Graham Packaging Co Inc.

CIK:0001478085|SEC Filings

Earnings Per Share

6 Months Ended

Jun. 30, 2011

21. Earnings Per Share

The following are reconciliations of net (loss) income attributable to GPC stockholders used to calculate basic and diluted (loss) earnings per share.

The following summarizes loss per share for the three months ended June 30, 2011 (in thousands, except share and per share data):


	As Reported			Attributable to Noncontrolling Interests (1)			Attributable to GPC Stockholders for Computation of Basic Loss Per Share			Adjustment for Potentially Dilutive Options to Purchase Partnership Units (2)		Adjusted for Computation of Diluted Loss Per Share
Numerator:
Net loss	$	(26,604	)	$	(1,835	)	$	(28,439	)	$	—	$	(28,439	)

Denominator:
Weighted average number of GPC shares outstanding (3)(4)								66,457,589					66,457,589

							Basic					Diluted
Loss per share:
Net loss attributable to GPC stockholders							$	(0.43	)			$	(0.43	)

The following summarizes earnings per share for the three months ended June 30, 2010 (in thousands, except share and per share data):


	As Reported		Attributable to Noncontrolling Interests (1)			Attributable to GPC Stockholders for Computation of Basic Earnings Per Share		Adjustment for Potentially Dilutive Options to Purchase Partnership Units (2)			Adjusted for Computation of Diluted Earnings Per Share
Numerator:
Net income	$	37,800	$	(4,264	)	$	33,536	$	(671	)	$	32,865

Denominator:
Weighted average number of GPC shares outstanding (3)(4)							62,555,962					62,555,962

						Basic					Diluted
Earnings per share:
Net income attributable to GPC stockholders						$	0.54				$	0.53

The following summarizes loss per share for the six months ended June 30, 2011 (in thousands, except share and per share data):


	As Reported			Attributable to Noncontrolling Interests (1)			Attributable to GPC Stockholders for Computation of Basic Loss Per Share			Adjustment for Potentially Dilutive Options to Purchase Partnership Units (2)		Adjusted for Computation of Diluted Loss Per Share
Numerator:
Net loss	$	(18,506	)	$	(2,849	)	$	(21,355	)	$	—	$	(21,355	)

Denominator:
Weighted average number of GPC shares outstanding (3)(4)								65,873,577					65,873,577

							Basic					Diluted
Loss per share:
Net loss attributable to GPC stockholders							$	(0.32	)			$	(0.32	)

The following summarizes earnings per share for the six months ended June 30, 2010 (in thousands, except share and per share data):


	As Reported		Attributable to Noncontrolling Interests (1)			Attributable to GPC Stockholders for Computation of Basic Earnings Per Share		Adjustment for Potentially Dilutive Options to Purchase Partnership Units (2)			Adjusted for Computation of Diluted Earnings Per Share
Numerator:
Net income	$	13,289	$	(1,974	)	$	11,315	$	(464	)	$	10,851

Denominator:
Weighted average number of GPC shares outstanding (3)(4)							57,780,042					57,780,042

						Basic					Diluted
Earnings per share:
Net income attributable to GPC stockholders						$	0.20				$	0.19

(1)	The allocation of earnings is based on the noncontrolling interests’ relative ownership percentage.

(2)

Holdings adjustment is based on incremental earnings that would be attributable to those potentially dilutive options to purchase partnership units on an “as-if converted” basis. For the three months ended June 30, 2011 and 2010, and the six months ended June 30, 2011 and 2010, 2,255,297, 722,112, 2,255,297 and 722,112 potential options to purchase partnership units, respectively, have been excluded as the options are either antidilutive or as a result of the related contingency not being met as of the reporting dates. Regarding the contingency, options that contain a contingency are those which vest and become exercisable upon the attainment of certain financial performance goals associated with a sale by Blackstone of 75% of its original ownership interest in the Company.

(3)

In conjunction with the IPO, and as further discussed in Note 22, the Graham Family entered into an Exchange Agreement. For the three months ended June 30, 2011 and 2010, and the six months ended June 30, 2011 and 2010, 2,692,525, 6,298,288, 2,692,525 and 6,298,288 of exchange rights, respectively, were excluded from diluted (loss) earnings per share as the effects were anti-dilutive.

(4)	For the three months ended June 30, 2011 and 2010, and the six months ended June 30, 2011 and 2010, 848,572, 803,088, 848,572 and 803,088 potential options to purchase GPC common stock, respectively, were excluded from diluted (loss) earnings per share as the effects were anti-dilutive.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating activities:
Net (loss) income	$ (18,506)	$ 13,289
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	104,723	77,645
Amortization of debt issuance fees	2,636	3,184
Accretion of senior unsecured notes	236	238
Net loss on debt extinguishment		2,664
Net (gain) loss on disposal of property, plant and equipment	(95)	1,053
Pension expense	1,500	1,577
Asset impairment charges	2,478	2,792
Unrealized (gain) loss on termination of cash flow hedge accounting	(6,502)	359
Stock compensation expense	498	656
Equity income from unconsolidated subsidiaries	(34)	(40)
Deferred tax provision	14,231	7,263
Increase in income tax receivable obligations	12,567	4,900
Foreign currency transaction (gain) loss	(300)	507
Interest receivable on loans to owners	(199)	(151)
Changes in operating assets and liabilities:
Accounts receivable	(95,345)	(47,419)
Inventories	(22,212)	2,397
Prepaid expenses and other current assets	2,998	20,490
Other non-current assets	(12,434)	(4,769)
Accounts payable and accrued expenses	108,536	15,015
Pension contributions	(2,468)	(2,916)
Other non-current liabilities	(270)	468
Net cash provided by operating activities	92,038	99,202
Investing activities:
Cash paid for property, plant and equipment	(80,580)	(75,937)
Proceeds from sale of property, plant and equipment	2,004	255
Cash paid for sale of business	(61)
Net cash used in investing activities	(78,637)	(75,682)
Financing activities:
Proceeds from issuance of long-term debt	27,072	42,518
Payment of long-term debt	(38,899)	(240,478)
Debt issuance fees	(462)	(648)
Proceeds from the issuance of common stock, net of underwriting discount of $11.3 million		171,055
Payment of other expenses for the issuance of common stock		(5,419)
Proceeds from issuance of ownership interests	6,421
Net cash used in financing activities	(5,868)	(32,972)
Effect of exchange rate changes on cash and cash equivalents	1,562	(2,244)
Increase (decrease) in cash and cash equivalents	9,095	(11,696)
Cash and cash equivalents at beginning of period	152,964	147,808
Cash and cash equivalents at end of period	162,059	136,112
Supplemental disclosures:
Cash paid for interest, net of amounts capitalized	99,953	74,401
Cash paid for income taxes (net of refunds)	8,349	9,686
Non-cash investing and financing activities:
Accruals for purchases of property, plant and equipment	18,621	6,051
Accruals for debt issuance fees	1	136
Accruals related to acquisitions	676
Accruals for fees related to the initial public offering		$ 250

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 162,059	$ 152,964
Accounts receivable, net	315,769	216,368
Inventories	272,330	247,166
Deferred income taxes	30,796	14,616
Prepaid expenses and other current assets	40,545	42,363
Total current assets	821,499	673,477
Property, plant and equipment, net	1,207,593	1,203,142
Intangible assets, net	186,639	195,780
Goodwill	658,255	643,064
Other non-current assets	73,549	91,364
Total assets	2,947,535	2,806,827
Current liabilities:
Current portion of long-term debt	31,599	34,007
Accounts payable	245,257	142,585
Accrued expenses and other current liabilities	205,897	196,432
Deferred revenue	40,294	32,471
Total current liabilities	523,047	405,495
Long-term debt	2,790,984	2,798,824
Deferred income taxes	41,214	32,428
Other non-current liabilities	113,140	100,804
Commitments and contingent liabilities (see Notes 15 and 16)
Graham Packaging Company Inc. stockholders' equity (deficit):
Preferred stock, $0.01 par value, 100,000,000 shares authorized, 0 shares issued and outstanding
Common stock, $0.01 par value, 500,000,000 shares authorized, shares issued and outstanding 67,754,824 and 63,311,512	678	633
Additional paid-in capital	466,373	459,422
Retained earnings (deficit)	(992,662)	(977,318)
Notes and interest receivable for ownership interests	(5,037)	(4,838)
Accumulated other comprehensive income (loss)	188	(22,508)
Graham Packaging Company Inc. stockholders' equity (deficit)	(530,460)	(544,609)
Noncontrolling interests	9,610	13,885
Equity (deficit)	(520,850)	(530,724)
Total liabilities and equity (deficit)	$ 2,947,535	$ 2,806,827