Greif(GEF) - 2025 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This part provides the company's comprehensive financial statements and related disclosures ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements for Greif, Inc. and its subsidiaries, including statements of income, comprehensive income, balance sheets, cash flows, and changes in shareholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, acquisitions, divestitures, debt, financial instruments, and segment information Condensed Consolidated Statements of Income This section presents the company's income statement data for the specified periods, detailing net sales, profit metrics, and earnings per share Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended July 31 | (in millions, except per share amounts) | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Net sales | $1,134.7 | $1,164.9 | | Gross profit | $257.3 | $244.9 | | Operating profit | $73.1 | $136.7 | | Net income attributable to Greif, Inc. | $64.0 | $87.1 | | Earnings per Class A common stock - diluted | $1.10 | $1.50 | | Earnings per Class B common stock - diluted | $1.66 | $2.26 | Condensed Consolidated Statements of Income (Unaudited) - Nine Months Ended July 31 | (in millions, except per share amounts) | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Net sales | $3,231.8 | $3,247.9 | | Gross profit | $711.9 | $671.2 | | Operating profit | $162.6 | $260.5 | | Net income attributable to Greif, Inc. | $119.9 | $198.7 | | Earnings per Class A common stock - diluted | $2.07 | $3.44 | | Earnings per Class B common stock - diluted | $3.10 | $5.16 | Condensed Consolidated Statements of Comprehensive Income This section presents the company's comprehensive income data, including net income and other comprehensive income components Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended July 31 | (in millions) | 2025 | 2024 | | :------------ | :--- | :--- | | Net income | $69.4 | $93.6 | | Other comprehensive income (loss), net of tax | $25.8 | $(13.4) | | Comprehensive income attributable to Greif, Inc. | $89.7 | $73.7 | Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Nine Months Ended July 31 | (in millions) | 2025 | 2024 | | :------------ | :--- | :--- | | Net income | $138.3 | $219.9 | | Other comprehensive income (loss), net of tax | $72.6 | $(25.9) | | Comprehensive income attributable to Greif, Inc. | $192.0 | $173.7 | Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheets (Unaudited) - As of July 31, 2025 and October 31, 2024 | (in millions) | July 31, 2025 | October 31, 2024 | | :-------------------------------- | :------------ | :--------------- | | ASSETS | | | | Total current assets | $1,995.4 | $1,549.4 | | Total long-term assets | $3,605.5 | $3,715.2 | | Properties, plants and equipment, net | $1,134.2 | $1,383.0 | | Total assets | $6,735.1 | $6,647.6 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Total current liabilities | $1,411.7 | $1,014.4 | | Total long-term liabilities | $2,993.9 | $3,385.8 | | Total Greif, Inc. shareholders' equity | $2,194.2 | $2,082.4 | | Total shareholders' equity | $2,238.1 | $2,117.5 | | Total liabilities and shareholders' equity | $6,735.1 | $6,647.6 | Condensed Consolidated Statements of Cash Flows This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended July 31 | (in millions) | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Net cash provided by operating activities | $303.3 | $168.8 | | Net cash used in investing activities | $(70.2) | $(703.8) | | Net cash (used in) provided by financing activities | $(188.3) | $541.7 | | Net increase in cash and cash equivalents | $87.5 | $13.3 | | Cash and cash equivalents at end of period | $285.2 | $194.2 | Condensed Consolidated Statements of Changes in Shareholders' Equity This section details changes in the company's shareholders' equity, including net income, other comprehensive income, and dividends Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - Nine Months Ended July 31, 2025 | (in millions) | Common Stock Amount | Treasury Stock Amount | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Greif, Inc. Equity | | :------------ | :------------------ | :-------------------- | :---------------- | :-------------------------------------------- | :----------------------- | | Balance as of October 31, 2024 | $230.3 | $(279.0) | $2,486.2 | $(355.1) | $2,082.4 | | Net income | | | $119.9 | | $119.9 | | Other comprehensive income (loss) | | | | $72.1 | $72.1 | | Dividends paid to Greif, Inc. shareholders | | | $(93.8) | | $(93.8) | | Balance as of July 31, 2025 | $246.6 | $(276.5) | $2,507.1 | $(283.0) | $2,194.2 | Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - Nine Months Ended July 31, 2024 | (in millions) | Common Stock Amount | Treasury Stock Amount | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Greif, Inc. Equity | | :------------ | :------------------ | :-------------------- | :---------------- | :-------------------------------------------- | :----------------------- | | Balance as of October 31, 2023 | $208.4 | $(281.9) | $2,337.9 | $(316.5) | $1,947.9 | | Net income | | | $198.7 | | $198.7 | | Other comprehensive income (loss) | | | | $(25.0) | $(25.0) | | Dividends paid to Greif, Inc. shareholders | | | $(89.8) | | $(89.8) | | Balance as of July 31, 2024 | $228.4 | $(279.0) | $2,449.0 | $(341.5) | $2,056.9 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the condensed consolidated financial statements NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the basis for preparing the interim financial statements, details a change in the Company's fiscal year, explains the reclassification of the Containerboard Business as discontinued operations, and describes the recent changes in segment reporting structure. It also mentions newly adopted and recently issued accounting standards - The Company is changing its fiscal year, effective for the 2025 fiscal year. The 2025 fiscal year began on November 1, 2024, and will end on September 30, 2025, consisting of eleven months. Thereafter, the fiscal year will begin on October 1 and end on September 30 of the following year[19] - The Containerboard Business divestiture qualifies as discontinued operations and its financial results have been reclassified for all periods presented, with related assets and liabilities classified as held for sale[22][23] - The Company changed its reporting structure to a material solution-based structure, resulting in a change from three to four reportable segments: Customized Polymer Solutions, Durable Metal Solutions, Sustainable Fiber Solutions, and Integrated Solutions. Prior period segment information has been recast[24][26] - The Company is evaluating the potential impact of recently issued ASUs: ASU 2024-03 (Expense Disaggregation Disclosures), ASU 2023-09 (Improvements to Tax Disclosures), and ASU 2023-07 (Improvements to Reportable Segment Disclosures), with effective dates ranging from fiscal year 2025 to 2027[29][30][31] NOTE 2 — ACQUISITIONS AND DIVESTITURES This note details the Company's divestiture activities, including the intended sales of the Soterra Business and the Containerboard Business, and the completed Ipackchem acquisition, providing financial impacts and reclassifications - On August 5, 2025, the Company entered into a definitive agreement to sell its Soterra land management business for approximately $462.0 million, with net cash proceeds to be used for debt repayment. This divestiture does not qualify as discontinued operations[32] - On June 30, 2025, the Company agreed to sell its Containerboard Business for $1,800.0 million, expected to close by August 31, 2025. This divestiture qualifies as discontinued operations and its financial results are presented separately[33] Containerboard Business Results from Discontinued Operations (Unaudited) | (in millions) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $317.2 | $289.3 | $871.6 | $783.1 | | Operating profit | $53.1 | $34.3 | $142.1 | $77.5 | | Net income from discontinued operations | $24.7 | $9.1 | $61.5 | $12.2 | Ipackchem Acquisition Summary (March 26, 2024) | (in millions) | Amount Recognized as of Acquisition Date | | :------------ | :--------------------------------------- | | Cash consideration | $582.1 | | Total identifiable net assets | $301.1 | | Goodwill | $281.0 | NOTE 3 — GOODWILL This note details the impact of the Company's segment realignment on its reporting units and the allocation of goodwill. It confirms that no impairment was found after testing, though one reporting unit has low headroom, and summarizes goodwill balances by segment - The Company's segment realignment resulted in a change from three to four reportable segments and new reporting units, with goodwill allocated on a relative fair value basis[47][49] - Goodwill impairment testing immediately before and after the segment realignment concluded that the estimated fair value of each reporting unit exceeded its carrying value, with the Customized Polymer Solutions – Small Plastics/Jerrycans reporting unit having a 2% headroom[50] Changes in Carrying Amount of Goodwill by Segment (Nine Months Ended July 31, 2025) | (in millions) | Global Industrial Packaging | Paper Packaging & Services | Customized Polymer Solutions | Durable Metal Solutions | Sustainable Fiber Solutions | Integrated Solutions | Total | | :------------ | :-------------------------- | :------------------------- | :--------------------------- | :---------------------- | :-------------------------- | :------------------- | :---- | | Balance at October 31, 2024 | $1,148.3 | $507.2 | $— | $— | $— | $— | $1,655.5 | | Segment recast | $(1,148.3) | $(507.2) | $607.9 | $401.8 | $475.9 | $169.9 | $— | | Goodwill acquired / Measurement period adjustment | $— | $— | $(10.0) | $— | $— | $— | $(10.0) | | Currency translation | $— | $— | $28.2 | $14.3 | $— | $7.8 | $50.3 | | Balance at July 31, 2025 | $— | $— | $626.1 | $416.1 | $475.9 | $177.7 | $1,695.8 | NOTE 4 — RESTRUCTURING CHARGES This note provides a reconciliation of restructuring reserves, detailing the charges incurred for employee separation and other costs during the three and nine months ended July 31, 2025 and 2024, and outlines the remaining expected costs Restructuring Charges (in millions) | Period | 2025 | 2024 | | :----- | :--- | :--- | | Three Months Ended July 31 | $25.2 | $2.7 | | Nine Months Ended July 31 | $42.5 | $1.6 | - The focus for 2025 restructuring activities is to optimize operations amidst industrial activity contraction and transform the Company's internal processes and portfolio for long-term profitable earnings growth[51] - Remaining amounts expected to be incurred from open or formulated restructuring plans totaled $30.3 million as of July 31, 2025[54] NOTE 5 — DEBT This note summarizes the Company's long-term and short-term debt, including details on the 2022 and 2023 Credit Agreements and accounts receivable credit facilities, along with their terms, interest rates, and compliance with covenants Long-Term Debt Summary (in millions) | | July 31, 2025 | October 31, 2024 | | :------------------------------------ | :------------ | :--------------- | | 2022 Credit Agreement - Term Loans | $1,641.3 | $1,707.4 | | 2023 Credit Agreement - Term Loan | $283.1 | $288.8 | | Accounts receivable credit facilities | $— | $357.9 | | 2022 Credit Agreement - Revolving Credit Facility | $395.7 | $373.7 | | Total long-term debt, net | $2,219.3 | $2,626.2 | - The 2022 Credit Agreement includes an $800.0 million secured revolving credit facility and various secured term loan facilities (A-1, A-2, A-4), with the Incremental Term Loan A-4 ($300.0 million) used to repay funds for the Ipackchem acquisition[57][58][59] - The 2023 Credit Agreement provides a $300.0 million secured term loan facility, used to repay and refinance a portion of the 2022 Credit Agreement borrowings[61] Short-Term Debt Summary (in millions) | | July 31, 2025 | October 31, 2024 | | :---------------------------- | :------------ | :--------------- | | Accounts receivable credit facilities | $386.6 | $— | | Other debt | $15.3 | $18.6 | | Total | $401.9 | $18.6 | - The U.S. Receivables Financing Facility Agreement (U.S. RFA) provides a $290.0 million facility, with $284.3 million outstanding as of July 31, 2025. The European RFA provides a €100.0 million facility, with $102.3 million outstanding as of July 31, 2025[65][68] NOTE 6 — FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS This note details the Company's financial instruments, including recurring fair value measurements for interest rate derivatives, foreign exchange hedges, and cross-currency swaps, as well as non-recurring fair value measurements related to asset impairment charges Recurring Fair Value Measurements (in millions) - July 31, 2025 | | Assets | Liabilities | | :---------------------- | :----- | :---------- | | Interest rate derivatives | $29.4 | $(7.2) | | Foreign exchange hedges | $1.0 | $(0.8) | | Cross currency swap | $5.8 | $(47.0) | - The Company has interest rate swaps with a total notional amount of $1,362.5 million, effectively converting variable rate debt to a fixed rate of 2.99%. Gains reclassified to earnings from these contracts were $4.6 million (Q3 2025) and $14.8 million (YTD 2025)[70][71][73] - Foreign currency forward contracts outstanding totaled $219.6 million as of July 31, 2025, used to reduce volatility from foreign exchange rate changes[74] - Cross currency interest rate swaps synthetically swap $534.9 million of U.S. fixed rate debt to Euro denominated fixed rate debt. A cash settlement of certain cross-currency swap contracts resulted in a cash receipt of $22.5 million in Q1 2025[78][81] - Non-cash asset impairment charges for the nine months ended July 31, 2025, totaled $27.8 million, primarily related to properties, plants and equipment, and definite-lived intangibles across various segments[84] NOTE 7 – STOCK-BASED COMPENSATION This note outlines the stock-based compensation activities, including the granting of restricted stock units (RSUs) and performance stock units (PSUs) under the Long-Term Incentive Plan, and the shares issued upon vesting - The Company granted 123,800 RSUs on December 13, 2024, with a weighted average fair value of $66.61, for the performance period ending September 30, 2027[87] - The Company granted 215,953 PSUs on December 13, 2024, with a weighted average fair value of $61.19, for the performance period ending September 30, 2027[89] NOTE 8 — INCOME TAXES This note details the income tax expense for the period, highlighting the increase compared to the prior year due to a one-time tax benefit in 2024 and the impact of the Delta Divestiture. It also addresses the impact of the OBBBA and deferred tax liabilities from the Ipackchem acquisition - Income tax expense for the nine months ended July 31, 2025, was $38.0 million, an increase of $22.0 million compared to $16.0 million in 2024. This increase was primarily due to a one-time discrete tax benefit of $48.1 million recognized in 2024 and a $17.3 million gain from the Delta Divestiture in 2024[92] - The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, permanently extends several major provisions of the Tax Cuts and Jobs Act of 2017. The Company determined it does not have a material effect on the current quarter's income tax provision, with most provisions affecting the 2026 fiscal year[93] - A deferred tax liability of $63.6 million was recorded through purchase accounting as part of the Ipackchem Acquisition, primarily due to temporary differences in intangible assets, property, plant and equipment, and inventory[94] NOTE 9 — POST RETIREMENT BENEFIT PLANS This note presents the components of net periodic pension cost for the three and nine months ended July 31, 2025 and 2024, and outlines expected employer contributions Net Periodic Pension Cost (Benefit) (in millions) | Period | 2025 | 2024 | | :----- | :--- | :--- | | Three Months Ended July 31 | $(0.4) | $(0.9) | | Nine Months Ended July 31 | $(1.1) | $(3.0) | - The Company expects to make employer contributions of $5.9 million during 2025[95] NOTE 10 — CONTINGENT LIABILITIES AND ENVIRONMENTAL RESERVES This note discusses the Company's potential exposure to litigation and regulatory matters, and details its environmental reserves, including the basis for estimation and the potential for future charges - The Company accrues for contingencies related to litigation and regulatory matters when a liability is probable and estimable, regularly reviewing accruals for adequacy[98] - Environmental reserves were $17.1 million as of July 31, 2025, and $16.5 million as of October 31, 2024, primarily based on environmental studies and third-party cost estimates[99] NOTE 11 — EARNINGS PER SHARE This note explains the Company's two-class method for computing earnings per share (EPS) for its Class A and Class B Common Stock, detailing the dividend distribution proportion and providing a reconciliation of shares used in the calculation - The Company applies the 'two-class method' for EPS calculation, allocating earnings based on a 40% to 60% dividend split for Class A and Class B shareholders, respectively[101][102] Numerator for Basic and Diluted EPS (in millions) | Period | Net income from continuing operations attributable to Greif, Inc. | Net income from discontinued operations attributable to Greif, Inc. | Net income attributable to Greif, Inc. | Cash dividends | Undistributed earnings attributable to Greif, Inc. | | :----- | :-------------------------------------------------------------- | :---------------------------------------------------------------- | :------------------------------------- | :------------- | :----------------------------------------------- | | Three Months Ended July 31, 2025 | $39.3 | $24.7 | $64.0 | $(31.4) | $32.6 | | Three Months Ended July 31, 2024 | $78.0 | $9.1 | $87.1 | $(30.1) | $57.0 | | Nine Months Ended July 31, 2025 | $58.4 | $61.5 | $119.9 | $(93.8) | $26.1 | | Nine Months Ended July 31, 2024 | $186.5 | $12.2 | $198.7 | $(89.8) | $108.9 | Shares Outstanding (in thousands) | | July 31, 2025 | October 31, 2024 | | :-------------------- | :------------ | :--------------- | | Class A Common Stock | 26,169,944 | 25,850,270 | | Class B Common Stock | 21,331,127 | 21,331,127 | NOTE 12 — COMPREHENSIVE INCOME (LOSS) This note provides a rollforward of accumulated other comprehensive income (loss), detailing changes related to foreign currency translation, derivative financial instruments, and minimum pension liability adjustments for the nine months ended July 31, 2025 and 2024 Rollforward of Accumulated Other Comprehensive Income (Loss) (in millions) - Nine Months Ended July 31, 2025 | | Foreign Currency Translation | Derivative Financial Instruments | Minimum Pension Liability Adjustment | Accumulated Other Comprehensive Income (Loss) | | :-------------------------- | :--------------------------- | :------------------------------- | :----------------------------------- | :-------------------------------------------- | | Balance as of October 31, 2024 | $(314.1) | $33.9 | $(74.9) | $(355.1) | | Other comprehensive income (loss) | $95.0 | $(21.4) | $(1.5) | $72.1 | | Balance as of July 31, 2025 | $(219.1) | $12.5 | $(76.4) | $(283.0) | Rollforward of Accumulated Other Comprehensive Income (Loss) (in millions) - Nine Months Ended July 31, 2024 | | Foreign Currency Translation | Derivative Financial Instruments | Minimum Pension Liability Adjustment | Accumulated Other Comprehensive Income (Loss) | | :-------------------------- | :--------------------------- | :------------------------------- | :----------------------------------- | :-------------------------------------------- | | Balance as of October 31, 2023 | $(317.7) | $71.7 | $(70.5) | $(316.5) | | Other comprehensive income (loss) | $14.8 | $(35.5) | $(4.3) | $(25.0) | | Balance as of July 31, 2024 | $(302.9) | $36.2 | $(74.8) | $(341.5) | NOTE 13 — BUSINESS SEGMENT INFORMATION This note details the Company's new four-segment reporting structure, providing descriptions of products and services for each segment. It also presents disaggregated net sales by geographic area and segment, along with segment operating profit, depreciation, and total assets - Effective November 1, 2024, the Company realigned its organizational structure into four reportable business segments: Customized Polymer Solutions, Durable Metal Solutions, Sustainable Fiber Solutions, and Integrated Solutions[107] Net Sales by Segment and Geographic Area (in millions) - Three Months Ended July 31, 2025 | Segment | United States | Europe, Middle East and Africa | Asia Pacific and Other Americas | Total | | :-------------------------- | :------------ | :----------------------------- | :------------------------------ | :---- | | Customized Polymer Solutions | $139.4 | $139.2 | $61.2 | $339.8 | | Durable Metal Solutions | $71.6 | $238.0 | $90.2 | $399.8 | | Sustainable Fiber Solutions | $294.3 | $0.2 | $13.5 | $308.0 | | Integrated Solutions | $65.2 | $12.9 | $9.0 | $87.1 | | Total net sales | $570.5 | $390.3 | $173.9 | $1,134.7 | Operating Profit by Segment (in millions) | Segment | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Customized Polymer Solutions | $8.8 | $9.6 | $28.8 | $26.9 | | Durable Metal Solutions | $37.6 | $36.2 | $95.1 | $99.8 | | Sustainable Fiber Solutions | $23.2 | $35.9 | $30.3 | $61.8 | | Integrated Solutions | $3.5 | $55.0 | $8.4 | $72.0 | | Total operating profit | $73.1 | $136.7 | $162.6 | $260.5 | Total Assets by Segment (in millions) | Segment | July 31, 2025 | October 31, 2024 | | :-------------------------- | :------------ | :--------------- | | Customized Polymer Solutions | $1,947.8 | $1,818.7 | | Durable Metal Solutions | $1,045.8 | $1,183.8 | | Sustainable Fiber Solutions | $2,904.7 | $2,788.8 | | Integrated Solutions | $311.0 | $403.1 | | Total segments | $6,209.3 | $6,194.4 | | Corporate and other | $525.8 | $453.2 | | Total assets | $6,735.1 | $6,647.6 | NOTE 14 — REDEEMABLE NONCONTROLLING INTERESTS This note describes the nature of redeemable noncontrolling interests in joint ventures and details the repurchase of a 20% ownership interest, along with a summary of changes in the redeemable noncontrolling interest balance - On May 30, 2025, the Company redeemed the remaining 20% ownership interest in one of its noncontrolling interests for $38.7 million, increasing its ownership to 100%[116] Change in Redeemable Noncontrolling Interest (in millions) - Nine Months Ended July 31, 2025 | | Redeemable Noncontrolling Interest | | :------------------------------------ | :------------------------------- | | Balance as of October 31, 2024 | $129.9 | | Current period mark to redemption value | $4.9 | | Repurchase of redeemable shareholder interest | $(40.9) | | Redeemable noncontrolling interest share of income | $5.2 | | Dividends to redeemable noncontrolling interest and other | $(7.7) | | Balance as of July 31, 2025 | $91.4 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the Company's financial condition and results of operations, including a general overview, detailed segment reviews for the third quarter and year-to-date, and an analysis of liquidity and capital resources General Information This subsection introduces the Management's Discussion and Analysis, highlights the Company's fiscal year change, and reiterates the reclassification of the Containerboard Business as discontinued operations and the intended sale of the Soterra Business - The Company's 2025 fiscal year began on November 1, 2024, and will end on September 30, 2025, consisting of eleven months. Subsequent fiscal years will run from October 1 to September 30[119] - The Containerboard Business is presented as discontinued operations starting in the third quarter of 2025 due to a definitive agreement for its sale for $1,800.0 million, expected to close by August 31, 2025[126] - A definitive agreement was entered on August 5, 2025, to sell the Soterra land management business for approximately $462.0 million, expected to close October 1, 2025. This divestiture does not qualify as discontinued operations[127] Business Segments Overview This section describes the Company's new four-segment reporting structure, effective November 1, 2024, outlining the primary products and services offered by each segment - The Company operates in four reportable business segments: Customized Polymer Solutions (plastic drums, IBCs, small plastics), Durable Metal Solutions (steel drums), Sustainable Fiber Solutions (fiber drums, recycled board, timberland management), and Integrated Solutions (paints, linings, closure systems, recycled fiber, adhesives)[128][129][130][131][132] Critical Accounting Policies This subsection confirms no material changes to critical accounting policies and provides a detailed discussion on goodwill valuation, including the impact of segment realignment and impairment testing results - There have been no material changes to the Company's critical accounting policies from the disclosures in the 2024 Form 10-K[136] - The segment realignment led to changes in reporting units and a reallocation of goodwill. Impairment testing showed that the fair value of each reporting unit exceeded its carrying value, though the Customized Polymer Solutions – Small Plastics/Jerrycans unit had a low headroom of 2%[137][138][139][140] Goodwill Balance by Reporting Unit (in millions) | Reporting Unit | July 31, 2025 | October 31, 2024 | | :------------------------------------ | :------------ | :--------------- | | Customized Polymer Solutions - Small Plastics/Jerrycans | $369.0 | $357.7 | | Customized Polymer Solutions - Large/Medium Plastics | $130.2 | $128.0 | | Customized Polymer Solutions - Intermediate Bulk Containers | $126.9 | $122.2 | | Durable Metal Solutions | $416.1 | $401.8 | | Sustainable Fiber Solutions - Boxboard & Converted | $475.9 | $475.9 | | Integrated Solutions | $177.7 | $169.9 | | Total | $1,695.8 | $1,655.5 | Results of Operations - Third Quarter This section analyzes the Company's consolidated and segment-level financial performance for the three months ended July 31, 2025, compared to the prior year, covering net sales, gross profit, SG&A expenses, operating profit, net income, and Adjusted EBITDA, along with key trends and income tax expense Consolidated Financial Performance (Three Months Ended July 31) | (in millions) | 2025 | 2024 | | :------------ | :--- | :--- | | Net sales | $1,134.7 | $1,164.9 | | Operating profit | $73.1 | $136.7 | | Adjusted EBITDA | $160.7 | $157.0 | - Net sales decreased by $30.2 million (2.6%) to $1,134.7 million in Q3 2025, primarily due to lower volumes ($40.1 million), partially offset by positive foreign currency translation impacts[152] - Gross profit increased by $12.4 million (5.1%) to $257.3 million in Q3 2025, driven by lower raw material costs. Gross profit margin improved to 22.7% from 21.0% in Q3 2024[153] - Operating profit decreased by $63.6 million (46.5%) to $73.1 million in Q3 2025, and net income decreased by $39.8 million (47.1%) to $44.7 million. Adjusted EBITDA increased by $3.7 million (2.4%) to $160.7 million[155] - Volumes in small plastics improved, but no compelling customer demand inflection is anticipated for the remainder of the year. Prices for steel, resin, old corrugated containers, other direct materials, transportation, labor, and utilities are expected to remain relatively stable[156] Segment Performance (Three Months Ended July 31, 2025 vs 2024) | Segment | Net Sales Change | Gross Profit Change | Operating Profit Change | Adjusted EBITDA Change | | :-------------------------- | :--------------- | :------------------ | :---------------------- | :--------------------- | | Customized Polymer Solutions | Up $25.1M | Up $10.1M | Down $0.8M | Down $1.1M | | Durable Metal Solutions | Down $24.3M | Up $0.7M | Up $1.4M | Up $2.1M | | Sustainable Fiber Solutions | Down $17.6M | Up $7.5M | Down $12.7M | Up $8.4M | | Integrated Solutions | Down $13.4M | Down $5.9M | Down $51.5M | Down $5.7M | - Income tax expense decreased by $21.7 million to $11.8 million in Q3 2025, primarily due to a gain from the Delta Divestiture in 2024[174] Results of Operations - Year-to-Date This section analyzes the Company's consolidated and segment-level financial performance for the nine months ended July 31, 2025, compared to the prior year, covering net sales, gross profit, SG&A expenses, operating profit, net income, and Adjusted EBITDA, along with income tax expense Consolidated Financial Performance (Nine Months Ended July 31) | (in millions) | 2025 | 2024 | | :------------ | :--- | :--- | | Net sales | $3,231.8 | $3,247.9 | | Operating profit | $162.6 | $260.5 | | Adjusted EBITDA | $412.4 | $403.8 | - Net sales decreased by $16.1 million (0.5%) to $3,231.8 million in YTD 2025, primarily due to lower volumes ($57.1 million), the Delta Divestiture ($40.8 million), and negative foreign currency impacts ($11.3 million), partially offset by recent acquisitions ($97.2 million)[179] - Gross profit increased by $40.7 million (6.1%) to $711.9 million in YTD 2025, mainly due to lower raw material costs. Gross profit margin improved to 22.0% from 20.7% in YTD 2024[180] - Operating profit decreased by $97.9 million (37.6%) to $162.6 million in YTD 2025, and net income decreased by $130.9 million (63.0%) to $76.8 million. Adjusted EBITDA increased by $8.6 million (2.1%) to $412.4 million[182] Segment Performance (Nine Months Ended July 31, 2025 vs 2024) | Segment | Net Sales Change | Gross Profit Change | Operating Profit Change | Adjusted EBITDA Change | | :-------------------------- | :--------------- | :------------------ | :---------------------- | :--------------------- | | Customized Polymer Solutions | Up $135.9M | Up $47.7M | Up $1.9M | Up $12.2M | | Durable Metal Solutions | Down $87.4M | Down $8.4M | Down $4.7M | Down $2.6M | | Sustainable Fiber Solutions | Down $23.9M | Up $16.6M | Down $31.5M | Up $14.1M | | Integrated Solutions | Down $40.7M | Down $15.2M | Down $63.6M | Down $15.1M | - Income tax expense increased by $22.0 million to $38.0 million in YTD 2025, primarily due to a one-time discrete tax benefit of $48.1 million in 2024 and a $17.3 million gain from the Delta Divestiture in 2024[196] Liquidity and Capital Resources This section discusses the Company's primary sources and uses of liquidity, the expected impact of divestiture proceeds on debt repayment, and provides a detailed analysis of cash flows from operating, investing, and financing activities, along with an overview of financial obligations and instruments - Primary liquidity sources are operating cash flows, borrowings under senior secured credit facilities, and proceeds from trade accounts receivable credit facilities. These are expected to be sufficient for anticipated needs for at least 12 months[197] - Net cash proceeds from the sales of the Containerboard Business ($1,800.0 million) and Soterra Business ($462.0 million) will be used for debt repayment[199] Cash Flow Summary (Nine Months Ended July 31, in millions) | | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Net cash provided by operating activities | $303.3 | $168.8 | | Net cash used in investing activities | $(70.2) | $(703.8) | | Net cash (used in) provided by financing activities | $(188.3) | $541.7 | | Net increase in cash and cash equivalents | $87.5 | $13.3 | | Cash and cash equivalents at end of period | $285.2 | $194.2 | - Net cash provided by operating activities increased to $303.3 million in YTD 2025 from $168.8 million in YTD 2024, primarily due to favorable changes in accounts receivable and inventories[200][201] - Net cash used in investing activities decreased significantly to $(70.2) million in YTD 2025 from $(703.8) million in YTD 2024, mainly due to the Ipackchem acquisition in 2024[200][205] - Net cash used in financing activities was $(188.3) million in YTD 2025, compared to $541.7 million provided in YTD 2024, reflecting debt repayments in 2025 versus significant borrowings for the Ipackchem acquisition in 2024[200][206] - As of July 31, 2025, the Company had $404.3 million of available borrowing capacity under its $800.0 million secured revolving credit facility[211] - The U.S. RFA was amended on August 28, 2025, to provide an accounts receivable financing facility of $200.0 million[218] - The Company received $22.5 million from a cash settlement of certain cross-currency swap contracts in Q1 2025[227] ITEM 4. CONTROLS AND PROCEDURES This section addresses the Company's internal control over financial reporting and disclosure controls and procedures, confirming their effectiveness and reporting no material changes Changes in Internal Control Over Financial Reporting This subsection reports on any changes to the company's internal control over financial reporting - There has been no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting during the most recent fiscal quarter[229] Disclosure Controls and Procedures This subsection confirms the effectiveness of the company's disclosure controls and procedures - The Company's management, with the participation of its principal executive officer and principal financial officer, concluded that its disclosure controls and procedures were effective as of the end of the reporting period[230] PART II. OTHER INFORMATION This part includes additional disclosures such as risk factors and exhibits ITEM 1A. RISK FACTORS This section states that there have been no material changes to the Company's risk factors since its last Annual Report on Form 10-K - There have been no material changes in the Company's risk factors from those disclosed in the 2024 Form 10-K[231] ITEM 6. EXHIBITS This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including amendments to agreements and certifications - Exhibits include Amendment No.1 to the Purchase and Agreement (dated July 15, 2025), Omnibus Amendment and Amendment No. 8 to the Third Amended and Restated Transfer and Administration Agreement (dated August 28, 2025), and Certifications of the Chief Executive Officer and Chief Financial Officer[232] SIGNATURES This section contains the official signatures for the Quarterly Report on Form 10-Q - The report was signed on August 28, 2025, by Lawrence A. Hilsheimer, Executive Vice President and Chief Financial Officer of Greif, Inc[234]