UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

_________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-00566

_________________________________

GREIF, INC.

(Exact name of registrant as specified in its charter)

_________________________________

Delaware	31-4388903
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

425 Winter Road Delaware Ohio	43015
(Address of principal executive offices)	(Zip Code)

(740) 549-6000

(Registrant’s telephone number, including area code)

Not Applicable

Former name, former address and former fiscal year, if changed since last report.

_________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,”

“smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A Common Stock	GEF	New York Stock Exchange
Class B Common Stock	GEF-B	New York Stock Exchange

The number of shares outstanding of each of the issuer’s classes of common stock as of the close of business on February 28, 2022:

Class A Common Stock	26,602,841 shares
Class B Common Stock	22,007,725 shares

Item		Page
	Part I. Financial Information
1	Financial Statements	4
	Condensed Consolidated Statements of Income for the Three Months Ended January 31, 2022 and 2021 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended January 31, 2022 and 2021 (Unaudited)	5
	Condensed Consolidated Balance Sheets at January 31, 2022 (Unaudited) and October 31, 2021	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended January 31, 2022 and 2021 (Unaudited)	8
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended January 31, 2022 and 2021 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
3	Quantitative and Qualitative Disclosures About Market Risk	37
4	Controls and Procedures	37
	Part II. Other Information
1A	Risk Factors	38
2	Unregistered Sales of Equity Securities and Use of Proceeds	38
6	Exhibits	38
	Signatures	39

3

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GREIF, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended January 31,
(in millions, except per share amounts)	2022		2021
Net sales	$	1,564.3	$	1,146.5
Cost of products sold	1,274.6		934.3
Gross profit	289.7		212.2
Selling, general and administrative expenses	151.6		134.3
Restructuring charges	3.5		3.1
Integration related costs	1.6		2.0
Non-cash asset impairment charges	62.4		1.3
(Gain) loss on disposal of properties, plants and equipment, net	(1.4)		1.6
Gain on disposal of businesses, net	—		(0.1)
Operating profit	72.0		70.0
Interest expense, net	17.1		25.2
Non-cash pension settlement charges	—		8.5
Other expense, net	2.0		—
Income before income tax expense and equity earnings of unconsolidated affiliates, net	52.9		36.3
Income tax expense	35.6		6.1
Equity earnings of unconsolidated affiliates, net of tax	(1.3)		(0.7)
Net income	18.6		30.9
Net income attributable to noncontrolling interests	(8.3)		(7.5)
Net income attributable to Greif, Inc.	$	10.3	$	23.4
Basic earnings per share attributable to Greif, Inc. common shareholders:
Class A common stock	$	0.17	$	0.40
Class B common stock	$	0.25	$	0.59
Diluted earnings per share attributable to Greif, Inc. common shareholders:
Class A common stock	$	0.18	$	0.40
Class B common stock	$	0.25	$	0.59
Weighted-average number of Class A common shares outstanding:
Basic	26.6		26.5
Diluted	26.8		26.5
Weighted-average number of Class B common shares outstanding:
Basic	22.0		22.0
Diluted	22.0		22.0
Cash dividends declared per common share:
Class A common stock	$	0.46	$	0.44
Class B common stock	$	0.68	$	0.65

See accompanying Notes to Condensed Consolidated Financial Statements

4

GREIF, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended January 31,
(in millions)	2022		2021
Net income	$	18.6	$	30.9
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(31.5)		27.6
Derivative financial instruments	11.8		1.9
Minimum pension liabilities	3.1		22.7
Other comprehensive (loss) income, net of tax	(16.6)		52.2
Comprehensive income	2.0		83.1
Comprehensive income attributable to noncontrolling interests	4.0		10.1
Comprehensive (loss) income attributable to Greif, Inc.	$	(2.0)	$	73.0

See accompanying Notes to Condensed Consolidated Financial Statements

5

GREIF, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions)	January 31, 2022		October 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	119.7	$	124.6
Trade accounts receivable, net of allowance	816.1		889.5
Inventories:
Raw materials	391.6		390.7
Work-in-process	—		1.5
Finished goods	96.7		107.0
Assets held for sale	139.8		6.9
Prepaid expenses	51.9		54.0
Other current assets	88.2		89.9
	1,704.0		1,664.1
Long-term assets
Goodwill	1,500.5		1,515.4
Other intangible assets, net of amortization	628.0		648.4
Deferred tax assets	7.5		16.3
Pension asset	50.3		39.9
Operating lease assets	287.0		289.4
Other long-term assets	132.5		121.1
	2,605.8		2,630.5
Properties, plants and equipment
Timber properties, net of depletion	227.6		224.6
Land	159.9		161.9
Buildings	531.7		543.8
Machinery and equipment	1,977.8		2,042.3
Capital projects in progress	131.3		137.2
	3,028.3		3,109.8
Accumulated depreciation	(1,571.5)		(1,588.6)
	1,456.8		1,521.2
Total assets	$	5,766.6	$	5,815.8

See accompanying Notes to Condensed Consolidated Financial Statements

6

GREIF, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions)	January 31, 2022		October 31, 2021
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	619.6	$	704.5
Accrued payroll and employee benefits	102.1		160.3
Restructuring reserves	17.0		20.3
Current portion of long-term debt	120.3		120.3
Short-term borrowings	37.4		50.5
Liabilities held for sale	83.5		0.9
Current portion of operating lease liabilities	54.3		54.0
Other current liabilities	246.3		203.3
	1,280.5		1,314.1
Long-term liabilities
Long-term debt	2,139.1		2,054.8
Operating lease liabilities	237.0		239.5
Deferred tax liabilities	319.1		318.0
Pension liabilities	73.0		78.3
Postretirement benefit obligations	10.9		11.0
Contingent liabilities and environmental reserves	20.4		19.5
Long-term income tax payable	27.8		27.8
Other long-term liabilities	82.4		153.1
	2,909.7		2,902.0
Commitments and contingencies (Note 8)
Redeemable noncontrolling interests	19.1		24.1
Equity
Common stock, without par value	183.2		179.3
Treasury stock, at cost	(134.0)		(134.1)
Retained earnings	1,812.9		1,825.6
Accumulated other comprehensive loss, net of tax:
Foreign currency translation	(322.6)		(295.4)
Derivative financial instruments	8.2		(3.6)
Minimum pension liabilities	(54.4)		(57.5)
Total Greif, Inc. shareholders' equity	1,493.3		1,514.3
Noncontrolling interests	64.0		61.3
Total shareholders' equity	1,557.3		1,575.6
Total liabilities and shareholders' equity	$	5,766.6	$	5,815.8

See accompanying Notes to Condensed Consolidated Financial Statements

7

GREIF, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended January 31,
(in millions)	2022		2021
Cash flows from operating activities:
Net income	$	18.6	$	30.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	59.4		59.3
Non-cash asset impairment charges	62.4		1.3
Non-cash pension settlement charges	—		8.5
Loss (gain) on disposals of properties, plants and equipment, net	(1.4)		1.6
Gain on disposals of businesses, net	—		(0.1)
Unrealized foreign exchange loss	3.4		—
Deferred income tax expense (benefit)	2.0		(1.9)
Non-cash lease expense	14.6		14.4
Other, net	0.6		1.9
Increase (decrease) in cash from changes in certain assets and liabilities:
Trade accounts receivable	(4.8)		(30.8)
Inventories	(62.9)		(35.5)
Accounts payable	9.6		13.7
Restructuring reserves	(1.7)		(2.4)
Operating leases	(16.0)		(9.9)
Pension and post-retirement benefit liabilities	(10.4)		(6.1)
Other, net	(51.0)		(33.4)
Net cash provided by operating activities	22.4		11.5
Cash flows from investing activities:
Purchases of properties, plants and equipment	(44.5)		(27.4)
Purchases of and investments in timber properties	(4.8)		(1.0)
Collections of receivables held in special purpose entities	—		50.9
Payments for issuance of loans receivable	—		(15.0)
Proceeds from the sale of properties, plants, equipment and other assets	8.2		—
Other, net	(4.7)		(3.3)
Net cash provided by (used in) investing activities	(45.8)		4.2
Cash flows from financing activities:
Proceeds from issuance of long-term debt	641.6		384.5
Payments on long-term debt	(551.4)		(353.5)
Proceeds (payments) on short-term borrowings, net	(4.2)		16.8
Proceeds from trade accounts receivable credit facility	—		11.2
Payments on trade accounts receivable credit facility	(2.0)		(18.3)
Payments for liabilities held in special purpose entities	—		(43.3)
Dividends paid to Greif, Inc. shareholders	(27.2)		(25.9)
Dividends paid to noncontrolling interests	(2.8)		(1.5)
Net cash provided by (used in) financing activities	54.0		(30.0)
Effects of exchange rates on cash	(18.6)		9.8
Net increase (decrease) in cash and cash equivalents	12.0		(4.5)
Cash and cash equivalents at beginning of period	124.6		105.9
Cash and cash equivalents at end of period*	$	136.6	$	101.4

*2022 Ending cash includes $16.9 million of cash presented within assets held for sale on the interim condensed consolidated balance sheet. See Note 13 for more information.

See accompanying Notes to Condensed Consolidated Financial Statements

8

GREIF, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

	Three Months Ended January 31, 2022
	Capital Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Greif, Inc. Equity		Non controlling Interests		Total Equity
(in millions, except for shares which are in thousands)	Common Shares	Amount		Treasury Shares	Amount
As of October 31, 2021	48,559	$	179.3	28,283	$	(134.1)	$	1,825.6	$	(356.5)	$	1,514.3	$	61.3	$	1,575.6
Net income							10.3				10.3		8.3		18.6
Other comprehensive income:
Foreign currency translation									(27.2)		(27.2)		(4.3)		(31.5)
Derivative financial instruments, net of $4.0 million of income tax benefit									11.8		11.8				11.8
Minimum pension liability adjustment, net of $0.5 million income tax benefit									3.1		3.1				3.1
Comprehensive income				.							(2.0)				2.0
Current period mark to redemption value of redeemable noncontrolling interest and other							5.0				5.0				5.0
Net income allocated to redeemable noncontrolling interests											—		0.4		0.4
Dividends paid to Greif, Inc. shareholders ($0.46 and $0.68 per Class A share and Class B share, respectively)							(27.2)				(27.2)				(27.2)
Dividends paid to noncontrolling interests and other											—		(1.7)		(1.7)
Dividends earned on RSU shares							(0.8)				(0.8)				(0.8)
Long-term incentive shares issued	46	2.7		(46)	0.1						2.8				2.8
Share based compensation	—	1.1		—	—						1.1				1.1
Restricted stock, executive	3	0.1		(3)	—						0.1				0.1
As of January 31, 2022	48,608	$	183.2	28,234	$	(134.0)	$	1,812.9	$	(368.8)	$	1,493.3	$	64.0	$	1,557.3

	Three Months Ended January 31, 2021
	Capital Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Greif, Inc. Equity		Non controlling Interests		Total Equity
(in millions, except for shares which are in thousands)	Common Shares	Amount		Treasury Shares	Amount
As of October 31, 2020	48,450	$	170.2	28,392	$	(134.4)	$	1,543.9	$	(427.5)	$	1,152.2	$	48.5	$	1,200.7
Net income							23.4				23.4		7.5		30.9
Other comprehensive income (loss):
Foreign currency translation									25.0		25.0		2.6		27.6
Derivative financial instruments, net of $0.6 million income tax expense									1.9		1.9				1.9
Minimum pension liability adjustment, net of $7.4 million income tax expense									22.7		22.7				22.7
Comprehensive income											73.0				83.1
Current period mark to redemption value of redeemable noncontrolling interest and other							0.6				0.6				0.6
Net income allocated to redeemable noncontrolling interests											—		(0.3)		(0.3)
Dividends paid to Greif, Inc. shareholders ($0.44 and $0.65 per Class A share and Class B share, respectively)							(25.9)				(25.9)				(25.9)
Dividends paid to noncontrolling interests and other											—		(1.0)		(1.0)
Long-term incentive shares issued	80	3.9		(80)	0.2						4.1				4.1
Share based compensation	—	1.2		—	—						1.2				1.2
Restricted stock, executive	3	0.1		(3)	—						0.1				0.1
As of January 31, 2021	48,533	$	175.4	28,309	$	(134.2)	$	1,542.0	$	(377.9)	$	1,205.3	$	57.3	$	1,262.6

9

GREIF, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 — 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, 2022 and October 31, 2021, the interim condensed consolidated statements of income, comprehensive income and changes in shareholders' equity for the three months ended January 31, 2022 and 2021 and the interim condensed consolidated statements of cash flows for the three months ended January 31, 2022 and 2021 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 interest 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, 2021 (the “2021 Form 10-K”).

Newly Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 Company adopted this ASU on November 1, 2021. The adoption of this guidance did not have a material impact on the Company's financial position, results of operations, comprehensive income, cash flows or disclosures.

Recently Issued Accounting Standards

Except for the accounting pronouncement described above, there have been no new accounting pronouncements issued since the filing of the 2021 Form 10-K that have significance, or potential significance, to the interim condensed consolidated financial statements.

10

NOTE 2 — RESTRUCTURING CHARGES

The following is a reconciliation of the beginning and ending restructuring reserve balances for the three months ended January 31, 2022:

(in millions)	Employee Separation Costs		Other Costs		Total
Balance at October 31, 2021	$	18.6	$	1.7	$	20.3
Costs incurred and charged to expense	1.6		1.9		3.5
Costs paid or otherwise settled	(4.4)		(2.4)		(6.8)
Balance at January 31, 2022	$	15.8	$	1.2	$	17.0

The focus for restructuring activities in 2022 is to optimize operations and close under-performing assets.

During the three months ended January 31, 2022, the Company recorded restructuring charges of $3.5 million, as compared to $3.1 million of restructuring charges recorded during the three months ended January 31, 2021. The restructuring activity for the three months ended January 31, 2022 consisted of $1.6 million in employee separation costs and $1.9 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 $14.6 million as of January 31, 2022:

(in millions)	Total Amounts Expected to be Incurred		Amounts Incurred During the Three Months Ended January 31, 2022		Amounts Remaining to be Incurred
Global Industrial Packaging
Employee separation costs	$	10.5	$	1.5	$	9.0
Other restructuring costs	3.3		0.6		2.7
	13.8		2.1		11.7
Paper Packaging & Services
Employee separation costs	1.1		0.1		1.0
Other restructuring costs	3.2		1.3		1.9
	4.3		1.4		2.9
	$	18.1	$	3.5	$	14.6

NOTE 3 — LONG-TERM DEBT

Long-term debt is summarized as follows:

(in millions)	January 31, 2022		October 31, 2021
2019 Credit Agreement - Term Loans	$	1,217.2	$	1,247.3
Senior Notes due 2027	496.1		495.9
Accounts receivable credit facilities	384.5		391.1
2019 Credit Agreement - Revolving Credit Facility	170.6		50.5
Other debt	0.4		0.6
	2,268.8		2,185.4
Less: current portion	120.3		120.3
Less: deferred financing costs	9.4		10.3
Long-term debt, net	$	2,139.1	$	2,054.8

2019 Credit Agreement

11

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 that commenced on April 30, 2019, that matures on January 31, 2024, (c) a $400.0 million secured term loan A-2 facility, with quarterly principal installments that commenced on April 30, 2019, that matures on January 31, 2026, and (d) a $225.0 million secured term A-3 loan with quarterly principal installments commenced on July 31, 2021 and continue through maturity on July 15, 2026. In addition, the Company has an option to add an aggregate of $475.0 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.

As of January 31, 2022, $1,387.8 million was outstanding under the 2019 Credit Agreement. The current portion of such outstanding amount was $120.3 million, and the long-term portion was $1,267.5 million. The weighted average interest rate for borrowings under the 2019 Credit Agreement was 1.33% for the three months ended January 31, 2022. The actual interest rate for borrowings under the 2019 Credit Agreement was 1.24% as of January 31, 2022. The deferred financing costs associated with the term loan portion of the 2019 Credit Agreement totaled $7.6 million as of January 31, 2022 and are recorded as a reduction of long-term debt on the interim condensed consolidated balance sheets. The deferred financing costs associated with the revolver portion of the 2019 Credit Agreement totaled $3.8 million as of January 31, 2022 and are recorded within other long-term assets on the interim condensed consolidated balance sheets.

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"). Semi-annual interest payments on the Senior Notes due 2027 commenced 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, as described above. The deferred financing cost associated with the Senior Notes due 2027 totaled $1.8 million as of January 31, 2022 and is recorded as a reduction of long-term debt on the interim condensed consolidated balance sheets.

United States Trade Accounts Receivable Credit Facility

On May 26, 2021, Greif Receivables Funding LLC (“Greif Funding”), Greif Packaging LLC (“Greif Packaging”), and certain other U.S. subsidiaries of the Company amended and restated its U.S. receivables financing facility (the “U.S. Receivables Facility”). The U.S. Receivables Facility provides an accounts receivable financing facility of $275.0 million, with a new maturity date of May 26, 2022. As of January 31, 2022, there was $275.0 million outstanding balance under the U.S. Receivables Facility that 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.

Greif Funding is a direct subsidiary of Greif Packaging and is included in the Company’s consolidated financial statements. However, because Greif Funding is a separate and distinct legal entity from the Company, the assets of Greif Funding are not available to satisfy the liabilities and obligations of the Company, Greif Packaging or other subsidiaries of the Company, and the liabilities of Greif Funding are not the liabilities or obligations of the Company or its other subsidiaries.

International Trade Accounts Receivable Credit Facility

On July 27, 2021, Cooperage Receivables Finance B.V. and Greif Services Belgium BV, 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 matures April 26, 2022. The European RFA provides an accounts receivable financing facility of up to €100.0 million ($111.5 million as of January 31, 2022) secured by certain European accounts receivable. The $109.5 million outstanding on the European RFA as of January 31, 2022 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.

12

NOTE 4 — 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, 2022 and October 31, 2021:

	January 31, 2022
	Assets								Liabilities
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest rate derivatives	$	—	$	10.7	$	—	$	10.7	$	—	$	(9.2)	$	—	$	(9.2)
Foreign exchange hedges	—		1.6		—		1.6		—		(0.6)		—		(0.6)
Insurance annuity	—		—		20.1		20.1		—		—		—		—
Cross currency swap	—		18.8		—		18.8		—		—		—		—
	October 31, 2021
	Assets								Liabilities
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest rate derivatives	$	—	$	7.6	$	—	$	7.6	$	—	$	(16.8)	$	—	$	(16.8)
Foreign exchange hedges	—		0.1		—		0.1		—		(0.1)		—		(0.1)
Insurance annuity	—		—		20.9		20.9		—		—		—		—
Cross currency swap	—		10.2		—		10.2		—		(1.2)		—		(1.2)

The carrying amounts of cash and cash equivalents, trade accounts receivable, accounts payable, current liabilities and short-term borrowings as of January 31, 2022 and October 31, 2021 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 interest rate swaps with a total notional amount of $200.0 million, 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, 2022 is $500.0 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 three interest rate swaps 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 transaction and in the same period during which the hedged transaction affects earnings. See Note 11 to the interim condensed consolidated financial statements for additional disclosures of the aggregate gain or loss included within other comprehensive income. 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.

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Losses reclassified to earnings under these contracts were $4.3 million and $4.4 million for the three months ended January 31, 2022, and 2021, respectively. A derivative loss of $5.8 million, based upon interest rates at January 31, 2022, 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, 2022, and October 31, 2021, the Company had outstanding foreign currency forward contracts in the notional amount of $184.5 million and $81.8 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 $(2.4) million and $2.0 million for the three months ended January 31, 2022, and 2021, respectively. Within other expense, net, the Company recognized an unrealized net gain (loss) of $1.0 million and $(0.6) million during the three months ended January 31, 2022 and 2021, 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.

In October 2021, the Company entered into two cross currency interest rate swap agreements that synthetically swap $116.8 million of fixed rate debt to Euro denominated fixed rate debt at a weighted average rate of 1.26%. These agreements are designated as cash flow hedges for accounting purposes and will mature on October 2026.

In August 2021, the Company entered into two cross currency interest rate swap agreements that synthetically swap $117.6 million of fixed rate debt to Euro denominated fixed rate debt at a weighted average rate of 1.19%. These agreements are designated as net investment hedges for accounting purposes and will mature in August 2026.

In March 2018, the Company entered into two 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 in March 2023.

The gain or loss on these net investment hedge derivative instruments is included in the foreign currency translation component of other comprehensive income until the net investment is sold, diluted, or liquidated. See Note 11 to the interim condensed consolidated financial statements for additional disclosures of the aggregate gain or loss included within other comprehensive income. The gain or loss on the cash flow hedge derivative instruments is included in the unrealized foreign exchange component of other expense, offset by the underlying gain or loss on the underlying cash flows that are being hedged. 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 consolidated statements of income. 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.

For the three months ended January 31, 2022 and 2021, gains recorded in interest expense, net under the cross currency swap agreements were $1.4 million and $0.6 million, respectively.

Other Financial Instruments

The fair values of the Company’s 2019 Credit Agreement, the U.S. Receivables Facility and the European RFA 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 Accounting Standard Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures."

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The following table presents the estimated fair values of the Company’s Senior Notes due 2027:

(in millions)	January 31, 2022		October 31, 2021
Senior Notes due 2027 estimated fair value	$	516.3	$	520.0

Non-Recurring Fair Value Measurements

The Company recognized asset impairment charges of $62.4 million and $1.3 million during the three months ended January 31, 2022 and 2021, respectively.

The following table presents quantitative information about the significant unobservable inputs used to determine the fair value of the impairment of long-lived assets held and used and net assets held for sale for the three months ended January 31, 2022 and 2021:

	Quantitative Information about Level 3 Fair Value Measurements
(in millions)	Impairment Amount		Valuation Technique	Unobservable Input	Range of Input Values
January 31, 2022
Net Assets Held for Sale	$	62.4	Indicative Bids	Indicative Bids	N/A
Total	$	62.4
January 31, 2021
Long Lived Assets	$	1.3	Discounted Cash Flows; Indicative Bids	Discounted Cash Flows; Indicative Bids	N/A
Total	$	1.3

Assets and Liabilities Held for Sale

During the three months ended January 31, 2022, the Company entered into a definitive agreement to divest its approximately 50% equity interest in the Flexible Products & Services business to its joint venture partner, Gulf Refined Packaging (the "FPS Divestiture"). This agreement triggered the reclassification of the Flexible Products & Services business to assets and liabilities held for sale, which further resulted in recognized impairment charges of $62.4 million. Included in the asset impairment, was $112.0 million related to the expected release of cumulative translation adjustment losses associated with the foreign subsidiaries classified as held for sale. During the three months ended January 31, 2021, the Company recorded no impairment charges related to assets and liabilities held for sale.

The assumptions used in measuring fair value of assets and liabilities held for sale are considered level 3 inputs, which include recent purchase offers, market comparables and/or data obtained from commercial real estate brokers.

Long-Lived Assets

As necessary, based on triggering events, the Company measures long-lived assets at fair value on a non-recurring basis. The Company recorded no impairment charges related to both properties, plants and equipment, net and intangible assets during the three months ended January 31, 2022 and $1.3 million impairment charges related to both properties, plants and equipment, net and intangible assets during the three months ended January 31, 2021, respectively.

The assumptions used in measuring fair value of long-lived assets are considered level 3 inputs, which include bids received from third parties, recent purchase offers, market comparable information and discounted cash flows based on assumptions that market participants would use.

NOTE 5 – STOCK-BASED COMPENSATION

Long-Term Incentive Plan

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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 Compensation Committee of the Company’s Board of Directors. For each three-year performance period commencing at the beginning of the year, participants may be granted restricted stock units (“RSUs”) or performance stock units (“PSUs”) or a combination of both.

The Company may grant 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 99,006 RSUs on December 16, 2021, for the performance period commencing on November 1, 2021 and ending October 31, 2024. The weighted average fair value of the RSUs granted on that date was $60.54.

Under the 2020 LTIP, the Company may grant 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 Compensation Committee. 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 162,392 PSUs on December 16, 2021, for the performance period commencing on November 1, 2021 and ending October 31, 2024. 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 $60.08. The weighted average fair value of the PSUs at January 31, 2022 was $58.03.

NOTE 6 — INCOME TAXES

Income tax expense for the quarter and year to date was computed in accordance with 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, 2022 and January 31, 2021, income tax expense was $35.6 million and $6.1 million, respectively. The increase in income tax expense for the three months ended January 31, 2022 was primarily attributable to an increase in pretax book income and an increase of unfavorable discrete items of $8.9 million. The increase in discrete items is primarily due to adjustments of certain assumptions regarding 2021 tax-only capital losses previously applied to timberland sales in 2021 and tax basis in certain tangible property, net of reductions in previously unrecognized tax benefits due to expiration of statutes of limitation and audit settlements. Additionally, a $62.4 million book impairment loss was recorded in the quarter relating to the FPS Divestiture on which there is expected to be no tax benefit.

NOTE 7 — POST RETIREMENT BENEFIT PLANS

The components of net periodic pension cost include the following:

	Three Months Ended January 31,
(in millions)	2022		2021
Service cost	$	3.0	$	3.1
Interest cost	5.1		4.5
Expected return on plan assets	(8.2)		(7.9)
Amortization of prior service cost	(0.1)		—
Recognized net actuarial loss	2.0		3.8
Net periodic pension cost	$	1.8	$	3.5

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As previously disclosed in the Company's Annual Report on Form 10-K for the year ended October 31, 2021, the Company expects to make employer contributions of $35.5 million, including benefits paid directly by the Company, during 2022.

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 income, net" in the interim condensed consolidated statements of income.

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.

NOTE 8 — 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.

Environmental Reserves

As of January 31, 2022, and October 31, 2021, the Company's environmental reserves were $20.4 million and $19.5 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, 2022 and October 31, 2021, the Company has accrued $11.0 million for the Diamond Alkali Superfund Site in New Jersey.

Aside from the Diamond Alkali Superfund Site, other environmental reserves of the Company as of January 31, 2022 and October 31, 2021 included $9.4 million and $8.5 million, respectively, for its various facilities around the world. 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.

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.

NOTE 9 — 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,

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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 Outstanding		Average 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 Outstanding		Average 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 Outstanding		Average 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)	2022		2021
Numerator for basic and diluted EPS
Net income attributable to Greif, Inc.	$	10.3	$	23.4
Cash dividends	(27.2)		(25.9)
Undistributed earnings attributable to Greif, Inc.	$	(16.9)	$	(2.5)

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.

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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, 2022
Class A Common Stock	128,000,000	42,281,920	26,600,442	15,681,478
Class B Common Stock	69,120,000	34,560,000	22,007,725	12,552,275
October 31, 2021
Class A Common Stock	128,000,000