0- -0- 290,000
Dwight L. Dexter 158,080 -0- 6,932 151,147
Kevin L. Drummond -0- 115,000 -0- 115,000
Sandra L. Fisher -0- 103,000 2,179 100,821
Michael J. Gasser 256,569 -0- 18,940 237,630
C. J. Guilbeau 193,155 -0- 5,664 187,491
James A. Hale 93,981 -0- 3,951 90,029
Philip R. Metzger 100,690 -0- 5,709 94,981
Howard S. Miller 70,000 -0- 20,000 50,000
Thomas V. Parker 111,388 -0- 111,388 -0-
Gerald L. Payne 85,942 -0- 8,841 77,101
Todd W. Prasher 145,339 -0- 8,182 137,157
Lawrence A. Ratcliffe 74,209 -0- 4,514 69,695
John Saldate 156,758 -0- 3,794 152,965
William R. Shew 165,000 -0- -0- 165,000
William B. Sparks 111,929 -0- -0- 111,929
Ralph V. Stoner, Jr. 225,000 -0- -0- 225,000
J. William Weller 84,971 -0- 84,971 -0-
Jeffrey C. Wood 121,496 -0- 4,604 116,892
$3,026,952 $218,000 $575,437 $2,669,515
</TABLE>
SCHEDULE II
(continued)
Lloyd D. Baker is a Vice President of Greif Bros. Corporation. The
loan is secured by a first mortgage on a house and lot in Delaware, Ohio and
2,000 shares of the Company's Class B Common Stock. Interest is payable at 3%
per annum.
Michael M. Bixby is a Vice President of Greif Bros. Corporation.
The loan is secured by a house and lot in Minnesota and interest is payable at
3% per annum.
Edward M. Bobula was a Vice President of Greif Bros. Corporation.
The loan was secured by 10,000 shares of the Company's Class B Common Stock
and interest was payable at 3% per annum.
Glenn D. Bramlett is a Director of Down River International, Inc.
The loan is secured by 17,650 shares of the Company's Class B Common Stock and
interest is payable at 10% per annum on $250,000 and 3% on the remaining
$40,000.
Dwight L. Dexter is a Vice President of Greif Bros. Corporation.
The loan is secured by a house and lot in Ohio and interest is payable at 3%
per annum.
Kevin L. Drummond is Controller of Michigan Packaging Company. The
loan is secured by a house and lot in Michigan and interest is payable at 3%
per annum.
Sandra L. Fisher is an insurance administrator of Greif Bros.
Corporation. The loan is secured by a house and lot in Ohio and interest is
payable at 7% per annum.
Michael J. Gasser is Chairman and Chief Executive Officer of Greif
Bros. Corporation. The loan is secured by 5,599 shares of the Company's Class
B Common Stock and a first mortgage on a house and lot in Ohio. Interest is
payable at 3% per annum.
C. J. Guilbeau is a Vice President of Greif Bros. Corporation. The
loan is secured by a house and lot in Illinois and interest is payable at 3%
per annum.
James A. Hale is a Vice President of Greif Bros. Corporation. The
loan is secured by a house and lot in Alabama and interest is payable at 3%
per annum.
Philip R. Metzger is Assistant Controller and Assistant Treasurer of
Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and
interest is payable at 3% per annum.
Howard S. Miller is a Director of Michigan Packaging Company. The
loan is secured by 4,000 shares of the Company's Class B Common Stock and
interest is payable at 7.79% per annum.
Thomas V. Parker is a plant manager of Greif Bros. Corporation. The
loan was secured by a house and lot in Ohio and interest was payable at 3% per
annum.
SCHEDULE II
(concluded)
Gerald L. Payne is a plant manager of Greif Bros. Corporation. The
loan is secured by a house and lot in Illinois and interest is payable at 3%
per annum.
Todd W. Prasher is a division controller of Greif Bros. Corporation.
The loan is secured by a house and lot in Ohio and interest is payable at 3%
per annum.
Lawrence A. Ratcliffe is a Vice President of Greif Bros.
Corporation. The loan is secured by a house and lot in Ohio and interest is
payable at 3% per annum.
John Saldate is a plant manager of Greif Bros. Corporation. The
loan is secured by a house and lot in California and interest is payable at 3%
per annum.
William R. Shew is President of Greif Board Corporation. The loan
is secured by 22,500 shares of Greif Bros. Corporation Class B common stock.
Interest is payable at the prime rate, as determined, and payable semi-
annually on April 30th and October 31st of each year.
William B. Sparks is Chairman of the Board of Down River
International, Inc. The loan is secured by 3,124 shares of the Company's
Class B Common Stock and 500 shares of the Company's Class A Common Stock.
Interest is payable at 3% per annum.
Ralph V. Stoner, Jr. is President of Michigan Packaging Company.
The loan is secured by a house and lot in North Carolina and interest is
payable at 3% per annum.
J. William Weller was Assistant Tax Manager of Greif Bros.
Corporation. The loan was secured by a house and lot in Ohio and interest was
payable at 3% per annum.
Jeffrey C. Wood is a Vice President of Greif Bros. Corporation. The
loan is secured by a house and lot in Ohio and interest is payable at 3% per
annum.
<TABLE>
SCHEDULE V
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED PROPERTIES, PLANTS AND EQUIPMENT (IN $000)
<CAPTION>
Other Balance
Balance at Additions Changes at End
Beginning at Retire- Add of
Description of Period Cost ments (Deduct) Period
Year ended October 31, 1992:
<S> <C> <C> <C> <C> <C> <C>
Timber Properties, less
depletion $ 2,701 $ 109 $ 45 $ (3) (A) $ 2,762
Land $ 9,159 $ 50 $ -0- $ (61) (A) $ 9,148
Land Improvements 2,773 2,478 -0- -0- 5,251
Buildings 70,616 5,163 222 125 (A)(B) 75,682
Machinery & Equipment 180,817 19,932 1,685 (2,229) (A)(B) 196,835
Furniture & Fixtures 5,135 507 181 (47) (A) 5,414
Construction in Process 7,758 15,202 -0- -0- 22,960
267,099 43,282 2,088 (2,151) 306,142
$276,258 $43,332 $2,088 $(2,212) $315,290
Year ended October 31, 1993:
Timber Properties, less
depletion $ 2,762 $ 530 $ -0- $ (2) (A) $ 3,290
Land $ 9,148 $ 497 $ -0- $ (36) (A)(B)$ 9,609
Land Improvements 5,251 139 23 -0- 5,367
Buildings 75,682 5,533 101 (333) (A)(B) 80,781
Machinery & Equipment 196,835 21,707 4,777 (982) (A)(B) 212,783
Furniture & Fixtures 5,414 419 152 11 (A)(B) 5,692
Construction in Process 22,960 45,692 -0- -0- 68,652
306,142 73,490 5,053 (1,304) 373,275
$315,290 $73,987 $5,053 $(1,340) $382,884
Year ended October 31, 1994:
Timber Properties, less
depletion $ 3,290 $ 350 $ -0- $ (1) (A) $ 3,639
Land $ 9,609 $ 928 $ 3 $ (13) (A) $ 10,521
Land Improvements 5,367 2,491 22 -0- 7,836
Buildings 80,781 11,793 349 (125) (A) 92,100
Machinery & Equipment 212,783 75,109 2,097 (334) (A) 285,461
Furniture & Fixtures 5,692 477 181 (23) (A) 5,965
Construction in Process 68,652 -0- 50,516 -0- 18,136
373,275 89,870 53,165 (482) 409,498
$382,884 $90,798 $53,168 $ (495) $420,019
<FN>
(A) Effect of Translation gain (loss) in accordance with FASB #52.
(B) Certain assets were reclassified during the year to reflect the current
year's presentation.
</TABLE>
<TABLE>
SCHEDULE VI
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTIES, PLANTS AND EQUIPMENT (IN $000)
<CAPTION>
Additions Other Balance
Balance at Charged to Changes at End
Beginning Costs and Retire- Add of
of Period Expenses ments (Deduct) Period
Year ended October 31, 1992:
<S> <C> <C> <C> <C> <C> <C>
Land Improvements $ 1,927 $ 238 $ -0- $ -0- $ 2,165
Buildings 25,497 2,337 55 210 (A)(B) 27,989
Machinery & Equipment 123,874 15,261 1,639 (1,434) (A)(B) 136,062
Furniture & Fixtures 3,788 456 165 (31) (A) 4,048
$155,086 $18,292 $1,859 $(1,255) $170,264
Year ended October 31, 1993:
Land Improvements $ 2,165 $ 269 $ 21 $ -0- $ 2,413
Buildings 27,989 2,541 90 (175) (A)(B) 30,265
Machinery & Equipment 136,062 15,587 4,517 (589) (A)(B) 146,543
Furniture & Fixtures 4,048 447 147 (11) (A)(B) 4,337
$170,264 $18,844 $4,775 $(775) $183,558
Year ended October 31, 1994:
Land Improvements $ 2,413 $ 351 $ 21 $ -0- $ 2,743
Buildings 30,265 2,866 304 (65) (A) 32,762
Machinery & Equipment 146,543 18,069 1,951 (264) (A) 162,397
Furniture & Fixtures 4,337 431 173 (9) (A) 4,586
$183,558 $21,717 $2,449 $(338) $202,488
<FN>
(A) Effect of Translation gain (loss) in accordance with FASB #52.
(B) Certain assets were reclassified during the year to reflect the current
year's presentation.
</TABLE>
<TABLE>
SCHEDULE VIII
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN $000)
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description of Period Expenses Accounts Deductions Period
Year ended October 31, 1992:
<S> <C> <C> <C> <C> <C> <C> <C>
Reserves deducted from
applicable assets:
For doubtful items--
trade accounts
receivable $ 965 $701 $16 (A) $717 (B) $ 965
For doubtful items--
other notes and
accounts receivable 697 -0- -0- -0- 697
Total reserves deducted
from applicable assets $1,662 $701 $16 $717 $1,662
Year ended October 31, 1993:
Reserves deducted from
applicable assets:
For doubtful items--
trade accounts
receivable $ 965 $364 $24 (A) $414 (B) $ 939
For doubful items--
other notes and
accounts receivable 697 -0- -0- -0- 697
Total reserves deducted
from applicable assets $1,662 $364 $24 $414 $1,636
Year ended October 31, 1994:
Reserves deducted from
applicable assets:
For doubtful items--
trade accounts
receivable $ 939 $398 $23 (A) $371 (B) $ 989
For doubtful items--
other notes and
accounts receivable 697 -0- -0- -0- 697
Total reserves deducted
from applicable assets $1,636 $398 $23 $371 $1,686
<FN>
(A) Collections of accounts previously written off.
(B) Accounts written off.
</TABLE>
<TABLE>
SCHEDULE X
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED SUPPLEMENTARY INCOME STATEMENT INFORMATION
(IN $000)
Charged to costs and expenses,
For the years ended October 31,
<CAPTION>
Item 1992 1993 1994
<S> <C> <C> <C>
Maintenance and repairs $22,530 $22,110 $24,581
Depreciation, depletion and amorti-
zation of properties, plants and
equipment $18,315 $18,881 $21,758
Depreciation and amortization of in-
tangible assets, preoperating costs
and similar deferrals (A) (A) (A)
Taxes, other than income taxes:
Payroll $ 9,088 $ 9,505 $ 9,630
Real estate, personal property
and other 5,122 4,905 4,806
$14,210 $14,410 $14,436
Rents (A) (A) (A)
Royalties (A) (A) (A)
Advertising costs (A) (A) (A)
<FN>
(A) Amount not stated because such amount does not exceed 1% of total sales
and revenues.
</TABLE>
<TABLE>
EXHIBIT 13
GREIF BROS. CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<CAPTION>
OCTOBER 31, 1994 1993
(Note 5)
<S> <C> <C>
CURRENT ASSETS
Cash and short term investments $ 29,543 $ 30,827
U.S. and Canadian government securities
--at amortized cost which approximates market 23,970 26,933
Trade accounts receivable -- less allowance
of $989 for doubtful items ($965 in 1993) 69,501 56,601
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 50,944 42,700
Prepaid expenses and other 14,384 12,793
Total current assets 188,342 169,854
LONG TERM ASSETS
Cash surrender value of life insurance 2,618 2,452
Interest in partnership 1,091 1,091
Other long term assets 5,853 5,171
9,562 8,714
PROPERTIES, PLANTS AND EQUIPMENT - at cost
Timber properties -- less depletion 3,639 3,290
Land 10,521 9,608
Buildings 99,936 86,148
Machinery, equipment, etc. 291,426 218,475
Construction in progress 18,136 68,652
Less accumulated depreciation (202,488) (183,558)
221,170 202,615
$419,074 $381,183
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 32,948 $ 22,422
Current portion of long term obligations 249 375
Accrued payrolls and employee benefits 7,082 5,793
Accrued taxes -- general 1,952 1,620
Taxes on income 713 1,448
Total current liabilities 42,944 31,658
LONG TERM OBLIGATIONS (interest rates from
3.85% - 6.00%; payable to 2000) 27,966 28,015
OTHER LONG TERM LIABILITIES 14,265 13,572
DEFERRED INCOME TAXES 6,960 2,971
Total long term liabilities 49,191 44,558
SHAREHOLDERS' EQUITY
Capital stock, without par value 9,034 9,034
Class A Common Stock:
Authorized 16,000,000 shares;
issued 10,570,480 shares;
in treasury 5,133,894 shares;
outstanding 5,436,586 shares
Class B Common Stock:
Authorized and issued 8,640,000 shares;
in treasury 1,985,826 shares;
(1,940,267 in 1993)
outstanding 6,654,174 shares
(6,699,733 in 1993)
Earnings retained for use in the business 321,583 298,757
Cumulative translation adjustment (3,678) (2,824)
326,939 304,967
$419,074 $381,183
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<CAPTION>
For the years ended October 31, 1994 1993 1992
(Note 5) (Note 5)
<S> <C> <C> <C>
Sales and other income
Net sales $583,526 $526,765 $510,995
Other income:
Interest and other 6,113 6,077 7,609
Gain on timber sales 4,604 5,618 4,114
594,243 538,460 522,718
Costs and expenses (including depreciation of
$21,717 in 1994, $18,845 in 1993
and $18,292 in 1992)
Cost of products sold 480,666 440,578 415,074
Selling, general and administrative 60,518 58,078 58,331
Interest 1,447 203 197
542,631 498,859 473,602
Income before income taxes 51,612 39,601 49,116
Taxes on income 17,858 14,992 18,902
Income before minority interest 33,754 24,609 30,214
Minority interest -0- -0- 495
Net income $ 33,754 $ 24,609 $ 29,719
Net income per share (based on the average number of shares outstanding during
the year):
Based on the assumption that earnings were allocated to Class A and Class B
Common Stock to the extent that dividends were actually paid for the year and
the remainder were allocated as they would be received by shareholders in the
event of liquidation, that is, equally to Class A and Class B shares, share and
share alike:
1994 1993 1992
Class A $2.63 $1.87 $2.30
Class B $2.91 $2.15 $2.56
Due to the special characteristics of the Company's two classes of stock
(see Note 4), earnings per share can be calculated upon the basis of varying
assumptions, none of which, in the opinion of management, would be free from
the claim that it fails fully and accurately to represent the true interest of
the shareholders of each class of stock and in the earnings retained for use in
the business.
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF EARNINGS RETAINED FOR USE IN THE BUSINESS
(Dollars in thousands, except per share amounts)
<CAPTION>
For the years ended October 31, 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of year,
as previously reported $298,356 $283,251 $261,615
Effect of restatement as required by
SFAS No. 109 (see Note 5) 401 1,025 1,679
Balance at beginning of year,
as restated 298,757 284,276 263,294
Net Income 33,754 24,609 29,719
332,511 308,885 293,013
Dividends paid in the fiscal years (Note):
On Class A Common Stock
-- $.60 per share 3,262 3,262 3,045
($.60 per share in 1993
and $.56 per share in 1992)
On Class B Common Stock
-- $.88 per share 5,877 5,914 5,516
($.88 per share in 1993
and $.82 per share in 1992)
9,139 9,176 8,561
Cost of shares of treasury stock 1,789 952 176
Balance at end of year $321,583 $298,757 $284,276
Note: Dividends paid during the calendar years 1994, 1993 and 1992, relating
to the results of operations for the fiscal years ended October 31, 1994, 1993
and 1992, were as follows:
1994 calendar year dividends per share -- Class A $.68; Class B $1.00
1993 calendar year dividends per share -- Class A $.60; Class B $ .88
1992 calendar year dividends per share -- Class A $.60; Class B $ .88
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
For the years ended October 31, 1994 1993 1992
(Note 5) (Note 5)
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $ 33,754 $ 24,609 $ 29,719
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and depletion 21,758 18,881 18,315
Minority interest in income -0- -0- 495
Deferred income taxes 4,011 1,133 2,511
Loss (gain) on disposals of properties, plants
and equipment 4 175 (429)
(Increase) decrease:
Trade accounts receivable (12,900) (543) (1,774)
Inventories (8,244) 5,190 (1,426)
Prepaid expenses and other (1,591) (1,009) (1,248)
Other long term assets (848) 554 (189)
Increase (decrease):
Accounts payable and accrued liabilities 10,526 2,325 (873)
Accrued payrolls and employee benefits 1,289 708 (214)
Accrued taxes - general 332 (55) (80)
Taxes on income (735) (1,318) (1,469)
Other long term liabilities 693 (1,175) (771)
Net cash provided by operating activities 48,049 49,475 42,567
Cash flows from investing activities:
Sales (purchases) of investments in
government securities, net 2,963 4,959 4,914
Reduction in loan to partnership -0- -0- 6,000
Purchase of minority interest -0- -0- (4,124)
Purchase of properties, plants and equipment (40,682) (74,521) (43,406)
Proceeds on disposals of properties, plants
and equipment 166 103 659
Net cash used by investing activities (37,553) (69,459) (35,957)
Cash flows from financing activities:
Proceeds from issuance of long term debt 7,700 28,108 -0-
Payments on long term debt (7,876) (677) (146)
Acquisition of treasury stock (1,789) (952) (176)
Dividends paid (9,139) (9,176) (8,561)
Net cash provided (used) by financing
activities (11,104) 17,303 (8,883)
Foreign currency translation adjustment (676) (1,931) (3,046)
Net decrease in cash and short term
investments (1,284) (4,612) (5,319)
Cash and short term investments at
beginning of year 30,827 35,439 40,758
Cash and short term investments at
end of year $ 29,543 $ 30,827 $ 35,439
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The Consolidated Financial Statements include the accounts of the
Company and its subsidiaries.
Revenue Recognition
Revenue is recognized when goods are shipped.
Income Taxes
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes",
which changed the method for calculating deferred income taxes. The Company
adopted SFAS No. 109, retroactive to November 1, 1990. Certain prior year
amounts in the Company's financial statements have been restated.
Inventories
Inventories are comprised principally of raw materials and are stated
at the lower of cost (principally on last-in, first-out basis) or market. If
inventories were stated on the first-in, first-out basis, they would be
$49,000,000 greater in 1994 and $42,800,000 greater in 1993. During 1993 the
Company experienced slight LIFO liquidations which were deemed to be
immaterial to the Consolidated Financial Statements.
Interest in Partnership
The 50% interest in Macauley & Company (the partnership), in which the
Company is a limited partner, is accounted for on the cost basis since, as a
limited partner, the Company cannot participate in the management of the
limited partnership.
Properties, Plants and Equipment
Depreciation on properties, plants and equipment is provided by the
straight line method over the estimated useful lives of the assets.
Accelerated depreciation methods are used for federal income tax purposes.
Expenditures for repairs and maintenance are charged to income as incurred.
Depletion on timber properties is computed on the basis of cost and the
estimated recoverable timber acquired.
When properties are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the asset and related reserve
accounts. Gains or losses are credited or charged to income as applicable.
<PAGE>
Earnings Retained for Use in the Business of Canadian Subsidiary Company
Deferred income taxes have been provided on accumulated earnings that
could be considered as not permanently reinvested in the Canadian subsidiary.
As of October 31, 1994, permanently reinvested earnings are
$28,591,000.
Foreign Currency Translation
In accordance with Statement of Financial Accounting Standards No. 52,
"Foreign Currency Translation", the assets and liabilities denominated in
foreign currency are translated into U.S. dollars at the current rate of
exchange existing at year-end and revenues and expenses are translated at the
average monthly exchange rates.
The following were the cumulative translation adjustments which
represent the effect of translating assets and liabilities of the Company's
foreign operation (Dollars in thousands):
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Balance at beginning of year $(2,824) $ (425)
Effect of balance sheet translation (854) (2,399)
Balance at end of year $(3,678) $(2,824)
</TABLE>
The transaction gains and losses included in income are immaterial.
Statement of Cash Flows
The Company considers highly liquid investments with an original
maturity of three months or less to be cash and short term investments.
Operations by Industry Segment
Information concerning the Company's industry segments is an integral
part of these financial statements.
Reclassifications
Certain prior year amounts have been reclassified to conform to the
1994 presentation.
NOTE 2--INTEREST IN PARTNERSHIP
The investment in partnership consists of an investment in Macauley &
Company (the partnership). As of October 31, 1994 and 1993, the partnership
holds Class B Common Stock (1,200,000 shares) of the Company. During 1992,
the Company purchased 100% of Virginia Fibre Corporation through an option
agreement with the partnership. This purchase was accounted for under the
purchase method.
<PAGE>
Virginia Fibre Corporation has existing stock option plans under which
additional shares may be issued but with restrictions which ensure that
ultimately these shares will be purchased by the Company. If all of these
options were fully exercised, and no shares were purchased by the Company,
Greif Bros. Corporation would then be the record holder of approximately 90%
of the outstanding stock of Virginia Fibre Corporation.
NOTE 3--LONG TERM OBLIGATIONS
The Company's long term obligations include the following as of October
31 (Dollars in thousands):
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Current portion of long term obligations $ 249 $ 375
Long term obligations $25,702 $25,526
Capital lease 2,264 2,489
Total long term obligations $27,966 $28,015
</TABLE>
During 1992, a subsidiary of the Company entered into a seven year
unsecured revolving loan agreement with a bank for $40 million. The revolving
loan agreement was used to finance the purchase of a 325 ton per day recycled
paper machine. The interest is an adjustable rate tied, at the Company's
discretion, to the lower of the bank's prime rate or the London Interbank
Offered Rates (4.81% as of October 31, 1994). There is no penalty for
prepayment. As part of this revolving loan agreement, the subsidiary agreed
to certain provisions and restrictions including a restriction on its
additional indebtedness.
On November 16, 1994, a different subsidiary of the Company signed a
loan commitment letter for an eight year unsecured revolving line of credit
with a bank for $17 million. This revolving credit arrangement will be used
to finance the construction of a manufacturing plant in Michigan. At the
Company's discretion, the interest rate may be tied to either the London
Interbank Offered Rates plus 50 basis points or the bank's prime rate less 25
basis points. There is no penalty for prepayment. In exchange, the
subsidiary agreed to certain restrictions including a restriction on its
additional indebtedness.
During 1993, the Company entered into a capital lease agreement covering
the land, building, and machinery and equipment at one of its plant locations.
The amount that is capitalized under this agreement is $2,708,000 and has
accumulated depreciation of $227,000 as of October 31, 1994 ($33,000 as of
October 31, 1993). In addition to the capital lease, the Company has entered
into non-cancelable operating leases for buildings and office space. The
future minimum lease payments for the non-cancelable operating leases are
$709,000 in 1995, $557,000 in 1996, $429,000 in 1997, $252,000 in 1998,
$72,000 in 1999 and $31,000 thereafter. Rent expense was $2,553,000 in 1994,
$2,555,000 in 1993 and $2,369,000 in 1992.
Annual maturities of the long term obligation and capital lease are
$392,000 in 1995, $1,992,000 in 1996, $8,391,000 in 1997, $8,388,000 in 1998,
$8,382,000 in 1999 and $1,300,000 thereafter. The amount that represents
future executory costs and interest payments for the capital lease is $630,000
as of October 31, 1994 ($785,000 as of October 31, 1993).
During 1994, the Company paid $1,599,000 of interest ($363,000 in 1993
and $171,000 in 1992) for the long term obligations and capital lease.
NOTE 4--CAPITAL STOCK AND RETAINED EARNINGS
Class A Common Stock is entitled to cumulative dividends of 2 cents a
share per year after which Class B Common Stock is entitled to non-cumulative
dividends up to 1 cent a share per year. Further distribution in any year
must be made in proportion of 1 cent a share for Class A Common Stock to 1-1/2
cents a share for Class B Common Stock. The Class A Common Stock shall have
no voting power nor shall it be entitled to notice of meetings of the
stockholders, all rights to vote and all voting power being vested exclusively
in the Class B Common Stock unless four quarterly cumulative dividends upon
the Class A Common Stock are in arrears. There is no cumulative voting. The
Company has acquired 7,119,720 shares of Class A and Class B Common Stock for
treasury at a cost of $38,129,296 which was appropriately charged against
earnings retained for use in the business. The Company acquired 45,559 of
these shares in 1994 for $1,789,009 (24,550 shares in 1993 for $951,812, and
4,500 shares in 1992 for $176,437).
NOTE 5--INCOME TAXES
Income tax expense is comprised as follows (Dollars in thousands):
<TABLE>
<CAPTION>
U.S. State and
Federal Foreign Local Total
<S> <C> <C> <C> <C>
1994:
Current $10,592 $ 1,882 $ 2,166 $14,640
Deferred 4,767 (196) (1,353) 3,218
$15,359 $ 1,686 $ 813 $17,858
1993:
Current $10,290 $ 1,483 $ 2,117 $13,890
Deferred 1,221 (119) -- 1,102
$11,511 $ 1,364 $ 2,117 $14,992
1992:
Current $12,460 $ 1,984 $ 1,999 $16,443
Deferred 2,512 (53) -- 2,459
$14,972 $ 1,931 $ 1,999 $18,902
</TABLE>
Foreign income before income taxes amounted to $4,111,000 in 1994
($3,208,000 in 1993 and $4,625,000 in 1992).
During 1994, the Company applied for and expects to receive a Virginia
state tax credit. The state of Virginia allows a tax credit equal to 10% of
the qualified purchase for the recycled paper machine in the year the
equipment is placed in service and for five additional years, subject to
certain income and percentage limitations.
The following is a reconciliation of the U.S. statutory federal income
tax rate to the Company's effective tax rate:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
U.S. federal statutory tax rate 35.0% 34.8% 34.0%
State taxes, net of federal tax
benefit 1.0 3.5 2.7
Limited partnership distribution -0- -0- 2.0
Other (1.4) (.4) (.2)
Effective income tax rate 34.6% 37.9% 38.5%
</TABLE>
The Company adopted SFAS No. 109, retroactive to November 1, 1990, as
discussed in Note 1 to the Consolidated Financial Statements. In connection
with the adoption of SFAS No. 109, the Company recorded a one time adjustment
that resulted in a reduction of the deferred income tax liability and the
recording of a deferred tax asset. Certain prior year amounts in the
Company's financial statements have been restated. The effect on net income
was a reduction of net income of $624,000 or $.05 per share for 1993, a
reduction of net income of $654,000 or $.05 per share for 1992 and an addition
to net income of $1,679,000 or $.14 per share for 1991.
Significant components of the Company's deferred tax liabilities and
assets are as follows (Dollars in thousands):
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Current deferred tax assets $ 2,804 $ 2,232
Current deferred tax liabilities $ 32 $ 35
Book basis on acquired assets $13,257 $14,920
Other 1,656 1,691
Long term deferred tax assets $14,913 $16,611
Plant and equipment $17,625 $14,864
Undistributed Canadian net income 1,402 1,402
Pension costs 1,737 1,174
Other 1,109 2,142
Long term deferred tax liabilities $21,873 $19,582
</TABLE>
During 1994, the Company paid $10,898,000 in U. S. Federal income taxes
($10,639,000 in 1993 and $13,994,000 in 1992).
NOTE 6--RETIREMENT PLANS
The Company has non-contributory defined benefit pension plans that
cover most of its employees. These plans include plans self-administered by
the Company along with Union administered multi-employer plans. The Union
plans' benefits are based primarily upon years of service. The self-
administered salaried plan benefits are based primarily on years of service
and earnings. The Company contributes an amount that is not less than the
minimum funding nor more than the maximum tax-deductible amount to these
plans. The plans' assets consist of unallocated insurance contracts, equity
securities, government obligations, and the allowable amount of the Company's
stock (61,876 shares of Class A Common Stock and 38,440 shares of Class B
Common Stock at October 31, 1994 and 1993).
The pension expense for the plans included the following (Dollars in
thousands):
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service cost, benefits earned during the year $ 1,415 $ 1,427 $ 1,445
Interest cost on projected benefit obligation 2,444 2,167 2,075
Actual return on assets (1,844) (4,244) (3,019)
Net amortization (1,699) 813 (293)
Pension expense 316 163 208
Multi-employer and non-U.S. pension expense 341 384 318
Total pension expense $ 657 $ 547 $ 526
</TABLE>
The range of weighted average discount rate and expected long term rate
of return on plan assets used in the actuarial valuation were 7.0% - 9.0% for
1994, 1993 and 1992. The rate of compensation increases for salaried
employees used in the actuarial valuation range from 4.5% to 6.5% for 1994,
1993 and 1992.
The following table sets forth the plans' funded status and amounts
recognized in the Company's statements (Dollars in thousands):
<TABLE>
<CAPTION>
ASSETS EXCEED ACCUMULATED BENEFITS
ACCUMULATED BENEFITS EXCEED ASSETS
1994 1993 1994
<S> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $22,568 $28,264 $ 8,209
Accumulated benefit obligation $22,828 $30,289 $ 9,440
Projected benefit obligation $32,290 $40,740 $ 9,440
Plan assets at fair value $45,591 $54,163 $ 8,552
Plan assets greater than
(less than) projected bene-
fit obligation $13,301 $13,423 $ (888)
Unrecognized net (gain) loss 1,889 (309) (1,952)
Prior service cost not yet re-
cognized in net periodic
pension cost 513 1,891 1,940
Adjustment required to recognize
minimum liability -- -- (1,013)
Unrecognized net (asset) obligation
from transition (11,851) (11,668) 1,025
Prepaid pension cost (liability) $ 3,852 $ 3,337 $ (888)
</TABLE>
During 1994, the Company, in accordance with the provisions of
Statement of Financial Accounting Standards No. 87, "Employers' Accounting for
Pensions", recorded the "adjustment
required to recognize minimum liability". The amount was offset by a long
term asset, of equal amount, recognized in the Consolidated Financial
Statements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and the
Board of Directors of
Greif Bros. Corporation
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of earnings retained for use in the
business and of cash flows present fairly, in all material respects, the
financial position of Greif Bros. Corporation and its subsidiaries at October
31, 1994 and 1993, and the results of their operations and their cash flows
for each of the three years in the period ended October 31, 1994, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
As discussed in Note 5 to the Consolidated Financial Statements, the
Company changed its method of accounting for income taxes.
Price Waterhouse LLP Columbus, Ohio
November 30, 1994
<TABLE>
QUARTERLY FINANCIAL DATA (Unaudited)
The quarterly results of operations for fiscal 1994 and 1993 are
shown below (Dollars in thousands, except per share amounts).
Quarter ended,
<CAPTION>
Jan. 31, Apr. 30, July 31, Oct. 31,
1994 1994 1994 1994
<S> <C> <C> <C> <C>
Net sales $128,772 $139,916 $147,629 $167,209
Gross profit 19,593 22,732 26,025 34,510
Net income 4,564 6,352 8,701 14,137
Net income per share:
Assuming distributions as actually
paid out in dividends and the
balance as in liquidation:
Class A $.29 $.50 $.70 $1.14
Class B $.45 $.54 $.74 $1.18
Market price (Class A Common Stock):
High $43-1/2 $43 $39-7/8 $46-1/2
Low $37-3/4 $38 $37-1/4 $39
</TABLE>
<TABLE>
Quarter ended,
<CAPTION>
Jan. 31, Apr. 30, July 31, Oct. 31,
1993 1993 1993 1993
<S> <C> <C> <C> <C>
Net sales $125,062 $133,881 $130,762 $137,060
Gross profit 20,516 21,837 18,988 24,846
Net income 5,158 5,800 3,979 9,672
Net income per share:
Assuming distributions as actually
paid out in dividends and the
balance as in liquidation:
Class A $.34 $.46 $.30 $.77
Class B $.50 $.50 $.34 $.81
Market price (Class A Common Stock):
High $39 $39-3/4 $41 $40-7/8
Low $34-1/2 $37-7/8 $38-1/8 $38
</TABLE>
The 1993 amounts have been restated to reflect the adoption of SFAS
No. 109 (see Note 5 to the Consolidated Financial Statements). The effect
on net income was a reduction of $157 for the quarter ended January 31, 1993,
$154 for the quarter ended April 30, 1993, $157 for the quarter ended July 31,
1993 and $156 for the quarter ended October 31, 1993.
The Class A Common Stock is traded on the Chicago Stock Exchange.
There is no active market for the Class B Common Stock.
As of November 30, 1994, there were 837 shareholders of record of
Class A Common Stock and 179 shareholders of Class B Common Stock.
<TABLE>
SELECTED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
YEAR ENDED OCTOBER 31
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net sales $583,526 $526,765 $510,995 $437,379 $438,143
Net income $ 33,754 $ 24,609 $ 29,719 $ 23,923 $ 22,127
Total assets $419,074 $381,183 $340,173 $327,693 $296,603
Long term
obligations $ 27,966 $ 28,015 $ 768 $ 916 $ 904
Dividends per share of
common stock:
Class A $ .60 $ .60 $ .56 $ .56 $ .56
Class B $ .88 $ .88 $ .82 $ .82 $ .82
Net income per share:
Based on the assumption that earnings were allocated to Class A and
Class B Common Stock to the extent that dividends were actually paid for the
year and the remainder were allocated as they would be received by shareholders
in the event of liquidation, that is, equally to Class A and Class B shares,
share and share alike:
1994 1993 1992 1991 1990
Class A $2.63 $1.87 $2.30 $1.82 $1.66
Class B $2.91 $2.15 $2.56 $2.08 $1.92
Due to the special characteristics of the Company's two classes of stock
(see Note 4 to the Consolidated Financial Statements), earnings per share can
be calculated upon the basis of varying assumptions, none of which, in the
opinion of management, would be free from the claim that it fails fully and
accurately to represent the true interest of the shareholders of each class of
stock and in the earnings retained for use in the business.
Certain prior year amounts have been restated to reflect the adoption
of SFAS No. 109 (see Note 5 to the Consolidated Financial Statements).
</TABLE>
THE BUSINESS
The Company principally manufactures shipping containers and
containerboard and related products which it sells to customers in many
industries primarily in the United States and Canada, through direct sales
contact with its customers. There were no significant changes in the business
since the beginning of the fiscal year.
The Company operates 97 locations in 29 states of the United States and
in 3 provinces of Canada and as such is subject to federal, state, local and
foreign regulations in effect at the various localities.
Due to the variety of products, the Company has many customers buying
different types of the Company's products and due to the scope of the
Company's sales, no one customer is considered principal in the total
operation of the Company.
Because the Company supplies a cross section of industries, such as
chemicals, food products, petroleum products, pharmaceuticals, metal products
and others and because the Company must make spot deliveries on a day-to-day
basis as its product is required by its customers, the Company does not
operate on a backlog and maintains only limited levels of finished goods.
Many customers place their orders weekly for delivery during the week.
The Company's business is highly competitive in all respects (price,
quality and service), and the Company experiences substantial competition in
selling its products. Many of the Company's competitors are larger than the
Company.
While research and development projects are important to the Company's
continued growth, the amount expended in any year is not material in relation
to the results of operations of the Company.
The Company's raw materials are principally pulpwood, waste paper for
recycling, paper, steel and resins. In the current year, as in prior years,
certain of these materials have been in short supply, but to date these
shortages have not had a significant effect on the Company's operations.
The Company's business is not materially dependent upon patents,
trademarks, licenses or franchises.
The business of the Company is not seasonal to any significant extent.
The approximate number of persons employed during the year was 4,500.
Industry Segments
The Company operates in two industry segments, shipping containers and
materials ("shipping containers") and containerboard and related products
("containerboard").
Operations in the shipping containers and materials industry segment
involve the production and sale of fibre, steel and plastic drums, multiwall
bags, cooperage, dunnage, pallets, laminated particle board, wood cut stock
and miscellaneous items. These products are manufactured and principally sold
throughout the United States and Canada.
Operations in the containerboard and related products segment involve
the production and sale of containerboard, both virgin and recycled, and
related corrugated products including corrugated paper and corrugated
containers. These products are manufactured and sold in the United States and
Canada.
In computing operating profit for the two industry segments, interest
expense, other income and expense, timber property management costs and income
taxes have not been added or deducted. These latter amounts, excluding income
taxes, comprise general corporate other income and expense, net.
Each segment's operating assets are those assets used in the
manufacture and sale of shipping containers and materials or containerboard
and related products. Corporate assets are principally cash, marketable
securities, timber properties and other investments.
The following segment information is presented for the three years
ended October 31, 1994, except as to asset information which is as of October
31 (Dollars in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net sales:
Shipping containers $353,992 $340,326 $335,012
Containerboard 229,534 186,439 175,983
Total $583,526 $526,765 $510,995
Operating profit:
Shipping containers $ 9,573 $ 6,709 $ 16,292
Containerboard 30,306 18,354 18,194
Total segment 39,879 25,063 34,486
General corporate other
income and expenses, net 11,733 14,538 14,135
Income before income taxes 51,612 39,601 48,621
Income taxes 17,858 14,992 18,902
Net income $ 33,754 $ 24,609 $ 29,719
Identifiable assets:
Shipping containers $179,794 $170,783 $174,007
Containerboard 178,053 146,550 93,225
Total segment 357,847 317,333 267,232
Corporate assets 61,227 63,850 72,941
Total $419,074 $381,183 $340,173
Depreciation expense:
Shipping containers $ 13,271 $ 13,697 $ 13,862
Containerboard 8,388 5,097 4,385
Total segment 21,659 18,794 18,247
Corporate assets 58 51 45
Total $ 21,717 $ 18,845 $ 18,292
Property additions:
Shipping containers $ 16,226 $ 15,503 $ 15,481
Containerboard 19,313 53,251 22,722
Total segment 35,539 68,754 38,203
Corporate assets 5,143 5,767 5,203
Total $ 40,682 $ 74,521 $ 43,406
<FN>
Certain prior year amounts have been restated to reflect the
adoption of SFAS No. 109 (see Note 5 to the Consolidated Financial
Statements).
</TABLE>
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Ratio Analysis
Presented below are certain comparative data illustrative of the
following discussion of the Company's financial condition, etc. (Dollars in
thousands):
<CAPTION>
1994 1993 1992 1991
<S> <C> <C> <C> <C>
Capital
expenditures $40,682 $74,521 $43,406 $25,025
Net sales $583,526 $526,765 $510,995 $437,379
Net income $33,754 $24,609 $29,719 $23,923
Cash flow from
operations $48,049 $49,475 $42,567 $32,588
Increase (decrease)
in working capital $7,202 $(15,105) $(2,991) $23,077
Current ratio 4.4:1 5.4:1 6.1:1 5.8:1
Other income $10,717 $11,695 $11,723 $14,801
<FN>
Certain prior year amounts have been restated to reflect the adoption
of SFAS No. 109 (see Note 5 to the Consolidated Financial Statements).
</TABLE>
Liquidity & Capital Resources
As indicated in the Consolidated Balance Sheet, elsewhere in this
Report and in the ratios set forth immediately above, the Company is dedicated
to maintaining a strong financial position. The Company's financial strength
is important to continue to achieve the following goals:
(a) To protect the assets of the Company and the intrinsic value of
share- holders' equity in periods of adverse economic conditions; and to
respond to any large and presently unanticipated cash demands that might
result from future drastic events.
(b) To replace and improve plant and equipment. When plant and
production machinery must be replaced either because of wear or to obtain the
cost-reducing potential of technological improvement required to remain a low
cost producer in the highly competitive environment in which the Company
operates, the costs of new plant and machinery are often much higher,
sometimes significantly higher, than the historical costs of the items being
replaced.
Self-financing and low interest rate borrowing have been the primary
source for such capital expenditures. The Company will attempt to finance
future capital expenditures in a like manner. While there is no commitment to
continue such a practice, at least one new manufacturing plant or major
additions to existing plants have been undertaken in each of the last three
years.
(c) To continue to pay competitive and sound remuneration,
including the ever-increasing costs of employee benefits, to Company employees
who produce the results for the Company's shareholders.
(d) To be able to benefit from new developments, new products and
new opportunities in order to achieve the best results for our shareholders.
Management believes that the present financial strength of the
Company will be sufficient to achieve the foregoing goals.
In spite of such necessary financial strength, the Company's
shipping containers business, where packages manufactured by Greif Bros.
Corporation are purchased by other manufacturers and suppliers, is wholly
subject to the general economic conditions and the business success of the
Company's customers.
Similarly, the Company's containerboard and related products
business is also subject to the general economic conditions and the effect of
the operating rates of the containerboard industry, including pricing
pressures from its competition.
The historical financial strength generated by these segments
has enabled them to remain independently liquid during adverse economic
conditions.
Results of Operations
As explained above, the Company is subject to the general economic
conditions of its customers.
In our 1993 Report to Shareholders, it was noted that the Company's
results were adversely affected by the following:
(a) The Company has experienced severe price pressures on its
products.
(b) The cost of the Company's raw materials continue to increase.
While these items still exist, the Company's continued efforts to
reduce operating costs by cost control measures, manufacturing innovations and
capital expenditures resulted in an improvement in the profit margin for 1994.
The Company, during 1994, invested approximately $40,682,000 in
capital additions. During the last three years, the Company has invested
$158,609,000. As noted in our 1993 Report to Shareholders, the Company during
1993 undertook a major addition at one of its subsidiaries. This project was
completed in December, 1993 and resulted in additional capacity for 1994. In
addition, another subsidiary of the Company is planning to build a new
manufacturing plant during 1995. These investments are an indication of the
Company's commitment to be the quality, low cost producer and the desirable
long term supplier to all of our customers.
The Company remains confident that with the financial strength that
it has built over its 117 year existence, it will be able to adequately
compete in highly competitive markets.
Net Sales
Net sales to customers, compared with the previous year, increased
10.8% in 1994. The 1994 sales established a record for net sales. The
increase in sales in 1994 was primarily the result of the addition of a 325
ton per day recycled paper machine at a subsidiary of the Company coupled with
shortages in containerboard and related products which resulted in increased
selling prices. Other capital expenditures from previous years also
attributed to this increase.
The increase in sales in 1993 of 3.1% was the result of capital
additions expended in previous years offset by reduced selling prices on some
of the Company's products.
The increase in sales in 1992 of 16.8% was primarily the result of
an increase in sales in the containerboard and related products segment. This
was the result of a full year of consolidation of Virginia Fibre Corporation
along with an increase in sales in the entities that make up that segment.
Other Income
The 1994 other income, compared with the previous year, decreased
due to less timber sales.
The 1993 other income was adversely affected by the reduced rates
available on the Company's investable funds. The Company's investable funds
were also reduced due to the significant capital additions during the year.
This reduction in other income was offset to a degree by the large amount of
timber sales in 1993. These sales were the result of the harvest of mature
timber in certain areas.
Also, the Company received a $5,104,640 dividend from an investment
in 1991. No such dividend was received in 1994, 1993 or 1992.
Income Before Income Taxes
The 1994 increase in income before taxes was the result of the sales
increase and increase in gross margin. This increase was slightly offset by a
reduction in timber sales and an increase in interest expense that resulted
from the Company's long term obligations.
The 1993 decrease in income before taxes was the result of
competitive price pressures of the Company's products, coupled with increases
in certain of its raw materials.
The 1992 increase in income before income taxes was the result of
the sales increase and increase in gross margin.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Greif Bros. Corporation will furnish to any shareholder of record,
upon written request, without charge, a copy of its most recently filed Form
10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission.
Written requests should be directed to Secretary, Greif Bros. Corporation, 621
Pennsylvania Avenue, Delaware, Ohio 43015.
<TABLE>
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
The following companies are wholly-owned subsidiaries of the Company
and are included in the consolidated financial statements:
<CAPTION>
Name of Subsidiary Incorporated Under Laws of
<S> <C>
Barzon Corporation Delaware
Down River International, Inc. Michigan
Greif Board Corporation Delaware
Greif Containers Inc. Canada
Michigan Packaging Company Delaware
Soterra, Incorporated Delaware
Virginia Fibre Corporation Virginia
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Form
10-K and is qualified in its entirety by reference to such Form 10-K.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<CASH> 29,543
<SECURITIES> 23,970
<RECEIVABLES> 70,490
<ALLOWANCES> (989)
<INVENTORY> 50,944
<CURRENT-ASSETS> 188,342
<PP&E> 423,658
<DEPRECIATION> (202,488)
<TOTAL-ASSETS> 419,074
<CURRENT-LIABILITIES> 42,944
<BONDS> 0
<COMMON> 9,034
0
0
<OTHER-SE> 317,905
<TOTAL-LIABILITY-AND-EQUITY> 419,074
<SALES> 583,526
<TOTAL-REVENUES> 594,243
<CGS> 480,666
<TOTAL-COSTS> 480,666
<OTHER-EXPENSES> 60,518
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,447
<INCOME-PRETAX> 51,612
<INCOME-TAX> 17,858
<INCOME-CONTINUING> 33,754
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,754
<EPS-PRIMARY> 2.63<F1>
<EPS-DILUTED> 2.63<F1>
<FN>
<F1>Amount represents the earnings per share for the Class A Common Stock. The
earnings per share for the Class B Common Stock are $2.91.
</FN>
</TABLE>