<PAGE> 1
U.S. 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, 1995
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of December 15, 1995:
Class A Common Stock 10,873,172 shares
Class B Common Stock 12,001,793 shares
Documents Incorporated by Reference
Document Incorporated into
Portions of Annual Report to Shareholders Part I, Part II, Part IV
for the year ended October 31, 1995
<PAGE> 2
PART I
Item 1. Business
Information on the nature, type of business and industry
segments, contained on pages 43-45 in the Company's 1995
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
Stockton Wood cut stock
Georgia
Macon Corrugated honeycomb
Tucker Fibre drums
Illinois
Blue Island Fibre drums
Chicago Steel drums
Joliet Steel drums
Lombard General office
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 1995 Annual Report to Shareholders is
deemed to be filed as part of this Form 10-K Annual Report.
<PAGE> 3
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
Mason 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
<PAGE> 4
Item 2. Properties (continued)
Location Products Manufactured
New Jersey
Rahway Fibre drums and plastic drums
Spotswood Fibre drums
Springfield (8) National accounts sales
office
Teterboro Fibre drums
Phillipsburg Plywood reels
New York
Lindenhurst (9) Research center
Syracuse Fibre drums and steel drums
North Carolina
Bladenboro Steel drums
Charlotte Fibre drums
Concord Corrugated sheets
Ohio
Caldwell Steel drums
Canton (10) Corrugated containers
Cleveland (11) Corrugated containers
Delaware Principal office
Fostoria Corrugated containers
Hebron Plastic products and containers
Massillon Recycled containerboard
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
Kelton (12) Corrugated honeycomb
Reno (13) Corrugated containers
Stroudsburg Rims and drum hardware
Washington Corrugated containers and sheets
<PAGE> 5
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
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
Pointe Aux Trembles,
Quebec Fibre drums and spiral tubes
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, 1996
( 3) Lease expires January 31, 1998
( 4) Lease expires June 30, 1999
( 5) Lease expires March 31, 1999
( 6) Lease expires December 31, 1999
( 7) Lease expires November 30, 1995
( 8) Lease expires September 7, 1997
<PAGE> 6
Item 2. Properties (concluded)
( 9) Lease expires December 31, 2000
(10) Lease expires March 31, 1998
(11) Lease expires November 30, 1995
(12) Lease expires April 30, 1996
(13) Lease expires February 28, 1996
The Company also owns in fee a substantial number of
scattered timber tracts comprising approximately 320,000
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.
A reserve for $2,000,000 has been recorded by the Company
during fiscal 1995.
<PAGE> 7
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 1995 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 41 of the
1995 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 34 of the 1995 Annual Report to Shareholders. The
annual dividends paid for the last three fiscal years are
contained on page 30.
Item 6. Selected Financial Data
The 5-year selected financial data, contained on page 41
of the 1995 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 1995 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
46-50.
Item 8. Financial Statements and Supplementary Data
The following information contained in the 1995 Annual
Report to Shareholders is incorporated by reference in this Form
10-K Annual Report:*
The consolidated financial statements and the report
thereon of management and Price Waterhouse LLP dated December
1, 1995 - pages 26 through 40.
The selected quarterly financial data - page 41.
*Except as specifically indicated herein, no other data
appearing in the Company's 1995 Annual Report to Shareholders is
deemed to be filed as part of this Form 10-K Annual Report.
<PAGE> 8
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 accountants and there were no matters of
disagreement on accounting and financial disclosure.
PART III
Item 10. Directors and Executive Officers of the Registrant
<TABLE>
The following information relates to Directors of the
Company:
<CAPTIONS>
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
Charles R. Chandler(A) for the ensuing year See response below. 1987
and serve until their
Naomi C. Dempsey(B) successors are elec- None. 1995
ted and qualify. The
Allan Hull(C) annual meeting is See response below. 1947
held on the fourth
Robert C. Macauley(D) Monday of February.) See response below. 1979
William B. Sparks, Jr. See response below. 1995
J Maurice Struchen(E) None. 1993
</TABLE>
(A) Charles R. Chandler (age 60) 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.
(B) Naomi C. Dempsey (age 79) is a member of the Compensation,
Stock Option and Audit Committees.
(C) 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.
(D) Robert C. Macauley (age 72) 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.
<PAGE> 9
Item 10. Directors and Executive Officers of the Registrant
(continued)
(E) J Maurice Struchen (age 75) has been, for more than the
past five years, the retired former Chairman and Chief
Executive Officer of Society Corporation. He is a member
of the Compensation, Stock Option and Audit Committees.
He is also a director for Forest City Enterprises, Inc.
Mr. Gasser, for more than the past five years, has been a
full-time officer of the Company (see below).
Mr. Sparks was elected President and Chief Operating
Officer in 1995. Prior to that time, he served as Chief
Executive Officer of Down River International, Inc. (see below).
<TABLE>
The following information relates to Executive Officers of
the Company (elected annually):
<CAPTION>
Year first
became
Executive
Name Age Positions and Offices Officer
<S> <C> <C> <C>
Michael J. Gasser 44 Chairman of the Board of 1988
Directors and Chief Executive
Officer, member of the Executive
and Finance Committees
William B. Sparks, Jr. 54 Director, President and Chief 1995
Operating Officer, member of the
Executive and Finance Committees
Allan Hull 82 Director, Vice President, 1964
General Counsel, member
of the Executive Com-
mittee
John P. Berg 75 President Emeritus, member of the 1972
Finance Committee and General
Manager of Western Division
Lloyd D. Baker 62 Vice President, member of the 1975
Finance Committee
Leonard W. Berkheimer 61 Vice President 1990
Michael M. Bixby 52 Vice President 1980
Richard R. Caron 63 Vice President 1990
Herbert L. Carpenter, Jr. 73 Vice President, General Manager 1976
of Cullman Supply Company
<PAGE> 10
Item 10. Directors and Executive Officers of the Registrant
(continued)
Year first
became
Executive
Name Age Positions and Offices Officer
John P. Conroy 66 Vice President and Secretary 1991
Edward L. Dean 60 Vice President 1985
Dwight L. Dexter 44 Vice President 1990
Richard E. Gerstner 47 Vice President 1990
Harrison C. Golway, Jr. 66 Vice President 1985
C. J. Guilbeau 48 Vice President, General Manager 1986
of Eastern Division
Thomas A. Haire 47 Vice President 1991
James A. Hale 55 Vice President 1990
Ralph A. Kelley 74 Vice President 1976
Jerry D. Kidd 60 Vice President 1992
Anthony Lanza 79 Vice President 1991
Sally W. Messner 59 Vice President 1993
Philip R. Metzger 48 Treasurer 1995
John B. Pope 80 Vice President 1995
Gail T. Randich 61 Vice President 1991
Lawrence A. Ratcliffe 54 Vice President and Director 1991
of Industrial Relations
Russell J. Rehark 84 Treasurer Emeritus 1972
John S. Ries 53 Vice President 1994
James T. Robinson 53 Vice President 1990
Harley G. Sasse 50 Vice President 1990
Alvis H. Snipes 90 Vice President 1947
Robert G. Straley 44 Vice President 1990
<PAGE> 11
Item 10. Directors and Executive Officers of the Registrant
(continued)
Year first
became
Executive
Name Age Positions and Offices Officer
Kenneth R. Swanson 55 Vice President 1990
Ronald L. Waterman, Sr. 56 Vice President 1989
Jeffrey C. Wood 43 Vice President 1992
</TABLE>
Except as indicated below, each Executive Officer has
served in his present capacity for at least five years.
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 former Seymour & Peck Division. He
currently serves in this capacity for the Eastern Division.
Mr. Gail T. Randich was elected Vice President in 1991.
During the last five years, he has served as Manager - Midwest
Operations for the former Seymour & Peck Division. Mr. Randich
continues to serve in this capacity for the Eastern Division.
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 former Norco and former West Coast Divisions.
Mr. Kidd currently serves as division purchasing manager for the
Western Division.
Mr. Jeffrey C. Wood was elected Vice President in 1992.
Prior to that time, he has served as a divisional fleet manager
for the former 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 former Norco and former West Coast Divisions. He
currently serves as Division Controller for the Western Division.
<PAGE> 12
Item 10. Directors and Executive Officers of the Registrant
(concluded)
Mr. Philip R. Metzger was elected Treasurer in 1995.
Prior to that time, he served as Assistant Treasurer and
Assistant Controller.
Mr. John B. Pope was elected Vice President in 1995.
During the last five years, Mr. Pope served as a manager in the
corporate office.
Item 11. Executive Compensation
<TABLE>
The following table sets forth the compensation for the
three years ended October 31, 1995 for each of the named
executive officers.
<CAPTION>
Number
of Stock
Deferred All Options
Name and Position Year Salary Bonus Compensation Other Granted
<S> <C> <C> <C> <C> <C> <C>
Michael J. Gasser 1995 $205,615 $166,841 30,000
Chairman
Chief Executive Officer 1994 $143,166 $99,999
1993 $110,040 $35,000
Charles R. Chandler 1995 $433,803 $111,977 $236,537 $219,807 10,000
Director
President and Chief 1994 $414,421 $94,952 $218,411 $52,794
Operating Officer of
Virginia Fibre Corporation 1993 $423,308 $126,013 $201,670 $21,294
Robert C. Macauley 1995 $316,500 $106,065 $56,222 $1,873,470
Director
Chief Executive Officer of 1994 $356,750 $90,172 $40,593 $445,410
Virginia Fibre Corporation
1993 $353,550 $104,782 $33,990 $146,520
John P. Berg 1995 $146,304 $103,416 10,000
President Emeritus
1994 $140,004 $93,844
1993 $132,766 $88,532
William B. Sparks, Jr. 1995 $173,048 $105,000 20,000
Director
President and Chief 1994 $140,616 $53,000
Operating Officer
1993 $134,568 $48,500
</TABLE>
<PAGE> 13
Item 11. Executive Compensation (continued)
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. Michael J. Gasser, Chairman and Chief Executive Officer,
on November 1, 1995, entered into an employment agreement with Greif
Bros. Corporation principally providing for (a) the employment of Mr.
Gasser as Chairman and Chief Executive Officer for a term of 15
years; (b) the right of Mr. Gasser to extend his employment on a
year-to-year basis until he reaches the age of 65; (c) the agreement
of Mr. Gasser to devote all of his time, attention, skill and effort
to the performance of his duties as an officer and employee of Greif
Bros. Corporation, and; (d) the fixing of the minimum basic salary
during such period of employment to the current year's salary plus
any additional raises authorized by the Board of Directors within two
fiscal years following October 31, 1995.
Mr. William B. Sparks, Jr., President and Chief Operating
Officer, on November 1, 1995, entered into an employment agreement
with Greif Bros. Corporation principally providing for (a) the
employment of Mr. Sparks as President and Chief Operating Officer for
a term of 11 years; (b) the agreement of Mr. Sparks to devote all of
his time, attention, skill and effort to the performance of his
duties as an officer and employee of Greif Bros. Corporation, and;
(c) the fixing of the minimum basic salary during such period of
employment to the current year's salary plus any additional raises
authorized by the Board of Directors within two fiscal years
following October 31, 1995.
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.
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 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.
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 $20,000 per year plus $1,000 for each audit, compensation and
stock option 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
<PAGE> 14
Item 11. Executive Compensation (continued)
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 $85,502
per year for 10 years and $57,001 per year for an additional 5 years.
Mr. Chandler's estimated accrued benefit from the Deferred
Compensation Contract is $202,137 per year for 10 years and $134,758
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.
During 1995, the Company adopted an Incentive Stock Option
Plan which provides the granting of incentive stock options to key
employees and non-statutory options for non-employees. The aggregate
number of the Company's Class A Common Stock which options may be
granted shall not exceed 1,000,000 shares. Under the terms of the
Plan, options are granted at exercise prices equal to the market
value on the date the options are granted and become exercisable
after two years from the date of grant.
The following table sets forth certain information with
respect to options to purchase Class A Common Stock granted during
the year ended October 31, 1995 to each of the named executive
officers.
<TABLE>
OPTION GRANTS TABLE
<CAPTION>
Potential Net Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (2)
% of Total
Options
Granted to
Number of Employees Exercise
Options in Fiscal Price Per Expiration
Name Granted (1) Year Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Michael J. Gasser 30,000 15% $26.19 04/17/05 $494,123 $1,252,203
Charles R. Chandler 10,000 5% $26.19 04/17/05 $164,708 $417,401
Robert C. Macauley -0- -0-% N/A N/A N/A N/A
John P. Berg 10,000 5% $26.19 04/17/05 $164,708 $417,401
William B. Sparks, Jr.20,000 10% $26.19 04/17/05 $329,415 $834,802
<FN>
(1) The options granted are exercisable on April 17, 1997.
(2) The values shown are based on the indicated assumed rates of
appreciation compounded annually. Actual gains realized, if any,
are based on the performance of the Class A Common Stock. There is
no assurance that the values shown will be achieved.
</TABLE>
<PAGE> 15
Item 11. Executive Compensation (continued)
The following table sets forth certain information with
respect to the exercise of options to purchase Class A Common Stock
during the year ended October 31, 1995, and the unexercised options
held and the value thereof at that date, by each of the named
executive officers:
<TABLE>
AGGREGATE OPTION EXERCISES AND FISCAL
YEAR-END OPTION VALUES TABLE
<CAPTION>
Value Number of Unexer- Value of In-The-
Shares Realized cised Options Held Money Options Held
Acquired upon at Year-End at Year-End
Name on Exercise Exercise Exer- Unexer- Exer- Unexer-
cisable cisable cisable cisable
<S> <C> <C> <C> <C> <C> <C>
Michael J. Gasser -0- $-0- -0- 30,000 $-0- $-0-
Charles R. Chandler -0- $-0- -0- 10,000 $-0- $-0-
Robert C. Macauley -0- $-0- -0- -0- $-0- $-0-
John P. Berg -0- $-0- -0- 10,000 $-0- $-0-
William B. Sparks, Jr. -0- $-0- -0- 20,000 $-0- $-0-
</TABLE>
In 1991, the shareholders of Virginia Fibre Corporation
granted 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 grant.
In addition to the above, Mr. Macauley and Mr. Charles R.
Chandler were granted 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 was not less than 110% of
the fair market value of such stock at the time the options were
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. The options are exercisable for a period of 10 years
from the date of grant.
No options were exercised during 1995, 1994 or 1993 by Mr.
Macauley or Mr. Chandler.
<TABLE>
DEFINED BENEFIT PENSION TABLE
<CAPTION>
Annual Benefit for Years of Service
Remuneration 15 20 25 30
<S> <C> <C> <C> <C>
$375,000 $26,250 $35,000 $43,750 $52,500
$270,000 $26,250 $35,000 $43,750 $52,500
$200,000 $26,250 $35,000 $43,750 $52,500
$140,000 $24,500 $32,667 $40,833 $49,000
</TABLE>
<PAGE> 16
Item 11. Executive Compensation (continued)
<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 16 $253,554 $28,000
John P. Berg 38 $234,955 $52,500
William B. Sparks, Jr. 1 $235,400 $1,750
Charles R. Chandler 23 $209,224 $48,122
Robert C. Macauley 23 $209,224 $48,122
</TABLE>
The registrant's pension plan is a defined benefit pension
plan with benefits based upon the average of the three
consecutive highest-paying years of total compensation 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.
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 upon various measurements
which are tied to 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:
Naomi C. Dempsey
Robert C. Macauley
J Maurice Struchen
<PAGE> 17
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>
1990 100 100 100
1991 125 129 172
1992 129 138 175
1993 142 154 149
1994 159 155 184
1995 184 191 192
<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>
<PAGE> 18
Item 12. Security Ownership of Certain Beneficial Owners and
Management
<TABLE>
The following ownership is as of December 15, 1995:
<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 6,043,236 50.35%
782 W. Orange Road Beneficially
Delaware, Ohio
Naomi C. Dempsey, Trustee Class B See (1) below 1,663,040 13.86%
John C. Dempsey Class B Record and 480,000 4.00%
621 Pennsylvania Avenue Beneficially
Delaware, Ohio
Robert C. Macauley Class B Record and 1,200,000 10.00%
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 15, 1995:
<CAPTION>
Title and Percent of Class
Name Class A %
<S> <C> <C>
Charles R. Chandler 400 -0-%
Naomi C. Dempsey -0- -0-%
Michael J. Gasser -0- -0-%
Allan Hull -0- -0-%
Robert C. Macauley -0- -0-%
William B. Sparks, Jr. 1,086 0.01%
J Maurice Struchen -0- -0-%
</TABLE>
<PAGE> 19
Item 12. Security Ownership of Certain Beneficial Owners and
Management (concluded)
<TABLE>
<CAPTION>
Title and Percent of Class
Name Class B %
<S> <C> <C>
Charles R. Chandler 4,000 0.03%
Naomi C. Dempsey 7,706,276 64.21%
Michael J. Gasser 11,798 0.10%
Allan Hull 149,600 1.25%
Robert C. Macauley 1,200,000 10.00%
William B. Sparks, Jr. 6,248 0.05%
J Maurice Struchen 7,400 0.06%
</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 123,752 shares of
Class A Common Stock and 76,880 shares of Class B Common Stock.
Messrs. Conroy, Hull and Ratcliffe serve as Trustees for the Greif
Bros. Corporation Retirement Plan for Certain Hourly Employees,
which holds 875 shares of Class B Common Stock. The Trustees of
these plans, 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 15, 1995:
<TABLE>
<CAPTION>
Title of Amount Percent
class of stock beneficially owned of class
<S> <C> <C>
Class A 10,108 0.09%
Class B 9,211,236 76.70%
</TABLE>
Item 13. Certain Relationships and Related Transactions
The law firm of Hull & Hull received $525,950 in fees for
legal services to the Corporation plus reimbursement of out-of-pocket
expenses of $42,120. 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.
<PAGE> 20
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
1995 the subsidiary company contributed approximately $4,250,000 to
this organization.
There are loans that have been made by the Company to
certain employees, including certain officers and directors of the
Company.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
<TABLE>
(a) The following documents are filed as part of this report:
<CAPTION>
Page in
Annual Report*
(1) Financial Statements:
<S> <C>
Consolidated Statements of Income for the
three years ended October 31, 1995 26
Consolidated Balance Sheets at October
31, 1995 and 1994 27-28
Consolidated Statements of Cash Flows
for the three years ended October 31, 1995 29
Consolidated Statements of Changes in
Shareholders' Equity for the three years
ended October 31, 1995 30
Notes to Consolidated Financial Statements 31-38
Report of Management's Responsibilities 39
Report of Independent Accountants 40
Selected Quarterly Financial Data (unaudited) 41
</TABLE>
* Incorporated by reference from the indicated pages of the
1995 Annual Report to Shareholders.
<PAGE> 21
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
Consolidated Valuation and Qualifying Accounts and
Reserves (Schedule II)
(3) Exhibits:
No.
(11.) Statements Re: Computation of Per Share Earnings
(13.) 1995 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 1995.
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, 1995, excepting
indebtedness incurred in the ordinary course of business which is
not in default.
<PAGE> 22
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 10, 1996 By
John K. Dieker
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
Naomi C. Dempsey Allan Hull
Member of the Board of Directors Member of the Board of Directors
Robert C. Macauley William B. Sparks, Jr.
Member of the Board of Directors Member of the Board of Directors
J Maurice Struchen
Member of the Board of Directors
Each of the above signatures is affixed as of January 10, 1996.
<PAGE> 23
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 December 1, 1995 appearing on page 40 of the
1995 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
December 1, 1995
<PAGE> 24
SCHEDULE II
<TABLE>
GREIF BROS. CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN $000)
<CAPTION>
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, 1993:
<S> <C> <C> <C> <C> <C>
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
Year ended October 31, 1995:
Reserves deducted from
applicable assets:
For doubtful items--
trade accounts
receivable $ 989 $536 $37 (A) $773 (B) $ 789
For doubtful items--
other notes and
accounts receivable 697 -0- -0- -0- 697
Total reserves deducted
from applicable assets $1,686 $536 $37 $773 $1,486
<FN>
(A) Collections of accounts previously written off.
(B) Accounts written off.
</TABLE>
<PAGE> 25
EXHIBIT 11
<TABLE>
STATEMENTS RE: COMPUTATION OF PER SHARE EARNINGS
Net income per share was calculated using the following
number of shares for the periods presented:
<CAPTION>
Year Ended October 31,
1995 1994 1993
<S> <C> <C> <C>
Class A Common Stock 10,873,172 10,873,172 10,873,172
Class B Common Stock 13,252,073 13,344,148 13,436,204
Three Months Ended October 31,
1995 1994 1993
Class A Common Stock 10,873,172 10,873,172 10,873,172
Class B Common Stock 13,201,793 13,311,326 13,425,650
</TABLE>
<PAGE> 26
EXHIBIT 13
<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, 1995 1994 1993
<S> <C> <C> <C>
Net sales $719,345 $583,526 $526,765
Other income:
Interest and other 5,822 6,113 6,077
Gain on timber sales 8,067 4,604 5,618
733,234 594,243 538,460
Costs and expenses (including depreciation of
$22,944 in 1995, $21,717 in 1994 and
$18,845 in 1993):
Cost of products sold 561,118 480,666 440,578
Selling, general and administrative 73,733 60,518 58,078
Interest 472 1,447 203
635,323 542,631 498,859
Income before income taxes 97,911 51,612 39,601
Taxes on income 37,778 17,858 14,992
Net income $ 60,133 $ 33,754 $ 24,609
</TABLE>
Net income per share (based on the average number of shares outstanding
during the year, adjusted for two-for-one stock split):
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:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Class A Common Stock $2.39 $1.32 $ .94
Class B Common Stock $2.58 $1.46 $1.08
</TABLE>
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 retained earnings.
[FN]
See accompanying Notes to Consolidated Financial Statements
<PAGE> 27
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<CAPTION>
October 31, 1995 1994
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 31,612 $ 29,543
U.S. and Canadian government securities 18,981 23,970
Trade accounts receivable -- less allowance
of $789 for doubtful items ($989 in 1994) 76,950 69,501
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 53,876 50,944
Prepaid expenses and other 16,482 14,384
Total current assets 197,901 188,342
LONG TERM ASSETS
Cash surrender value of life insurance 2,838 2,618
Interest in partnership 1,091 1,091
Other long term assets 6,977 5,853
10,906 9,562
PROPERTIES, PLANTS AND EQUIPMENT -- at cost
Timber properties -- less depletion 4,518 3,639
Land 11,014 10,521
Buildings 104,892 99,936
Machinery, equipment, etc. 319,785 291,426
Construction in progress 42,102 18,136
Less accumulated depreciation (223,456) (202,488)
258,855 221,170
$467,662 $419,074
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 28
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
October 31, 1995 1994
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 35,935 $ 32,948
Current portion of long term obligations 264 249
Accrued payrolls and employee benefits 10,882 7,082
Accrued taxes -- general 1,954 1,952
Taxes on income 0 126 713
Total current liabilities 49,161 42,944
LONG TERM OBLIGATIONS (interest rates from
4.81% - 8.00%; payable to 2002) 14,101 27,966
OTHER LONG TERM LIABILITIES 18,305 14,265
DEFERRED INCOME TAXES 13,562 6,960
Total long term liabilities 45,968 49,191
SHAREHOLDERS' EQUITY
Capital stock, without par value 9,034 9,034
Class A Common Stock:
Authorized 32,000,000 shares;
issued 21,140,960 shares;
outstanding 10,873,172 shares
Class B Common Stock:
Authorized and issued 17,280,000 shares;
outstanding 13,201,793 shares
(13,308,348 in 1994)
Treasury stock, at cost (40,776) (38,129)
Class A Common Stock: 10,267,788 shares
Class B Common Stock: 4,078,207 shares
(3,971,652 in 1994)
Retained earnings 407,665 359,712
Cumulative translation adjustment (3,390) (3,678)
372,533 326,939
$467,662 $419,074
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 29
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
For the years ended October 31, 1995 1994 1993
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $60,133 $33,754 $24,609
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and depletion 23,002 21,758 18,881
Deferred income taxes 6,597 4,011 1,133
(Gain) loss on disposals of properties,
plants and equipment (331) 4 175
(Increase) decrease:
Trade accounts receivable (7,449) (12,900) (543)
Inventories (2,932) (8,244)
5,190
Prepaid expenses and other (2,098) (1,591) (1,009)
Other long term assets (1,344) (848) 554
Increase (decrease):
Accounts payable 2,987 10,526 2,325
Accrued payrolls and employee
benefits 3,800 1,289 708
Accrued taxes -- general 2 332 (55)
Taxes on income (587) (735) (1,318)
Other long term liabilities 4,040 693 (1,175)
Net cash provided by operating
activities 85,820 48,049 49,475
Cash flows from investing activities:
Sales of investments in government
securities 9,211 22,177 26,512
Purchases of investments in government
securities (4,223) (19,214) (21,553)
Purchase of properties, plants and
equipment (61,066) (40,682) (74,521)
Proceeds on disposals of properties, plants
and equipment 745 166 103
Net cash used by investing activities (55,333) (37,553) (69,459)
Cash flows from financing activities:
Proceeds from issuance of long term
debt 12,000 7,700 28,108
Payments on long term debt (25,849) (7,876) (677)
Acquisition of treasury stock (2,647) (1,789) (952)
Dividends paid (12,180) (9,139) (9,176)
Net cash (used) provided by financing
activities (28,676) (11,104) 17,303
Foreign currency translation adjustment 258 (676) (1,931)
Net increase (decrease) in cash and
cash equivalents 2,069 (1,284) (4,612)
Cash and cash equivalents at beginning
of year 29,543 30,827 35,439
Cash and cash equivalents at end of year $31,612 $29,543 $30,827
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 30
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars and shares in thousands, except per share amounts)
<CAPTION>
Trans-
lation Share-
Capital Stock Treasury Stock Retained Adjust- holders'
Shares Amount Shares Amount Earnings ment Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
November 1, 1992 24,322 $9,034 14,099 $(35,388) $319,664 $ (425) $292,885
Net income 24,609 24,609
Dividends paid (Note):
Class A - $.30 (3,262) (3,262)
Class B - $.44 (5,914) (5,914)
Treasury shares
acquired (49) 49 (952) (952)
Translation loss (2,399) (2,399)
Balance at
October 31, 1993 24,273 9,034 14,148 (36,340) 335,097 (2,824) 304,967
Net income 33,754 33,754
Dividends paid (Note):
Class A - $.30 (3,262) (3,262)
Class B - $.44 (5,877) (5,877)
Treasury shares
acquired (91) 91 (1,789) (1,789)
Translation loss (854) (854)
Balance at
October 31, 1994 24,182 9,034 14,239 (38,129) 359,712 (3,678) 326,939
Net income 60,133 60,133
Dividends paid (Note):
Class A - $.40 (4,349) (4,349)
Class B - $.59 (7,831) (7,831)
Treasury shares
acquired (107) 107 (2,647) (2,647)
Translation gain 288 288
Balance at
October 31, 1995 24,075 $9,034 14,346 $(40,776) $407,665$(3,390) $372,533
NOTE:Dividends paid during the calendar years 1995, 1994 and 1993, relating to the
results of operations
for the fiscal years ended October 31, 1995, 1994 and 1993, were as
follows:
1995 calendar year dividends per share - Class A $.40;Class B $.59
1994 calendar year dividends per share - Class A $.34;Class B $.50
1993 calendar year dividends per share - Class A $.30;Class B $.44
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 31
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
Income taxes are accounted for under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". In
accordance with this statement, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases, as measured by tax rates currently in
effect.
Cash and Cash Equivalents
The Company considers highly liquid investments with an
original maturity of three months or less to be cash and cash
equivalents. Included in these amounts are repurchase agreements
and certificates of deposit of $6,800,000 and $11,700,000,
respectively, in 1995 ($7,500,000 and $9,400,000, respectively,
in 1994).
U.S. and Canadian Government Securities
There are no U.S. marketable securities at October 31,
1995.
The Canadian government securities are classified as
available-for-sale and, as such, are reported at their fair value
which approximates amortized cost. These securities have
maturities to 2001.
During 1995, the Company received $3,600,000 in proceeds
from the sale of available-for-sale securities. The realized
gains and losses included in income are immaterial.
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 $57,600,000 greater in
<PAGE> 32
1995, $49,000,000 greater in 1994 and $42,800,000 greater in 1993. During
1995 and 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, 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.
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 cumulative translation adjustments which represent the
effect of translating assets and liabilities of the Company's
foreign operation are presented in the Consolidated Statements of
Changes in Shareholders' Equity. The transaction gains and
losses included in income are immaterial.
Operations by Industry Segment
Information concerning the Company's industry segments,
presented on pages 43-45, is an integral part of these financial
statements.
Reclassifications
Certain prior year amounts have been reclassified to
conform to the 1995 presentation.
<PAGE> 33
NOTE 2--INTEREST IN PARTNERSHIP
Effective November 6, 1995, Macauley & Company (the
Partnership) was liquidated. Prior to the liquidation, the
Partnership held Class B Common Stock (2,400,000 shares) of the
Company. Upon liquidation, the Company received 1,200,000 shares
of the Class B Common Stock. The Company will record the
liquidation by crediting interest in partnership and charging an
equal amount to treasury stock.
NOTE 3--LONG TERM OBLIGATIONS
<TABLE>
The Company's long term obligations include the following
as of October 31 (Dollars in thousands):
<CAPTION>
1995 1994
<S> <C> <C>
Current portion of long term obligations $ 264 $ 249
Long term obligations $12,076 $25,702
Capital lease 2,025 2,264
Total long term obligations $14,101 $27,966
</TABLE>
During 1992, a subsidiary of the Company entered into an
unsecured revolving loan agreement, as amended in 1995, with a
bank for $25 million of financing through 1996. On October 31,
1995, there were no outstanding long term obligations. The
interest is an adjustable rate tied to the London Interbank
Offered Rates. 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. On October
31, 1995, the amount in long term obligations was $12 million.
This revolving credit arrangement was used to finance the
construction of a manufacturing plant in Michigan which was
completed in November 1995. 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. As part of the
revolving credit arrangement, 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 $416,000 as of October 31, 1995 ($227,000 as of
October 31, 1994). 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 $556,000 in 1996, $418,000 in
1997, $318,000 in 1998, $178,000 in 1999, $64,000 in 2000 and
$116,000 thereafter. Rent expense was $3,246,000 in 1995,
$2,553,000 in 1994 and $2,555,000 in 1993.
<PAGE> 34
Annual maturities of the long term obligations and capital
lease are $392,000 in 1996, $391,000 in 1997, $388,000 in 1998,
$2,675,000 in 1999, $3,731,000 in 2000 and $7,276,000 thereafter.
The amount that represents future executory costs and interest
payments for the capital lease is $488,000 as of October 31, 1995
($630,000 as of October 31, 1994).
During 1995, the Company paid $1,359,000 of interest
($1,599,000 in 1994 and $363,000 in 1993) for the long term
obligations and capital lease. Interest of $780,000 in 1995,
$211,000 in 1994 and $272,000 in 1993 was capitalized.
NOTE 4--CAPITAL STOCK
In March 1995, authorized Class A Common Stock was increased
from 16,000,000 shares to 32,000,000 shares and Class B Common
Stock from 8,640,000 shares to 17,280,000 shares. At the same
time, all issued shares were split two-for-one.
Class A Common Stock is entitled to cumulative dividends of
1 cent a share per year after which Class B Common Stock is
entitled to non-cumulative dividends up to 1/2 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 shareholders, 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.
NOTE 5--STOCK OPTIONS
During 1995, the Company adopted an Incentive Stock Option
Plan (the Plan) which provides the granting of incentive stock
options to key employees and non-statutory options for non-employees.
The aggregate number of the Company's Class A Common
Stock which options may be granted shall not exceed 1,000,000
shares. Under the terms of the Plan, options are granted at
exercise prices equal to the market value on the date the options
are granted and become exercisable after two years from the date
of grant. Options expire ten years after date of grant.
In 1995, 155,000 and 44,500 incentive stock options have
been granted with option prices of $26.19 per share and $22.94
per share, respectively. In addition, 10,000 non-statutory
options have been granted with option prices of $23.75 per share.
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.
<PAGE> 35
NOTE 6--INCOME TAXES
<TABLE>
Income tax expense is comprised as follows (Dollars in
thousands):
<CAPTION>
U.S. State and
Federal Foreign Local Total
<S> <C> <C> <C> <C>
1995:
Current $27,053 $ 1,616 $ 3,567 $32,236
Deferred 3,655 258 1,629 5,542
$30,708 $ 1,874 $ 5,196 $37,778
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
</TABLE>
Foreign income before income taxes amounted to $4,452,000
in 1995 ($4,111,000 in 1994 and $3,208,000 in 1993).
During 1994, the Company was awarded 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 was placed in service and for five additional
years, subject to certain income and percentage limitations.
<TABLE>
The following is a reconciliation of the U.S. statutory
federal income tax rate to the Company's effective tax rate:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
U.S. federal statutory tax rate 35.0% 35.0% 34.8%
State taxes, net of federal tax
benefit 3.9% 1.0% 3.5%
Other (.3%) (1.4%) (.4%)
Effective income tax rate 38.6% 34.6% 37.9%
</TABLE>
<PAGE> 36
<TABLE>
Significant components of the Company's deferred tax assets
and liabilities are as follows (Dollars in thousands):
<CAPTION>
1995 1994
<S> <C> <C>
Current deferred tax assets $ 4,244 $ 2,804
Current deferred tax liabilities $ 36 $ 32
Book basis on acquired assets $12,264 $13,257
Other 3,791 1,656
Long term deferred tax assets $16,055 $14,913
Plants and equipment $25,823 $17,625
Undistributed Canadian net income 1,402 1,402
Pension costs 1,733 1,737
Other 659 1,109
Long term deferred tax liabilities $29,617 $21,873
</TABLE>
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, 1995, permanently
reinvested earnings are $17,150,000. If deferred taxes were
provided on permanently reinvested earnings, the amount would
approximate $1 million.
During 1995, the Company paid $27,680,000 in U. S. Federal
income taxes
($10,898,000 in 1994 and $10,639,000 in 1993).
NOTE 7--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 self-administered hourly
and Union plans' benefits are based primarily upon years of
service. The self-administered salaried plan's 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 (123,752 shares of Class A Common
Stock and 77,755 shares of Class B Common Stock at October 31,
1995 and 1994).
<PAGE> 37
<TABLE>
The pension expense for the plans included the following
(Dollars in thousands):
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost, benefits
earned during the year $ 2,365 $ 1,415 $ 1,427
Interest cost on projected
benefit obligation 3,839 2,444 2,167
Actual return on assets (2,464) (1,844) (4,244)
Net amortization (1,919) (1,699) 813
1,821 316 163
Multi-employer and non-U.S.
pension expense 790 341 384
Total pension expense $ 2,611 $ 657 $ 547
</TABLE>
The range of weighted average discount rate and expected
long term rate of return on plan assets used in the actuarial
valuation was 7.0% - 9.0% for 1995, 1994 and 1993. The rate of
compensation increases for salaried employees used in the
actuarial valuation range from 4.0% - 6.5% for 1995, 1994 and
1993.
<PAGE> 38
<TABLE>
The following table sets forth the plans' funded status and
amounts recognized in the Consolidated Financial Statements (Dollars
in thousands):
<CAPTION>
ASSETS EXCEED ACCUMULATED BENEFITS
ACCUMULATED BENEFITS EXCEED ASSETS
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $30,816 $22,568 $ 8,389 $ 8,209
Accumulated benefit
obligation $31,122 $22,828 $10,152 $ 9,440
Projected benefit
obligation $45,027 $32,290 $10,152 $ 9,440
Plan assets at fair value $48,399 $45,591 $ 9,290 $ 8,552
Plan assets greater than
(less than) projected bene-
fit obligation $ 3,372 $13,301 $ (862) $ (888)
Unrecognized net (gain)
loss (7,806) 1,889 897 (1,952)
Prior service cost not yet re-
cognized in net periodic
pension cost 7,077 513 1,880 1,940
Adjustment required to recognize
minimum liability -- -- (938) (1,013)
Unrecognized net obligation (asset)
from transition 1,056 (11,851) (1,839) 1,025
Prepaid pension cost
(liability) $ 3,699 $ 3,852 $ (862) $ (888)
<FN>
During 1995 and 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 an equal amount, recognized in the Consolidated Financial
Statements.
</TABLE>
<PAGE> 39
REPORT OF MANAGEMENT'S RESPONSIBILITIES
To the Shareholders of
Greif Bros. Corporation
The Company's management is responsible for the financial
and operating information included in this Annual Report to
Shareholders, including the Consolidated Financial Statements of
Greif Bros. Corporation and its subsidiaries. These statements
were prepared in accordance with generally accepted accounting
principles and, as such, include certain estimates and judgements
made by management.
The system of internal accounting control, which is designed
to provide reasonable assurance as to the integrity and
reliability of financial reporting, is established and maintained
by the Company's management. This system is continuously
reviewed by the internal auditor of the Company. In addition,
Price Waterhouse LLP, an independent accounting firm, audits the
financial statements of Greif Bros. Corporation and its
subsidiaries and issues reports to management concerning the
internal controls of the Company. The Audit Committee of the
Board of Directors meets periodically with the internal auditor
and the independent accountants to discuss the internal control
structure and the results of their audits.
Michael J. Gasser John K. Dieker
Chairman and Chief Executive Officer Controller
<PAGE> 40
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 changes in
shareholders' equity and of cash flows present fairly, in all
material respects, the financial position of Greif Bros.
Corporation and its subsidiaries at October 31, 1995 and 1994,
and the results of their operations and their cash flows for each
of the three years in the period ended October 31, 1995, 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.
Price Waterhouse LLP Columbus, Ohio
December 1, 1995
<PAGE> 41
<TABLE>
QUARTERLY FINANCIAL DATA (Unaudited)
The quarterly results of operations for fiscal 1995 and 1994 are
shown below (Dollars in thousands, except per share amounts).
<CAPTION>
Quarter ended,
Jan. 31, Apr. 30, July 31, Oct. 31,
1995 1995 1995 1995
<S> <C> <C> <C> <C>
Net sales $170,058 $184,869 $184,159 $180,259
Gross profit 37,400 37,969 46,148 36,710
Net income 15,378 14,881 17,588 12,286
Net income per share:
Assuming distributions as actually
paid out in dividends and the
balance as in liquidation:
Class A Common Stock $.58 $.60 $.71 $.50
Class B Common Stock $.68 $.63 $.74 $.53
Market price (Class A Common Stock):
High $27-1/2 $28-7/8 $27-3/8 $25-1/2
Low $21-3/16 $25 $22-1/4 $21-1/4
Quarter ended,
Jan. 31, Apr. 30, July 31, Oct. 31,
1994 1994 1994 1994
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 Common Stock $.15 $.25 $.35 $.57
Class B Common Stock $.23 $.27 $.37 $.59
Market price (Class A Common Stock):
High $21-3/4 $21-1/2 $19-15/16 $23-1/4
Low $18-7/8 $19 $18-5/8 $19-1/2
<FN>
The prior year per share amounts have been adjusted to reflect the
two-for-one stock split (see Note 4 to the Consolidated Financial
Statements).
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, 1995, there were 812 shareholders of record of
Class A Common Stock and 199 shareholders of Class B Common Stock.
</TABLE>
<PAGE> 42
<TABLE>
SELECTED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
<CAPTION>
YEAR ENDED OCTOBER 31
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales $719,345 $583,526 $526,765 $510,995 $437,379
Net income $ 60,133 $ 33,754 $ 24,609 $ 29,719 $ 23,923
Total assets $467,662 $419,074 $381,183 $340,173 $327,693
Long term obligations $ 14,101 $ 27,966 $ 28,015 $ 768 $ 916
Dividends per share of
common stock:
Class A Common Stock $ .40 $ .30 $ .30 $ .28 $ .28
Class B Common Stock $ .59 $ .44 $ .44 $ .41 $ .41
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:
1995 1994 1993 1992 1991
Class A Common Stock $2.39 $1.32 $ .94 $1.15 $ .91
Class B Common Stock $2.58 $1.46 $1.08 $1.28 $1.04
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 retained earnings.
The prior year per share amounts have been adjusted to
reflect the two-for-one stock split (see Note 4 to the Consolidated
Financial Statements).
</TABLE>
<PAGE> 43
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 95 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).
<PAGE> 44
Operations in the shipping containers 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 segment involve the
production and sale of containerboard, both virgin and recycled,
and related corrugated products including corrugated sheets 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 or containerboard.
Corporate assets are principally cash, marketable securities,
timber properties and other investments.
<PAGE> 45
<TABLE>
The following segment information is presented for the three
years ended October 31, 1995, except as to asset information
which is as of October 31 (Dollars in thousands):
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net sales:
Shipping containers $392,505 $353,992 $340,326
Containerboard 326,840 229,534 186,439
Total $719,345 $583,526 $526,765
Operating profit:
Shipping containers $ 9,059 $ 9,573 $ 6,709
Containerboard 80,476 30,306 18,354
Total segment 89,535 39,879 25,063
General corporate other
income and expense, net 8,376 11,733 14,538
Income before income taxes 97,911 51,612 39,601
Income taxes 37,778 17,858 14,992
Net income $ 60,133 $ 33,754 $ 24,609
Identifiable assets:
Shipping containers $190,982 $179,794 $170,783
Containerboard 220,213 178,053 146,550
Total segment 411,195 357,847 317,333
Corporate assets 56,467 61,227 63,850
Total $467,662 $419,074 $381,183
Depreciation expense:
Shipping containers $ 13,114 $ 13,271 $ 13,697
Containerboard 9,765 8,388 5,097
Total segment 22,879 21,659 18,794
Corporate assets 65 58 51
Total $ 22,944 $ 21,717 $ 18,845
Property additions:
Shipping containers $ 12,540 $ 16,226 $ 15,503
Containerboard 47,593 24,065 58,453
Total segment 60,133 40,291 73,956
Corporate assets 933 391 565
Total $ 61,066 $ 40,682 $ 74,521
</TABLE>
<PAGE> 46
MANAGEMENT'S DISCUSSION AND ANALYSIS
<TABLE>
FINANCIAL DATA
Presented below are certain comparative data illustrative of
the following discussion of the Company's results of operations,
financial condition and changes in financial condition (Dollars
in thousands):
<CAPTION>
1995 1994 1993 1992
<S> <C> <C> <C> <C>
Net sales:
Shipping containers $392,505 $353,992 $340,326 $335,012
Containerboard 326,840 229,534 186,439 175,983
Total $719,345 $583,526 $526,765 $510,995
Operating profit:
Shipping containers $ 9,059 $ 9,573 $ 6,709 $ 16,292
Containerboard 80,476 30,306 18,354 18,194
Total $ 89,535 $ 39,879 $ 25,063 $ 34,486
Net Income $ 60,133 $ 33,754 $ 24,609 $ 29,719
Current ratio 4.0:1 4.4:1 5.4:1 6.1:1
Cash flow from
operations $ 85,820 $ 48,049 $ 49,475 $ 42,567
Increase (decrease)
in working capital $ 3,342 $ 7,202 $(15,105) $ (2,991)
Capital expenditures $ 61,066 $ 40,682 $ 74,521 $ 43,406
</TABLE>
RESULTS OF OPERATIONS
The 1995 results of operations established a record for net
sales and net income of the Company. Net sales to customers,
compared with the previous year, increased $136 million or 23% in
1995. Net income increased $26 million or 78% over last year.
Historically, revenues or earnings may or may not be
representative of future operations because of various economic
factors. As explained below, the Company is subject to the
general economic conditions of its customers and the industry in
which it is included.
The Company remains confident that, with the financial
strength that it has built over its 118 year existence, it will
be able to adequately compete in highly competitive markets.
Net Sales
The containerboard segment had an increase in net sales of
$97 million in 1995, which is the due primarily to higher sales
prices. The increase in sales prices resulted from shortages in
the containerboard and related products industry. In addition,
there was a less significant increase in unit sales of the
segment because of the inclusion of an entire year of sales in
1995 for the 325 ton per day
<PAGE> 47
recycled paper machine at a subsidiary of the Company which was completed
in December 1993.
The shipping containers segment had an increase in sales of
$38 million in 1995, resulting from more volume because of
capital expenditures made in the current and prior years. In
addition, there were some sales price increases that were made
because of the increase in the cost of the Company's raw
materials.
The increase in sales in 1994 of 10.8% was primarily the
result of the addition of the recycled paper machine, discussed
above, coupled with shortages in containerboard and related
products that resulted in increased selling prices. Other
capital expenditures made in 1994 and previous years also
contributed to this increase.
The increase in sales in 1993 of 3.1% was the result of
capital additions expended in 1993 and previous years offset by
reduced selling prices on some of the Company's products. The
price decreases resulted from competitive price pressures.
Operating Profit
The overall increase in operating profit since the prior
year is due to higher net sales, as discussed above, and a better
gross profit margin of 22.0% of net sales in 1995 compared to
17.6% of net sales in 1994. This improvement in the gross profit
margin is due to a higher percent of the net sales being
comprised of the containerboard segment, which has a higher gross
profit margin than the Company's other segment.
The operating profit of the containerboard segment is $80
million or 24.6% of net sales in 1995 compared to $30 million or
13.2% of net sales in 1994. This increase is due to the increase
in sales coupled with more favorable gross profit margins. The
increase in 1994 as compared to the two prior years is also due
to these reasons.
The operating profit of the shipping containers segment is
$9 million or 2.3% of net sales in 1995 compared to $10 million
or 2.7% of net sales in 1994. The operating profits of this
segment have decreased since fiscal 1992 due to severe price
pressures on its products, especially during 1993. In addition,
the Company's cost of certain raw materials have continued to
increase over the past couple years. However, due to the
Company's ongoing efforts to reduce operating costs by cost
control measures, manufacturing innovations and capital
expenditures, the operating profits have increased from 1993 to
1995.
Other Income
The other income of the Company increased in 1995 primarily
due to the sale of timber properties and more salvage timber
sales. The increase in volume of timber sales was accompanied by
higher timber prices.
<PAGE> 48
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.
Income Before Income Taxes
In 1995, income before income taxes increased because of
higher sales and more favorable gross profit margins. In
addition, as discussed above, there was an increase in the sale
of timber and timber properties in the current year.
The 1994 increase in income before income 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 income taxes was the
result of competitive price pressures of the Company's products,
coupled with increases in the cost of certain raw materials.
LIQUIDITY AND CAPITAL RESOURCES
As indicated in the Consolidated Balance Sheets, elsewhere
in this Report and in the ratios set forth immediately above, the
Company is dedicated to maintaining a strong financial position.
It is our belief that this dedication is extremely important
during all economic times.
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 shareholders' equity in periods of adverse economic
conditions.
(b) To respond to any large and presently unanticipated
cash demands that might result from future drastic events.
(c) To be able to benefit from new developments, new
products and new opportunities in order to achieve the best
results for our shareholders.
(d) To replace and improve plants and equipment. When
plants 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
<PAGE> 49
highly competitive environment in which the Company operates, the
cost of new plants and machinery are often much higher, sometimes
significantly higher, than the historical cost of the items being
replaced.
The Company, during 1995, invested approximately $61 million
in capital additions. During the last three years, the Company
has invested $176 million. The Company began operations in its
new injection molding facility in Durant, Mississippi during the
year. This location replaced an existing operation at a nearby
location. In addition, a subsidiary of the Company built a new
manufacturing plant in Mason, Michigan in 1995. The new plant,
which caused a significant increase in construction in progress
as compared to the prior year, was completed in November 1995.
As noted in our 1993 Report to Shareholders, the Company during
1993 undertook a major addition at Virginia Fibre Corporation.
This project was completed in December 1993 and resulted in
additional capacity for 1994 and 1995.
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 a major addition to an
existing plant has been undertaken in each of the last three
years.
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.
(e) 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.
During 1995, the Company performed a complete study of the
compensation and retirement policies. As a result of this study,
an Incentive Stock Option Plan was implemented. In addition,
improvements were made to the pension plans and a 401(k) Plan was
begun to supplement the benefits of our office and salaried
employees.
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 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.
<PAGE> 50
Long term obligations are lower at October 31, 1995 compared
to October 31, 1994 due to the pre-payment of long term debt.
The decrease caused by this pre-payment was partially offset by
additional long term debt which was incurred to build the plant
in Mason, Michigan.
During 1995, a subsidiary company approved a $35 million
mill modernization program in Virginia. In addition, the Company
has approved future purchases, primarily for equipment, of
approximately $11 million. As explained above, self-financing
and low interest rate borrowing have been the primary source for
financing such capital expenditures.
***************************************************************
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.
<PAGE> 51
EXHIBIT 21
<TABLE>
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-31-1995
<PERIOD-END> OCT-31-1995
<CASH> 31,612
<SECURITIES> 18,981
<RECEIVABLES> 77,739
<ALLOWANCES> (789)
<INVENTORY> 53,876
<CURRENT-ASSETS> 197,901
<PP&E> 482,311
<DEPRECIATION> 223,456
<TOTAL-ASSETS> 467,662
<CURRENT-LIABILITIES> 49,161
<BONDS> 0
0
0
<COMMON> 9,034
<OTHER-SE> 363,499
<TOTAL-LIABILITY-AND-EQUITY> 467,662
<SALES> 719,345
<TOTAL-REVENUES> 733,234
<CGS> 561,118
<TOTAL-COSTS> 561,118
<OTHER-EXPENSES> 73,733
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 472
<INCOME-PRETAX> 97,911
<INCOME-TAX> 37,778
<INCOME-CONTINUING> 60,133
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,133
<EPS-PRIMARY> 2.39<F1>
<EPS-DILUTED> 2.39<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 $2.58.
</FN>
</TABLE>
