GREIF, INC, 10-Q filed on 2/26/2021
Quarterly Report
v3.20.4
Cover Page - shares
3 Months Ended
Jan. 31, 2021
Feb. 22, 2021
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jan. 31, 2021  
Document Transition Report false  
Entity File Number 001-00566  
Entity Registrant Name GREIF, INC  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 31-4388903  
Entity Address, Address Line One 425 Winter Road  
Entity Address, City or Town Delaware  
Entity Address, State or Province OH  
Entity Address, Postal Zip Code 43015  
City Area Code 740  
Local Phone Number 549-6000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Amendment Flag false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Entity Central Index Key 0000043920  
Current Fiscal Year End Date --10-31  
Class A Common Stock    
Document Information [Line Items]    
Title of 12(b) Security Class A Common Stock  
Trading Symbol GEF  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   26,525,238
Class B Common Stock    
Document Information [Line Items]    
Title of 12(b) Security Class B Common Stock  
Trading Symbol GEF-B  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   22,007,725
v3.20.4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($)
$ in Millions
3 Months Ended
Jan. 31, 2021
Jan. 31, 2020
Net sales $ 1,146.5 $ 1,112.4
Cost of products sold 934.3 889.8
Gross profit 212.2 222.6
Selling, general and administrative expenses 134.3 135.4
Restructuring charges 3.1 3.3
Acquisition and integration related costs 2.0 5.1
Non-cash asset impairment charges 1.3 0.1
Loss (gain) on disposal of properties, plants and equipment, net 1.6 (0.5)
Gain on disposal of businesses, net (0.1) 0.0
Operating profit 70.0 79.2
Interest expense, net 25.2 30.7
Non-cash pension settlement charges (income) 8.5 (0.1)
Other expense, net 0.0 1.3
Income before income tax expense and equity earnings of unconsolidated affiliates, net 36.3 47.3
Income tax expense 6.1 11.4
Equity earnings of unconsolidated affiliates, net of tax (0.7) (0.2)
Net income 30.9 36.1
Net income attributable to noncontrolling interests (7.5) (3.8)
Net income attributable to Greif, Inc. $ 23.4 $ 32.3
Class A Common Stock    
Basic earnings per share attributable to Greif, Inc. common shareholders:    
Basic earnings per share attributable to Greif, Inc. common shareholders (usd per share) $ 0.40 $ 0.55
Diluted earnings per share attributable to Greif, Inc. common shareholders:    
Diluted earnings per share attributable to Greif, Inc. common shareholders (usd per share) $ 0.40 $ 0.55
Weighted-average number of common shares outstanding:    
Weighted-average number of common shares outstanding, basic (shares) 26,456,071 26,260,943
Weighted-average number of common shares outstanding, diluted (shares) 26,531,403 26,414,280
Cash dividends declared per common share:    
Cash dividends declared per common share (usd per share) $ 0.44 $ 0.44
Class B Common Stock    
Basic earnings per share attributable to Greif, Inc. common shareholders:    
Basic earnings per share attributable to Greif, Inc. common shareholders (usd per share) 0.59 0.81
Diluted earnings per share attributable to Greif, Inc. common shareholders:    
Diluted earnings per share attributable to Greif, Inc. common shareholders (usd per share) $ 0.59 $ 0.81
Weighted-average number of common shares outstanding:    
Weighted-average number of common shares outstanding, basic (shares) 22,000,000.0 22,000,000.0
Weighted-average number of common shares outstanding, diluted (shares) 22,000,000.0 22,000,000.0
Cash dividends declared per common share:    
Cash dividends declared per common share (usd per share) $ 0.65 $ 0.65
v3.20.4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($)
$ in Millions
3 Months Ended
Jan. 31, 2021
Jan. 31, 2020
Statement of Comprehensive Income [Abstract]    
Net income $ 30.9 $ 36.1
Other comprehensive income (loss), net of tax:    
Foreign currency translation 27.6 (3.1)
Derivative financial instruments 1.9 0.2
Minimum pension liabilities 22.7 21.7
Other comprehensive income, net of tax 52.2 18.8
Comprehensive income 83.1 54.9
Comprehensive income attributable to noncontrolling interests 10.1 1.8
Comprehensive income attributable to Greif, Inc. $ 73.0 $ 53.1
v3.20.4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Jan. 31, 2021
Oct. 31, 2020
Current assets    
Cash and cash equivalents $ 101.4 $ 105.9
Trade accounts receivable, less allowance of $8.4 in 2021 and $9.4 in 2020 679.7 636.6
Inventories:    
Raw materials 243.5 208.4
Work-in-process 2.9 5.4
Finished goods 89.3 79.8
Assets held for sale 57.0 57.0
Other current assets 119.9 115.8
Prepaid expenses 52.6 43.0
Total current assets 1,346.3 1,302.8
Long-term assets    
Goodwill 1,530.4 1,518.4
Other intangible assets, net of amortization 700.1 715.3
Deferred tax assets 28.4 11.3
Pension asset 32.3 29.5
Operating lease assets 299.8 307.5
Other long-term assets 114.4 99.2
Total long term assets, excluding properties, plants and equipment 2,705.4 2,681.2
Properties, plants and equipment    
Timber properties, net of depletion 224.2 224.5
Land 164.8 162.6
Buildings 535.8 524.7
Machinery and equipment 1,976.1 1,930.6
Capital projects in progress 122.6 120.6
Properties, plants and equipment, gross 3,023.5 2,963.0
Accumulated depreciation (1,508.6) (1,436.1)
Properties, plants and equipment, net 1,514.9 1,526.9
Total assets 5,566.6 5,510.9
Current liabilities    
Accounts payable 468.0 450.7
Accrued payroll and employee benefits 94.6 122.3
Restructuring reserves 19.4 21.6
Current portion of long-term debt 133.6 123.1
Short-term borrowings 46.2 28.4
Other current liabilities 176.9 158.4
Current portion of operating lease liabilities 51.8 52.3
Total current liabilities 990.5 1,000.1
Long-term liabilities    
Long-term debt 2,359.6 2,335.5
Operating lease liabilities 250.5 257.7
Deferred tax liabilities 364.8 339.2
Pension liabilities 111.1 137.7
Postretirement benefit obligations 11.6 11.6
Contingent liabilities and environmental reserves 19.7 20.2
Mandatorily redeemable noncontrolling interests 8.4 8.4
Long-term income tax payable 27.8 27.8
Other long-term liabilities 140.8 152.0
Total long-term liabilities 3,294.3 3,290.1
Commitments and contingencies (Note 8)
Redeemable noncontrolling interests 19.2 20.0
Equity    
Common stock, without par value 175.4 170.2
Treasury stock, at cost (134.2) (134.4)
Retained earnings 1,542.0 1,543.9
Accumulated other comprehensive loss, net of tax:    
Total Greif, Inc. shareholders' equity 1,205.3 1,152.2
Noncontrolling interests 57.3 48.5
Total shareholders' equity 1,262.6 1,200.7
Total liabilities and shareholders' equity 5,566.6 5,510.9
Foreign Currency Translation    
Accumulated other comprehensive loss, net of tax:    
Total Greif, Inc. shareholders' equity (269.9) (294.9)
Derivative Financial Instruments    
Accumulated other comprehensive loss, net of tax:    
Total Greif, Inc. shareholders' equity (22.8) (24.7)
Minimum Pension Liability Adjustment    
Accumulated other comprehensive loss, net of tax:    
Total Greif, Inc. shareholders' equity (85.2) (107.9)
Held by special purpose entities    
Inventories:    
Other current assets 0.0 50.9
Current liabilities    
Other current liabilities $ 0.0 $ 43.3
v3.20.4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
Jan. 31, 2021
Oct. 31, 2020
Statement of Financial Position [Abstract]    
Allowance of trade accounts receivable $ 8.4 $ 9.4
v3.20.4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
3 Months Ended
Jan. 31, 2021
Jan. 31, 2020
Cash flows from operating activities:    
Net income $ 30.9 $ 36.1
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, depletion and amortization 59.3 61.3
Non-cash asset impairment charges 1.3 0.1
Non-cash pension settlement charges (income) 8.5 (0.1)
Loss (gain) on disposals of properties, plants and equipment, net 1.6 (0.5)
Gain on disposals of businesses, net (0.1) 0.0
Deferred income tax benefit (1.9) (7.0)
Non-cash lease expense 14.4 14.9
Other, net 1.9 0.2
Increase (decrease) in cash from changes in certain assets and liabilities:    
Trade accounts receivable (30.8) 21.5
Inventories (35.5) (17.0)
Accounts payable 13.7 (32.2)
Restructuring reserves (2.4) (1.5)
Operating leases (9.9) 0.0
Pension and post-retirement benefit liabilities (6.1) (6.1)
Other, net (33.4) (50.2)
Net cash provided by operating activities 11.5 19.5
Cash flows from investing activities:    
Purchases of properties, plants and equipment (27.4) (37.5)
Purchases of and investments in timber properties (1.0) (1.6)
Collections of receivables held in special purpose entities 50.9 0.0
Payments for issuance of loans receivable (15.0) 0.0
Other (3.3) 1.5
Net cash provided by (used in) investing activities 4.2 (37.6)
Cash flows from financing activities:    
Proceeds from issuance of long-term debt 384.5 429.0
Payments on long-term debt (353.5) (311.4)
Proceeds (payments) on short-term borrowings, net 16.8 (3.7)
Proceeds from trade accounts receivable credit facility 11.2 2.5
Payments on trade accounts receivable credit facility (18.3) (57.9)
Payments for liabilities held in special purpose entities (43.3) 0.0
Dividends paid to Greif, Inc. shareholders (25.9) (25.9)
Dividends paid to noncontrolling interests (1.5) (0.8)
Net cash provided by (used in) financing activities (30.0) 31.8
Effects of exchange rates on cash 9.8 (0.2)
Net increase (decrease) in cash and cash equivalents (4.5) 13.5
Cash and cash equivalents at beginning of period 105.9 77.3
Cash and cash equivalents at end of period $ 101.4 $ 90.8
v3.20.4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) - USD ($)
shares in Thousands, $ in Millions
Total
Executive
Directors
Capital Stock
Capital Stock
Executive
Capital Stock
Directors
Treasury Stock
Treasury Stock
Executive
Treasury Stock
Directors
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Greif, Inc. Equity
Greif, Inc. Equity
Executive
Greif, Inc. Equity
Directors
Non controlling interests
Beginning balance (shares) at Oct. 31, 2019       48,266     28,576                
Beginning balance at Oct. 31, 2019 $ 1,191.1     $ 162.6     $ (134.8)     $ 1,539.0 $ (433.7) $ 1,133.1     $ 58.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                              
Net income 36.1                 32.3   32.3     3.8
Other comprehensive income:                              
Foreign currency translation (3.1)                   (1.1) (1.1)     (2.0)
Derivative financial instruments, net of income tax expense 0.2                   0.2 0.2      
Minimum pension liability adjustment, net of income tax expense 21.7                   21.7 21.7      
Comprehensive income 54.9                     53.1      
Current period mark to redemption value of redeemable noncontrolling interest 3.3                 3.3   3.3      
Net income allocated to redeemable noncontrolling interests (0.1)                           (0.1)
Dividends paid to Greif, Inc. shareholders (25.9)                 (25.9)   (25.9)      
Dividends paid to noncontrolling interests and other (0.8)                           (0.8)
Restricted stock (shares)           3     (3)            
Restricted stock     $ 0.2     $ 0.1     $ 0.1         $ 0.2  
Ending balance (shares) at Jan. 31, 2020       48,269     28,573                
Ending balance at Jan. 31, 2020 1,222.7     $ 162.7     $ (134.7)     1,548.7 (412.9) 1,163.8     58.9
Beginning balance (shares) at Oct. 31, 2020       48,450     28,392                
Beginning balance at Oct. 31, 2020 1,200.7     $ 170.2     $ (134.4)     1,543.9 (427.5) 1,152.2     48.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]                              
Net income 30.9                 23.4   23.4     7.5
Other comprehensive income:                              
Foreign currency translation 27.6                   25.0 25.0     2.6
Derivative financial instruments, net of income tax expense 1.9                   1.9 1.9      
Minimum pension liability adjustment, net of income tax expense 22.7                   22.7 22.7      
Comprehensive income 83.1                     73.0      
Current period mark to redemption value of redeemable noncontrolling interest 0.6                 0.6   0.6      
Net income allocated to redeemable noncontrolling interests (0.3)                           (0.3)
Dividends paid to Greif, Inc. shareholders (25.9)                 (25.9)   (25.9)      
Dividends paid to noncontrolling interests and other (1.0)                           (1.0)
Long-term incentive shares issued (shares)       80     (80)                
Long-term Incentive shares issued 4.1     $ 3.9     $ 0.2         4.1      
Share based compensation 1.2     $ 1.2               1.2      
Restricted stock (shares)         3     (3)              
Restricted stock   $ 0.1     $ 0.1               $ 0.1    
Ending balance (shares) at Jan. 31, 2021       48,533     28,309                
Ending balance at Jan. 31, 2021 $ 1,262.6     $ 175.4     $ (134.2)     $ 1,542.0 $ (377.9) $ 1,205.3     $ 57.3
v3.20.4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
3 Months Ended
Jan. 31, 2021
Jan. 31, 2020
Derivative gain (loss), tax $ (0.6)  
Defined benefit plan, tax $ (7.4) $ (7.5)
Class A Common Stock    
Dividend paid (usd per share) $ 0.44 $ 0.44
Class B Common Stock    
Dividend paid (usd per share) $ 0.65 $ 0.65
v3.20.4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Jan. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The interim condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the interim condensed consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates.
The fiscal year of Greif, Inc. and its subsidiaries (the “Company”) begins on November 1 and ends on October 31 of the following year. Any references to years or to any quarter of those years, relates to the fiscal year or quarter, as the case may be, ended in that year, unless otherwise stated.
The information filed herein reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim condensed consolidated balance sheets as of January 31, 2021 and October 31, 2020, the interim condensed consolidated statements of income and comprehensive income for the three months ended January 31, 2021 and 2020 and the interim condensed consolidated statements of cash flows for the three months ended January 31, 2021 and 2020 of the Company. The interim condensed consolidated financial statements include the accounts of Greif, Inc., all wholly-owned and consolidated subsidiaries and investments in limited liability companies, partnerships and joint ventures in which it has controlling influence or is the primary beneficiary. Non-majority owned entities include investments in limited liability companies, partnerships and joint ventures in which the Company does not have controlling influence and are accounted for using either the equity or cost method, as appropriate.
The unaudited interim condensed consolidated financial statements included in the Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended October 31, 2020 (the “2020 Form 10-K”).
Effective the first quarter 2021, the Company adjusted its reportable segments. The presentation of prior periods throughout Part I Item 1 of this Form 10-Q has been modified to reflect the new segment reporting structure. See Note 12 to the Interim Condensed Consolidated Financial Statements for additional information.
COVID-19
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in such financial statements. The estimates and assumptions used in the preparation of the financial statements contained in this Form 10-Q do not reflect material changes to the estimates and assumptions disclosed in the 2020 Form 10-K. Nevertheless, the Company's actual results and outcomes during the three months ended January 31, 2021 have been impacted by the COVID-19 pandemic, which has caused market disruption and volatility. Because the scope, duration and magnitude of the effects of the COVID-19 pandemic continue to evolve, the Company cannot, at this time, predict the impact the pandemic will have on its future consolidated financial position, cash flows or results of operations; however, the impact could be material. The Company's future financial results and operations depend in part on the duration and severity of the pandemic and what actions are taken to mitigate the outbreak.
Newly Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, “Financial Instruments – Credit Losses.” This ASU sets forth a current expected credit loss model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU on November 1, 2020. The adoption of this guidance did not have a material impact on financial position, results of operations, comprehensive income, cash flows or disclosures.
Recently Issued Accounting Standards
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", which is intended to simplify accounting for income taxes. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. The effective date for the Company to adopt this ASU is November 1, 2021. The Company is in the process of determining the potential impact of adopting this guidance on its financial position, results of operations, comprehensive income, cash flow and disclosures.
v3.20.4
RESTRUCTURING CHARGES
3 Months Ended
Jan. 31, 2021
Restructuring and Related Activities [Abstract]  
RESTRUCTURING CHARGES RESTRUCTURING CHARGES
The following is a reconciliation of the beginning and ending restructuring reserve balances for the three months ended January 31, 2021:
(in millions)Employee
Separation
Costs
Other
Costs
Total
Balance at October 31, 2020$17.9 $3.7 $21.6 
Costs incurred and charged to expense1.5 1.6 3.1 
Costs paid or otherwise settled(3.5)(1.8)(5.3)
Balance at January 31, 2021$15.9 $3.5 $19.4 

The focus for restructuring activities in 2021 is to optimize and integrate operations in the Paper Packaging & Services segment and to rationalize operations and close underperforming assets in the Global Industrial Packaging segment.
During the three months ended January 31, 2021, the Company recorded restructuring charges of $3.1 million, as compared to $3.3 million of restructuring charges recorded during the three months ended January 31, 2020. The restructuring activity for the three months ended January 31, 2021 consisted of $1.5 million in employee separation costs and $1.6 million in other restructuring costs, primarily consisting of professional fees and other fees associated with restructuring activities.
The following is a reconciliation of the total amounts expected to be incurred from open restructuring plans or plans that are being formulated and have not been announced as of the filing date of this Form 10-Q. Remaining amounts expected to be incurred were $22.5 million as of January 31, 2021:
(in millions)Total Amounts
Expected to
be Incurred
Amounts Incurred During the three months ended January 31, 2021Amounts
Remaining
to be Incurred
Global Industrial Packaging
Employee separation costs$14.8 $1.5 $13.3 
Other restructuring costs5.7 1.3 4.4 
20.5 2.8 17.7 
Paper Packaging & Services
Other restructuring costs5.1 0.3 4.8 
5.1 0.3 4.8 
$25.6 $3.1 $22.5 
v3.20.4
LONG-TERM DEBT
3 Months Ended
Jan. 31, 2021
Debt Disclosure [Abstract]  
LONG-TERM DEBT LONG-TERM DEBT
Long-term debt is summarized as follows:
(in millions)January 31, 2021October 31, 2020
2019 Credit Agreement - Term Loans$1,365.8 $1,429.8 
Senior Notes due 2027495.3 495.1 
Senior Notes due 2021242.1 234.8 
Accounts receivable credit facilities305.4 310.0 
2019 Credit Agreement - Revolving Credit Facility96.7 — 
2,505.3 2,469.7 
Less: current portion133.6 123.1 
Less: deferred financing costs12.1 11.1 
Long-term debt, net$2,359.6 $2,335.5 

2019 Credit Agreement
On February 11, 2019, the Company and certain of its subsidiaries entered into an amended and restated senior secured credit agreement (the “2019 Credit Agreement”) with a syndicate of financial institutions. The Company's obligations under the 2019 Credit Agreement are guaranteed by certain of its U.S. and non-U.S. subsidiaries.
The 2019 Credit Agreement provides for (a) an $800.0 million secured revolving credit facility, consisting of a $600.0 million multicurrency facility and a $200.0 million U.S. dollar facility, maturing on February 11, 2024, (b) a $1,275.0 million secured term loan A-1 facility with quarterly principal installments commencing on April 30, 2019 and continuing through maturity on January 31, 2024, and (c) a $400.0 million secured term loan A-2 facility with quarterly principal installments commencing on April 30, 2019 and continuing through maturity on January 31, 2026. In addition, the Company has an option to add an aggregate of $700.0 million to the secured revolving credit facility under the 2019 Credit Agreement with the agreement of the lenders. The revolving credit facility is available to fund ongoing working capital and capital expenditure needs, for general corporate purposes, and to finance acquisitions.
On November 13, 2020 the Company and certain of its U.S. subsidiaries entered into an incremental term loan agreement (the "Incremental Term A-3 Loan Agreement") with a syndicate of farm credit institutions. The Incremental Term A-3 Loan Facility provides for a loan commitment in the aggregate principal amount of $225.0 million that must be funded in a single draw on a business day occurring on or before July 15, 2021 (the "Incremental Term A-3 Loan"). The Incremental Term A-3 Loan matures on July 15, 2026, with quarterly installments of principal payable on the last day of each fiscal quarter commencing with the first such date to occur after the funding date. The Incremental Term A-3 Loan has, for all material purposes, the identical terms and provisions as the term A-1 and the term A-2 loans under the 2019 Credit Agreement, discussed above. The Company's obligations with respect to the Incremental Term A-3 Loan will constitute obligations under the 2019 Credit Agreement and will be secured and guaranteed with the other obligations as provided in the under the 2019 Credit Facility on a pari passu basis. The Company intends to draw upon the Incremental Term A-3 Loan prior to July 15, 2021, and use the loan proceeds to pay all of the outstanding principal of and interest on the Senior Notes due 2021, discussed below.
As of January 31, 2021, $1,462.5 million was outstanding under the 2019 Credit Agreement. The current portion of such outstanding amount was $133.6 million, and the long-term portion was $1,328.9 million. The weighted average interest rate for borrowings under the 2019 Credit Agreement was 1.95% for the three months ended January 31, 2021. The actual interest rate for borrowings under the 2019 Credit Agreement was 1.90% as of January 31, 2021. The deferred financing costs associated with the term loan portion of the 2019 Credit Agreement totaled $8.0 million as of January 31, 2021 and are recorded as a direct deduction from the balance sheet line Long-Term Debt. The deferred financing costs associated with the revolver portion of the 2019 Credit Agreement totaled $5.6 million as of January 31, 2021 and are recorded within Other Long-Term Assets.
Senior Notes due 2027
On February 11, 2019, the Company issued $500.0 million of 6.50% Senior Notes due March 1, 2027 (the "Senior Notes due 2027"). Interest on the Senior Notes due 2027 is payable semi-annually commencing on September 1, 2019. The Company's obligations under the Senior Notes due 2027 are guaranteed by its U.S. subsidiaries that guarantee the 2019 Credit Agreement.
The deferred financing cost associated with the Senior Notes due 2027 totaled $2.2 million as of January 31, 2021 and are recorded as a direct deduction from the balance sheet line Long-Term Debt.
Senior Notes due 2021
On July 15, 2011, Greif, Inc.’s wholly-owned subsidiary, Greif Nevada Holdings, Inc., S.C.S., issued €200.0 million of 7.375% Senior Notes due July 15, 2021 (the "Senior Notes due 2021"). The Senior Notes due 2021 are guaranteed on a senior basis by Greif, Inc. Interest on the Senior Notes due 2021 is payable semi-annually. During the first quarter of 2021, the Company entered into the Incremental Term A-3 Loan Agreement, as described above, with the intent to utilize the proceeds from the Incremental Term A-3 Loan to pay down the Company's Senior Notes due 2021 at maturity.
United States Trade Accounts Receivable Credit Facility
On September 24, 2020, the Company amended and restated the existing receivable financing facility (the "U.S. Receivables Facility"), which currently matures on September 24, 2021. Greif Receivables Funding LLC, Greif Packaging LLC, for itself and as servicer, and certain other U.S. subsidiaries of the Company entered into a Fourth Amended and Restated Transfer and Administration Agreement, dated as of September 24, 2020 (the "Fourth Amended TAA"), with Bank of America, N.A., as the agent, managing agent, administrator and committed investor, and various investor groups, managing agents, and administrators, from time to time parties thereto. The Fourth Amended TAA provides a $250.0 million U.S. Receivables Facility that is secured by certain U.S. accounts receivable. The $224.1 million outstanding balance under the U.S. Receivables Facility as of January 31, 2021 is reported in "Long-term debt" on the interim condensed consolidated balance sheets because the Company intends to refinance this obligation on a long-term basis and has the intent and ability to consummate a long-term refinancing.
International Trade Accounts Receivable Credit Facility
On April 17, 2020, Cooperage Receivables Finance B.V. and Greif Coordination Center BVBA, an indirect wholly owned subsidiary of Greif, Inc., amended and restated the Nieuw Amsterdam Receivables Financing Agreement (the "European RFA") with affiliates of a major international bank. The amended and restated European RFA will mature April 17, 2021. The European RFA provides an accounts receivable financing facility of up to €100.0 million ($121.1 million as of January 31, 2021) secured by certain European accounts receivable. The $81.3 million outstanding on the European RFA as of January 31, 2021 is reported as "Long-term debt" on the interim condensed consolidated balance sheets because the Company intends to refinance these obligations on a long-term basis and has the intent and ability to consummate a long-term refinancing by exercising the renewal option in the respective agreement or entering into new financing arrangements.
v3.20.4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
3 Months Ended
Jan. 31, 2021
Fair Value Disclosures [Abstract]  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
The following table presents the fair value for those assets and (liabilities) measured on a recurring basis as of January 31, 2021 and October 31, 2020:
 January 31, 2021 
 Fair Value Measurement 
(in millions)Level 1Level 2Level 3TotalBalance Sheet Location
Interest rate derivatives$— $1.4 $— $1.4 Other current assets
Interest rate derivatives— (32.6)— (32.6)Other current liabilities and other long-term liabilities
Foreign exchange hedges— 1.5 — 1.5 Other current assets
Foreign exchange hedges— (2.1)— (2.1)Other current liabilities
Insurance annuity— — 22.0 22.0 Other long-term assets
Cross currency swap— 4.6 — 4.6 Other current assets and other long-term assets
Total$— $(27.2)$22.0 $(5.2)
 October 31, 2020 
 Fair Value Measurement 
(in millions)Level 1Level 2Level 3TotalBalance Sheet Location
Interest rate derivatives$— $(37.9)$— $(37.9)Other long-term liabilities and other current liabilities
Foreign exchange hedges— 1.5 — 1.5 Other current assets
Foreign exchange hedges— (1.6)— (1.6)Other current liabilities
Insurance annuity— — 21.4 21.4 Other long-term assets
Cross currency swap— 8.9 — 8.9 Other current assets and other long-term assets
Total$— $(29.1)$21.4 $(7.7)

The carrying amounts of cash and cash equivalents, trade accounts receivable, accounts payable, current liabilities and short-term borrowings as of January 31, 2021 and October 31, 2020 approximate their fair values because of the short-term nature of these items and are not included in this table.
Interest Rate Derivatives
The Company has various borrowing facilities which charge interest based on the one-month U.S. dollar LIBOR rate plus a spread.
In 2020, the Company entered into four forward starting interest rate swaps with a total notional amount of $200.0 million effective July 15, 2021, maturing on July 15, 2029. The Company receives variable rate interest payments based upon one-month U.S. dollar LIBOR, and in return the Company is obligated to pay interest at a weighted-average interest rate of 0.90% plus a spread. This effectively converted the borrowing rate on an amount of debt equal to the outstanding notional amount of the interest rate swap from a variable rate to a fixed rate.
In 2019, the Company entered into six interest rate swaps with a total notional amount of $1,300.0 million that amortize to $200.0 million over a five-year term, maturing on March 11, 2024. The outstanding notional amount as of January 31, 2021 is $600.0 million. The Company receives variable rate interest payments based upon one-month U.S. dollar LIBOR, and in return the Company is obligated to pay interest at a weighted-average interest rate of 2.49% plus a spread. This effectively converted the borrowing rate on an amount of debt equal to the outstanding notional amount of the interest rate swap from a variable rate to a fixed rate.
In 2017, the Company entered into an interest rate swap with a notional amount of $300.0 million, maturing on February 1, 2022. The Company receives variable rate interest payments based upon one-month U.S. dollar LIBOR, and in return the Company is obligated to pay interest at a fixed rate of 1.19% plus a spread. This effectively converted the borrowing rate on an amount of debt equal to the outstanding notional amount of the interest rate swap from a variable rate to a fixed rate.
These derivatives are designated as cash flow hedges for accounting purposes. Accordingly, the gain or loss on these derivative instruments are reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transactions and in the same period during which the hedged transactions affect earnings. See Note 11 to the Interim Condensed Consolidated Financial Statements for additional information. The assumptions used in measuring fair value of these interest rate derivatives are considered level 2 inputs, which are based upon observable market rates, including LIBOR and interest paid based upon a designated fixed rate over the life of the swap agreements.
Losses reclassified to earnings under these contracts were $4.4 million and $1.5 million for the three months ended January 31, 2021, and 2020, respectively. A derivative loss of $17.8 million, based upon interest rates at January 31, 2021, is expected to be reclassified from accumulated other comprehensive income (loss) to earnings in the next twelve months.
Foreign Exchange Hedges
The Company conducts business in various international currencies and is subject to risks associated with changing foreign exchange rates. The Company’s objective is to reduce volatility associated with foreign exchange rate changes. Accordingly, the Company enters into various contracts that change in value as foreign exchange rates change to protect the value of certain existing foreign currency assets and liabilities, commitments and anticipated foreign currency cash flows. As of January 31, 2021, and October 31, 2020, the Company had outstanding foreign currency forward contracts in the notional amount of $294.9 million and $268.6 million, respectively. Adjustments to fair value are recognized in earnings, offsetting the impact of the
hedged profits. The assumptions used in measuring fair value of foreign exchange hedges are considered level 2 inputs, which are based on observable market pricing for similar instruments, principally foreign exchange futures contracts.
Realized gains (losses) recorded in other expense, net under fair value contracts were $2.0 million and $(0.8) million for the three months ended January 31, 2021, and 2020, respectively. The Company recognized in other expense, net an unrealized net gain (loss) of $(0.6) million and $0.7 million during the three months ended January 31, 2021 and 2020, respectively.
Cross Currency Swap
The Company has operations and investments in various international locations and is subject to risks associated with changing foreign exchange rates. On March 6, 2018, the Company entered into a cross currency interest rate swap agreement that synthetically swaps $100.0 million of fixed rate debt to Euro denominated fixed rate debt at a rate of 2.35%. The agreement is designated as a net investment hedge for accounting purposes and will mature on March 6, 2023. Accordingly, the gain or loss on this derivative instrument is included in the foreign currency translation component of other comprehensive income until the net investment is sold, diluted or liquidated. Interest payments received for the cross currency swap are excluded from the net investment hedge effectiveness assessment and are recorded in interest expense, net on the interim condensed consolidated statements of income. For the three months ended January 31, 2021 and 2020, gains recorded in interest expense, net under the cross currency swap agreement were $0.6 million and $0.6 million, respectively. See Note 11 to the Interim Condensed Consolidated Financial Statements for additional information. The assumptions used in measuring fair value of the cross currency swap are considered level 2 inputs, which are based upon the Euro to United States Dollar exchange rate market.
Other Financial Instruments
The fair values of the Company’s 2019 Credit Agreement and the U.S. Receivables Facility and European RFA (the latter two facilities, collectively, "Accounts Receivable Credit Facilities") do not materially differ from carrying value as the Company’s cost of borrowing is variable and approximates current borrowing rates. The fair values of the Company’s long-term obligations are estimated based on either the quoted market prices for the same or similar issues or the current interest rates offered for the debt of the same remaining maturities, which are considered level 2 inputs in accordance with ASC Topic 820, "Fair Value Measurements and Disclosures."
The following table presents the estimated fair values of the Company’s Senior Notes and Assets held by special purpose entities:
(in millions)January 31,
2021
October 31,
2020
Senior Notes due 2021 estimated fair value$249.8 $242.0 
Senior Notes due 2027 estimated fair value533.8 524.4 
Assets held by special purpose entities estimated fair value— 50.9 
v3.20.4
STOCK-BASED COMPENSATION
3 Months Ended
Jan. 31, 2021
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
Long-Term Incentive Plan
The Company's 2020 Long-Term Incentive Plan (the "2020 LTIP") is intended to focus management on the key measures that drive superior performance over the longer term. The 2020 LTIP provides key employees with incentive compensation based upon consecutive and overlapping three-year performance periods that commence at the start of every year. For each three-year performance period, the performance goals are based on performance criteria as determined by the Special Subcommittee of the Compensation Committee of the Company’s Board of Directors (the “Special Subcommittee”). For the three-year performance period commencing November 1, 2020, participants were granted restricted stock units (“RSUs”) or performance stock units (“PSUs”) or a combination of both.
The Company grants RSUs based on a three-year vesting period on the basis of service only. The RSUs are an equity-classified plan measured at fair value on the grant date recognized ratably over the service period. Dividend-equivalent rights may be granted in connection with an RSU award and are recognized in conjunction with the Company's dividend issuance and settled upon vesting of the award.
The Company granted 139,360 RSUs after plan approval on December 17, 2020, for the service period commencing on November 1, 2020 and ending October 31, 2023. The weighted average fair value of the RSUs granted on that date was $48.50.
Under the 2020 LTIP, the Company grants PSUs for a three-year performance period based upon service, performance criteria and market conditions. The performance criteria are based on targeted levels of earnings before interest, taxes, depreciation, depletion and amortization and total shareholder return as determined by the Special Subcommittee. The PSUs are a liability-classified plan wherein the fair value of the PSUs awarded is determined at each reporting period using a Monte Carlo simulation. A Monte Carlo simulation uses assumptions including the risk-free interest rate, expected volatility of the Company’s stock price and expected life of the awards to determine a fair value of the market condition throughout the vesting period.
The Company granted 253,102 PSUs after plan approval on December 17, 2020, for the performance period commencing on November 1, 2020 and ending October 31, 2023. If earned, the PSUs are to be awarded in shares of Class A Common Stock. The weighted average fair value of the PSUs granted on that date was $47.26. The weighted average fair value of the PSUs at January 31, 2021 was $46.80.
v3.20.4
INCOME TAXES
3 Months Ended
Jan. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXESIncome tax expense for the quarter was computed in accordance with Accounting Standards Codification ("ASC") 740-270 "Income Taxes - Interim Reporting." Under this method, losses from jurisdictions for which a valuation allowance has been provided have not been included in the amount to which the ASC 740-270 rate was applied. Income tax expense of the Company may fluctuate due to changes in estimated losses and income from jurisdictions for which a valuation allowance has been provided, the timing of recognition of the related tax expense under ASC 740-270, and the impact of discrete items in the respective quarter.For the three months ended January 31, 2021 and January 31, 2020, income tax expense was $6.1 million and $11.4 million, respectively. The decrease in income tax expense for the three months ended January 31, 2021 was primarily caused by the reduction in pre-tax book earnings, greater tax credit utilization and a favorable one-time discrete item of $1.1 million for the settlement of the U.S. Federal Income tax audit in the period. Additionally, changes in judgement and lapses of statue of limitations for uncertain tax positions caused an increase to tax compared to first quarter of 2020.
v3.20.4
POST RETIREMENT BENEFIT PLANS
3 Months Ended
Jan. 31, 2021
Postemployment Benefits [Abstract]  
POST RETIREMENT BENEFIT PLANS POST RETIREMENT BENEFIT PLANS
During the three months ended January 31, 2021, an annuity contract for approximately $100.0 million was purchased with United States defined benefit plan assets and the pension obligation for certain retirees in the United States under that plan was irrevocably transferred from that plan to the annuity contract. Additionally, lump sum payments totaling $1.5 million were made from the defined benefit plan assets to certain participants who agreed to such payments, representing the current fair value of the participant’s respective pension benefit. The settlement items described above resulted in a decrease in the fair value of both the plan assets and the projected benefit obligation of $101.5 million and a non-cash pension settlement charge of $8.5 million of unrecognized net actuarial loss included in accumulated other comprehensive loss.
As a result of the settlement described above, the Company remeasured the United States defined benefit pension plan as of November 30, 2020. The result of this remeasurement was a net increase of $20.8 million in the funded status of the plan. Plan assets increased $46.7 million due to higher than expected returns, which was partially offset by a $25.9 million increase in the projected benefit obligation due to a decrease in the discount rate from 3.01% as of October 31, 2020 to 2.76% as of November 30, 2020.
The components of net periodic pension cost include the following:
 Three Months Ended
January 31,
(in millions)20212020
Service cost$3.1 $3.2 
Interest cost4.5 6.6 
Expected return on plan assets(7.9)(10.3)
Amortization of prior service cost— 3.5 
Recognized net actuarial loss3.8 — 
Net periodic pension cost$3.5 $3.0 

As previously disclosed in the Company's Annual Report on Form 10-K for the year ended October 31, 2020, the Company expects to make employer contributions of $28.7 million, including benefits paid directly by the Company, during 2021.
The components of net periodic pension cost and net periodic post-retirement benefit, other than the service cost components, are included in the line item "Other expense, net" in the interim condensed consolidated statements of income.
v3.20.4
CONTINGENT LIABILITIES AND ENVIRONMENTAL RESERVES
3 Months Ended
Jan. 31, 2021
Environmental Remediation Obligations [Abstract]  
CONTINGENT LIABILITIES AND ENVIRONMENTAL RESERVES CONTINGENT LIABILITIES AND ENVIRONMENTAL RESERVES
Litigation-related Liabilities
The Company may become involved from time-to-time in litigation and regulatory matters incidental to its business, including governmental investigations, enforcement actions, personal injury claims, product liability, employment health and safety matters, commercial disputes, intellectual property matters, disputes regarding environmental clean-up costs, litigation in connection with acquisitions and divestitures, and other matters arising out of the normal conduct of its business. The Company intends to vigorously defend itself in such litigation. The Company does not believe that the outcome of any pending litigation will have a material adverse effect on its interim condensed consolidated financial statements.
The Company may accrue for contingencies related to litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. The Company regularly reviews contingencies to determine whether its accruals are adequate. The amount of ultimate loss may differ from these estimates.
Since 2017, two reconditioning facilities in the Milwaukee, Wisconsin area that are owned by Container Life Cycle Management LLC ("CLCM"), the Company’s U.S. reconditioning joint venture company, have been subject to investigations conducted by federal, state and local governmental agencies concerning, among other matters, potential violations of environmental laws and regulations. As a result of these investigations, the United States Environmental Protection Agency (“U.S. EPA”) and the Wisconsin Department of Natural Resources (“WDNR”) have issued notices of violations to the Company and CLCM regarding violations of certain federal and state environmental laws and regulations. The remedies being sought in these proceedings include compliance with the applicable environmental laws and regulations as being interpreted by the U.S. EPA and WDNR and monetary sanctions. The Company has cooperated with the governmental agencies in these investigations and proceedings. As of February 26, 2021, no material citations have been issued or material fines assessed with respect to any violation of environmental laws and regulations. Since these proceedings remain in their investigative stage, the Company is unable to predict the outcome of these proceedings or estimate a range of reasonable possible monetary sanctions or costs associated with any remedial actions that may be required or requested by the U.S. EPA or WDNR.
In addition, on November 8, 2017, the Company, CLCM and other parties were named as defendants in a punitive class action lawsuit filed in Wisconsin state court concerning one of CLCM’s Milwaukee reconditioning facilities. The plaintiffs are alleging that odors from this facility have invaded their property and are interfering with the use and enjoyment of their property and causing damage to the value of their property. Plaintiffs are seeking compensatory and punitive damages, along with their legal fees. The Company and CLCM are vigorously defending themselves in this lawsuit. The Company is unable to predict the outcome of this lawsuit or estimate a range of reasonably possible losses.
Environmental Reserves
As of January 31, 2021, and October 31, 2020, the Company's environmental reserves were $19.7 million and $20.2 million, respectively. These reserves are principally based on environmental studies and cost estimates provided by third parties, but also take into account management estimates. The estimated liabilities are reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of relevant costs. For sites that involve formal actions subject to joint and several liabilities, these actions have formal agreements in place to apportion the liability.
As of January 31, 2021 and October 31, 2020, the Company has accrued $11.1 million for the Diamond Alkali Superfund Site in New Jersey. It is possible that there could be resolution of uncertainties in the future that would require the Company to record charges that could be material to future earnings.
Aside from the Diamond Alkali Superfund Site, other environmental reserves of the Company as of January 31, 2021 and October 31, 2020 included $8.6 million and $9.1 million, respectively, for its various facilities around the world.
The Company’s exposure to adverse developments with respect to any individual site is not expected to be material. Although environmental remediation could have a material effect on results of operations if a series of adverse developments occur in a particular quarter or year, the Company believes that the chance of a series of adverse developments occurring in the same
quarter or year is remote. Future information and developments will require the Company to continually reassess the expected impact of these environmental matters.
v3.20.4
EARNINGS PER SHARE
3 Months Ended
Jan. 31, 2021
Earnings Per Share [Abstract]  
EARNINGS PER SHARE EARNINGS PER SHARE
The Company has two classes of common stock and, as such, applies the “two-class method” of computing earnings per share (“EPS”) as prescribed in ASC 260, “Earnings Per Share.” In accordance with this guidance, earnings are allocated in the same fashion as dividends would be distributed. Under the Company’s certificate of incorporation, any distribution of dividends in any year must be made in proportion of one cent a share for Class A Common Stock to one and one-half cents a share for Class B Common Stock, which results in a 40% to 60% split to Class A and B shareholders, respectively. In accordance with this, earnings are allocated first to Class A and Class B Common Stock to the extent that dividends are actually paid and the remainder is allocated assuming all of the earnings for the period have been distributed in the form of dividends.
The Company calculates EPS as follows:
Basic Class A EPS=40% * Average Class A Shares Outstanding*Undistributed Net Income+Class A Dividends Per Share
40% * Average Class A Shares Outstanding + 60% * Average Class B Shares OutstandingAverage Class A Shares Outstanding
Diluted Class A EPS=40% * Average Class A Shares Outstanding*Undistributed Net Income+Class A Dividends Per Share
40% * Average Class A Shares Outstanding + 60% * Average Class B Shares OutstandingAverage Diluted Class A Shares Outstanding
Basic Class B EPS=60% * Average Class B Shares Outstanding*Undistributed Net Income+Class B Dividends Per Share
40% * Average Class A Shares Outstanding + 60% * Average Class B Shares OutstandingAverage Class B Shares Outstanding
         *Diluted Class B EPS calculation is identical to Basic Class B calculation
The following table provides EPS information for each period, respectively:
 Three Months Ended
January 31,
(in millions)20212020
Numerator for basic and diluted EPS
Net income attributable to Greif, Inc.$23.4 $32.3 
Cash dividends(25.9)(25.9)
Undistributed earnings attributable to Greif, Inc.$(2.5)$6.4 

The Class A Common Stock has no voting rights unless four quarterly cumulative dividends upon the Class A Common Stock are in arrears. The Class B Common Stock has full voting rights. There is no cumulative voting for the election of directors.
Common Stock Repurchases
The Board of Directors has authorized the Company to repurchase shares of the Company's Class A Common Stock or Class B Common Stock or any combination of the foregoing. As of January 31, 2021, the remaining amount of shares that may be repurchased under this authorization was 4,703,487. There were no shares repurchased during the first quarter of 2021 or fiscal year 2020.
The following table summarizes the Company’s Class A and Class B common and treasury shares as of the specified dates:
Authorized
Shares
Issued
Shares
Outstanding
Shares
Treasury
Shares
January 31, 2021
Class A Common Stock128,000,000 42,281,920 26,525,238 15,756,682 
Class B Common Stock69,120,000 34,560,000 22,007,725 12,552,275 
October 31, 2020
Class A Common Stock128,000,000 42,281,920 26,441,986 15,839,934 
Class B Common Stock69,120,000 34,560,000 22,007,725 12,552,275 

The following is a reconciliation of the shares used to calculate basic and diluted earnings per share:
 Three Months Ended
January 31,
 20212020
Class A Common Stock:
Basic shares26,456,071 26,260,943 
Assumed conversion of restricted shares75,332 153,337 
Diluted shares26,531,403 26,414,280 
Class B Common Stock:
Basic and diluted shares22,007,725 22,007,725 
v3.20.4
LEASES
3 Months Ended
Jan. 31, 2021
Leases [Abstract]  
LEASES LEASES
The Company leases certain buildings, warehouses, land, transportation equipment, operating equipment, and office equipment with remaining lease terms from less than one year up to 21 years. The Company reviews all options to extend, terminate, or purchase a right of use asset at the time of lease inception and accounts for options deemed reasonably certain.
The Company combines lease and non-lease components for all leases, except real estate, for which these components are presented separately. Leases with an initial term of twelve months or less are not capitalized and are recognized on a straight-line basis over the lease term. The implicit rate is not readily determinable for substantially all of the Company's leases, and therefore the initial present value of lease payments is calculated utilizing an estimated incremental borrowing rate determined at the portfolio level based on market and Company specific information.
Certain of the Company’s leases include variable costs. As the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, changes in these variable expenses are not capitalized and are expensed as incurred throughout the lease term.
As of January 31, 2021, the Company does not have material exposure to finance leases and has not entered into any significant leases which have not yet commenced.
The following table presents the lease expense components for the three months ended January 31, 2021 and 2020:
Three Months Ended
January 31,
(in millions)20212020
Operating lease cost$17.3 $17.2 
Other lease cost*
5.7 6.4 
Total lease cost$23.0 $23.6 
*Amount includes variable, short-term, and finance lease costs.
Future maturity for the Company's lease liabilities, during the next five years, and in the aggregate for the years thereafter, are as follows:
(in millions)January 31,
2021
2021$66.8 
202258.2 
202350.0 
202441.1 
202537.0 
Thereafter 139.9 
Total lease payments$393.0 
Less: Interest(90.7)
Lease liabilities$302.3 

The following table presents other required lease related information for the three months ended January 31, 2021:
Three Months Ended
January 31,
(in millions)20212020
Operating cash flows used for operating liabilities$17.4 $17.1 
Leased assets obtained in exchange for new operating lease liabilities1.9 28.7 
Weighted-average remaining lease term (years)10.910.4
Weighted-average discount rate3.68 %3.39 %
v3.20.4
COMPREHENSIVE INCOME (LOSS)
3 Months Ended
Jan. 31, 2021
Equity [Abstract]  
COMPREHENSIVE INCOME (LOSS) COMPREHENSIVE INCOME (LOSS)
The following table provides the rollforward of accumulated other comprehensive income (loss) for the three months ended January 31, 2021:
(in millions)Foreign
Currency
Translation
Derivative Financial InstrumentsMinimum
Pension
Liability
Adjustment
Accumulated
Other
Comprehensive
Income (Loss)
Balance as of October 31, 2020$(294.9)$(24.7)$(107.9)$(427.5)
Other Comprehensive Income25.0 1.9 22.7 49.6 
Balance as of January 31, 2021$(269.9)$(22.8)$(85.2)$(377.9)

The following table provides the rollforward of accumulated other comprehensive income (loss) for the three months ended January 31, 2020:
(in millions)Foreign Currency
Translation
Derivative
Financial
Instruments
Minimum Pension
Liability Adjustment
Accumulated Other
Comprehensive
Income (Loss)
Balance as of October 31, 2019$(298.0)$(12.7)$(123.0)$(433.7)
Other Comprehensive Income (Loss)
(1.1)0.2 21.7 20.8 
Balance as of January 31, 2020$(299.1)$(12.5)$(101.3)$(412.9)

The components of accumulated other comprehensive income (loss) above are presented net of tax, as applicable.
v3.20.4
BUSINESS SEGMENT INFORMATION
3 Months Ended
Jan. 31, 2021
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION BUSINESS SEGMENT INFORMATION
The Company has made changes to the operational and financial management practices and procedures of the Rigid Industrial Packaging & Services and Flexible Products & Services segments and combined the two segments under a single global leadership team. These changes were made to enhance cross-selling and service offerings to customers within similar markets and enhance Greif Business System effectiveness. As a result of these changes, during the first quarter of 2021, the Rigid Industrial Packaging & Services reportable segment and the Flexible Products & Services reportable segment have been combined into a single reportable segment known as Global Industrial Packaging. On February 24, 2021, the Company filed a Current Report on Form 8-K with the SEC to furnish certain historical GAAP and non-GAAP financial information in a revised presentation aligned with the Company's new reportable segment structure described above.
The Company’s reportable business segments offer different products and services and are compiled of six operating segments. The accounting policies of the reportable business segments are substantially the same as those described in the “Basis of Presentation and Summary of Significant Accounting Policies” note in the 2020 Form 10-K.
The following tables present net sales disaggregated by geographic area for each reportable segment for the three months ended January 31, 2021:
Three Months Ended January 31, 2021
(in millions)United StatesEurope, Middle East and AfricaAsia Pacific and Other AmericasTotal
Global Industrial Packaging$202.8 $330.5 $126.0 $659.3 
Paper Packaging & Services473.5 — 7.4 480.9 
Land Management6.3 — — 6.3 
Total net sales$682.6 $330.5 $133.4 $1,146.5 

The following tables present net sales disaggregated by geographic area for each reportable segment for the three months ended January 31, 2020:
Three Months Ended January 31, 2020
(in millions)United StatesEurope, Middle East and AfricaAsia Pacific and Other AmericasTotal
Global Industrial Packaging$209.1 $307.3 $115.3 $631.7 
Paper Packaging & Services467.8 — 5.9 473.7 
Land Management7.0 — — 7.0 
Total net sales
$683.9 $307.3 $121.2 $1,112.4 

The following segment information is presented for the periods indicated:
 Three Months Ended
January 31,
(in millions)20212020
Operating profit:
Global Industrial Packaging$54.0 $44.8 
Paper Packaging & Services14.3 32.5 
Land Management1.7 1.9 
Total operating profit
$70.0 $79.2 
Depreciation, depletion and amortization expense:
Global Industrial Packaging$21.0 $21.1 
Paper Packaging & Services37.2 39.2 
Land Management1.1 1.0 
Total depreciation, depletion and amortization expense
$59.3 $61.3 
The following table presents total assets by segment and total properties, plants and equipment, net by geographic area:
(in millions)January 31,
2021
October 31,
2020
Assets:
Global Industrial Packaging$2,453.8 $2,338.5 
Paper Packaging & Services2,520.2 2,524.3 
Land Management297.3 348.6 
Total segments5,271.3 5,211.4 
Corporate and other295.3 299.5 
Total assets$5,566.6 $5,510.9 
Long lived assets, net*:
United States$1,324.8 $1,345.8 
Europe, Middle East and Africa373.8 377.6 
Asia Pacific and other Americas116.1 111.0 
Total long-lived assets, net$1,814.7 $1,834.4 
*includes impact of capitalization of operating lease assets
v3.20.4
SUBSEQUENT EVENTS
3 Months Ended
Jan. 31, 2021
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTSOn February 24, 2021, the Company has entered into an agreement to sell approximately 69,200 acres of its timberland acreage in southwest Alabama to Weyerhaeuser Company and a subsidiary for approximately $149.0 million in cash. Proceeds will be applied toward debt repayment. As of January 31, 2021, assets associated with the sale were classified as held for sale, with an approximate net book value of $47.5 million. The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2021.
v3.20.4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
3 Months Ended
Jan. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation
The interim condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions to Quarterly Reports on Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the interim condensed consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates.
The fiscal year of Greif, Inc. and its subsidiaries (the “Company”) begins on November 1 and ends on October 31 of the following year. Any references to years or to any quarter of those years, relates to the fiscal year or quarter, as the case may be, ended in that year, unless otherwise stated.
The information filed herein reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim condensed consolidated balance sheets as of January 31, 2021 and October 31, 2020, the interim condensed consolidated statements of income and comprehensive income for the three months ended January 31, 2021 and 2020 and the interim condensed consolidated statements of cash flows for the three months ended January 31, 2021 and 2020 of the Company. The interim condensed consolidated financial statements include the accounts of Greif, Inc., all wholly-owned and consolidated subsidiaries and investments in limited liability companies, partnerships and joint ventures in which it has controlling influence or is the primary beneficiary. Non-majority owned entities include investments in limited liability companies, partnerships and joint ventures in which the Company does not have controlling influence and are accounted for using either the equity or cost method, as appropriate.
The unaudited interim condensed consolidated financial statements included in the Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended October 31, 2020 (the “2020 Form 10-K”).
Effective the first quarter 2021, the Company adjusted its reportable segments. The presentation of prior periods throughout Part I Item 1 of this Form 10-Q has been modified to reflect the new segment reporting structure. See Note 12 to the Interim Condensed Consolidated Financial Statements for additional information.
COVID-19
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in such financial statements. The estimates and assumptions used in the preparation of the financial statements contained in this Form 10-Q do not reflect material changes to the estimates and assumptions disclosed in the 2020 Form 10-K. Nevertheless, the Company's actual results and outcomes during the three months ended January 31, 2021 have been impacted by the COVID-19 pandemic, which has caused market disruption and volatility. Because the scope, duration and magnitude of the effects of the COVID-19 pandemic continue to evolve, the Company cannot, at this time, predict the impact the pandemic will have on its future consolidated financial position, cash flows or results of operations; however, the impact could be material. The Company's future financial results and operations depend in part on the duration and severity of the pandemic and what actions are taken to mitigate the outbreak.
Newly Adopted Accounting Standards and Recently Issued Accounting Standards
Newly Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, “Financial Instruments – Credit Losses.” This ASU sets forth a current expected credit loss model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU on November 1, 2020. The adoption of this guidance did not have a material impact on financial position, results of operations, comprehensive income, cash flows or disclosures.
Recently Issued Accounting Standards
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", which is intended to simplify accounting for income taxes. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. The effective date for the Company to adopt this ASU is November 1, 2021. The Company is in the process of determining the potential impact of adopting this guidance on its financial position, results of operations, comprehensive income, cash flow and disclosures.
v3.20.4
RESTRUCTURING CHARGES (Tables)
3 Months Ended
Jan. 31, 2021
Restructuring and Related Activities [Abstract]  
Reconciliation of Beginning and Ending Restructuring Reserve Balances
The following is a reconciliation of the beginning and ending restructuring reserve balances for the three months ended January 31, 2021:
(in millions)Employee
Separation
Costs
Other
Costs
Total
Balance at October 31, 2020$17.9 $3.7 $21.6 
Costs incurred and charged to expense1.5 1.6 3.1 
Costs paid or otherwise settled(3.5)(1.8)(5.3)
Balance at January 31, 2021$15.9 $3.5 $19.4 
Reconciliation of Total Amounts Expected to be Incurred from Open Restructuring Plans Anticipated to be Realized
The following is a reconciliation of the total amounts expected to be incurred from open restructuring plans or plans that are being formulated and have not been announced as of the filing date of this Form 10-Q. Remaining amounts expected to be incurred were $22.5 million as of January 31, 2021:
(in millions)Total Amounts
Expected to
be Incurred
Amounts Incurred During the three months ended January 31, 2021Amounts
Remaining
to be Incurred
Global Industrial Packaging
Employee separation costs$14.8 $1.5 $13.3 
Other restructuring costs5.7 1.3 4.4 
20.5 2.8 17.7 
Paper Packaging & Services
Other restructuring costs5.1 0.3 4.8 
5.1 0.3 4.8 
$25.6 $3.1 $22.5 
v3.20.4
LONG-TERM DEBT (Tables)
3 Months Ended
Jan. 31, 2021
Debt Disclosure [Abstract]  
Summary of Long-Term Debt
Long-term debt is summarized as follows:
(in millions)January 31, 2021October 31, 2020
2019 Credit Agreement - Term Loans$1,365.8 $1,429.8 
Senior Notes due 2027495.3 495.1 
Senior Notes due 2021242.1 234.8 
Accounts receivable credit facilities305.4 310.0 
2019 Credit Agreement - Revolving Credit Facility96.7 — 
2,505.3 2,469.7 
Less: current portion133.6 123.1 
Less: deferred financing costs12.1 11.1 
Long-term debt, net$2,359.6 $2,335.5 
v3.20.4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
3 Months Ended
Jan. 31, 2021
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements
The following table presents the fair value for those assets and (liabilities) measured on a recurring basis as of January 31, 2021 and October 31, 2020:
 January 31, 2021 
 Fair Value Measurement 
(in millions)Level 1Level 2Level 3TotalBalance Sheet Location
Interest rate derivatives$— $1.4 $— $1.4 Other current assets
Interest rate derivatives— (32.6)— (32.6)Other current liabilities and other long-term liabilities
Foreign exchange hedges— 1.5 — 1.5 Other current assets
Foreign exchange hedges— (2.1)— (2.1)Other current liabilities
Insurance annuity— — 22.0 22.0 Other long-term assets
Cross currency swap— 4.6 — 4.6 Other current assets and other long-term assets
Total$— $(27.2)$22.0 $(5.2)
 October 31, 2020 
 Fair Value Measurement 
(in millions)Level 1Level 2Level 3TotalBalance Sheet Location
Interest rate derivatives$— $(37.9)$— $(37.9)Other long-term liabilities and other current liabilities
Foreign exchange hedges— 1.5 — 1.5 Other current assets
Foreign exchange hedges— (1.6)— (1.6)Other current liabilities
Insurance annuity— — 21.4 21.4 Other long-term assets
Cross currency swap— 8.9 — 8.9 Other current assets and other long-term assets
Total$— $(29.1)$21.4 $(7.7)
Estimated Fair Values for the Company's Senior Notes and Assets Held by Special Purpose Entities
The following table presents the estimated fair values of the Company’s Senior Notes and Assets held by special purpose entities:
(in millions)January 31,
2021
October 31,
2020
Senior Notes due 2021 estimated fair value$249.8 $242.0 
Senior Notes due 2027 estimated fair value533.8 524.4 
Assets held by special purpose entities estimated fair value— 50.9 
v3.20.4
POST RETIREMENT BENEFIT PLANS (Tables)
3 Months Ended
Jan. 31, 2021
Postemployment Benefits [Abstract]  
Components of Net Periodic Pension Cost
The components of net periodic pension cost include the following:
 Three Months Ended
January 31,
(in millions)20212020
Service cost$3.1 $3.2 
Interest cost4.5 6.6 
Expected return on plan assets(7.9)(10.3)
Amortization of prior service cost— 3.5 
Recognized net actuarial loss3.8 — 
Net periodic pension cost$3.5 $3.0 
v3.20.4
EARNINGS PER SHARE (Tables)
3 Months Ended
Jan. 31, 2021
Earnings Per Share [Abstract]  
Computation of Class Based Basic and Diluted Earnings Per Share
The Company calculates EPS as follows:
Basic Class A EPS=40% * Average Class A Shares Outstanding*Undistributed Net Income+Class A Dividends Per Share