GBC's Certificate of Incorporation provides for 40,000,000 authorized shares of Common Stock, $0.125 par value per share, and 4,796,550 shares of Class B Common Stock, $0.125 par value per share. Each Class B share is entitled to 15 votes and is to be automatically converted into one share of common stock upon transfer thereof. All of the Class B shares are owned by Lane Industries, Inc., GBC's majority stockholder.

The recorded value of GBC shares held by the Company ("Treasury Stock") decreased during the period by $2.0 million as 171,308 shares were issued to employees and directors related to restricted stock units and stock options previously granted under the Company's stock compensation plans.

The following table illustrates the computation of basic and diluted earnings per share (000 omitted except per share data):

Management believes that the restructuring provisions recorded will be adequate to cover estimated restructuring costs that will be paid in future periods. Management expects that the remaining balance of the liability for severance and asset impairment and other exit costs will be paid in 2005. Lease costs (lease payments in excess of the sublease income) average approximately $0.3 million annually until the last lease terminates in 2013. The balance in the restructuring reserve at March 31, 2005 is primarily related to severance and lease costs.

(6) Retirement Plans and Post-Retirement Benefits

The following table summarizes the components of net periodic pension costs for the Company's retirement plans (000 omitted):

The following summarizes the components of net periodic post-retirement benefit costs (000 omitted):

The Company expects to contribute a total of $0.5 million to its post-retirement benefit plan in 2005.

GBC is engaged in the design, manufacture and distribution of office equipment, related supplies and laminating equipment and supplies. The Company has three primary business groups: a) Commercial and Consumer Group ("CCG"); b) Industrial and Print Finishing Group ("IPFG"); and c) Europe.

boards, easels, etc.), document shredders, custom binders and folders, and desktop accessories, as well as maintenance and repair services through both indirect channels (resellers, including office product superstores, contract/commercial stationers, wholesalers, mail order companies, mass marketers and other dealers) and direct channels (salespersons, telemarketers, internet portals, etc.) The Group's products and services are sold to customers which include the home markets and office markets, commercial reprographic centers, educational and training markets, and government agencies throughout North and South America and the Asia/Pacific region. The Europe Group distributes many of the Commercial and Consumer Group's products to customers in Europe.

IPFG's revenues are primarily derived through sales of thermal and pressure sensitive films, mid-range and commercial high-speed laminators and large-format digital print laminators. The Industrial and Print Finishing Group's products and services are sold worldwide through direct and dealer channels to commercial reprographic centers, and commercial printers.

GBC's products are sold primarily in North America, Latin America, Europe, Japan and Australia to office product resellers and directly to end-users in the business, education, commercial/professional and government markets. GBC has a large base of customers; however, the loss of, or major reduction in business or failure to collect receivables from one or more of GBC's major customers could have a material adverse effect on GBC's financial position or results of operations.

Financial information for the three months ended March 31, 2005 and 2004, by geographical area is summarized below (000 omitted):

(8) New Accounting Standards

In December 2004, the FASB issued a revision to SFAS No. 123, "Share Based Payment." This statement requires companies to recognize the cost of employee services received in exchange for an award of equity instruments. Prior to the revision to SFAS No. 123, companies had an alternative to either recognize the cost of employee services based upon fair value at the grant date, or to use the intrinsic value method of accounting under APB No. 25. GBC currently accounts for stock options in accordance with APB No. 25 under which stock options issued to employees generally result in no compensation expense. GBC's adoption of SFAS No. 123(R) will result in compensation expense related to stock options issued. In April 2005, the FASB approved a new rule which defers the implementation date of SFAS No. 123(R). The new rule allows adoption for annual, rather than interim periods that begin after June 15, 2005. The Company is in the process of evaluating the impact of SFAS No. 123(R), and will adopt it in the first quarter of 2006. See note 2 to the condensed consolidated financial statements for proforma disclosure information related to stock compensation expense.

In December 2004, the FASB issued FASB Staff Position No. FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004 ("AJCA")." The AJCA, enacted in October 2004, introduces a temporary 85% dividends received deduction on the repatriation of certain foreign earnings of a U.S. taxpayer, provided certain criteria are met. FAS 109-2 provides accounting and disclosure guidance for the repatriation provision. It allows companies time beyond the financial reporting period of enactment to evaluate the effect of the AJCA on unremitted earnings of foreign subsidiaries for the purpose of applying the "indefinite reversal criterion" under APB Opinion No. 23, "Accounting for Income Taxes - Special Areas." FAS 109-2 also requires explanatory disclosures from companies that have not yet completed the evaluation. GBC has begun, but has not yet completed, its evaluation of the repatriation provision and has not decided whether, and to what extent, it will repatriate unremitted foreign earnings under the provision.

In accordance with SFAS No. 142, GBC tests its goodwill balances to determine whether these assets are impaired. The annual impairment test is performed as of January 1. In 2005, it was determined that the Company's goodwill balances were not impaired.

SFAS No. 142 also requires that previously recognized intangible assets, other than goodwill, be reassessed to determine the appropriateness of the estimated useful lives of these assets. Intangible assets determined to have finite lives are amortized over those lives, and intangible assets that have indefinite lives are not amortized. As of March 31, 2005, there have been no events or circumstances which would warrant a revision to the remaining useful lives of these assets.

Amortization expense related to GBC's other intangible assets is summarized below (000 omitted):

Summarized financial information for GBC's joint ventures, which are accounted for under the equity method of accounting, is as follows (000s omitted):

The summarized financial information is presented as of and for the end of the first fiscal quarter for each of the joint ventures. Pelikan-Quartet and GMP each have September 30 fiscal year ends and Neschen GBC Graphic Films Information fiscal year end is December 31.

On March 16, 2005, GBC, along with Fortune Brands, Inc. ("Fortune"), announced an agreement for Fortune to spin-off its ACCO World Corporation office products unit ("ACCO") to Fortune's stockholders to be followed immediately by the merger of a subsidiary of ACCO with and into GBC. The merger is expected to be completed some time during the third quarter of 2005. During the first quarter of 2005, GBC reported $2.5 million in other expenses, consisting primarily of professional fees, which have been incurred in connection with the pending merger.

During 1998, GBC issued $150 million of 9.375% Senior Subordinated Notes which are due in 2008. Each of GBC's domestic restricted subsidiaries has jointly and severally, fully and unconditionally guaranteed the Senior Subordinated Notes. Rather than filing separate financial statements for each guarantor subsidiary with the Securities and Exchange Commission, GBC has elected to present the following consolidating financial statements which detail the results of operations, financial position and cash flows of the Parent, Guarantors, and Non-Guarantors (in each case carrying investments under the equity method), and the eliminations necessary to arrive at the information for GBC on a consolidated basis.