GREIF INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended July 31, 2005

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

For the transition period from to

Commission File Number 1-566

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)

Registrant’s telephone number, including area code (740) 549-6000

Not Applicable

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

Indicated 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 x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

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

The number of shares outstanding of each of the issuer’s classes of common stock at the close of business on July 31, 2005 was as follows:

Class A Common Stock 11,537,181 shares

Class B Common Stock 11,556,189 shares

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(Dollars in thousands, except per share amounts)


	Three months ended July 31,						Nine months ended July 31,
	2005			2004			2005			2004
Net sales	$	609,046		$	584,814		$	1,804,570		$	1,595,863
Costs of products sold		515,575			484,921			1,524,455			1,337,259

Gross profit		93,471			99,893			280,115			258,604

Selling, general and administrative expenses		52,224			57,105			168,013			163,875
Restructuring charges		5,296			12,324			23,103			39,861
Gain on sale of assets		46,579			1,290			61,117			6,521

Operating profit		82,530			31,754			150,116			61,389

Interest expense, net		9,754			10,885			30,540			33,848
Debt extinguishment charge		—			—			2,828			—
Other income, net		2,401			292			3,608			1,208

Income before income tax expense and equity in earnings of affiliates and minority interests		75,177			21,161			120,356			28,749

Income tax expense		24,344			6,000			37,310			8,337
Equity in earnings of affiliates and minority interests		(121	)		(292	)		(431	)		(460	)

Net income	$	50,712		$	14,869		$	82,615		$	19,952

Basic earnings per share:
Class A Common Stock	$	1.76		$	0.52		$	2.88		$	0.71
Class B Common Stock	$	2.63		$	0.79		$	4.31		$	1.06

Diluted earnings per share:
Class A Common Stock	$	1.71		$	0.51		$	2.81		$	0.70
Class B Common Stock	$	2.63		$	0.79		$	4.31		$	1.06

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

ASSETS


	July 31, 2005			October 31, 2004
	(Unaudited)
Current assets
Cash and cash equivalents	$	70,810		$	38,109
Trade accounts receivable, less allowance of $8,256 in 2005 and $11,454 in 2004		276,352			307,750
Inventories		206,235			191,457
Net assets held for sale		17,103			14,753
Deferred tax assets		9,357			6,636
Other current assets		66,282			53,977

		646,139			612,682

Long-term assets
Goodwill, net of amortization		232,091			237,803
Other intangible assets, net of amortization		24,550			27,524
Timber note receivable (Note 9)		50,891			—
Other long-term assets		55,092			54,547

		362,624			319,874

Properties, plants and equipment
Timber properties, net of depletion		132,553			129,141
Land		72,701			68,349
Buildings		315,991			321,183
Machinery and equipment		843,142			851,800
Capital projects in progress		49,727			37,192

		1,414,114			1,407,665
Accumulated depreciation		(569,608	)		(526,983	)

		844,506			880,682

	$	1,853,269		$	1,813,238

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

LIABILITIES AND SHAREHOLDERS’ EQUITY


	July 31, 2005			October 31, 2004
	(Unaudited)
Current liabilities
Accounts payable	$	235,547		$	281,265
Accrued payrolls and employee benefits		40,582			49,633
Restructuring reserves		10,858			17,283
Short-term borrowings		26,050			11,621
Other current liabilities		79,980			77,416

		393,017			437,218

Long-term liabilities
Long-term debt		404,682			457,415
Deferred tax liability		170,506			148,639
Pension liability		45,070			44,036
Postretirement benefit liability		48,869			48,667
Timber note securitized (Note 9)		43,250			—
Other long-term liabilities		37,212			46,444

		749,589			745,201

Minority interest		1,797			1,725

Shareholders’ equity
Common stock, without par value		47,857			27,382
Treasury stock, at cost		(72,157	)		(65,360	)
Retained earnings		778,557			711,919
Accumulated other comprehensive loss:
- foreign currency translation		1,544			5,655
- interest rate derivatives		(3,530	)		(7,097	)
- minimum pension liability		(43,405	)		(43,405	)

		708,866			629,094

	$	1,853,269		$	1,813,238

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Dollars in thousands)


For the nine months ended July 31,	2005			2004
Cash flows from operating activities:
Net income	$	82,615		$	19,952
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		74,576			77,134
Asset impairments		4,110			2,581
Deferred income taxes		8,673			8,766
Gain on disposals of properties, plants and equipment, net		(19,042	)		(6,520	)
Gain on sale of significant nonstrategic timberland gains (Note 9)		(42,090	)		—
Equity in earnings of affiliates, net of dividends received, and minority interests		698			(930	)
Increase (decrease) in cash from changes in certain assets and liabilities:
Trade accounts receivable		29,486			(45,482	)
Inventories		(16,893	)		(6,785	)
Other current assets		(13,839	)		(3,212	)
Other long-term assets		13,834			(8,088	)
Accounts payable		(43,136	)		35,641
Accrued payroll and employee benefits		(8,653	)		(4,808	)
Restructuring reserves		(6,369	)		41
Other current liabilities		2,931			814
Postretirement benefit liability		1,555			778
Other long-term liabilities		618			(11,016	)

Net cash provided by operating activities		69,074			58,866

Cash flows from investing activities:
Acquisitions of companies, net of cash acquired		(4,889	)		—
Purchases of properties, plants and equipment		(59,184	)		(47,406	)
Proceeds from the sale of properties, plants and equipment		23,789			10,324