RockTenn Reports Fourth Quarter Fiscal 2012 Results

Cash Provided From Operating, Financing and Investing Activities

At September 30, 2012, total debt was $3.41 billion and our Leverage Ratio (as hereinafter defined) was 2.96 times, well below our maximum credit agreement covenant of 3.75 times. Net debt (as hereinafter defined) increased by $34.6 million in the September quarter to $3.38 billion. Cash provided by operations was $115.3 million in the fourth quarter of fiscal 2012, after pension funding in excess of expense of $143.1 million. We invested $104.1 million in capital expenditures, purchased $17.0 million of previously leased assets, returned $14.1 million in dividends to our shareholders and made final payments of $5.1 million on two prior period acquisitions.

Conference Call

We will host a conference call to discuss our results of operations for the fourth quarter of fiscal 2012 and other topics that may be raised during the discussion at 9:00 a.m., Eastern Time, on November 2, 2012. 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 November 16, 2012 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 and recycling solutions. RockTenn’s 26,300 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.

Cautionary Statements

Statements in this release that do not relate strictly to historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations, beliefs, plans or forecasts and use words such as will, estimate, anticipate, project, intend, or expect, or refer to future time periods, and include statements made in this report regarding, among other things our belief that we expect that by the end of the March quarter we will be realizing most of the anticipated benefit of announced corrugated price increases, including those relating to containerboard, boxes and sheets, and that those increases will be partially offset by lower prices in our consumer segment and higher commodity input costs constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to certain risks and uncertainties including with respect to our expectations regarding economic, competitive and market conditions generally; expected volumes and price levels of purchases by customers; fiber and energy costs; costs associated with facility closures; competitive conditions in our businesses and possible adverse actions of our customers, our competitors and suppliers. These expectations are based on assumptions that management believes are reasonable; however, undue reliance should not be placed on these forward-looking statements because these risks and uncertainties could cause actual results to differ materially from those contained in any forward-looking statements. There are many other factors and uncertainties that impact these forward-looking statements that we cannot predict accurately, including our ability to integrate Smurfit-Stone or to achieve benefits from the Smurfit-Stone acquisition, including synergies, performance improvements and successful implementation of capital projects. Further, our business is subject to a number of general risks that would affect any such forward-looking statements including, among others, decreases in demand for our products; increases in energy, raw materials, shipping and capital equipment costs; reduced supply of raw materials; fluctuations in selling prices and volumes; intense competition; the potential loss of certain key customers; changes in environmental and other governmental regulation; and adverse changes in general market and industry conditions. These risks are more particularly described in our filings with the Securities and Exchange Commission, including under the caption “Business―Forward-Looking Information” and “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011. The information contained in this release speaks as of the date hereof and we do not undertake any obligation to update this information as future events unfold.

ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
	FOR THE THREE MONTHS ENDED								FOR THE TWELVE MONTHS ENDED
	September 30,				September 30,				September 30,				September 30,
		2012				2011				2012				2011
NET SALES	$	2,353.8			$	2,463.5			$	9,207.6			$	5,399.6
Cost of Goods Sold		1,933.9				2,029.1				7,674.9				4,407.7
Gross Profit		419.9				434.4				1,532.7				991.9
Selling, General and Administrative Expenses		242.4				224.4				927.5				541.2
Restructuring and Other Costs, net		23.1				30.9				75.2				93.3
Operating Profit		154.4				179.1				530.0				357.4
Interest Expense		(28.0	)			(33.2	)			(119.7	)			(88.9	)
Loss on Extinguishment of Debt		(6.3	)			-				(25.9	)			(39.5	)
Interest Income and Other Income (Expense), net		0.2				(19.1	)			1.3				(15.0	)
Equity in Income of Unconsolidated Entities		0.5				0.3				3.4				1.5
INCOME BEFORE INCOME TAXES		120.8				127.1				389.1				215.5
Income Tax Expense		(37.4	)			(42.3	)			(136.9	)			(69.5	)
CONSOLIDATED NET INCOME		83.4				84.8				252.2				146.0
Less: Net Income Attributable to Noncontrolling
Interests		(1.1	)			(0.9	)			(3.1	)			(4.9	)
NET INCOME ATTRIBUTABLE TO ROCK-TENN COMPANY SHAREHOLDERS	$	82.3			$	83.9			$	249.1			$	141.1
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	$	82.3			$	83.9			$	249.1			$	141.1
Less: Distributed and undistributed income
available to participating securities		(0.1	)			(0.5	)			(0.7	)			(1.4	)
Distributed and undistributed income available
to Rock-Tenn Company shareholders	$	82.2			$	83.4			$	248.4			$	139.7
Diluted weighted average shares outstanding		72.4				71.6				72.1				50.5
Diluted earnings per share	$	1.14			$	1.17			$	3.45			$	2.77

ROCK-TENN COMPANY
SEGMENT INFORMATION
(UNAUDITED)
(IN MILLIONS)
		FOR THE THREE MONTHS ENDED										FOR THE TWELVE MONTHS ENDED
		September 30,				September 30,						September 30,				September 30,
			2012				2011						2012				2011
NET SALES:
Corrugated Packaging		$	1,597.3			$	1,626.5					$	6,171.2			$	2,768.7
Consumer Packaging			660.6				667.9						2,557.5				2,359.8
Recycling			264.4				355.8						1,228.8				585.9
Intersegment Eliminations			(168.5	)			(186.7	)					(749.9	)			(314.8	)
TOTAL NET SALES		$	2,353.8			$	2,463.5					$	9,207.6			$	5,399.6
SEGMENT INCOME:
Corrugated Packaging (1)		$	112.6			$	149.6					$	364.0			$	241.7
Consumer Packaging			98.8				82.1						347.2				275.2
Recycling			(2.8	)			5.3						7.1				14.8
TOTAL SEGMENT INCOME		$	208.6			$	237.0					$	718.3			$	531.7
Restructuring and Other Costs, net			(23.1	)			(30.9	)					(75.2	)			(93.3	)
Non-Allocated Expenses			(30.6	)			(26.7	)					(109.7	)			(79.5	)
Interest Expense			(28.0	)			(33.2	)					(119.7	)			(88.9	)
Loss on Extinguishment of Debt			(6.3	)			-						(25.9	)			(39.5	)
Interest Income and Other Income (Expense), net			0.2				(19.1	)					1.3				(15.0	)
INCOME BEFORE INCOME TAXES		$	120.8			$	127.1					$	389.1			$	215.5
(1) After $6.7 million of pre-tax losses at our Matane, Quebec containerboard mill in the twelve months ended September 30, 2012 and after inventory step-up expense of $0.2 million and $0.8 million pre-tax in the three and twelve months ended September 30, 2012, respectively, and $4.0 million and $59.4 million pre-tax in the three and twelve months ended September 30, 2011, respectively.

ROCK-TENN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)
		FOR THE THREE MONTHS ENDED										FOR THE TWELVE MONTHS ENDED
		September 30,				September 30,						September 30,				September 30,
			2012				2011						2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income		$	83.4			$	84.8					$	252.2			$	146.0
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			137.6				130.9						534.3				278.3
Deferred income tax expense			32.7				51.2						123.4				60.0
Loss on extinguishment of debt			6.3				-						25.9				39.5
Share-based compensation expense			8.1				4.8						29.2				21.4
(Gain) loss on disposal of plant and equipment and other, net			2.9				1.0						(10.0	)			0.9
Equity in income of unconsolidated entities			(0.5	)			(0.3	)					(3.4	)			(1.5	)
Settlement of foreign currency hedge and interest rate swaps			-				-						(2.8	)			1.7
Pension funding (more) less than expense			(143.1	)			(28.1	)					(305.4	)			(22.7	)
Impairment adjustments and other non-cash items			10.1				27.3						29.2				31.5
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable			(8.3	)			(8.6	)					55.5				(14.4	)
Inventories			(1.4	)			(31.1	)					7.1				(0.5	)
Other assets			26.6				(2.5	)					(17.8	)			33.2
Accounts payable			(42.1	)			(57.6	)					(77.8	)			(38.8	)
Income taxes			2.7				(3.1	)					13.3				(56.2	)
Accrued liabilities and other			0.3				(46.7	)					3.8				(16.7	)
NET CASH PROVIDED BY OPERATING ACTIVITIES			115.3				122.0						656.7				461.7
INVESTING ACTIVITIES:
Capital expenditures			(104.1	)			(91.9	)					(452.4	)			(199.4	)
Cash paid for the purchase of a leased facility			(17.0	)			-						(17.0	)			-
Cash paid for purchase of businesses, net of cash acquired			(5.1	)			1.4						(125.6	)			(1,300.1	)
Investment in unconsolidated entities			-				(0.7	)					(1.7	)			(2.0	)
Return of capital from unconsolidated entities			0.2				0.4						1.8				1.0
Proceeds from sale of property, plant and equipment			3.4				1.0						40.5				8.6
Proceeds from property, plant and equipment insurance settlement			-				0.2						10.2				0.5
NET CASH USED FOR INVESTING ACTIVITIES			(122.6	)			(89.6	)					(544.2	)			(1,491.4	)
FINANCING ACTIVITIES:
Proceeds from issuance of notes			693.3				-						1,442.2				-
Additions to revolving credit facilities			437.5				439.1						748.1				802.6
Repayments of revolving credit facilities			(615.5	)			(285.0	)					(759.8	)			(564.5	)
Additions to debt			12.8				0.4						326.6				2,877.4
Repayments of debt			(484.3	)			(180.2	)					(1,803.6	)			(1,966.3	)
Debt issuance costs			(9.7	)			(0.7	)					(16.2	)			(43.8	)
Cash paid for debt extinguishment costs			(0.1	)			-						(14.0	)			(37.9	)
Issuances of common stock, net of related minimum tax withholdings			4.8				1.0						5.2				25.2
Excess tax benefits from share-based compensation			(0.8	)			(7.3	)					10.0				-
Advances from unconsolidated entity			0.5				1.1						0.2				1.7
Cash dividends paid to shareholders			(14.1	)			(14.0	)					(56.5	)			(37.6	)
Cash distributions to noncontrolling interests			(0.4	)			(1.0	)					(0.8	)			(5.2	)
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES			24.0				(46.6	)					(118.6	)			1,051.6
Effect of exchange rate changes on cash and cash equivalents			1.0				4.3						1.6				3.9
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			17.7				(9.9	)					(4.5	)			25.8
Cash and cash equivalents at beginning of period			19.5				51.6						41.7				15.9
Cash and cash equivalents at end of period		$	37.2			$	41.7					$	37.2			$	41.7
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Income taxes, net of refunds		$	3.4			$	3.1					$	(9.6	)		$	22.7
Interest, net of amounts capitalized			39.2				44.1						114.8				86.9

ROCK-TENN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN MILLIONS)
		September 30,				September 30,
		2012				2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	37.2			$	41.7
Restricted cash			40.6				41.1
Accounts receivable (net of allowances of $26.9 and $30.1)			1,075.6				1,109.6
Inventories			861.9				849.8
Other current assets			174.5				186.7
TOTAL CURRENT ASSETS			2,189.8				2,228.9
Property, plant and equipment at cost:
Land and buildings			1,207.7				1,135.1
Machinery and equipment			6,121.7				5,691.1
Transportation equipment			13.6				12.8
Leasehold improvements			20.0				6.9
			7,363.0				6,845.9
Less accumulated depreciation and amortization			(1,751.6	)			(1,318.7	)
Net property, plant and equipment			5,611.4				5,527.2
Goodwill			1,865.3				1,839.4
Intangibles, net			795.1				799.4
Other assets			225.5				171.1
TOTAL ASSETS		$	10,687.1			$	10,566.0
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of debt		$	261.3			$	143.3
Accounts payable			708.9				780.7
Accrued compensation and benefits			211.4				220.0
Other current liabilities			226.7				174.3
TOTAL CURRENT LIABILITIES			1,408.3				1,318.3
Long-term debt due after one year			3,151.2				3,302.5
Pension liabilities			1,493.1				1,431.0
Postretirement medical liabilities			154.2				155.2
Deferred income taxes			888.8				827.1
Other long-term liabilities			173.9				153.3
Redeemable noncontrolling interests			11.4				6.3
Total Rock-Tenn Company shareholders' equity			3,405.7				3,371.6
Noncontrolling interests			0.5				0.7
Total Equity			3,406.2				3,372.3
TOTAL LIABILITIES AND EQUITY		$	10,687.1			$	10,566.0

Rock-Tenn Company Quarterly Statistics
Key Financial Statistics
(In Millions, Unless Otherwise Specified)
		1 st Quarter				2 nd Quarter				3 rd Quarter				4 th Quarter				Fiscal Year
Net Income (Loss) Attributable to Rock-Tenn Company Shareholders
2010		$	56.3			$	32.8			$	45.1			$	91.4			$	225.6
2011			50.3				37.0				(30.1	)			83.9				141.1
2012			76.7				31.9				58.2				82.3				249.1
Diluted Earnings (Loss) per Share
2010		$	1.43			$	0.83			$	1.14			$	2.31			$	5.70
2011			1.27				0.92				(0.60	)			1.17				2.77
2012			1.06				0.44				0.81				1.14				3.45
Depreciation & Amortization
2010		$	37.5			$	36.8			$	36.4			$	36.7			$	147.4
2011			36.7				37.2				73.5				130.9				278.3
2012			132.7				132.6				131.4				137.6				534.3
Capital Expenditures
2010		$	12.3			$	18.3			$	30.3			$	45.3			$	106.2
2011			28.5				30.3				48.7				91.9				199.4
2012			81.6				120.6				146.1				104.1				452.4
Total Production - Thousands of Tons (1)
2010			568.5				566.7				589.1				591.4				2,315.7
2011			583.7				593.5				1,232.3				2,390.0				4,799.5
2012			2,290.9				2,167.0				2,131.1				2,317.9				8,906.9
Mill System Operating Rates
2010			94.2	%			95.1	%			98.2	%			97.1	%			96.2	%
2011			95.4	%			98.3	%			96.7	%			99.1	%			97.9	%
2012			96.4	%			90.6	%			92.4	%			97.7	%			94.3	%
(1) Containerboard, SBS/SBL and Pulp tons produced include the Smurfit-Stone tons beginning May 28, 2011.

	Rock-Tenn Company Quarterly Statistics
	Segment Operating Statistics
	(Sales and Income In Millions, Production in Thousands of Tons Unless Otherwise Specified)
			1 st Quarter						2 nd Quarter						3 rd Quarter						4 th Quarter						Fiscal Year
	Corrugated Packaging Segment Sales
	2010		$	180.1					$	191.0					$	210.5					$	219.0					$	800.6
	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
	Corrugated Packaging Intersegment Sales
	2010		$	7.3					$	8.6					$	9.6					$	11.8					$	37.3
	2011			9.4						11.1						21.3						39.9						81.7
	2012			32.3						30.8						28.7						29.8						121.6
	Corrugated Packaging Segment Income
	2010		$	35.8					$	21.9					$	36.7					$	49.1					$	143.5
	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
	Return On Sales
	2010			19.9	%					11.5	%					17.4	%					22.4	%					17.9	%
	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	%
	Containerboard Production (7)
	2010			234.2						231.6						243.4						246.1						955.3
	2011			246.2						245.5						858.5						1,923.2						3,273.4
	2012			1,843.5						1,736.5						1,676.4						1,852.1						7,108.5
	Bleached Linerboard Production
	2010			-						-						-						-						-
	2011			-						-						12.5						32.9						45.4
	2012			27.7						27.1						30.8						33.8						119.4
	Pulp Production
	2010			-						-						-						-						-
	2011			-						-						26.2						74.9						101.1
	2012			77.9						58.1						75.5						75.4						286.9
	Corrugated Containers Shipments - BSF (8) (9)
	2010			2.7						2.6						2.9						2.8						11.0
	2011			2.6						2.9						9.1						19.3						33.9
	2012			19.0						19.1						19.5						19.7						77.3
	Corrugated Containers Per Shipping Day - MMSF (8) (9)
	2010			43.7						42.4						45.0						43.4						43.6
	2011			43.1						45.2						144.7						301.4						134.6
	2012			317.2						298.3						309.3						313.0						309.3
(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 Production
(8)	MMSF - millions of square feet and BSF - billions of square feet
(9)	Corrugated Container Shipments include Smurfit-Stone shipments beginning May 28, 2011.

Rock-Tenn Company Quarterly Statistics
Segment Operating Statistics
(Sales and Income In Millions, Production in Thousands of Tons Unless Otherwise Specified)
		1 st Quarter					2 nd Quarter					3 rd Quarter						4 th Quarter						Fiscal Year
Consumer Packaging Segment Sales
2010		$	497.8				$	516.9				$	543.5					$	574.7					$	2,132.9
2011			544.5					567.8					579.6						667.9						2,359.8
2012			620.4					647.6					628.9						660.6						2,557.5
Consumer Packaging Intersegment Sales
2010		$	2.8				$	2.6				$	3.9					$	3.7					$	13.0
2011			3.8					3.9					6.8						9.0						23.5
2012			7.6					6.2					6.1						5.3						25.2
Consumer Packaging Segment Income
2010		$	55.1		(1)		$	55.7		(2)		$	69.0					$	81.9					$	261.7
2011			71.0					61.0					61.1						82.1						275.2
2012			80.3					84.4					83.7						98.8						347.2
Return on Sales
2010			11.1	%	(1)			10.8	%	(2)			12.7	%					14.3	%					12.3	%
2011			13.0	%				10.7	%				10.5	%					12.3	%					11.7	%
2012			12.9	%				13.0	%				13.3	%					15.0	%					13.6	%
Recycled Paperboard Production (3)
2010			223.6					227.8					234.2						235.1						920.7
2011			226.7					235.2					239.4						242.0						943.3
2012			227.3					234.6					234.1						239.0						935.0
Bleached Paperboard Production
2010			85.1					83.5					87.4						84.1						340.1
2011			87.4					86.6					74.8						90.8						339.6
2012			87.5					85.6					87.9						91.0						352.0
Pulp Production
2010			25.6					23.8					24.1						26.1						99.6
2011			23.4					26.2					20.9						26.2						96.7
2012			27.0					25.1					26.4						26.6						105.1
Consumer Packaging Converting Shipments - BSF (4)
2010			4.9					4.9					5.1						5.2						20.1
2011			5.0					5.2					5.2						5.3						20.7
2012			5.0					5.2					5.1						5.2						20.5
Consumer Packaging Converting Per Shipping Day - MMSF (4)
2010			78.3					78.7					80.4						82.0						79.9
2011			82.2					83.0					82.1						82.5						82.4
2012			83.5					81.0					80.6						83.1						82.0
(1) Excludes $20.7 million of alternative fuel mixture credit, net of expenses.
(2) Excludes $8.1 million of alternative fuel mixture credit.
(3) Recycled paperboard tons produced include coated and specialty paperboard, including gypsum paperboard liner tons produced by Seven Hills Paperboard LLC, our unconsolidated joint venture with Lafarge North America, Inc.
(4) MMSF - millions of square feet and BSF - billions of square feet

Rock-Tenn Company Quarterly Statistics
Segment Operating Statistics
(Sales and Income In Millions, Production in Thousands of Tons Unless Otherwise Specified)
	1 st Quarter				2 nd Quarter				3 rd Quarter				4 th Quarter				Fiscal Year
Recycling Segment Sales
2010	$	28.6			$	44.2			$	40.7			$	37.1			$	150.6
2011		41.9				40.8				147.4				355.8				585.9
2012		329.4				296.1				338.9				264.4				1,228.8
Recycling Intersegment Sales
2010	$	5.6			$	9.0			$	9.3			$	8.5			$	32.4
2011		10.4				10.1				51.3				137.8				209.6
2012		165.0				129.7				175.0				133.4				603.1
Recycling Segment Income
2010	$	1.2			$	4.1			$	2.2			$	1.5			$	9.0
2011		2.3				2.6				4.6				5.3				14.8
2012		3.5				4.2				2.2				(2.8	)			7.1
Return on Sales
2010		4.2	%			9.3	%			5.4	%			4.0	%			6.0	%
2011		5.5	%			6.4	%			3.1	%			1.5	%			2.5	%
2012		1.1	%			1.4	%			0.6	%			(1.1	)%			0.6	%
Fiber Reclaimed and Brokered (1)
2010		222.4				233.7				229.8				220.7				906.6
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
(1) Fiber Reclaimed and Brokered tons shipped include the Smurfit-Stone tons beginning May 28, 2011.

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