Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     X     No       

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes X    No___

As of June 30, 2004, GBC's most recently completed second fiscal quarter, the aggregate market value of the Common Stock (based upon the average bid and asked prices of these shares on the Over-The-Counter Market - NASDAQ) of the company held by nonaffiliates was approximately $97,636,398.

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

"SKU's" and facilities, as well as headcount reductions. In 2001, GBC began implementation of Phase II of the profit improvement program. In the fourth quarter of 2001, after a comprehensive six-month operational review, the Company launched its "Operational Excellence Program." This program is based upon a continuous improvement process which uses the "80/20 principles" of simplification, segmentation and intense focus. The goals of this program include: a) focusing on greater profitability and long-term revenue growth; b) streamlining and improving worldwide infrastructure; and c) generating cash to increase financial flexibility. The program has produced positive results and is expected to continue with further operational and financial improvements, although there can be no assurance that such improvement will continue and to what extent. The

2

savings from this program have helped to offset the effect of a challenging sales environment, increased raw material costs, fund investments related to new sales, marketing and product development initiatives, and reduce the Company's debt levels.

In 2003, GBC modified its segment reporting to reflect changes in the Company's organization. The changes primarily consisted of combining three of GBC's four business units into the following two groups - Commercial and Consumer Group ("CCG") and Industrial and Print Finishing Group ("IPFG"). The CCG is responsible for marketing the Company's binding, laminating, visual display (writing boards, bulletin boards, easels, etc.), and other products for use by consumers and commercial customers. The IPFG targets "print-for-pay" and other finishing customers who use GBC's professional grade finishing equipment and supplies.

Many of the equipment and supply products manufactured and/or sold by GBC and certain application methods related to such products are covered by United States and foreign patents either owned by GBC or licensed from others. Although the patents owned or licensed by GBC

are important to its business, the loss of any or all such patents would not have a significant effect on GBC's business.

The Company has registered the GBC, Quartet, Ibico, Shredmaster, VeloBind and Bates trademarks in the United States and numerous foreign countries and considers those trademarks material to its business. GBC has also registered numerous other important trademarks related to specific products in the United States and many foreign countries; however, GBC does not consider its business dependent on any of those trademarks.

* Per the latest report from the Transfer Agent. Each security dealer holding shares in a street name for one or       more individuals is counted as only one shareholder of record.

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(1) In 2002, GBC adopted SFAS No.142, "Goodwill and Other Intangible Assets" (SFAS No.142). The cumulative effect of accounting change related to the adoption of SFAS No.142 was $79.0 million, net of taxes.
(2) Amounts represent per share amounts for both Common Stock and Class B Common Stock.

The Company's results are dependent upon sales of CCG and IPFG products, which are susceptible to changes in economic conditions, customer and industry consolidation, reseller business strategy (e.g., private label vs. branded products) and other factors which are difficult to predict. During periods of deteriorating economic conditions, GBC may be increasingly affected by competitive pricing pressures and decreased customer demand. In 2004, competitive pricing pressures continued to affect the office products business of CCG and the commercial laminating films business of IPFG. Additionally, during 2004 GBC was negatively impacted by increased costs on certain raw materials used in the manufacture of its products. While worldwide economic growth may continue in 2005, GBC believes that factors impacting its business will continue to be challenging. To offset its challenging business environment, the Company has continued to identify and work to achieve cost reductions and operating efficiencies through its Operational Excellence Program, as described in more detail in Item 1 "Business", and to introduce new products to market.

Fluctuations in foreign currency exchange rates also have a significant impact on GBC's results, as a significant portion of GBC's revenues and operations are located outside the U.S. In 2004,

10

due to foreign currency translation, sales in each of the Company's business groups benefited from a weakened U.S. dollar. This trend may continue in 2005, however, GBC would expect that a strengthening of the U.S. dollar would have an opposite and negative impact on the Company's results.

GBC's net sales for the year ended December 31, 2004 increased 2.1% to $712.3 million compared to $697.9 million in 2003. The Company's net sales were favorably impacted by a weaker U.S. dollar in 2004 compared to 2003. The translation impact of foreign exchange rates benefited sales by approximately 3.4% in 2004. Net sales by business segment are summarized below (000 omitted):

CCG's sales decreased $13.2 million or 2.9% in 2004 when compared to 2003. Factors negatively affecting the Group's 2004 results include: a) competitive pricing pressure in the Group's office products business; b) lower direct sales due to lower than expected sales representative head count; and c) a decision to exit a private label three-ring binder position with a customer. Sales for the IPFG increased by $20.4 million or 14.9% in 2004 when compared to the prior year, primarily due to growth in the Group's European commercial films and digital print finishing businesses. Sales in the Europe Group increased $7.3 million or 7.2% in 2004, due primarily to the effect of a weaker U.S. dollar in 2004 compared to 2003. The effect of foreign exchange rates benefited the Europe group by 10.3% in 2004. There was a decrease in local currency sales in Europe due to a highly competitive currency-related pricing environment.

GBC's gross profit margin in 2004 was 38.9% compared to 40.0% in 2003. Despite cost savings achieved through the Company's Operational Excellence initiatives, competitive pricing environments within each of the business groups and raw material price increases caused the gross profit margin decline.

Total selling, service and administrative expenses increased $1.1 million in 2004 compared to 2003. The increase was primarily due to translation of a weaker U.S. dollar in 2004 compared to 2003. As a percentage of sales, total selling, service and administrative expenses declined in 2004 to 31.7% from 32.2% in 2003. While the Company achieved cost savings from Operational Excellence initiatives, certain costs such as distribution increased due to higher fuel costs and increased volumes. Overall, the effect of foreign exchange rates resulted in a 3.2% increase in GBC's total selling, service and administrative expenses.

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In 2004, GBC recognized $1.3 million in earnings from joint ventures compared to a break-even level in 2003. The joint venture earnings in 2004 were generated from the Company's Australian joint venture, Pelikan-Quartet Pty Ltd. ('"Pelikan-Quartet"), which is part of the Commercial and Consumer Group. Earnings from Pelikan-Quartet more than offset losses from the Company's investments in GMP Co,. Ltd. ("GMP") and Neschen/GBC Graphic Films LLC ("Neschen"). In 2003, earnings from Pelikan-Quartet were entirely offset by losses from GMP and Neschen.

Segment operating income for GBC's business groups, which is calculated as net sales less product cost of sales, selling, service and administrative expenses, amortization of other intangibles, plus equity earnings of joint ventures. See note 16 to the consolidated financial statements for a reconciliation of segment operating income to income before income taxes and cumulative effect of accounting change. Segment operating income is summarized below (000 omitted):

Operating income for 2004 decreased 3.0% or $1.7 million compared to 2003. Operating income in the CCG decreased by $11.1 million in 2004, primarily due to lower sales and gross profit margins as a result of pricing pressures, along with higher distribution expenses in the Group's office products business. The impact of lower sales and higher expenses was partially offset by the increase in equity earnings of Pelikan-Quartet and a favorable adjustment for contingencies related to certain regulatory matters. The IPFG's operating income increased $3.7 million in 2004, due primarily to increased sales volumes in the Group's European commercial films and digital print finishing businesses. Europe's operating income increased by $0.8 million in 2004 compared to 2003, primarily as a result of favorable exchange rates. Corporate expenses were lower in 2004 compared to 2003 primarily due to reduced spending on information services as a result of consolidation of resources.

Beginning in 2001, GBC launched its Operational Excellence Program, an on-going effort to improve the Company's financial performance and flexibility. Initiatives undertaken in connection with this program have resulted in restructuring and other expenses in 2004 and 2003.

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During 2004, GBC recorded restructuring charges of $0.9 million, which were primarily related to work force reduction programs which were announced in 2003.

The restructuring charges associated with the 2003 projects consist of the following (in millions):

The relocation of manufacturing operations from Booneville, Mississippi to Nuevo Laredo, Mexico began in July 2003, and was completed during the third quarter of 2004. The Amelia, Virginia plant was closed during the first quarter of 2004. Initiatives related to work force reductions were implemented during the second half of 2003.

During 2004, GBC also recorded $1.7 million in other charges related to the realignment of management in the Commercial and Consumer Group and an impairment of GBC's investment in GMP Co. Ltd.

GBC has an investment in GMP of approximately 20% of the equity capital of that company, and accounts for its investment under the equity method of accounting. GMP realized significant net losses in the fourth quarter of both 2004 and 2003. In the fourth quarter of 2004 and 2003, GBC recognized its share of GMP's loss (approximately $0.9 million in 2004 and approximately $1.2 million in 2003). As a result of GMP's poor financial performance and other factors, GBC evaluated whether its investment in GMP was impaired. The GMP investment was valued based upon the traded value of GMP shares on the KOSDAQ exchange (Korean over-the counter market) and projections of cash flow, earnings and sales developed by GMP management. Based upon the analysis performed, and GBC's determination that the decline in value of its investment in GMP was other than temporary, impairment charges of $0.9 million and $4.7 million were recorded in 2004 and 2003, respectively.

Interest expense decreased by $8.5 million to $25.9 million in 2004 compared to 2003 due primarily to reduced debt levels and lower average interest rates. Included in interest expense in 2003 was $1.1 million related to the loss on the extinguishment of the Company's previous credit facility which was refinanced in June 2003.

GBC recognized other expense of $0.7 million in 2004. The most significant items included in other expense in 2004 were: a) foreign exchange losses of $1.8 million; b) interest income and

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purchase discounts of $1.2 million; and c) a gain of $0.7 million on the sale of a former manufacturing facility.

In 2004, income tax expense was $9.1 million on pre-tax income of $23.9 million. Factors that affected income tax expense in 2004 included: a) a benefit for the reversal of the beginning-of-the-year valuation allowance for deferred tax assets at certain non-U.S. subsidiaries ($1.4 million); b) a benefit for the utilization of non-U.S. net operating losses ($1.4 million); and c) a benefit recorded for the decrease in withholding tax liabilities as a result of enacted tax rate changes ($0.8 million). Also, the Company provided for income taxes on non-U.S. earnings expected to be remitted to the U.S., which substantially offset the favorable benefits realized in 2004.

Income tax expense was $7.6 million in 2003 on pre-tax income of $4.4 million. Factors that affected income tax expense in 2003 included: a) the non-cash write-off of deferred tax assets as a result of the reorganization of certain international subsidiaries ($4.4 million); and b) the combined effect of the pre-tax impairment charge and GBC's share of the loss incurred in fiscal 2003 by GMP. These items were not tax deductible.

On October 22, 2004, President Bush signed the American Jobs Creation Act of 2004 (the "Act"). The Act creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing an 85 % dividends received deduction for certain dividends from controlled foreign corporations. The deduction is subject to a number of limitations, and uncertainty remains as to how to interpret numerous provisions in the Act. As such, GBC is not yet in a position to decide on whether, and to what extent, it might repatriate foreign earnings that have not yet been remitted to the U.S. GBC does not expect to be able to complete its evaluation of the repatriation provision until after Congress or the Treasury Department provide additional clarifying language on key elements of the provision. Based on the Company's analysis to date, however, the range of reasonably possible amounts that GBC may repatriate is between zero and $69 million (of which $44 million is considered permanently reinvested). While GBC estimates that the related potential range of additional income tax liability is from zero to $9 million, this estimation is subject to change in the event that technical correction legislation currently pending in Congress is enacted. Also, the amount of additional income tax resulting from repatriation of foreign earnings under the provision would be reduced by the part of the eligible dividend that is attributable to foreign earnings on which a deferred tax liability had been previously accrued.

See note 13 to the consolidated financial statements for more information on income taxes.

GBC had net income of $14.8 million in 2004 compared to a net loss of $3.3 million in 2003. The 2003 net loss was impacted by the previously described restructuring charges of $11.1 million, other expense of $4.7 million, the loss on extinguishment of debt of $1.1 million as well as the $4.4 million write-off of deferred tax assets.

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GBC's net sales for the year ended December 31, 2003 decreased 0.5% to $697.9 million compared to $701.7 million in 2002. The Company's net sales were favorably impacted by a weaker U.S. dollar in 2003 compared to 2002. The effect of foreign exchange rates benefited sales by approximately 4.0% in 2003. Net sales by business segment are summarized below (000 omitted):

The Commercial and Consumer Group's sales decreased $7.3 million (or 1.6%) in 2003 when compared to 2002. Lower demand for the Group's visual communication products and binding and laminating machines was partially offset by increased sales of private label three-ring binders and paper shredders. Sales for the Industrial and Print Finishing Group decreased $1.2 million or 0.9%. The impact of favorable exchange rates benefited the Group's sales by approximately 6.0%. A decrease in sales in the U.S. commercial film business, which was affected by pricing pressures and lower purchasing levels by certain of the Group's customers, was the primary reason for the sales decrease. In addition, the Group's U.S. commercial film business continued to be affected by weak market conditions. Sales in the Europe Group increased by $4.7 million. The impact of foreign exchange benefited sales in the Europe Group by approximately 15.0%. The Group's sales in local currencies declined due to a competitive, currency-related pricing environment, weak economic conditions in certain European markets, and the timing of new product introductions.

GBC's gross profit margin in 2003 increased by 0.3 points to 39.9% compared to 2002. Gross profit margins in the CCG were down due to an unfavorable product mix (higher sales of private label three-ring binders and lower sales of visual communication products and binding and laminating machines) and increased rebate and allowance programs. IPFG's gross profit margins were up slightly due to reduced spending on research and development. The Europe Group's gross profit margin increased significantly due to favorable foreign exchange and increased manufacturing volumes, along with lower product costs due to sourcing initiatives.

Total selling, service and administrative expenses in 2003 decreased $3.8 million compared to 2002, primarily due to lower spending by the CCG, coupled with lower corporate expenses. Efficiencies achieved in connection with the creation of the CCG resulted in reduced expenditures on certain administrative functions. Additionally, the Group benefited from increased equity earnings from the Pelikan-Quartet joint venture. Corporate expenses were down in 2003 primarily as a result of reduced spending on information systems. These savings were partially offset by the recognition of GBC's share of the net loss of GMP (see the "Restructuring and Other" and "GMP Relationship" sections of this "Management Discussion and Analysis of Financial Condition and Results of Operations" for further discussion regarding

15

GBC's investment in GMP). Selling, service and administrative expenses as a percentage of sales decreased slightly to 31.9% in 2003 from 32.3% in 2002.

In 2003, earnings from joint ventures were at a break-even level compared to $0.2 million in 2002. In both 2003 and 2002, earnings from Pelikan-Quartet were offset by losses from GMP and Neschen.

Segment operating income for GBC's business groups, which is calculated as net sales less product cost of sales, selling, service and administrative expenses and amortization of other intangibles, plus equity earnings of joint ventures, is summarized below (000 omitted):

Segment operating income for 2003 increased 6.6% or $3.4 million compared to 2002. Operating income in the Commercial and Consumer Group decreased by $1.9 million, or 3.3%, in 2003 primarily due to the lower level of sales and reduced gross profit margin, which was partially offset by lower expenses. The Industrial and Print Finishing Group's operating income decreased 6.0% or $1.1 million due to the lower sales volume and higher selling, service and administrative expenses. The Europe Group's operating income increased $4.7 million due primarily to improved gross profit margins. Unallocated corporate items decreased $1.7 million primarily due to reduced spending on information services as a result of consolidation of resources.

During 2002, GBC recorded inventory charges of approximately $1.0 million primarily related to the Commercial and Consumer Group. This charge relates to GBC's product line rationalization and reflects an adjustment to the realizable value of certain products which the Company decided to discontinue in 2001.

Pre-tax restructuring charges in 2003 totaled $11.1 million, related to the following projects: a) relocating the manufacturing of labor intensive visual communication products from the Company's facility in Booneville, Mississippi to Nuevo Laredo, Mexico; b) closing a

16

manufacturing plant in Amelia, Virginia and consolidating production in the Company's plant in Lincolnshire, Illinois; c) company-wide workforce reduction programs; and d) subleasing a manufacturing facility as part of a previously announced restructuring.

The restructuring charges associated with the 2003 projects consist of the following (in millions):

The relocation of manufacturing operations from Booneville, Mississippi to Nuevo Laredo, Mexico began in July 2003, and was completed during the third quarter of 2004. The Amelia, Virginia plant was closed in 2004. Initiatives related to work force reductions were implemented during the second half of 2003.

During 2002, GBC recorded pre-tax restructuring charges of $8.0 million for expenses related to the following projects: a) closing the Company's facility in Buffalo Grove, Illinois and transferring the manufacturing and administrative functions to other GBC locations; b) downsizing a binder manufacturing facility in Amelia, Virginia; c) severance costs associated with the creation of the CCG; and d) charges related to the reorganization of certain corporate and other support functions.

The restructuring charges associated with the 2002 projects consist of the following (in millions):

The transition of manufacturing operations from the Buffalo Grove facility was completed in 2002. Administrative and support personnel previously located in the Buffalo Grove facility were transferred to other GBC locations by early 2003. Actions associated with the 2002 Amelia downsizing and other reductions in force were completed in 2002.

The Company has an investment in GMP Co., Ltd. of approximately 20% of the equity capital of that company, and accounts for its investment under the equity method of accounting. In the fourth quarter of 2003, GBC recognized its share (approximating $1.2 million) of GMP's fourth

17

quarter 2003 loss. As a result of GMP's poor financial performance and other business factors, GBC evaluated whether its investment in GMP was impaired. The GMP investment was valued based upon the traded value of GMP shares on the KOSDAQ exchange (Korean over-the-counter market) and projections of cash flow, earnings and sales developed by GMP management. Based upon the analysis performed, and GBC's determination that the decline in value of its investment in GMP was other than temporary, an impairment charge of $4.7 million was recognized.

During 2002, GBC incurred $1.1 million in other expenses primarily related to costs associated with the transition of production from the closed and down-sized facilities to other GBC facilities.

Interest expense decreased by $5.5 million to $34.4 million in 2003 compared to 2002 due to reduced debt levels and lower average interest rates. Included in interest expense in 2003 was $1.1 million related to the loss on the extinguishment of the Company's previous credit facility which was refinanced in June 2003.

Other expense was approximately $0.2 million in both 2003 and 2002. In 2002, other expense included non-cash losses of $1.1 million on the sale of a previously closed facility in Mexico and $1.1 million on the disposal of GBC's investment in an Indian joint venture. These non-cash losses were offset by net interest income of $0.9 million received in connection with the settlement of a U.S. Federal income tax refund claim, as well as currency gains which primarily related to the translation of liabilities denominated in other than functional currencies.

Income tax expense was $7.6 million in 2003 on pre-tax income of $4.4 million. Factors that affected income tax expense in 2003 included: a) the non-cash write-off of deferred tax assets as a result of the reorganization of certain international subsidiaries ($4.4 million); and b) the combined effect of the pre-tax impairment charge and GBC's share of the loss incurred in fiscal 2003 by GMP. These items were not tax deductible.

In 2002, income tax expense was approximately $2.0 million on pre-tax income of approximately $1.1 million. During 2002, new U.S. tax legislation enabled GBC to carry back its 2001 domestic tax loss to 1996 and 1997. The carryback generated a $7.5 million tax refund and reduced previously utilized tax credits. The tax credits became deferred tax assets which GBC was not able to use before the expiration of the carryover period. The resulting write-off of these deferred tax assets created additional income tax expense of $1.5 million. Additionally, GBC settled a U.S. Federal income tax contingency resulting in a refund of approximately $0.9 million which is reflected as a reduction to GBC's 2002 income tax provision.

See note 13 to the consolidated financial statements for more information on income taxes.

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Effective January 1, 2002, GBC implemented SFAS No. 142, "Goodwill and Other Intangible Assets." In accordance with SFAS No. 142, the Company tested its goodwill balances to determine whether these assets were impaired. Based upon the testing performed, GBC recorded a non-cash impairment charge of $110 million ($79 million, net of tax), primarily related to the impairment of goodwill in the CCG.

Liquidity and Capital Resources

Management assesses the Company's liquidity in terms of its overall debt capacity and ability to generate cash from operations to fund its operating activities, capital needs and debt service requirements. Significant factors affecting liquidity are cash flows generated from operating activities, capital expenditures, interest and debt service requirements, adequate bank lines of credit and financial flexibility to attract long-term capital with satisfactory terms. GBC's primary sources of liquidity and capital resources are internally-generated cash flows and borrowings under GBC's revolving credit facility.

Cash provided by operating activities was $22.7 million in 2004 compared to $51.6 million in 2003. While net income increased $18.0 million in 2004. The 2003 results included higher depreciation and amortization expenses and a higher non-cash impairment of GBC's investment in GMP, which partially offsets the increase. Receivables and inventories increased a total of $28.4 million in 2004 compared to 2003. The increase in receivables of $9.3 million is due to higher level of sales in November and December of 2004 compared to 2003. Inventory levels increased $19.1 million due to the transition of certain manufacturing operations in 2004 from the Company's facility in Booneville, Mississippi to Nuevo Laredo, Mexico, and the attendant need to provide for improved service levels.

Net cash used in investing activities was $8.2 million in 2004 compared to $10.5 million in 2003. The Company's investments in capital expenditure and Neschen joint venture were flat in 2004 compared to 2003. The reduction in cash used in investing activities is due to the receipt of a dividend for the Pelikan-Quartet joint venture along with the sale of plant and equipment.

21

Net cash used in financing activities was $13.1 million in 2004 compared to $41.4 million in 2003. The lower level of debt reduction in 2004 was primarily due to the higher level of receivables and inventories.

GBC is restricted under its credit agreements from paying dividends, and therefore no dividends were paid during either 2004 or 2003.

As discussed in note 1 to the consolidated financial statements, GBC is included in the consolidated U.S. Federal income tax return and certain U.S. State income tax returns of its majority shareholder, Lane Industries, Inc. The Internal Revenue Service has an open examination of Lane Industries, Inc. and subsidiaries for the years 1999 through 2002. Additionally, there are ongoing audits in the U.S. and several international jurisdictions. In the opinion of management, GBC has made adequate tax provisions for all years subject to examination, and currently has adequate liquidity available to settle any known claims.

GBC sources many of its laminating machines from GMP Co. Ltd, a company whose manufacturing facility is located in the Republic of Korea. GBC also has an equity ownership interest in GMP of approximately 20% of the equity capital of that company. While GBC has a long-term supply arrangement with GMP, there can be no assurance that GMP will be able to continue to fulfill any or all of its obligations to the Company. GMP's ability to fulfill GBC's requirements for laminating machines could be affected by Korean and other regional and worldwide economic, political and governmental conditions. Additionally, GMP has a highly leveraged capital structure. In order to ensure the continuation of its operations, GMP requires on-going sources of financing. There can be no assurance that such financing will continue to be available. At times during 2003 and 2004, the Company accelerated its payment terms to GMP to provide it with liquidity assistance. The amount of any advance payments to GMP outstanding at any one time has not exceeded $1.0 million. In the event GMP seeks additional financial assistance in the future in the form of advance payments from GBC, the Company will consider such requests taking into consideration then existing market, liquidity and other factors; however, there can be no assurance that the Company would make any such advances, or provide other financial support.

If GMP were unable to supply GBC with laminating machines, there are alternative sources available. However, changing suppliers for the laminating machines manufactured by GMP would require lead times of a duration that could result in a disruption of supply. If GBC's supply chain were disrupted, the Company's results of operations and its financial position would be negatively impacted. It is estimated that during 2005, absent a disruption in supply, GBC will have sales of laminating machines supplied by GMP within the range of $20-25 million.

During 2004 and 2003, GBC recorded losses related to its portion of GMP's operating results. GBC's share of GMP's loss was $0.9 million and $1.0 million in 2004 and 2003, respectively. As a result of GMP's operating losses and other business factors, GBC evaluated whether its investment in GMP was impaired. The evaluations concluded that the investment was impaired and GBC recorded non-cash charges of $0.9 million and $4.7 million in 2004 and 2003, respectively. As of December 31, 2004, GBC's remaining investment in GMP is $1.0 million.

22

The Company does not have any material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

The table below sets forth GBC's contractual cash obligations at December 31, 2004 (in millions):

(1) Excludes related interest.
(2) GBC's purchase obligations primarily consist of open purchase orders to acquire raw materials used in the manufacture of product or to acquire finished product sourced from third-party vendors. A substantial majority of the Company's open purchase orders are non-binding and can be cancelled with up to 90 days notice. For purposes of this disclosure, an estimate of 90 days of open purchase orders, based upon purchases made in 2004, has been used. Assuming such purchase orders are not cancelled, the Company believes its purchase obligations for 2005, based on prior years' experience, will be approximately $287.0 million.
(3) The Company's primary obligations related to other long-term liabilities consist of payments under retirement benefit plans. Future contributions, where not fixed, have been estimated based upon actual 2004 payments.

At December 31, 2004, GBC had commercial financial commitments of approximately $4.6 million consisting of standby letters of credit which primarily support domestic workers compensation claims and a real estate operating lease on one of the Company's facilities.

GBC has several customers of the CCG which, in the normal course of business, make significant purchases from the Company. Trade receivable balances from these customers have ranged from $3 million - $19 million. As a result, at any point in time, GBC may have a significant concentration of its accounts receivable balance among this customer group. To mitigate the credit risk among this group of customers, management monitors trends in the office products market, as well as the payment trends of these customers. However, should one or more of those customers fail, such failure could have a material adverse affect on GBC's financial position and results of operations.

GBC made no acquisitions nor was it involved in any other business combination transactions during the years 2002 through 2004.

GBC is exposed to market risk from changes in foreign currency exchange rates and interest rates which may affect the results of its operations and financial condition. GBC seeks to manage these risks through its regular operating and financing activities, and when deemed appropriate, through the use of derivative financial instruments. GBC does not use any derivative instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments. The methods used by GBC to assess and mitigate the market risks discussed herein should not be considered projections of future events and exposures.

The majority of GBC's exposures to currency movements are in Europe, the Asia/Pacific region, Canada and Mexico, and the significant hedging transactions related to these areas outstanding as of December 31, 2004 are presented below. All of the outstanding contracts have maturity dates in 2005. Increases and decreases in the fair market values of the forward agreements are

26

completely offset by changes in the values of the net underlying foreign currency transaction exposures. GBC's contracts are primarily for the sale or purchase of foreign currencies in exchange for U.S. dollars. Selected information related to GBC's foreign exchange contracts as of December 31, 2004 is as follows (all items except exchange rates in millions):

(1) As of December 31, 2004, GBC recorded cumulative unrealized losses of approximately $0.2 million in its consolidated statement of income related to hedges of intercompany loans (hedge accounting has not been applied to these transactions). Unrealized losses of approximately $2.3 million related to hedges of intercompany inventory purchases have been recorded in Other Comprehensive Income.
(2) CAD = Canadian Dollars; GBP = Pound Sterling; MXN = Mexican Pesos

As a result of GBC's funding program for its global activities, GBC has various debt obligations upon which interest is paid on the basis of fixed and floating rates. GBC utilizes an interest rate management program to reduce its exposures to floating interest rates and achieve a desired risk profile. To accomplish this objective, GBC currently hedges these exposures by using interest rate swap agreements.

The table below provides information about GBC's derivative financial instruments and other financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt obligations. For debt obligations, the table presents significant principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted average interest rates by contractual maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contracts. Weighted average variable rates are based on implied forward rates in the yield curve at the reporting date and the current interest rate spreads under the Company's credit facilities. The information is presented in U.S. dollar equivalents, which is GBC's reporting currency. Significant interest rate sensitive instruments as of December 31, 2004, are presented below (in millions):

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The management of General Binding Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company's management conducted an assessment of the effectiveness of the Company's internal control over financial reporting as of December 31,2004. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, the Company's management concluded that, as of December 31, 2004, the Company's internal control over financial reporting was effective.

Management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report which appears herein.

General Binding Corporation
March 15, 2005

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To the Board of Directors and Stockholders of General Binding Corporation:

We have completed an integrated audit of General Binding Corporation's 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2004 and audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

In our opinion, the consolidated financial statements listed in the accompanying index, present fairly, in all material respects, the financial position of General Binding Corporation and its subsidiaries at December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in notes 1 and 2 to the consolidated financial statements, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

Also, in our opinion, management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2004 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control - Integrated Framework issued by COSO. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management's assessment and on the effectiveness of the Company's internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial

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reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP
Chicago, Illinois
March 15, 2005

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