GREIF INC

Previous wording

The discussion and analysis presented below relates to the material changes in financial condition and results of operations for the interim condensed consolidated balance sheet as of April 30, 2024 and the condensed consolidated balance sheet as of October 31, 2023, and for the interim condensed consolidated statements of income for the three and six months ended April 30, 2024 and 2023. This discussion and analysis should be read in conjunction with the interim condensed consolidated financial statements that appear elsewhere in this Form 10-Q and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023 (the “2023 Form 10-K”). Readers are encouraged to review the entire 2023 Form 10-K, as it includes information regarding Greif not discussed in this Form 10-Q. This information will assist in your understanding of the discussion of our current period financial results.

Current wording

The discussion and analysis presented below relates to the material changes in financial condition and results of operations for the interim condensed consolidated balance sheet as of July 31, 2024 and the condensed consolidated balance sheet as of October 31, 2023, and for the interim condensed consolidated statements of income for the three and nine months ended July 31, 2024 and 2023. This discussion and analysis should be read in conjunction with the interim condensed consolidated financial statements that appear elsewhere in this Form 10-Q and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023 (the “2023 Form 10-K”). Readers are encouraged to review the entire 2023 Form 10-K, as it includes information regarding Greif not discussed in this Form 10-Q. This information will assist in your understanding of the discussion of our current period financial results.

Previous wording

In the Global Industrial Packaging reportable segment, we are a leading global producer of industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, jerrycans and other small plastics, closure systems for industrial packaging products, transit protection products, water bottles and remanufactured and reconditioned industrial containers, and services, such as container life cycle management, filling, logistics, warehousing and other packaging services. We sell our industrial packaging products on a global basis to customers in industries such as chemicals, paints and pigments, food and beverage, petroleum, industrial coatings, agriculture, pharmaceutical and minerals, among others.

Current wording

In the Global Industrial Packaging reportable segment, we are a leading global producer of industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, jerrycans and other small plastics, closure systems for industrial packaging products, transit protection products, water bottles and remanufactured and reconditioned industrial containers, and services, such as container life cycle management, logistics, warehousing and other packaging services. We sell our industrial packaging products on a global basis to customers in industries such as chemicals, paints and pigments, food and beverage, petroleum, industrial coatings, agriculture, pharmaceutical and minerals, among others.

Previous wording

In the Land Management reportable segment, we are focused on the active harvesting and regeneration of our United States timber properties to achieve sustainable long-term yields. While timber sales are subject to fluctuations, we seek to maintain a consistent cutting schedule, within the limits of market and weather conditions. We also sell, from time to time, timberland and special use land, which consists of surplus land, higher and better use (“HBU”) land and development land. As of April 30, 2024, we owned approximately 176,000 acres of timber property in the southeastern United States, which includes 6,500 acres of special use land.

Current wording

In the Land Management reportable segment, we are focused on the active harvesting and regeneration of our United States timber properties to achieve sustainable long-term yields. While timber sales are subject to fluctuations, we seek to maintain a consistent cutting schedule, within the limits of market and weather conditions. We also sell, from time to time, timberland and special use land, which consists of surplus land, higher and better use (“HBU”) land and development land. As of July 31, 2024, we owned approximately 176,000 acres of timber property in the southeastern United States, which includes 7,100 acres of special use land.

Previous wording

The following comparative information is presented for the three and six months ended April 30, 2024 and 2023. Historical revenues and earnings may or may not be representative of future operating results as a result of various economic and other factors.

Current wording

The following comparative information is presented for the three and nine months ended July 31, 2024 and 2023. Historical revenues and earnings may or may not be representative of future operating results as a result of various economic and other factors.

Previous wording

The non-GAAP financial measures of EBITDA and Adjusted EBITDA are used throughout the following discussion of our results of operations, both for our consolidated and segment results. For our consolidated results, EBITDA is defined as net income, plus interest expense, net, plus income tax (benefit) expense, plus depreciation, depletion and amortization, and Adjusted EBITDA is defined as EBITDA plus restructuring charges, plus acquisition and integration related costs, plus non-cash asset impairment charges, plus (gain) loss on disposal of properties, plants and equipment, net, plus (gain) loss on disposal of businesses, net, plus fiscal year-end change costs. Since we do not calculate net income by reportable segment, EBITDA and Adjusted EBITDA by reportable segment are reconciled to operating profit by reportable segment. In that case, EBITDA is defined as operating profit by reportable segment less other (income) expense, net, less equity earnings of unconsolidated affiliates, net of tax, plus depreciation, depletion and amortization expense for that reportable segment, and Adjusted EBITDA is defined as EBITDA plus restructuring charges, plus acquisition and integration related costs, plus non-cash asset impairment charges, plus (gain) loss on disposal of properties, plants and equipment, net, plus (gain) loss on disposal of businesses, net, plus fiscal year-end change costs, for that reportable segment.

Current wording

The non-GAAP financial measures of EBITDA and Adjusted EBITDA are used throughout the following discussion of our results of operations, both for our consolidated and segment results. For our consolidated results, EBITDA is defined as net income, plus interest expense, net, plus income tax (benefit) expense, plus depreciation, depletion and amortization, and Adjusted EBITDA is defined as EBITDA plus acquisition and integration related costs, plus restructuring charges, plus non-cash asset impairment charges, plus (gain) loss on disposal of properties, plants and equipment, net, plus (gain) loss on disposal of businesses, net, plus fiscal year-end change costs. Since we do not calculate net income by reportable segment, EBITDA and Adjusted EBITDA by reportable segment are reconciled to operating profit by reportable segment. In that case, EBITDA is defined as operating profit by reportable segment less other (income) expense, net, less equity earnings of unconsolidated affiliates, net of tax, plus depreciation, depletion and amortization expense for that reportable segment, and Adjusted EBITDA is defined as EBITDA plus acquisition and integration related costs, plus restructuring charges, plus non-cash asset impairment charges, plus (gain) loss on disposal of properties, plants and equipment, net, plus (gain) loss on disposal of businesses, net, plus fiscal year-end change costs, for that reportable segment.

Previous wording

Net sales were $2,576.8 million for the first six months of 2024 compared with $2,579.9 million for the first six months of 2023. The $3.1 million decrease was primarily due to lower average selling prices and lower volumes across the Paper Packaging & Services segment and lower volumes across the Global Industrial Packaging segment, partially offset by higher average selling prices across the Global Industrial Packaging segment and the contribution from recent acquisitions. See the “Segment Review” below for additional information on net sales by segment.

Current wording

Net sales were $1,454.2 million for the third quarter of 2024 compared with $1,330.3 million for the third quarter of 2023. The $123.9 million increase was primarily due to higher average selling prices and higher volumes across the Global Industrial Packaging segment and the Paper Packaging & Services segment, respectively, and contributions from recent acquisitions. See the “Segment Review” below for additional information on net sales by segment.

Previous wording

Gross profit was $270.1 million for the second quarter of 2024 compared with $311.8 million for the second quarter of 2023. The $41.7 million decrease was primarily due to higher raw material, transportation and manufacturing costs, partially offset by the same factors that impacted net sales. See the “Segment Review” below for additional information on gross profit by segment. Gross profit margin was 19.7 percent and 23.8 percent for the second quarter of 2024 and 2023, respectively.

Current wording

Gross profit was $290.4 million for the third quarter of 2024 compared with $307.0 million for the third quarter of 2023. The $16.6 million decrease was primarily due to higher raw material, transportation and manufacturing costs, partially offset by the same factors that impacted net sales. See the “Segment Review” below for additional information on gross profit by segment. Gross profit margin was 20.0 percent and 23.1 percent for the third quarter of 2024 and 2023, respectively.

Previous wording

Selling, general and administrative (“SG&A”) expenses were $167.2 million for the second quarter of 2024 compared with $137.2 million for the second quarter of 2023. The $30.0 million increase was primarily related to higher compensation expenses, costs incurred for strategic investments and amortization expenses due to recent acquisitions. SG&A expenses were 12.2 percent and 10.5 percent of net sales for the second quarter of 2024 and 2023, respectively.

Current wording

Selling, general and administrative (“SG&A”) expenses were $164.0 million for the third quarter of 2024 compared with $135.7 million for the third quarter of 2023. The $28.3 million increase was primarily related to higher compensation expenses, costs incurred for strategic investments and amortization expenses due to recent acquisitions. SG&A expenses were 11.3 percent and 10.2 percent of net sales for the third quarter of 2024 and 2023, respectively.

Previous wording

Operating profit was $98.1 million for the second quarter of 2024 compared with $181.1 million for the second quarter of 2023. Net income was $52.0 million for the second quarter of 2024 compared with $116.0 million for the second quarter of 2023. Adjusted EBITDA was $169.9 million for the second quarter of 2024 compared with $228.6 million for the second quarter of 2023. The reasons for the changes in operating profit, net income, and Adjusted EBITDA for each segment are described below in the “Segment Review.”

Current wording

Operating profit was $171.0 million for the third quarter of 2024 compared with $155.6 million for the third quarter of 2023. Net income was $93.6 million for the third quarter of 2024 compared with $96.7 million for the third quarter of 2023. Adjusted EBITDA was $193.7 million for the third quarter of 2024 compared with $226.5 million for the third quarter of 2023. The reasons for the changes in operating profit, net income, and Adjusted EBITDA for each segment are described below in the “Segment Review.”

Previous wording

Our Global Industrial Packaging segment offers a comprehensive line of industrial packaging products, such as steel, fibre, and plastic drums, rigid intermediate bulk containers, jerrycans and other small plastics, closure systems for industrial packaging products, transit protection products, water bottles, and remanufactured and reconditioned industrial containers, and services, such as container life cycle management, filling, logistics, warehousing, and other packaging services. Key factors influencing profitability in the Global Industrial Packaging segment are:

Current wording

Our Global Industrial Packaging segment offers a comprehensive line of industrial packaging products, such as steel, fibre, and plastic drums, rigid intermediate bulk containers, jerrycans and other small plastics, closure systems for industrial packaging products, transit protection products, water bottles, and remanufactured and reconditioned industrial containers, and services, such as container life cycle management, logistics, warehousing, and other packaging services. Key factors influencing profitability in the Global Industrial Packaging segment are:

Previous wording

Gross profit was $86.0 million for the second quarter of 2024 compared with $131.4 million for the second quarter of 2023. The $45.4 million decrease in gross profit was primarily due to higher raw material, transportation, and manufacturing costs, partially offset by the same factors that impacted net sales. Gross profit margin was 15.3 percent and 23.7 percent for the second quarter of 2024 and 2023, respectively.

Current wording

Gross profit was $102.5 million for the third quarter of 2024 compared with $128.1 million for the third quarter of 2023. The $25.6 million decrease in gross profit was primarily due to higher raw material, transportation and manufacturing costs, partially offset by the same factors that impacted net sales. Gross profit margin was 17.0 percent and 22.7 percent for the third quarter of 2024 and 2023, respectively.

Previous wording

Operating profit was $12.6 million for the second quarter of 2024 compared with $67.6 million for the second quarter of 2023. The $55.0 million decrease was primarily due to the same factors that impacted gross profit and higher SG&A expenses related to higher incentive expenses and costs incurred for strategic investments. Adjusted EBITDA was $49.0 million for the second quarter of 2024 compared with $104.9 million for the second quarter of 2023. The $55.9 million decrease in Adjusted EBITDA was primarily due to the same factors that impacted operating profit.

Current wording

Operating profit was $37.5 million for the third quarter of 2024 compared with $52.1 million for the third quarter of 2023. The $14.6 million decrease was primarily due to the same factors that impacted gross profit and higher SG&A expenses related to higher incentive expenses and costs incurred for strategic investments, partially offset by lower restructuring charges and higher gains on disposal of properties, plants and equipment, net. Adjusted EBITDA was $69.4 million for the third quarter of 2024 compared with $98.1 million for the third quarter of 2023. The $28.7 million decrease in Adjusted EBITDA was primarily due to the same factors that impacted gross profit.

Previous wording

As of April 30, 2024, we had approximately 6,500 acres of special use property in the United States.

Current wording

As of July 31, 2024, we had approximately 7,100 acres of special use property in the United States.

Previous wording

Our quarterly income tax expense was computed in accordance with Accounting Standards Codification (“ASC”) 740-270 "Income Taxes - Interim Reporting." In accordance with this accounting standard, annual estimated income tax expense is computed based on forecasted annual earnings and other forecasted annual amounts, including, but not limited to items such as uncertain tax positions and withholding taxes. Additionally, losses from jurisdictions for which a valuation allowance has been provided have not been included in the annual estimated tax rate. Income tax expense each quarter is provided for on a current year-to-date basis using the annual estimated tax rate, adjusted for discrete taxable events that occur during the interim period.

Current wording

Our quarterly income tax expense was computed in accordance with Accounting Standards Codification (“ASC”) 740-270 "Income Taxes - Interim Reporting." In accordance with this accounting standard, annual estimated tax expense is computed based on forecasted annual earnings and other forecasted annual amounts, including, but not limited to items such as uncertain tax positions and withholding taxes. Additionally, losses from jurisdictions for which a valuation allowance has been provided have not been included in the annual estimated tax rate. Income tax expense each quarter is provided for on a current year-to-date basis using the annual estimated tax rate, adjusted for discrete taxable events that occur during the interim period.

Previous wording

Income tax expense for the second quarter of 2024 was $17.0 million on $68.3 million of pretax income, and income tax expense for the second quarter of 2023 was $39.1 million on $154.8 million of pretax income. The $22.1 million net decrease in income tax expense was primarily attributable to the following:

Current wording

Income tax expense for the third quarter of 2024 was $36.2 million on $128.9 million of pretax income, and income tax expense for the third quarter of 2023 was $31.1 million on $126.9 million of pretax income. The $5.1 million net increase in income tax expense was primarily attributable to the following:

Previous wording

•A $7.4 million decrease due to changes in income tax expense related to prior year tax returns.

Current wording

•A $1.0 million increase related to changes in tax expense related to prior year tax returns;

Previous wording

•A $22.7 million decrease in tax due to changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, as well as the timing of recognition of the related income tax expense under ASC 740-270.

Current wording

•A $2.9 million decrease related to changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, as well as the timing of recognition of the related tax expense under ASC 740-270.

Previous wording

The estimated net decrease in unrecognized tax benefits for the next 12 months ranges from zero to $5.7 million. Actual results may differ materially from this estimate.

Current wording

The estimated net decrease in unrecognized tax benefits for the next 12 months ranges from zero to $6.3 million. Actual results may differ materially from this estimate.

Previous wording

The Organization for Economic Co-operation and Development proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 countries. During 2023, many countries began to incorporate Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. Accordingly, we still are evaluating the potential impacts of Pillar 2 on our longer-term business, financial position and results of operations. Pillar 2 will be effective for the Company as of the first quarter of its fiscal year beginning November 1, 2024.

Current wording

The Organization for Economic Co-operation and Development proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 countries. During 2023, many countries began to incorporate Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. Accordingly, we still are evaluating the potential long-term impacts of Pillar 2 on our financial position, results of operations, cash flow and disclosures. Pillar 2 will be effective for us as of the first quarter of its fiscal year beginning November 1, 2024.

Previous wording

The following table sets forth the net sales, operating profit, EBITDA and Adjusted EBITDA for each of our business segments for the six months ended April 30, 2024 and 2023:

Current wording

The following table sets forth the net sales, operating profit, EBITDA and Adjusted EBITDA for each of our business segments for the nine months ended July 31, 2024 and 2023:

Previous wording

The following table sets forth EBITDA and Adjusted EBITDA, reconciled to net income and operating profit, for our consolidated results for the six months ended April 30, 2024 and 2023:

Current wording

The following table sets forth EBITDA and Adjusted EBITDA, reconciled to net income and operating profit, for our consolidated results for the nine months ended July 31, 2024 and 2023:

Previous wording

The following table sets forth EBITDA and Adjusted EBITDA for our business segments, reconciled to the operating profit for each segment, for the six months ended April 30, 2024 and 2023:

Current wording

The following table sets forth EBITDA and Adjusted EBITDA for our business segments, reconciled to the operating profit for each segment, for the nine months ended July 31, 2024 and 2023:

Previous wording

Net sales were $1,371.0 million for the second quarter of 2024 compared with $1,308.9 million for the second quarter of 2023. The $62.1 million increase was primarily due to higher average selling prices and higher volumes across the Global Industrial Packaging segment, higher volumes across the Paper Packaging & Services segment, and the contribution from recent acquisitions, partially offset by lower average selling prices across the Paper Packaging & Services segment. See the “Segment Review” below for additional information on net sales by segment.

Current wording

Net sales were $4,031.0 million for the first nine months of 2024 compared with $3,910.2 million for the first nine months of 2023. The $120.8 million increase was primarily due to higher average selling prices and higher volumes across the Global Industrial Packaging segment, higher volumes across the Paper Packaging & Services segment, and contributions from recent acquisitions, partially offset by lower average selling prices across the Paper Packaging & Services segment. See the “Segment Review” below for additional information on net sales by segment.

Previous wording

Gross profit was $491.7 million for the first six months of 2024 compared with $563.4 million for the first six months of 2023. The $71.7 million decrease was primarily due to the same factors that impacted net sales and higher raw material, transportation, and manufacturing costs. See “Segment Review” below for additional information on gross profit by segment. Gross profit margin was 19.1 percent and 21.8 percent for first six months of 2024 and 2023, respectively.

Current wording

Gross profit was $782.1 million for the first nine months of 2024 compared with $870.4 million for the first nine months of 2023. The $88.3 million decrease was primarily due to higher raw material, transportation and manufacturing costs, partially offset by the same factors that impacted net sales. See “Segment Review” below for additional information on gross profit by segment. Gross profit margin was 19.4 percent and 22.3 percent for first nine months of 2024 and 2023, respectively.

Previous wording

SG&A expenses were $313.0 million for the first six months of 2024 compared with $276.6 million for the first six months of 2023. The $36.4 million increase in SG&A expenses was primarily related to higher compensation expenses, costs incurred for strategic investments and amortization expenses due to recent acquisitions. SG&A expenses were 12.1 percent and 10.7 percent of net sales for first six months of 2024 and 2023, respectively.

Current wording

SG&A expenses were $477.0 million for the first nine months of 2024 compared with $412.3 million for the first nine months of 2023. The $64.7 million increase in SG&A expenses was primarily related to higher compensation expenses, costs incurred for strategic investments and amortization expenses due to recent acquisitions. SG&A expenses were 11.8 percent and 10.5 percent of net sales for first nine months of 2024 and 2023, respectively.

Previous wording

Operating profit was $167.0 million for the first six months of 2024 compared with $337.5 million for the first six months of 2023. Net income was $126.3 million for the first six months of 2024 compared with $209.1 million for the first six months of 2023. Adjusted EBITDA was $297.9 million for the first six months of 2024 compared with $393.1 million for the first six months of 2023. The reasons for the changes in operating profit, net income, and Adjusted EBITDA for each segment are described below in the “Segment Review.”

Current wording

Operating profit was $338.0 million for the first nine months of 2024 compared with $493.1 million for the first nine months of 2023. Net income was $219.9 million for the first nine months of 2024 compared with $305.8 million for the first nine months of 2023. Adjusted EBITDA was $491.6 million for the first nine months of 2024 compared with $619.6 million for the first nine months of 2023. The reasons for the changes in operating profit, net income, and Adjusted EBITDA for each segment are described below in the “Segment Review.”

Previous wording

Net sales were $1,491.4 million for the first six months of 2024 compared with $1,454.0 million for the first six months of 2023. The $37.4 million increase in net sales was primarily due to higher average selling prices and the contribution from recent acquisitions, partially offset by lower volumes and negative foreign currency translation impacts.

Current wording

Net sales were $2,337.4 million for the first nine months of 2024 compared with $2,215.8 million for the first nine months of 2023. The $121.6 million increase in net sales was primarily due to higher average selling prices, higher volumes and contributions from recent acquisitions, partially offset by negative foreign currency translation impacts.

Previous wording

Gross profit was $316.8 million for the first six months of 2024 compared with $303.2 million for the first six months of 2023. The $13.6 million increase in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material, transportation, and manufacturing costs. Gross profit margin was 21.2 percent and 20.9 percent for the first six months of 2024 and 2023, respectively.

Current wording

Gross profit was $502.4 million for the first nine months of 2024 compared with $480.0 million for the first nine months of 2023. The $22.4 million increase in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material, transportation and manufacturing costs. Gross profit margin was 21.5 percent and 21.7 percent for the first nine months of 2024 and 2023, respectively.

Previous wording

Operating profit was $134.3 million for the first six months of 2024 compared with $157.2 million for the first six months of 2023. The $22.9 million decrease in operating profit was primarily due to higher SG&A expenses related to higher compensation expenses, costs incurred for strategic investments and amortization expenses from recent acquisitions and a $9.8 million gain recognized during the second quarter of 2023 related to our previously held minority ownership interest in Centurion, partially offset by the same factors that impacted gross profit. Adjusted EBITDA was $189.2 million for the first six months of 2024 compared with $193.0 million for the first six months of 2023. The $3.8 million decrease in Adjusted EBITDA was primarily due to higher SG&A expenses related to higher compensation expenses, costs incurred for strategic investments and amortization expenses from recent acquisitions, partially offset by the same factors that impacted gross profit.

Current wording

Operating profit was $266.1 million for the first nine months of 2024 compared with $259.2 million for the first nine months of 2023. The $6.9 million increase in operating profit was primarily due to the same factors that impacted gross profit and a $46.1 million gain from the Delta Divestiture during the third quarter of 2024, partially offset by higher SG&A expenses related to higher compensation expenses, costs incurred for strategic investments and amortization expenses from recent acquisitions and a $9.8 million gain recognized during the second quarter of 2023 related to our previously held minority ownership interest in Centurion. Adjusted EBITDA was $311.5 million for the first nine months of 2024 compared with $319.5 million for the first nine months of 2023. The $8.0 million decrease in Adjusted EBITDA was primarily due to higher SG&A expenses related to higher compensation expenses and costs incurred for strategic investments, partially offset by the same factors that impacted gross profit.

Previous wording

Gross profit was $170.4 million for the first six months of 2024 compared with $255.6 million for the first six months of 2023. The $85.2 million decrease in gross profit was primarily due to the same factors that impacted net sales and higher raw material, transportation, and manufacturing costs. Gross profit margin was 15.8 percent and 22.9 percent for the first six months of 2024 and 2023, respectively.

Current wording

Gross profit was $272.9 million for the first nine months of 2024 compared with $383.7 million for the first nine months of 2023. The $110.8 million decrease in gross profit was primarily due to higher raw material, transportation and manufacturing costs. Gross profit margin was 16.3 percent and 22.9 percent for the first nine months of 2024 and 2023, respectively.

Previous wording

Operating profit was $29.4 million for the first six months of 2024 compared with $176.7 million for the first six months of 2023. The $147.3 million decrease in operating profit was primarily due to the same factors that impacted gross profit, a $54.6 million gain from divestiture of Tama Paperboard, LLC (the “Tama Divestiture”) during the first quarter of 2023 and higher SG&A expenses related to higher compensation expenses, costs incurred for strategic investments and amortization expenses from recent acquisitions. Adjusted EBITDA was $104.5 million for the first six months of 2024 compared with $195.6 million for the first six months of 2023. The $91.1 million decrease in Adjusted EBITDA was primarily due to the same factors that impacted gross profit and higher SG&A expenses related to higher compensation expenses, costs incurred for strategic investments and amortization expenses from recent acquisitions.

Current wording

Operating profit was $66.9 million for the first nine months of 2024 compared with $228.8 million for the first nine months of 2023. The $161.9 million decrease in operating profit was primarily due to the same factors that impacted gross profit, a $54.6 million gain from the divestiture of Tama Paperboard, LLC (the “Tama Divestiture”) during the first quarter of 2023 and higher SG&A expenses related to higher compensation expenses, costs incurred for strategic investments and amortization expenses from recent acquisitions. Adjusted EBITDA was $173.9 million for the first nine months of 2024 compared with $293.7 million for the first nine months of 2023. The $119.8 million decrease in Adjusted EBITDA was primarily due to the same factors that impacted gross profit and higher SG&A expenses related to higher compensation expenses and costs incurred for strategic investments.

Previous wording

Income tax benefit for the first six months of 2024 was $(21.2) million on $103.9 million of pretax income, and income tax expense for the first six months of 2023 was $76.8 million on $285.1 million of pretax income. The $98.0 million net decrease in income tax expense was primarily attributable to the following:

Current wording

Income tax expense for the first nine months of 2024 was $15.0 million on $232.8 million of pretax income, and income tax expense for the first nine months of 2023 was $107.9 million on $412.0 million of pretax income. The $92.9 million net decrease in income tax expense was primarily attributable to the following:

Previous wording

•One-time discrete tax benefits of $48.1 million related to the recognition of deferred tax assets due to the onshoring of certain non-U.S. intangible property.

Current wording

•A $48.1 million decrease related to the recognition of deferred tax assets from onshoring certain non-U.S. intangible property;

Previous wording

•A $14.7 million benefit due to changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, as well as the timing of recognition of the related income tax expense under ASC740-270.

Current wording

•A $38.0 million decrease related to changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, as well as the timing of recognition of the related tax expense under ASC 740-270;

Previous wording

•An $8.4 million decrease due to changes in income tax expense related to prior year tax returns and audits.

Current wording

•An $8.3 million decrease related to prior year tax returns and audits;

Previous wording

During the first six months of 2024 and 2023, cash (used in) provided by change in accounts receivable was $(65.9) million and $66.0 million, respectively. The unfavorable change in accounts receivable levels was primarily due to an increase in net sales.

Current wording

During the first nine months of 2024 and 2023, cash (used in) provided by change in accounts receivable was $(82.0) million and $109.5 million, respectively. The unfavorable change in accounts receivable levels was primarily due to an increase in net sales.

Previous wording

During the first six months of 2024 and 2023, cash (used in) provided by change in inventories was $(37.5) million and $38.6 million, respectively. The unfavorable change in inventories was primarily due to increases in raw material prices and purchases to meet demand.

Current wording

During the first nine months of 2024 and 2023, cash (used in) provided by change in inventories was $(46.4) million and $49.9 million, respectively. The unfavorable change in inventories was primarily due to increases in raw material prices and purchases to meet demand.

Previous wording

During the first six months of 2024 and 2023, cash (used in) provided by change in accounts payable was $49.1 million and $(66.9) million, respectively. The favorable change in accounts payable levels was primarily due to increase in raw material prices and purchases to meet demand.

Current wording

During the first nine months of 2024 and 2023, cash (used in) provided by change in accounts payable was $26.1 million and $(65.6) million, respectively. The favorable change in accounts payable levels was primarily due to increase in raw material prices and purchases to meet demand.

Previous wording

During the first six months of 2024 and 2023, we invested $96.6 million and $91.1 million, respectively, of cash in capital expenditures.

Current wording

During the first nine months of 2024 and 2023, we invested $141.4 million and $136.4 million, respectively, of cash in capital expenditures.

Previous wording

During the first six months of 2024, we paid $567.6 million for the purchases of business, net of cash acquired, primarily for the Ipackchem Acquisition. During the first six months of 2023, we paid $447.5 million for purchases of businesses, net of cash acquired, primarily for the Lee Container Acquisition and the Centurion Acquisition.

Current wording

During the first nine months of 2024, we paid $567.6 million for the purchases of business, net of cash acquired, primarily for the Ipackchem Acquisition. During the first nine months of 2023, we paid $447.5 million for purchases of businesses, net of cash acquired, primarily for the Lee Container Acquisition and the Centurion Acquisition.