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RockTenn Reports First Quarter Fiscal 2013 Results

  RockTenn Reports First Quarter Fiscal 2013 Results

Business Wire

NORCROSS, Ga. -- January 22, 2013

RockTenn (NYSE:RKT) today reported earnings for the quarter ended December 31,
2012 of $1.18 per diluted share and adjusted earnings of $1.35 per diluted
share. Adjusted earnings per share increased 14% over the prior year quarter.

                                                             
                                                 Three Months     Three Months
                                                 Ended            Ended
                                                 December 31,     December 31,
                                              2012           2011
                                                                  
Earnings per diluted share                       $    1.18        $    1.06
                                                                  
Restructuring and other costs and operating
losses and transition costs due to plant              0.17             0.12
closures
                                                            
Adjusted earnings per diluted share            $    1.35      $    1.18
                                                                       

First Quarter Results

  *Net sales of $2,287 million for the first quarter of fiscal 2013 increased
    $19 million compared to the first quarter of fiscal 2012. Segment income
    of $209 million increased $16 million or 8% over the prior year quarter.
  *RockTenn’s restructuring and other costs and operating losses and
    transition costs due to plant closures were $0.17 per diluted share
    after-tax, for the first quarter of fiscal 2013. These costs consisted
    primarily of $9 million of pre-tax facility closure charges and $7 million
    of pre-tax integration costs.

Chairman and Chief Executive Officer’s Statement

RockTenn Chairman and Chief Executive Officer James A. Rubright stated, “Our
14% adjusted earnings per share increase over the prior year quarter reflects
the progress we’ve made in the operating performance of our Corrugated
Packaging segment and higher pricing from the fall 2012 containerboard and box
price increases. Corrugated Packaging segment EBITDA margins increased to
15.4% for the quarter.”

Segment Results

Containerboard and Paperboard Tons Shipped

Corrugated Packaging segment tons shipped declined approximately 16,000 tons
over the prior year quarter as we took two major maintenance outages and built
approximately 74,000 tons of inventory in the current year quarter. Consumer
Packaging segment paperboard and pulp shipments of approximately 346,000 tons
increased 4% percent over the prior year quarter primarily on stronger demand
for recycled paperboard.

Corrugated Packaging Segment

Corrugated Packaging segment net sales increased $67 million to $1,590 million
in the first quarter of fiscal 2013 compared to the prior year quarter and
segment income increased $29 million to $138 million in the first quarter of
fiscal 2013 compared to the prior year quarter. The increased sales and
earnings are primarily related to higher selling prices and lower recycled
fiber and energy costs partially offset by $16 million of incremental
maintenance outage expense and higher virgin fiber and chemical costs.
Corrugated Packaging segment EBITDA margin was 15.4% for the first quarter of
fiscal 2013.

Consumer Packaging Segment

Consumer Packaging segment net sales decreased $9 million in the first quarter
of fiscal 2013 compared to the prior year quarter due primarily to lower
selling prices. Segment income was $67 million in the first quarter of fiscal
2013 compared to $80 million in the prior year quarter due primarily to lower
selling prices, and to lower income from promotional displays that resulted
primarily from higher containerboard prices. Consumer Packaging segment EBITDA
margin was 14.9% for the first quarter of fiscal 2013.

Recycling Segment

Recycling segment net sales decreased $78 million over the prior year first
quarter to $252 million primarily as a result of lower selling prices and
volume. Segment income increased $1 million to $4 million in the first quarter
of fiscal 2013 compared to the prior year quarter primarily due to cost
structure improvements. Recycling segment EBITDA margin was 3.0% for the first
quarter of fiscal 2013.

Cash Provided From Operating, Financing and Investing Activities

Cash provided by operations was $278 million in the first quarter of fiscal
2013, after pension funding in excess of expense of $13 million. We reduced
net debt (as defined) by $155 million in the December quarter to $3.22 billion
and our Leverage Ratio (as defined) was 2.77 times. Total debt was $3.25
billion at December 31, 2012. We invested $92 million in capital expenditures
and returned $32 million in dividends to our shareholders, including the
acceleration of the February 2013 dividend.

Conference Call

We will host a conference call to discuss our results of operations for the
first quarter of fiscal 2013 and other topics that may be raised during the
discussion at 9:00 a.m., Eastern Time, on January 23, 2013. The conference
call will be webcast live with an accompanying slide presentation, along with
a copy of this press release, at www.rocktenn.com.

Investors who wish to participate in the webcast via teleconference should
dial 888-790-4710 (inside the U.S.) or 773-756-0961 (outside the U.S.) at
least 15 minutes prior to the start of the call and enter the passcode
ROCKTENN. Replays of the call will be available through February 6, 2013 and
can be accessed at 866-351-2785 (U.S. callers) and 203-369-0055 (outside the
U.S.).

About RockTenn

RockTenn (NYSE:RKT) is one of North America's leading integrated manufacturers
of corrugated and consumer packaging. RockTenn’s 26,000 employees are
committed to exceeding their customers’ expectations – every time. The Company
operates locations in the United States, Canada, Mexico, Chile, Argentina and
China. For more information, visit www.rocktenn.com.



ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
                                                        

                                                                  
                                    FOR THE THREE MONTHS ENDED
                                    December 31,                  December 31,
                                    2012                          2011
                                                           
                                                                  
NET SALES                           $   2,287.1                   $  2,267.7
                                                                  
Cost of Goods Sold                      1,877.6                      1,875.5
                                                           
                                                                  
Gross Profit                            409.5                        392.2
Selling, General and                    223.0                        225.9
Administrative Expenses
Restructuring and Other                 16.1                         10.3
Costs, net
                                                           
                                                                  
Operating Profit                        170.4                        156.0
Interest Expense                        (29.1     )                  (32.7   )
Loss on Extinguishment of               (0.2      )                  -
Debt
Interest Income and Other               -                            0.4
Income (Expense), net
Equity in Income of                     0.6                          0.7
Unconsolidated Entities
                                                           
                                                                  
INCOME BEFORE INCOME TAXES              141.7                        124.4
                                                                  
Income Tax Expense                      (54.8     )                  (47.6   )
                                                           
                                                                  
CONSOLIDATED NET INCOME                 86.9                         76.8
                                                           
                                                                  
Less: Net Income
Attributable to
Noncontrolling
Interests                               (0.9      )                  (0.1    )
                                                           
                                                                  
NET INCOME ATTRIBUTABLE TO
ROCK-TENN
COMPANY SHAREHOLDERS                $   86.0                      $  76.7
                                                           
                                                                  
Computation of diluted earnings per share under the two-class
method (in millions, except per share data):
                                                                  
Net income attributable to
Rock-Tenn Company
shareholders                        $   86.0                      $  76.7
Less: Distributed and
undistributed income
available to participating             -                          (0.4    )
securities
Distributed and
undistributed income
available
to Rock-Tenn Company                $   86.0                     $  76.3    
shareholders
                                                                  
Diluted weighted average                72.7                         71.7
shares outstanding
                                                                  
Diluted earnings per share          $   1.18                     $  1.06    
                                                                             
                                                                             

ROCK-TENN COMPANY
SEGMENT INFORMATION
(UNAUDITED)
(IN MILLIONS)
                                                             
                                                            
                                                                  
                                                 FOR THE THREE MONTHS ENDED
                                                 December 31,     December 31,
                                                 2012             2011
                                                            
                                                                  
NET SALES:
                                                                  
Corrugated Packaging                             $  1,589.9       $  1,522.8
Consumer Packaging                                  611.3            620.4
Recycling                                           251.8            329.4
Intersegment Eliminations                           (165.9  )        (204.9  )
                                                            
TOTAL NET SALES                                $  2,287.1    $  2,267.7 
                                                                  
SEGMENT INCOME:
                                                                  
Corrugated Packaging ^(1)                        $  137.8         $  109.3
Consumer Packaging                                  66.5             80.3
Recycling                                           4.3              3.5
                                                            
TOTAL SEGMENT INCOME                           $  208.6      $  193.1   
                                                                  
Restructuring and Other Costs, net                  (16.1   )        (10.3   )
Non-Allocated Expenses                              (21.5   )        (26.1   )
Interest Expense                                    (29.1   )        (32.7   )
Loss on Extinguishment of Debt                      (0.2    )        -
Interest Income and Other Income (Expense),         -                0.4
net
                                                            
INCOME BEFORE INCOME TAXES                     $  141.7      $  124.4   

^(1) Includes inventory step-up expense of $0.4 million in the three months
ended December 31, 2011.



ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)
                                                             
                                                 FOR THE THREE MONTHS ENDED
                                                 December 31,     December 31,
                                              2012           2011
                                                                  
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income                          $  86.9          $  76.8
                                                                  
Adjustments to reconcile consolidated net
income to net cash provided by operating
activities:
Depreciation and amortization                       138.1            132.7
Deferred income tax expense                         50.2             42.9
Loss on extinguishment of debt                      0.2              -
Share-based compensation expense                    6.8              5.3
(Gain) loss on disposal of plant and                0.7              (0.6    )
equipment and other, net
Equity in income of unconsolidated entities         (0.6    )        (0.7    )
Settlement of interest rate swaps                   -                (2.8    )
Pension funding more than expense                   (12.8   )        (68.2   )
Impairment adjustments and other non-cash           2.7              1.6
items
Changes in operating assets and liabilities,
net of acquisitions:
Accounts receivable                                 74.7             132.2
Inventories                                         (49.2   )        (69.4   )
Other assets                                        11.0             (10.9   )
Accounts payable                                    (31.8   )        (56.8   )
Income taxes                                        (8.3    )        8.3
Accrued liabilities and other                    8.9          (45.3   )
NET CASH PROVIDED BY OPERATING ACTIVITIES        277.5        145.1   
INVESTING ACTIVITIES:
                                                                  
Capital expenditures                                (92.0   )        (81.6   )
Cash paid for purchase of businesses, net of        -                (87.5   )
cash acquired
Investment in unconsolidated entities               -                (1.6    )
Return of capital from unconsolidated               0.4              0.7
entities
Proceeds from sale of property, plant and        2.6          11.7    
equipment
NET CASH USED FOR INVESTING ACTIVITIES           (89.0   )     (158.3  )
FINANCING ACTIVITIES:
Additions to revolving credit facilities            31.8             104.4
Repayments of revolving credit facilities           (14.5   )        (39.9   )
Additions to debt                                   150.1            26.0
Repayments of debt                                  (326.9  )        (63.3   )
Debt issuance costs                                 (1.3    )        (0.8    )
Issuances of common stock, net of related           (4.8    )        2.0
minimum tax withholdings
Excess tax benefits from share-based                4.4              -
compensation
Repayments to unconsolidated entity                 -                (0.5    )
Cash dividends paid to shareholders                 (32.1   )        (14.1   )
Cash distributions to noncontrolling             (1.3    )     -       
interests
NET CASH PROVIDED BY (USED FOR) FINANCING        (194.6  )     13.8    
ACTIVITIES
Effect of exchange rate changes on cash and         (0.1    )        (1.3    )
cash equivalents
                                                                  
DECREASE IN CASH AND CASH EQUIVALENTS               (6.2    )        (0.7    )
                                                                  
Cash and cash equivalents at beginning of        37.2         41.7    
period
Cash and cash equivalents at end of period     $  31.0       $  41.0    
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid (received) during the period for:
Income taxes, net of refunds                     $  8.4           $  (3.6    )
Interest, net of amounts capitalized             9.3          23.6    
                                                                             
                                                                             

ROCK-TENN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN MILLIONS)
                                                           
                                                            
                                                December 31,     September 30,
                                                2012             2012
                                                           
                                                                 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                       $ 31.0           $  37.2
Restricted cash                                   11.3              40.6
Accounts receivable (net of allowances of         1,000.7           1,075.6
$27.3 and $26.9)
Inventories                                       910.1             861.9
Other current assets                              171.9             174.5
                                                           
                                                                 
TOTAL CURRENT ASSETS                              2,125.0           2,189.8
                                                           
                                                                 
Property, plant and equipment at cost:
Land and buildings                                1,209.1           1,207.7
Machinery and equipment                           6,180.0           6,121.7
Transportation equipment                          14.0              13.6
Leasehold improvements                           20.3            20.0     
                                                  7,423.4           7,363.0
Less accumulated depreciation and                (1,854.8 )       (1,751.6 )
amortization
Net property, plant and equipment                 5,568.6           5,611.4
Goodwill                                          1,864.9           1,865.3
Intangibles, net                                  772.3             795.1
Other assets                                      211.3             225.5
                                                           
                                                                 
TOTAL ASSETS                                    $ 10,542.1       $  10,687.1
                                                           
                                                                 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of debt                         $ 87.4           $  261.3
Accounts payable                                  677.5             708.9
Accrued compensation and benefits                 184.9             211.4
Other current liabilities                         216.3             226.7
                                                           
                                                                 
TOTAL CURRENT LIABILITIES                         1,166.1           1,408.3
                                                           
                                                                 
Long-term debt due after one year                 3,163.8           3,151.2
Pension liabilities                               1,469.9           1,493.1
Postretirement medical liabilities                152.1             154.2
Deferred income taxes                             930.5             888.8
Other long-term liabilities                       179.3             173.9
Redeemable noncontrolling interests               11.2              11.4
                                                                 
Total Rock-Tenn Company shareholders'             3,468.7           3,405.7
equity
Noncontrolling interests                         0.5             0.5      
Total Equity                                      3,469.2           3,406.2
                                                           
                                                                 
TOTAL LIABILITIES AND EQUITY                  $ 10,542.1    $  10,687.1 
                                                                             
                                                                             

Rock-Tenn Company Quarterly Statistics
                                                           
Key Financial Statistics
(In Millions, Unless Otherwise Specified)
                                                                       
                    1^st          2^nd        3^rd         4^th        Fiscal
                    Quarter       Quarter     Quarter      Quarter     Year
                                                                       
Net Income (Loss)
Attributable to Rock-Tenn
Company Shareholders
      2011           $50.3     $ 37.0      $ (30.1)     $ 83.9      $ 141.1
      2012            76.7          31.9        58.2         82.3        249.1
      2013            86.0
                                                                       
Diluted
Earnings
(Loss) per
Share
      2011           $1.27     $ 0.92      $ (0.60)     $ 1.17      $ 2.77
      2012            1.06          0.44        0.81         1.14        3.45
      2013            1.18
                                                                       
Depreciation &
Amortization
      2011           $36.7     $ 37.2      $ 73.5       $ 130.9     $ 278.3
      2012            132.7         132.6       131.4        137.6       534.3
      2013            138.1
                                                                       
Capital
Expenditures
      2011           $ 28.5     $ 30.3      $ 48.7       $ 91.9      $ 199.4
      2012            81.6          120.6       146.1        104.1       452.4
      2013            92.0
                                                                       
Mill System
Operating
Rates
      2011            95.4%         98.3%       96.7%        99.1%       97.9%
      2012            96.4%         90.6%       92.4%        97.7%       94.3%
      2013            97.6%
                                                                       
                                                                       

Rock-Tenn Company Quarterly Statistics
                                                                                       
Segment Operating Statistics
(Sales and Income In Millions, Shipments in Thousands of Tons Unless Otherwise Specified)
                                                                                                       
                                                                                                       
                   1^st                 2^nd                 3^rd                 4^th                 Fiscal
                   Quarter              Quarter              Quarter              Quarter              Year
Corrugated
Packaging
Segment Sales
      2011         $ 198.3              $ 209.4              $ 734.5              $ 1,626.5            $ 2,768.7
      2012           1,522.8              1,505.9              1,545.2              1,597.3              6,171.2
      2013           1,589.9
Corrugated
Packaging
Intersegment
Sales
      2011         $ 9.4                $ 11.1               $ 21.3               $ 39.9               $ 81.7
      2012           32.3                 30.8                 28.7                 29.8                 121.6
      2013           28.2
Corrugated
Packaging
Segment Income
      2011         $ 37.4               $ 30.1               $ 80.0      ^(1)     $ 153.6     ^(2)     $ 301.1
      2012           109.7     ^(3)       75.4      ^(4)       73.6      ^(5)       112.8     ^(6)       371.5
      2013           137.8
Return On
Sales
      2011           18.9%                14.4%                10.9%     ^(1)       9.4%      ^(2)       10.9%
      2012           7.2%      ^(3)       5.0%      ^(4)       4.8%      ^(5)       7.1%      ^(6)       6.0%
      2013           8.7%
                                                                                                       
Containerboard
Shipments ^(7)
      2011           247.4                243.9                850.7                1,914.4              3,256.4
      2012           1,832.0              1,695.9              1,722.9              1,859.1              7,109.9
      2013           1,816.6
                                                                                                       
Bleached
Linerboard
Shipments
      2011           -                    -                    12.9                 29.8                 42.7
      2012           29.3                 28.5                 32.3                 31.0                 121.1
      2013           30.2
                                                                                                       
Pulp Shipments
      2011           -                    -                    28.7                 71.2                 99.9
      2012           75.0                 61.5                 73.8                 77.0                 287.3
      2013           73.4
                                                                                                       
Corrugated
Containers
Shipments -
BSF ^(8)
      2011           2.6                  2.9                  9.1                  19.3                 33.9
      2012           19.0                 19.1                 19.5                 19.7                 77.3
      2013           19.2
                                                                                                       
Corrugated
Containers Per
Shipping Day -
MMSF ^(8)
      2011           43.1                 45.2                 144.7                301.4                134.6
      2012           317.2                298.3                309.3                313.0                309.3
      2013           314.1

^(1)  Excludes $55.4 million of inventory step-up expense.
^(2)   Excludes $4.0 million of inventory step-up expense.
^(3)   Excludes $0.4 million of inventory step-up expense.
^(4)   Excludes $6.7 million of operating losses at the recently closed
       Matane, Quebec containerboard mill.
^(5)   Excludes $0.2 million of inventory step-up expense.
^(6)   Excludes $0.2 million of inventory step-up expense.
^(7)   Includes Kraft Paper
^(8)   MMSF - millions of square feet and BSF - billions of square feet
       
       

Rock-Tenn Company Quarterly Statistics
                                                         
Segment Operating Statistics
(Sales and Income In Millions, Shipments in Thousands of Tons Unless Otherwise
Specified)
                                                                     
                                                                     
                   1^st          2^nd        3^rd        4^th        Fiscal
                   Quarter       Quarter     Quarter     Quarter     Year
Consumer
Packaging
Segment Sales
      2011         $  544.5      $ 567.8     $ 579.6     $ 667.9     $ 2,359.8
      2012            620.4        647.6       628.9       660.6       2,557.5
      2013            611.3
Consumer
Packaging
Intersegment
Sales
      2011         $  3.8        $ 3.9       $ 6.8       $ 9.0       $ 23.5
      2012            7.6          6.2         6.1         5.3         25.2
      2013            6.4
Consumer
Packaging
Segment Income
      2011         $  71.0       $ 61.0      $ 61.1      $ 82.1      $ 275.2
      2012            80.3         84.4        83.7        98.8        347.2
      2013            66.5
Return on
Sales
      2011            13.0%        10.7%       10.5%       12.3%       11.7%
      2012            12.9%        13.0%       13.3%       15.0%       13.6%
      2013            10.9%
                                                                     
Recycled
Paperboard
Shipments ^(1)
      2011            224.5        239.3       238.2       241.0       943.0
      2012            222.8        236.8       231.8       237.9       929.3
      2013            231.5
                                                                     
Bleached
Paperboard
Shipments
      2011            84.4         85.1        77.4        88.0        334.9
      2012            83.8         87.4        91.5        90.3        353.0
      2013            87.6
                                                                     
Pulp Shipments
      2011            22.1         24.0        20.9        25.1        92.1
      2012            24.9         25.1        24.3        21.9        96.2
      2013            26.7
                                                                     
Consumer
Packaging
Converting
Shipments -
BSF ^(2)
      2011            5.0          5.2         5.2         5.3         20.7
      2012            5.0          5.2         5.1         5.2         20.5
      2013            4.9
                                                                     
Consumer
Packaging
Converting Per
Shipping Day -
MMSF ^ (2)
      2011            82.2         83.0        82.1        82.5        82.4
      2012            83.5         81.0        80.6        83.1        82.0
      2013            81.0

^(1)  Recycled paperboard tons include coated and specialty paperboard,
       including gypsum paperboard liner tons by Seven Hills Paperboard LLC,
       our unconsolidated joint venture with Lafarge North America, Inc.
^(2)   MMSF - millions of square feet and BSF - billions of square feet
       
       

Rock-Tenn Company Quarterly Statistics

Segment Operating Statistics
(Sales and Income In Millions, Shipments in Thousands of Tons Unless Otherwise
Specified)
                                                             
                                                                         
                 1^st          2^nd          3^rd          4^th          Fiscal
                 Quarter       Quarter       Quarter       Quarter       Year
Recycling
Segment
Sales
      2011       $ 41.9        $ 40.8        $ 147.4       $ 355.8       $ 585.9
      2012         329.4         296.1         338.9         264.4         1,228.8
      2013         251.8
Recycling
Intersegment
Sales
      2011       $ 10.4        $ 10.1        $ 51.3        $ 137.8       $ 209.6
      2012         165.0         129.7         175.0         133.4         603.1
      2013         131.3
Recycling
Segment
Income
      2011       $ 2.3         $ 2.6         $ 4.6         $ 5.3         $ 14.8
      2012         3.5           4.2           2.2           (2.8)         7.1
      2013         4.3
Return on
Sales
      2011         5.5%          6.4%          3.1%          1.5%          2.5%
      2012         1.1%          1.4%          0.6%          (1.1)%        0.6%
      2013         1.7%
                                                                         
Fiber
Reclaimed
and Brokered
      2011         211.6         213.7         773.9         1,759.6       2,958.8
      2012         2,064.5       1,996.9       2,039.7       1,982.8       8,083.9
      2013         1,945.0
                                                                         
                                                                         

Non-GAAP Financial Measures and Reconciliations

We have included financial measures that are not prepared in accordance with
GAAP. Any analysis of non-GAAP financial measures should be used only in
conjunction with results presented in accordance with GAAP. Below, we define
the non-GAAP financial measures, provide a reconciliation of each non-GAAP
financial measure to the most directly comparable financial measure calculated
in accordance with GAAP, and discuss the reasons that we believe this
information is useful to management and may be useful to investors. These
measures may differ from similarly captioned measures of other companies in
our industry. The following non-GAAP measures are not intended to be
substitutes for GAAP financial measures and should not be used as such.

Net Debt

We have defined the non-GAAP measure “net debt” to include the aggregate debt
obligations reflected in our consolidated balance sheet, less the hedge
adjustments resulting from fair value interest rate derivatives or swaps and
the balance of our cash and cash equivalents.

Our management uses net debt, along with other factors, to evaluate our
financial condition. We believe that net debt is an appropriate supplemental
measure of financial condition because it provides a more complete
understanding of our financial condition before the impact of our decisions
regarding the appropriate use of cash and liquid investments. Set forth below
is a reconciliation of net debt to the most directly comparable GAAP measures,
Current portion of debt and Long-term debt due after one year for the current
quarter and the prior quarter.

(In Millions)                                December 31,  September 30,
                                              2012           2012
                                                             
Current Portion of Debt                       $  87.4        $  261.3
Long-Term Debt Due After One Year               3,163.8      3,151.2  
Total Debt                                       3,251.2        3,412.5
Less: Hedge Adjustments Resulting From Fair
Value Interest Rate Derivatives or Swaps        (0.1    )     (0.1     )
                                                 3,251.1        3,412.4
Less: Cash and Cash Equivalents                 (31.0   )     (37.2    )
Net Debt                                      $  3,220.1    $  3,375.2  
                                                                         

Segment EBITDA Margins

Our management uses “Segment EBITDA Margins”, along with other factors, to
evaluate our segment performance against our peers. Management believes that
investors also use this measure to evaluate our performance relative to our
peers.

Set forth below is a reconciliation of Segment EBITDA margins to the most
directly comparable GAAP measures, Segment Income and Segment Sales for the
quarter ending December 31, 2012:

(In
Millions,                                                   
except
percentages)
               Corrugated    Consumer                Corporate
                                                     /
               Packaging     Packaging   Recycling   Other        Consolidated
                                                                  
Segment        $ 1,589.9     $ 611.3     $ 251.8     $ (165.9 )   $   2,287.1
Sales
                                                                  
Segment        $ 137.8       $ 66.5      $ 4.3                    $   208.6
Income
Depreciation
and             107.3       24.4      3.2        3.2            138.1
Amortization
Total Debt
EBITDA         $ 245.1       $ 90.9      $ 7.5
                                                                  
Segment
EBITDA           15.4    %     14.9  %     3.0   %
Margins
                                                                  

Credit Agreement EBITDA and Total Funded Debt

“Credit Agreement EBITDA” is calculated in accordance with the definition
contained in our Credit Facility. Credit Agreement EBITDA is generally defined
as Consolidated Net Income plus: consolidated interest expense, income taxes
of the consolidated companies determined in accordance with GAAP, depreciation
and amortization expense of the consolidated companies determined in
accordance with GAAP, loss on extinguishment of debt and financing fees,
certain non-cash and cash charges incurred, including certain restructuring
and other costs, acquisition and integration costs, charges and expenses
associated with the write-up of inventory acquired and other items.

“Total Funded Debt” is calculated in accordance with the definition contained
in our Credit Facility. Total Funded Debt is generally defined as aggregate
debt obligations reflected in our balance sheet, less the hedge adjustments
resulting from terminated and existing fair value interest rate derivatives or
swaps, less certain cash, plus additional outstanding letters of credit not
already reflected in debt and certain guarantees.

Our management uses Credit Agreement EBITDA and Total Funded Debt to evaluate
compliance with our debt covenants and borrowing capacity available under our
Credit Facility. Management believes that investors also use these measures to
evaluate our compliance with our debt covenants and available borrowing
capacity. Borrowing capacity is dependent upon, in addition to other measures,
the “Credit Agreement Debt/EBITDA ratio” or the “Leverage Ratio,” which is
defined as Total Funded Debt divided by Credit Agreement EBITDA. As of the
December 31, 2012 calculation, our Leverage Ratio was 2.77 times. Our maximum
permitted Leverage Ratio under the Credit Facility at December 31, 2012 was
3.75 times.

Set forth below is a reconciliation of Credit Agreement EBITDA for the twelve
months ended December 31, 2012, to the most directly comparable GAAP measure,
Consolidated Net Income:

(In Millions)                  Twelve Months
                                Ended
                                December 31, 2012
                                
Consolidated Net Income         $      262.3
Interest Expense, net                  104.8
Income Taxes                           144.1
Depreciation and Amortization          539.7
Additional Permitted Charges          149.9
Credit Agreement EBITDA         $      1,200.8
                                       

Set forth below is a reconciliation of Total Funded Debt to the most directly
comparable GAAP measures, Current portion of debt and Long-term debt due after
one year:

(In Millions, except ratio)                                December 31,
                                                            2012
                                                            
Current Portion of Debt                                     $  87.4
Long-Term Debt Due After One Year                             3,163.8 
Total Debt                                                     3,251.2
Less: Hedge Adjustments Resulting From Terminated
Fair Value Interest Rate Derivatives or Swaps                 (0.1    )
Total Debt Less Hedge Adjustments                              3,251.1
Plus: Letters of Credit, Guarantees and Other Adjustments     72.5    
Total Funded Debt                                           $  3,323.6 
                                                            
Credit Agreement EBITDA for the Twelve Months Ended
December 31, 2012                                           $  1,200.8 
                                                            
Leverage Ratio                                                2.77    
                                                                       

Adjusted Net Income and Adjusted Earnings per Diluted Share

We also use the non-GAAP measures “adjusted net income” and “adjusted earnings
per diluted share”. Management believes these non-GAAP financial measures
provide our board of directors, investors, potential investors, securities
analysts and others with useful information to evaluate the performance of the
Company because it excludes restructuring and other costs, net, and other
specific items that management believes are not indicative of the ongoing
operating results of the business. The Company and our board of directors use
this information to evaluate the Company’s performance relative to other
periods. We believe that the most directly comparable GAAP measures to
adjusted net income and adjusted earnings per diluted share are Net income
attributable to Rock-Tenn Company shareholders and Earnings per Diluted Share,
respectively. Set forth at the beginning of this press release is a
reconciliation of adjusted earnings per diluted share to Earnings per diluted
share. Set forth below is a reconciliation of adjusted net income to Net
income attributable to Rock-Tenn Company shareholders:

                                                            
                                               Three Months   Three Months
                                                 Ended            Ended
                                                 December 31,     December 31,
(In Millions)                                  2012           2011
                                                                  
Net income attributable to Rock-Tenn Company     $    86.0        $    76.7
shareholders
                                                                  
Restructuring and other costs and operating
losses
and transition costs due to plant closures            12.0             8.3
Loss on extinguishment of debt                        0.1              —
Acquisition inventory step-up                         —                0.2
                                                            
Adjusted net income                            $    98.1      $    85.2

Contact:

RockTenn
John Stakel, SVP-Treasurer, 678-291-7900
 
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