Atlanta, Ga.

Highlights

• Q3 Net Sales were $1,581.6 million versus $1,531.8 million in the prior year period.
• Q3 Earnings per Diluted Share were $0.18 versus $0.30 in the prior year period.
• Q3 Adjusted Earnings per Diluted Share were $0.20 versus $0.22 in the prior year period.
• Q3 Net Income was $52.1 million versus $94.3 million in the prior year period.
• Q3 Adjusted EBITDA was $244.3 million versus $256.3 million in the prior year period.
• Completed the previously announced and planned extensive maintenance outage at our Texarkana SBS mill on time and on budget.
• Announced strategic $600 million investment in new coated recycled paperboard (CRB) machine in Kalamazoo, Michigan.
• Completed the acquisition of Artistic Carton Company, a diversified producer of folding cartons and CRB.
• Returned $79 million to stakeholders in Q3 through $50 million of share repurchases, $23 million of dividends, and $6 million of distributions to the GPIP Partner.

Graphic Packaging Holding Company, (the "Company"), a leading provider of packaging solutions to food, beverage, foodservice, and other consumer products companies, today reported Net Income for third quarter 2019 of $52.1 million, or $0.18 per share, based on 293.7 million weighted average diluted shares. This compares to third quarter 2018 Net Income of $94.3 million, or $0.30 per share, based on 311.5 million weighted average diluted shares.

Third quarter 2019 Net Income was impacted by a net $5.3 million of special charges that are detailed in the Reconciliation of Non-GAAP Financial Measures table attached. When adjusting for these charges, Adjusted Net Income for the third quarter of 2019 was $57.4 million, or $0.20 per diluted share. This compares to third quarter 2018 Adjusted Net Income of $69.1 million, or $0.22 per diluted share.

Michael Doss, the Company's President and CEO said, "The third quarter of 2019 was a solid quarter with Adjusted EBITDA of $244 million at the high-end of our expectations. Pricing improved by $34 million reflecting the benefits of our pricing initiatives. Importantly, our pricing to commodity input cost relationship was a positive $26 million for the quarter and $67 million for the first nine months of 2019. In addition, we successfully completed the previously announced and planned extensive maintenance outage at our Texarkana SBS mill on time and on budget." Doss added, "We remain focused on capturing benefits from the consumer-driven shift into our innovative paperboard solutions and continue to expect that new product wins will drive 100-200 basis points of net organic volume growth in 2020."

Operating Results

Net Sales

Net Sales increased 3.3% to $1,581.6 million in the third quarter of 2019, compared to $1,531.8 million in the prior year period. The $49.8 million increase was driven by $33.8 million of higher pricing and $27.9 million of improved volume/mix related primarily to acquisitions and organic volume growth. These benefits were partially offset by $11.9 million of unfavorable foreign exchange.

Attached is supplemental data highlighting Net Tons Sold by quarter for 2019 and 2018.

EBITDA

EBITDA for the third quarter of 2019 was $235.7 million. After adjusting both periods for charges associated with business combinations and other special charges, and the third quarter 2018 gain on sale of assets, Adjusted EBITDA decreased $12.0 million to $244.3 million in the third quarter of 2019 from $256.3 million in the third quarter of 2018. When comparing against the prior year quarter, Adjusted EBITDA in the third quarter of 2019 was positively impacted by $33.8 million of higher pricing. Favorable pricing was offset by $20.4 million of operating items (primarily the previously announced extensive mill maintenance outage at Texarkana), $7.6 million of commodity input cost inflation (primarily wood), $12.0 million of other inflation (primarily labor and benefits), $3.3 million of foreign exchange, and $2.5 million from volume/mix.

Other Results

Total Debt (Long-Term, Short-Term and Current Portion) decreased $67.8 million during the third quarter of 2019 to $3,002.8 million compared to the second quarter of 2019. Total Net Debt (Total Debt, net of Cash and Cash Equivalents) decreased $51.8 million during the third quarter of 2019 to $2,954.1 million compared to the second quarter of 2019. The Company's third quarter 2019 pro forma Net Leverage Ratio was 2.90 times Adjusted EBITDA compared to 2.91 times at the end of the second quarter of 2019.

At September 30, 2019, the Company had available liquidity of $1,486.7 million, including the undrawn availability under its global revolving credit facilities.

Net Interest Expense was $35.9 million in the third quarter of 2019, up compared to the $31.0 million reported in the third quarter of 2018, primarily reflecting higher average borrowing rates.

Capital expenditures for the third quarter of 2019 were $71.6 million compared to $96.6 million in the third quarter of 2018.

Third quarter 2019 Income Tax Expense was $16.9 million, compared to a $17.8 million expense in the third quarter of 2018.

Please note that a tabular reconciliation of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted EPS, Adjusted Net Cash Provided by Operating Activities, Adjusted Cash Flow, Total Net Debt and pro forma Net Leverage Ratio is attached to this release.

Earnings Call

The Company will host a conference call at 10:00 a.m. ET today (October 22, 2019) to discuss the results of third quarter 2019. The conference call will be webcast and can be accessed from the Investors section of the Graphic Packaging website at www.graphicpkg.com. Participants may also listen via telephone by dialing 800-392-9489 from the United States and Canada, and 706-634-2372 from outside the United States and Canada. Telephone participants are required to provide the conference ID 2668375 and should call at least 10 minutes prior to the start of the conference call.