What changed in this filing

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Item 1. Financial Statements

2023-05-03 compared with 2022-11-02 · 305 added, 583 removed, 653 unchanged (58% of the section changed)

32 unchanged sentences

Other Liabilities 38,937 38,088

Commitments and Contingencies

Sonoco Shareholders’ Equity

2 unchanged sentences

97,955 and 97,645 shares issued and outstanding

at October 2, 2022 and December 31, 2021, respectively

at April 2, 2023 and December 31, 2022 , respectively

Capital in excess of stated value 138,008 140,539

6 unchanged sentences

* The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (the “United States” or “U.S.”).

See accompanying Notes to Condensed Consolidated Financial Statements

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Net sales $ 1,729,783 $ 1,770,982

3 unchanged sentences

Restructuring/Asset impairment charges 28,814 12,142

Gain/(loss) on divestiture of business — 2,849 — ( 2,667 )

Gain on divestiture of business and other assets 72,010 —

Operating profit 229,648 169,061

2 unchanged sentences

Interest income 1,562 1,516

Loss from the early extinguishment of debt — — — 20,184

Income/(Loss) before income taxes 155,127 111,768 476,437 ( 247,634 )

Provision for/(Benefit from) income taxes 36,824 2,564 116,712 ( 91,542 )

Income/(Loss) before equity in earnings of affiliates 118,303 109,204 359,725 ( 156,092 )

Income before income taxes 193,320 148,672

Provision for income taxes 46,912 35,289

Income before equity in earnings of affiliates 146,408 113,383

Equity in earnings of affiliates, net of tax 1,856 2,224

Net income/(loss) 122,502 111,555 369,876 ( 150,391 )

Net (income)/loss attributable to noncontrolling interests ( 273 ) ( 415 ) ( 642 ) ( 243 )

Net income/(loss) attributable to Sonoco $ 122,229 $ 111,140 $ 369,234 $ ( 150,634 )

Net income 148,264 115,607

Net loss/(income) attributable to noncontrolling interests 55 ( 274 )

Net income attributable to Sonoco $ 148,319 $ 115,333

Weighted average common shares outstanding:

2 unchanged sentences

Per common share:

Net income/(loss) attributable to Sonoco:

Net income attributable to Sonoco:

Basic $ 1.51 $ 1.18

Diluted $ 1.50 $ 1.17

See accompanying Notes to Condensed Consolidated Financial Statements

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

SONOCO PRODUCTS COMPANY

2 unchanged sentences

(Dollars in thousands)

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Net income/(loss) $ 122,502 $ 111,555 $ 369,876 $ ( 150,391 )

Other comprehensive (loss)/income:

Three Months Ended

April 2, 2023 April 3, 2022

Net income $ 148,264 $ 115,607

Other comprehensive income:

Foreign currency translation adjustments 31,808 706

1 unchanged sentence

Changes in derivative financial instruments, net of tax 2,514 2,550

Other comprehensive (loss)/income $ ( 82,363 ) $ ( 35,118 ) $ ( 153,248 ) $ 377,507

Other comprehensive income $ 35,238 $ 3,447

Comprehensive income:

183,502 119,054

Net income attributable to noncontrolling interests ( 273 ) ( 415 ) ( 642 ) ( 243 )

Other comprehensive loss attributable to noncontrolling interests 515 664 148 425

Net loss/(income) attributable to noncontrolling interests 55 ( 274 )

Other comprehensive income attributable to noncontrolling interests ( 239 ) ( 891 )

Comprehensive income attributable to Sonoco $ 183,318 $ 117,889

See accompanying Notes to Condensed Consolidated Financial Statements

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

SONOCO PRODUCTS COMPANY

1 unchanged sentence

CHANGES IN TOTAL EQUITY (unaudited)

(Dollars in thousands)

(Dollars and shares in thousands)

Equity Common Shares Capital in

5 unchanged sentences

December 31, 2021 $ 1,849,541 97,370 $ 7,175 $ 119,690 $ ( 359,425 ) $ 2,070,005 $ 12,096

Net income/(loss) 72,293 72,297 ( 4 )

Other comprehensive income/(loss):

Translation loss ( 32,541 ) ( 32,021 ) ( 520 )

Defined benefit plan adjustment, net of tax 5,385 5,385

Derivative financial instruments, net of tax 958 958

Other comprehensive loss $ ( 26,198 ) $ ( 25,678 ) $ ( 520 )

Dividends ( 45,510 ) ( 45,510 )

Issuance of stock awards 364 245 364

Shares repurchased ( 5,051 ) ( 85 ) ( 5,051 )

Share-based compensation 6,372 6,372

April 4, 2021 $ 1,912,798 100,607 $ 7,175 $ 315,741 $ ( 782,520 ) $ 2,362,003 $ 10,399

Net loss ( 334,239 ) ( 334,070 ) $ ( 169 )

Other comprehensive income:

Translation gain 12,596 11,837 759

Defined benefit plan adjustment, net of tax 422,745 422,745

Derivative financial instruments, net of tax 3,482 3,482

Other comprehensive income $ 438,823 $ 438,064 $ 759

Dividends ( 45,503 ) ( 45,503 )

Issuance of stock awards 246 41 246

Shares repurchased ( 154,519 ) ( 1,819 ) ( 154,519 )

Share-based compensation 4,827 4,827

July 4, 2021 $ 1,822,433 98,829 $ 7,175 $ 166,295 $ ( 344,456 ) $ 1,982,430 $ 10,989

Net income 115,607 115,333 274

Other comprehensive income/(loss):

Translation loss ( 37,741 ) ( 37,077 ) ( 664 )

Translation gain/(loss) 706 ( 185 ) 891

Defined benefit plan adjustment, net of tax 191 191

5 unchanged sentences

Share-based compensation 10,689 10,689

October 3, 2021 $ 1,860,732 98,326 $ 7,175 $ 172,655 $ ( 378,910 ) $ 2,049,072 $ 10,740

Purchase of noncontrolling interest ( 13,196 ) ( 7,080 ) ( 6,116 )

April 3, 2022 $ 1,918,931 97,492 $ 7,175 $ 120,266 $ ( 356,869 ) $ 2,141,214 $ 7,145

Total Equity Common Shares Capital in

5 unchanged sentences

December 31, 2022 $ 2,072,797 97,645 $ 7,175 $ 140,539 $ ( 430,083 ) $ 2,348,183 $ 6,983

Net income 115,607 115,333 274

Other comprehensive income/(loss):

Translation income/(loss) 706 ( 185 ) 891

Net income/(loss) 148,264 148,319 ( 55 )

Other comprehensive income:

Translation gain 31,808 31,569 239

Defined benefit plan adjustment, net of tax 916 916

2 unchanged sentences

Dividends ( 48,203 ) ( 48,203 )

Purchase of noncontrolling interest ( 13,196 ) ( 7,080 ) ( 6,116 )

Issuance of stock awards 472 485 472

2 unchanged sentences

April 2, 2023 $ 2,205,565 97,955 $ 7,175 $ 138,008 $ ( 395,084 ) $ 2,448,299 $ 7,167

Net income 131,767 131,672 95

Other comprehensive loss

Translation loss ( 70,314 ) ( 69,790 ) ( 524 )

Defined benefit plan adjustment, net of tax ( 1,928 ) ( 1,928 )

Derivative financial instruments, net of tax ( 2,090 ) ( 2,090 )

Other comprehensive loss $ ( 74,332 ) $ ( 73,808 ) $ ( 524 )

Dividends ( 48,041 ) ( 48,041 )

Issuance of stock awards 263 13 263

Shares repurchased ( 574 ) ( 10 ) ( 574 )

Share-based compensation 8,377 8,377

July 3, 2022 $ 1,936,391 97,495 $ 7,175 $ 128,332 $ ( 430,677 ) $ 2,224,845 $ 6,716

Net income 122,502 122,229 273

Other comprehensive income/(loss):

Translation loss ( 81,972 ) ( 81,457 ) ( 515 )

Defined benefit plan adjustment, net of tax 861 861 —

Derivative financial instruments, net of tax ( 1,252 ) ( 1,252 ) —

Other comprehensive loss ( 82,363 ) ( 81,848 ) ( 515 )

Dividends ( 48,034 ) ( 48,034 )

Issuance of stock awards 270 18 270

Shares repurchased ( 72 ) ( 1 ) ( 72 )

Share-based compensation 6,387 6,387

October 2, 2022 $ 1,935,081 97,512 $ 7,175 $ 134,917 $ ( 512,525 ) $ 2,299,040 $ 6,474

See accompanying Notes to Condensed Consolidated Financial Statements

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars in thousands)

Nine Months Ended

October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Cash Flows from Operating Activities:

3 unchanged sentences

Depreciation, depletion and amortization 82,137 73,315

Loss on early extinguishment of debt — 20,184

Share-based compensation expense 7,573 10,689

Equity in earnings of affiliates ( 10,151 ) ( 5,701 )

Equity in earnings of affiliates, net ( 1,856 ) ( 2,224 )

Cash dividends from affiliated companies 1,875 350

Net gain on disposition of assets ( 178 ) ( 2,376 )

Net loss on divestiture of businesses — 2,667

Net (gain)/loss on disposition of assets ( 60,615 ) 190

Net gain on divestiture of business ( 11,065 ) —

Pension and postretirement plan expense 4,408 2,232

Pension and postretirement plan contributions ( 4,931 ) ( 28,095 )

Decrease in net deferred tax liabilities ( 1,745 ) ( 164,581 )

Increase in net deferred tax liabilities 1,588 4,613

Change in assets and liabilities, net of effects from acquisitions and foreign currency adjustments:

9 unchanged sentences

Cost of acquisitions, net of cash acquired — ( 1,348,589 )

Proceeds from the sale of businesses, net — 91,569

Proceeds from the sale of assets 6,040 10,536

Other net investing activity ( 1,976 ) 6,776

Proceeds from the sale of business, net 13,839 —

Proceeds from the sale of assets, net 71,405 183

Other net investing activities ( 4,810 ) 145

Net cash used in investing activities ( 2,967 ) ( 1,415,768 )

3 unchanged sentences

Net change in commercial paper 12,000 ( 27,000 )

Net decrease in outstanding checks ( 16,509 ) ( 10,736 )

Proceeds from foreign exchange forward contracts and interest rate swaps — 4,387

Net increase (decrease) in outstanding checks 2,670 ( 15,759 )

Cash dividends ( 47,731 ) ( 43,747 )

Purchase of noncontrolling interest — ( 14,474 )

Excess cash costs of early extinguishment of debt — ( 20,111 )

Payments for share repurchases ( 10,576 ) ( 3,410 )

Net cash provided/(used) by financing activities 1,270,866 ( 563,218 )

Net cash (used in)/provided by financing activities ( 118,178 ) 1,392,638

Effects of Exchange Rate Changes on Cash 5,356 2,629

Net Increase/(Decrease) in Cash and Cash Equivalents 11,260 ( 404,836 )

Net Decrease in Cash and Cash Equivalents ( 17,787 ) ( 19,441 )

Cash and cash equivalents at beginning of period 227,438 170,978

Cash and cash equivalents at end of period $ 209,651 $ 151,537

See accompanying Notes to Condensed Consolidated Financial Statements

Certain prior year amounts reported within net cash provided by operating activities have been revised to conform with the current presentation.

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

SONOCO PRODUCTS COMPANY

3 unchanged sentences

In the opinion of the management of Sonoco Products Company (the “Company” or “Sonoco”), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments, unless otherwise stated) necessary to state fairly the consolidated financial position, results of operations and cash flows for the interim periods reported herein.

Certain amounts within “Cash Flows from Operating Activities” in the Condensed Consolidated Statements of Cash Flows for the nine months ended October 3, 2021, have been reclassified to conform to the current year presentation .

Operating results for the three- and nine-month periods ended October 2, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Certain amounts within “Cash Flows from Operating Activities” in the Condensed Consolidated Statements of Cash Flows for the three-month period ended April 3, 2022 have been reclassified to conform to the current year presentation .

Operating results for the three-month period ended April 2, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

With respect to the unaudited condensed consolidated financial information of the Company for the three- and nine-month periods ended October 2, 2022 and October 3, 2021 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information.

However, their separate report dated November 2, 2022 appearing herein, states that they did not audit and they do not express an opinion on that unaudited financial information.

Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied.

PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

New Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

” The amendments in this update require that a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs in each annual reporting period, including a description of key payment terms, and a rollforward of the outstanding obligation as of the end of the annual period.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023.

The Company does not plan to elect early adoption of this update and does not expect this pronouncement to materially affect its consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, “ Financial Instruments—Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures.

” The amendments in this update eliminate the accounting guidance for troubled debt restructurings while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

The amendments in this update also require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases.

The Company does not expect this pronouncement to materially affect its consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “ Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

” Under current accounting standards, contract assets and contract liabilities acquired in a business combination are to be recorded at fair value using the ASC 805 measurement principle.

ASU 2021-08 requires the acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606:

Revenue from Contracts with Customers as if the acquirer had originated the contracts rather than at fair value.

ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company elected to early adopt ASU 2021-08 on a prospective basis as of January 1, 2022.

The election to use practical expedients allowed under ASU 2021-08 will be applied on an acquisition-by-acquisition basis.

There was no impact to the Company’s consolidated financial statements as of the adoption date.

During the nine-month period ended October 2, 2022, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a material impact on the Company’s financial statements.

Further, at October 2, 2022, there are no other pronouncements pending adoption that are expected to have a material impact on the Company’s consolidated financial statements.

Disclosure of Supplier Finance Program Obligations.” The amendments in this ASU require that a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs in each annual reporting period, including a description of key payment terms, amounts outstanding, and a rollforward of the outstanding obligation.

In each interim reporting period, the amount outstanding requires disclosure.

The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023.

The Company adopted this standard in the first quarter of 2023, with the exception of the amendment on rollforward information, which will be adopted in the first quarter of 2024.

The adoption of the new standard did not have a material effect on the consolidated financial statements.

During the three-month period ended April 2, 2023, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a material impact on the Company’s financial statements.

Further, at April 2, 2023, there are no other pronouncements pending adoption that are expected to have a material impact on the Company’s consolidated financial statements.

Acquisitions and Divestitures

As previously disclosed, on November 9, 2022, the Company entered into a definitive agreement to purchase the remaining equity interest in RTS Packaging, LLC (“RTS”), from joint venture partner WestRock Company (“WestRock”) and one WestRock paper mill in Chattanooga, Tennessee, for $ 330,000 in cash, subject to customary pricing adjustments.

In January 2023, both the Company and WestRock received a request for additional information and documentary material from the Antitrust Division of the U.S.

Department of Justice.

The Company anticipates completing the transaction in the second half of 2023, subject to the satisfaction or waiver of the closing conditions contained in the purchase agreement, including the expiration or early termination of waiting periods or extensions thereof under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Upon completion of the transaction, the Company will own 100 % of RTS, which is currently operated as a joint venture between Sonoco ( 35 % ownership interest) and WestRock ( 65 % ownership interest).

The RTS joint venture was formed in 1997 and combined the former protective packaging operations of WestRock and the Company to market solid fiber partitions from recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals.

The transaction will give the Company full ownership of fourteen converting operations, including ten in the United States, two in Mexico, and two in South America and one paper mill in the United States.

Upon completion of the transaction, approximately 1,100 individuals will become employees of the Company.

The Company expects to fund the acquisition with new borrowings from lenders and cash on hand .

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

Acquisitions and Divestitures

On September 23, 2022, the Company entered into a definitive agreement to acquire S.P.

Holding, Skjern A/S (“Skjern”), a privately owned manufacturer of paper based in Skjern, Denmark.

The estimated $ 88,000 (purchase price subject to foreign currency fluctuations) all-cash transaction is expected to be completed in the fourth quarter of 2022, subject to customary closing conditions.

On November 15, 2022, the Company completed the acquisition of S.P.

Holding, Skjern A/S (“Skjern”), a privately owned manufacturer of paper based in Skjern, Denmark for $ 88,647 , net of cash acquired.

Skjern produces high-grade paperboard from recycled paper for rigid paper containers, tubes and cores, and other applications.

The acquisition is expected to expand production capacity for the Company’s converting operations and customers throughout Europe.

On August 31, 2022, the Company completed the acquisition of Nordeste Tubetes and NE Tubetes (collectively “Nordeste”), two small tube and core operations in Brazil.

Total consideration for the two businesses was $ 6,518 , including cash paid at closing of $ 3,933 , and deferred payments totaling $ 2,585 expected to be paid over the next six years.

Goodwill for Nordeste, all of which is expected to be deductible for income tax purposes, consists of increased access to certain markets and existing customer relationships.

Nordeste's financial results from the date acquired are included in the Company's Industrial Paper Packaging segment.

On January 26, 2022, the Company completed the acquisition of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging (“Metal Packaging”), a leading supplier of sustainable metal packaging for food and household products and the largest aerosol can producer in North America, for $ 1,348,589 , net of cash acquired.

As previously disclosed, final consideration was subject to customary post-closing adjustments for working capital, cash and indebtedness and was finalized in the second quarter of 2022.

The Company received cash from the sellers totaling $ 14,820 , of which $ 6,924 was included in “Other receivables” in the Company's Condensed Consolidated Balance Sheet at April 3, 2022.

Prior to the Company's acquisition of Metal Packaging, Ball Metalpack Holding, LLC was a joint venture formed in 2018 and owned by Platinum Equity ( 51 %) and Ball Corporation ( 49 %).

Metal Packaging consists of eight manufacturing plants in the United States and a headquarters facility in Broomfield, Colorado.

This acquisition fits the Company's strategy of investing in its core businesses as it complements the Company's largest Consumer Packaging franchise, global rigid paper containers, and further expands the Company's sustainable packaging portfolio to include metal packaging.

The Company's initial preliminary fair values of the assets acquired and the liabilities assumed in the Metal Packaging acquisition, as well as revised preliminary fair values reflecting adjustments made during the measurement period, are as follows:

Initial Allocation Measurement Period Adjustments Revised Allocation

Goodwill for Skjern, none of which is expected to be deductible for income tax purposes, consists of increased access to certain markets and existing customer relationships.

Skjern's financial results are included in the Company's Industrial Paper Packaging segment.

The Company's initial fair value estimates of the assets acquired and the liabilities assumed in the Skjern acquisition, as well as updated preliminary fair value allocations reflecting adjustments made during the measurement period, are as follows:

Initial Estimate Measurement Period Adjustments Preliminary Allocation

Trade accounts receivable $ 8,055 $ — $ 8,055

6 unchanged sentences

Goodwill 29,059 ( 1,447 ) 27,612

Other net tangible assets 48,069 ( 196 ) 47,873

Payable to suppliers ( 3,466 ) — ( 3,466 )

Accrued expenses and other ( 1,173 ) — ( 1,173 )

Notes payable and current portion of long-term debt ( 46,463 ) — ( 46,463 )

Taxes payable ( 576 ) — ( 576 )

Noncurrent operating lease liabilities ( 20 ) — ( 20 )

Long-term debt ( 39,543 ) — ( 39,543 )

Deferred income taxes ( 13,549 ) — ( 13,549 )

Total purchase price, net of cash acquired $ 88,647 $ — $ 88,647

The allocation of the purchase price of Skjern to the tangible and intangible assets acquired and liabilities assumed, as reflected under the heading “Preliminary Allocation” in the table above, is based on the Company's preliminary allocations of their fair value, based on information currently available.

Management is continuing to finalize its valuation of certain assets and liabilities including, but not limited to:

property, plant and equipment;

other intangible assets;

and deferred income taxes, and expects to complete its valuations within one year of the date of acquisition.

The Company has accounted for this acquisition as a business combination under the acquisition method and has included the results of operations of the acquired business in the Company's Condensed Consolidated Statements of Income from the date of acquisition.

Prior to the Company's acquisition of Metal Packaging, Ball Metalpack Holding, LLC was a joint venture formed in 2018 and owned by Platinum Equity ( 51 %) and Ball Corporation ( 49 %).

Metal Packaging consists of eight manufacturing plants in the United States and a headquarters facility in Broomfield, Colorado.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The allocation of the purchase price of Metal Packaging to the tangible and intangible assets acquired and liabilities assumed, as reflected under the heading “Revised Allocation” in the table above, is based on the Company's preliminary estimates of their fair value, based on information currently available.

Management is continuing to finalize its valuation of certain assets and liabilities including, but not limited to:

During the three-month period ended April 2, 2023, the Company finalized its valuations of the assets and liabilities assumed in the acquisition of Metal Packaging.

As a result, the following measurement period adjustments were made to the previously disclosed provisional fair values of assets acquired and liabilities assumed:

Measurement Period Adjustments Three Months Ended April 2, 2023

Inventories $ ( 73 )

Property, plant and equipment ( 247 )

other intangible assets;

deferred income taxes;

trade accounts receivable;

and accrued expenses and other, and expects to complete its valuations within one year of the date of acquisition.

Accrued expenses and other ( 119 )

Additional cash consideration $ —

Factors comprising goodwill include increased access to certain markets as well as the value of the assembled workforce.

Approximately 67 % of goodwill is expected to be deductible for income tax purposes.

Approximately 81 % of the goodwill is expected to be deductible for income tax purposes.

Metal Packaging's financial results are included in the Company's Consumer Packaging segment.

The following table presents the unaudited financial results for Metal Packaging for the three-month period ended October 2, 2022 and from the date of acquisition through October 2, 2022:

Supplemental Information (unaudited) Three Months Ended January 26 to

Metal Packaging October 2, 2022 October 2, 2022

The following table presents the unaudited financial results for Metal Packaging from the prior year date of acquisition through the end of the reporting period ending April 3, 2022:

Supplemental Information (unaudited) January 26 to

Metal Packaging April 3, 2022

Net sales $ 171,228

Net income $ 14,019

The following table presents the Company’s estimated unaudited pro forma consolidated results for the three- and nine-month periods ended October 2, 2022 and October 3, 2021, assuming the acquisition of Metal Packaging had occurred on January 1, 2021.

The following table presents the Company’s estimated unaudited pro forma consolidated results for the three-month period ended April 3, 2022, assuming the acquisition of Metal Packaging had occurred on January 1, 2021.

This unaudited pro forma information is presented for informational purposes only and does not purport to represent the results of operations that would have been achieved if the acquisition had been completed at the beginning of 2021, nor is it necessarily indicative of future consolidated results.

Pro Forma Supplemental Information (unaudited) Three Months Ended Nine Months Ended

Consolidated October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Pro Forma Supplemental Information (unaudited) Three Months Ended

Consolidated April 3, 2022

Net sales $ 1,820,570

Net income/(loss) attributable to Sonoco $ 123,047 $ 105,578 $ 428,287 $ ( 215,045 )

Net income attributable to Sonoco $ 164,881

The unaudited pro forma information above does not project the Company’s expected results for any future period and gives no effect to any future synergistic benefits that may result from the combination or the costs of integrating the acquired operations with those of the Company.

Unaudited pro forma information for the three- and nine-month periods ended October 2, 2022 and October 3, 2021 includes adjustments to depreciation, amortization, and income taxes based upon the preliminary fair value allocation of the purchase price to Metal Packaging's tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2021.

Unaudited pro forma information for the three-month period ended April 3, 2022 includes adjustments to depreciation, amortization, and income taxes based upon the final fair value allocation of the purchase price to Metal Packaging's tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2021.

Interest expense on the additional debt issued by the Company to fund the acquisition and retention bonuses incurred related to the acquisition are also included in the unaudited pro forma information as if the acquisition had occurred on January 1, 2021.

Acquisition-related costs of $ 793 and $ 27,195 were recognized during the three- and nine-month periods ended October 2, 2022, respectively, and charges related to fair value adjustments to acquisition-date inventory of $ 33,155 were recognized during the nine-month period ended October 2, 2022.

These costs are excluded from 2022 unaudited pro forma net income and are instead reflected in 2021 pro forma net income as though the acquisition had occurred on January 1, 2021.

Acquisition-related costs of $ 22,284 were recognized during the three-month period ended April 3, 2022 and charges related to fair value adjustments to acquisition-date inventory of $ 25,000 were recognized during the three-month period ended April 3, 2022.

These costs are excluded from 2022 unaudited pro forma net income as though the acquisition had occurred on January 1, 2021.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

As previously disclosed, the Company completed the sale of its U.S.

display and packaging business, part of the All Other group of businesses, to Hood Container Corporation on April 4, 2021 for $ 80,000 in cash.

This business provided design, manufacturing and fulfillment of point-of-purchase displays, as well as contract packaging services, for consumer product customers and had approximately 450 employees.

Its operations included eight manufacturing and fulfillment facilities and four sales and design centers.

The selling price was adjusted at closing for certain transaction expenses and for anticipated differences between targeted levels of working capital and the projected levels at the time of closing.

Net cash proceeds of $ 79,704 were received on April 5, 2021 and the Company recognized a loss on the divestiture of this business of $ 5,516 , before tax, in the first quarter of 2021.

During the quarter ended October 3, 2021, the Company finalized the working capital settlement related to this sale.

The settlement resulted in additional cash proceeds of $ 1,971 and the buyer's assumption of certain liabilities totaling $ 786 .

As a result, the Company recognized a reduction in the previously reported loss on the sale of this business of $ 2,757 , before tax, in the third quarter of 2021, bringing the total loss on the sale of business to $ 2,759 , before tax.

On September 30, 2021, the Company completed the sale of its plastics foods thermoforming business in Wilson, North Carolina (“Wilson Thermoforming”) to Placon for net cash proceeds of $ 3,528 , resulting in the recognition of a pre-tax gain on the sale of $ 92 .

Divestiture of Business

On January 26, 2023, the Company completed the sale of its Sonoco Sustainability Solutions (“S3”) business, a provider of customized waste and recycling management programs and part of the Company's Industrial Paper Packaging segment, to Northstar Recycling Co.

(“Northstar”), for total cash proceeds of $ 13,839 .

An additional $ 1,500 of proceeds are being held in escrow and will be released to the Company, pursuant to any indemnification claims, 20 months following the date of the divestiture.

These escrow proceeds are included in “Other Assets” in the Company’s Condensed Consolidated Balance Sheets as of April 2, 2023.

The Company wrote off net assets totaling $ 4,274 as part of the divestiture of the business, including $ 3,042 of allocated goodwill, and recognized a pretax gain of $ 11,065 during the three-month period ended April 2, 2023, which is included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

The Company is also entitled to receive additional proceeds of $ 3,200 in the second quarter of 2024 if certain conditions are met.

This contingent consideration will be recognized as additional gain on the sale at the point the contingencies are resolved.

In addition, the Company purchased a 2.7 % equity interest in Northstar for $ 5,000 .

This investment is being accounted for under the measurement alternative (i.e., cost less impairment, adjusted for any qualifying observable price changes).

The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to be suboptimal or nonstrategic.

Sale of Assets

With the completion of Project Horizon, the Company's project to convert the corrugated medium machine in Hartsville, South Carolina, to produce uncoated recycled paperboard, the Company now produces paper exclusively from recycled fibers and no longer requires natural tree fiber for production.

Accordingly, on March 29, 2023, the Company sold its timberland properties, approximately 55,000 acres, to Manulife Investment Management for net cash proceeds of $ 70,802 .

The Company disposed of assets with a net book value of $ 9,857 as part of the sale, and recognized a pretax gain from the sale of these assets of $ 60,945 during the three months ended April 2, 2023, which is included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

Acquisition and Divestiture-Related Costs

Acquisition- and divestiture-related costs totaled $ 2,022 and $ 62,655 during the three- and nine-month periods ended October 2, 2022, respectively, primarily related to the Metal Packaging acquisition.

These costs include legal and professional fees, investment banking fees, representation and warranty insurance premiums, and other transaction costs, totaling $ 2,022 and $ 29,500 during the three- and nine-month periods ended October 2, 2022, respectively, that are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

The costs for the nine-month period ended October 2, 2022 also include fair value adjustments to acquisition-date inventory totaling $ 33,155 , that are included in “Cost of sales” in the Company's Condensed Consolidated Statements of Income.

Acquisition and divestiture-related costs totaled $ 1,015 and $ 12,503 during the three- and nine-month periods ended October 3, 2021, respectively.

These costs, consisting primarily of legal and professional fees, are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

Acquisition- and divestiture-related costs totaled $ 5,188 during the three-month period ended April 2, 2023.

These costs include legal and professional fees, investment banking fees, and other transaction costs that are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

Acquisition-related costs totaled $ 48,352 during the three months ended April 3, 2022 primarily related to the acquisition of Metal Packaging.

These charges included the partial amortization of the fair value step-up of finished goods inventory of $ 25,000 , included in “Cost of sales” in the Company's Condensed Consolidated Statements of Income, and other acquisition-related charges of $ 23,352 .

These other charges consisted primarily of investment banking fees, representation and warranty insurance premiums, legal and professional fees, and other transaction costs and are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

SONOCO PRODUCTS COMPANY

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Shareholders' Equity

Earnings/(loss) per Share

The following table sets forth the computation of basic and diluted earnings/(loss) per share:

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Net income/(loss) attributable to Sonoco $ 122,229 $ 111,140 $ 369,234 $ ( 150,634 )

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended

April 2, 2023 April 3, 2022

Net income attributable to Sonoco $ 148,319 $ 115,333

Weighted average common shares outstanding:

Basic 98,167 97,924

Dilutive effect of stock-based compensation 749 470 691 —

Dilutive effect of share-based compensation 448 630

Diluted 98,615 98,554

Net income/(loss) attributable to Sonoco per common share:

Net income attributable to Sonoco per common share:

Basic $ 1.51 $ 1.18

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Cash dividends $ 0.49 $ 0.45

No adjustments were made to “Net income/(loss) attributable to Sonoco” in the computations of net income/(loss) attributable to Sonoco per common share.

No adjustments were made to “Net income attributable to Sonoco” in the computations of net income attributable to Sonoco per common share.

Anti-dilutive Securities

2 unchanged sentences

These SARs may become dilutive in the future if the market price of the Company's common stock appreciates.

The average numbers of SARs that were anti-dilutive and, therefore, not included in the computation of diluted earnings per share during the three- and nine-month periods ended October 2, 2022 and October 3, 2021 were as follows (in thousands):

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

The average numbers of SARs that were anti-dilutive and, therefore, not included in the computation of diluted earnings per share during the three-month periods ended April 2, 2023 and April 3, 2022 were as follows (in thousands):

Three Months Ended

April 2, 2023 April 3, 2022

Anti-dilutive stock appreciation rights 343 401

Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued unless doing so is anti-dilutive.

Such securities have an anti-dilutive impact in those periods in which a loss is reported.

Diluted net loss per share of common stock for the nine-month period ended October 3, 2021 is the same as basic net loss per share because otherwise dilutive securities are excluded from the computation of diluted net loss per share.

The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share during the nine-month period ended October 3, 2021:

Nine Months Ended

October 3, 2021

Dilutive securities excluded due to reported loss 469

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Stock Repurchases

1 unchanged sentence

Following several repurchase transactions in 2021, a total of $ 137,972 remained available for share repurchases under this authorization as of December 31, 2021.

No shares were purchased under this authorization during the nine months ended October 2, 2022.

On May 10, 2021, the Company entered into an accelerated share repurchase agreement (“ASR Agreement”) with a financial institution to repurchase outstanding shares of the Company's common stock.

In exchange for an upfront payment of $ 150,000 , which was funded with available cash on hand, the financial institution delivered 1,751 initial shares to the Company, representing 80 % of the expected number of shares to be repurchased during the repurchase period based upon an estimated average repurchase price of $ 68.50 per share.

The initial shares received were retired by the Company.

The final number of shares repurchased and retired were based on the Company's volume-weighted average share price during the repurchase period, less a discount and subject to certain adjustments.

Pursuant to the ASR agreement, the financial institution elected to accelerate the settlement of the transaction in two tranches.

On July 21, 2021, the financial institution transferred 168 additional shares to the Company based upon an effective settlement price of $ 66.52 and a notional value of $ 50,000 , or one third of the total $ 150,000 prepayment.

On July 26, 2021, the financial institution transferred 337 additional shares to the Company upon full settlement of the remaining $ 100,000 notional value of the transaction at the final settlement price of $ 66.45 .

On May 6, 2021, the Company repurchased 54 shares for $ 3,615 from a private stockholder based upon the average closing stock price on that day.

The cost of these share repurchases, as well as those related to the accelerated share agreement mentioned above, was allocated to “Capital in excess of stated value” on the Company's Condensed Consolidated Balance Sheet for the period ended July 4, 2021.

No shares were repurchased under this authorization during the year ended December 31, 2022 or the three-month period ended April 2, 2023.

The Company regularly repurchases shares of its common stock to satisfy employee tax withholding obligations in association with certain share-based compensation awards.

These repurchases, which are not part of a publicly announced plan or program, totaled 71 shares during the nine months ended October 2, 2022, at a cost of $ 4,056 , and 100 shares during the nine months ended October 3, 2021, at a cost of $ 6,039 .

These repurchases, which are not part of a publicly announced plan or program, totaled 175 shares during the three-month period ended April 2, 2023, at a cost of $ 10,576 , and 60 shares during the three-month period ended April 3, 2022, at a cost of $ 3,410 .

Dividend Declarations

On July 20, 2022, the Board of Directors declared a regular quarterly dividend of $ 0.49 per share.

This dividend was paid on September 9, 2022 to all shareholders of record as of August 10, 2022.

On October 18, 2022, the Board of Directors declared a regular quarterly dividend of $ 0.49 per share.

This dividend is payable on December 9, 2022 to all shareholders of record as of November 10, 2022.

On February 8, 2023, the Board of Directors declared a regular quarterly dividend of $ 0.49 per share.

This dividend was paid on March 10, 2023 to all shareholders of record as of February 22, 2023.

On April 19, 2023, the Board of Directors declared a regular quarterly dividend of $ 0.51 per share.

This dividend is payable on June 9, 2023 to all shareholders of record as of May 10, 2023.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Noncontrolling interests

1 unchanged sentence

Prior to March 31, 2022, the Company consolidated 100% of Graffo, with the partner's 33 % share included in “Noncontrolling Interests” within the equity section of the balance sheet.

On March 31, 2022, the Company paid $ 14,474 in cash to acquire the remaining 33 % ownership interest from the three noncontrolling partners, which resulted in a $ 6,116 reduction in noncontrolling interest, a $ 7,080 charge to capital in excess of stated value, and a $ 1,278 reduction to accrued expenses and other on the Company's Condensed Consolidated Balance Sheet as of July 3, 2022.

Restructuring and Asset Impairments

2 unchanged sentences

The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope and location of the restructuring activities.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Restructuring and restructuring-related asset impairment charges $ 28,814 $ 5,753

Other asset impairments — 6,389

Restructuring/Asset Impairment Charges $ 20,652 $ 3,488 $ 43,357 $ 8,889

Restructuring and asset impairment charges $ 28,814 $ 12,142

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Severance and termination benefits $ 5,516 $ 2,099

Asset Impairments/(Gains from Disposal of Assets) 3,301 ( 1,722 ) 4,533 ( 8,207 )

Asset impairments 19,193 445

Other costs 4,105 3,209

1 unchanged sentence

The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Consumer Packaging $ 1,576 $ 1,635

4 unchanged sentences

Restructuring and restructuring-related asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company's Condensed Consolidated Statements of Income.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:

3 unchanged sentences

Liability at December 31, 2022

$ 14,677 $ — $ 1,392 $ 16,069

2023 charges 5,516 19,193 4,105 28,814

Cash (payments)/receipts ( 9,966 ) 4,751 ( 13,983 ) ( 19,198 )

Cash payments ( 6,380 ) ( 166 ) ( 2,378 ) ( 8,924 )

Asset writedowns/disposals — ( 19,027 ) — ( 19,027 )

Foreign currency translation 14 — 11 25

Liability at October 2, 2022

Liability at April 2, 2023

$ 13,827 $ — $ 3,130 $ 16,957

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

“Severance and Termination Benefits” during the first nine months of 2022 includes the cost of severance for approximately 180 employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts.

“Asset Impairments/Disposal of Assets” during the first nine months of 2022 consists primarily of asset impairment charges related to plant closures and the shutdown of operations in the Consumer Packaging and Industrial Paper Packaging segments.

These charges were partially offset by gains from the sale of previously impaired assets and closed facilities in the “All Other” group of businesses.

Cash proceeds in the first nine months of 2022 relate to the sales of these assets and facilities as well as the partial sale of a previously closed operation in Canada, part of the Industrial Paper Packaging segment.

“Other Costs” during the first nine months of 2022 consists primarily of consulting services and costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance.

“Severance and Termination Benefits” during the first three months of 2023 includes the cost of severance for approximately 159 employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts and severance related to the closure of the Company's paper mill in Hutchinson, Kansas, part of the Industrial Paper Packaging segment.

“Asset Impairments/Disposal of Assets” during the first three months of 2023 consists primarily of asset impairment charges related to the closure of the Company's paper mill in Hutchinson, Kansas.

“Other Costs” during the first three months of 2023 consists primarily of consulting services, costs related to the closure of the Hutchinson, Kansas paper mill, and the cost of earlier plant closures, including equipment removal, utilities, plant security, property taxes and insurance.

The Company expects to pay the majority of the remaining restructuring reserves by the end of 2023 using cash generated from operations.

2 unchanged sentences

Other Asset Impairments

The Company recognized other asset impairment charges totaling $ 10,095 in the nine-month period ended October 2, 2022.

As a result of the Company exiting its operations in Russia, consisting of two small tube and core plants in the Industrial Paper Packaging segment, other asset impairment charges of $ 9,165 were recognized in the nine-month period ended October 2, 2022.

These charges include $ 3,747 of cu mulative translation adjustment losses that were reclassified from accumulated other comprehensive income upon completion of the Company's exit from Russia on July 1, 2022.

Total other asset impairment charges in the nine-month period ended October 2, 2022 also include $ 930 of fixed asset impairments in the Company's plastics foods operations, part of the Consumer Packaging segment.

These assets were determined to be impaired as the value of their projected undiscounted cash flows was no longer sufficient to recover their carrying value.

The Company recognized other asset impairment charges totaling $ 284 and $ 4,841 in the three- and nine-month periods ended October 3, 2021, respectively.

The year-to-date charges consist of fixed asset impairments totaling $ 2,442 in the Company's plastics foods operations, part of the Consumer Packaging segment, and $ 2,399 in the temperature-assured packaging business, part of the All Other group of businesses.

Total other asset impairment charges of $ 6,389 were incurred during the three months ended April 3, 2022, which includes $ 5,713 of impairment charges related to the Company's decision to exit its operations in Russia, part of the Industrial Paper Packaging segment, as a result of the ongoing Russia-Ukraine conflict, and $ 676 of fixed asset impairments in the Company's plastics foods operations, part of the Consumer Packaging segment.

The assets were impaired as the value of their projected undiscounted cash flows was determined to no longer be sufficient to recover their carrying value.

4 unchanged sentences

Accumulated Other Comprehensive Loss

The following table summarizes the components of accumulated other comprehensive loss and the changes in the balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the nine-month period ended October 2, 2022 and October 3, 2021:

The following table summarizes the components of accumulated other comprehensive loss and the changes in the balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the three-month periods ended April 2, 2023 and April 3, 2022:

Items Defined

4 unchanged sentences

$ ( 338,316 ) $ ( 90,973 ) $ ( 794 ) $ ( 430,083 )

Other comprehensive (loss)/income before reclassifications ( 155,179 ) ( 3,948 ) 4,136 ( 154,991 )

Other comprehensive income/(loss) before reclassifications 31,569 ( 393 ) 2,645 33,821

Amounts reclassified from accumulated other comprehensive loss to net income — 1,309 ( 431 ) 878

Amounts reclassified from accumulated other comprehensive loss to fixed assets — — 300 300

Other comprehensive (loss)/income ( 151,432 ) ( 876 ) ( 792 ) ( 153,100 )

Balance at October 2, 2022

Other comprehensive income 31,569 916 2,514 34,999

Balance at April 2, 2023

$ ( 306,747 ) $ ( 90,057 ) $ 1,720 $ ( 395,084 )

5 unchanged sentences

Other comprehensive (loss)/income ( 185 ) 191 2,550 2,556

Balance at October 3, 2021

Balance at April 3, 2022

$ ( 269,261 ) $ ( 91,206 ) $ 3,598 $ ( 356,869 )

2 unchanged sentences

(Dollars and shares in thousands except per share data)

The following table summarizes the effects on net income of significant amounts reclassified from each component of accumulated other comprehensive loss for the three- and nine-month periods ended October 2, 2022 and October 3, 2021:

The following table summarizes the effects on net income of significant amounts reclassified from each component of accumulated other comprehensive loss for the three-month periods ended April 2, 2023 and April 3, 2022:

Amount Reclassified from Accumulated

Other Comprehensive Loss

Three Months Ended Nine Months Ended

Three Months Ended

Details about Accumulated Other

Comprehensive

Loss Components October 2,

2022 October 3,

2021 October 2,

2022 October 3,

Loss Components April 2,

2023 April 3,

2022 Affected Line Item in

1 unchanged sentence

Statements of Income

Foreign currency items

Loss on Russia restructuring (a)

$ — — $ ( 3,747 ) — Restructuring/Asset impairment charges

Gains/(losses) on cash flow hedges

2 unchanged sentences

Commodity contracts ( 32 ) 3,850 Cost of sales

2,560 2,277 5,657 3,263 Income/(Loss) before income taxes

Income tax impact ( 473 ) ( 607 ) ( 1,371 ) ( 860 ) Provision for/(Benefit from) income taxes

2,087 1,670 4,286 2,403 Net income/(loss)

576 3,721 Income before income taxes

Income tax impact ( 145 ) ( 1,067 ) Provision for income taxes

431 2,654 Net income

Defined benefit pension items

Effect of settlement loss (b)

Effect of settlement loss (a)

( 686 ) ( 356 ) Non-operating pension costs

Amortization of defined

benefit pension items (b)

benefit pension items (a)

( 1,071 ) ( 1,171 ) Non-operating pension costs

( 1,229 ) ( 1,661 ) ( 4,085 ) ( 562,625 ) Income/(Loss) before income taxes

Income tax impact 313 382 1,013 144,104 Provision for/(Benefit from) income taxes

( 916 ) ( 1,279 ) ( 3,072 ) ( 418,521 ) Net income/(loss)

Total reclassifications for the period $ 1,171 $ 391 $ ( 2,533 ) $ ( 416,118 ) Net income/(loss)

( 1,757 ) ( 1,527 ) Income before income taxes

Income tax impact 448 365 Provision for income taxes

( 1,309 ) ( 1,162 ) Net income

Total reclassifications for the period $ ( 878 ) $ 1,492 Net income

(a) See Note 11 for additional details.

(b) See Note 11 for additional details.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The following table summarizes the before and after tax amounts for the various components of other comprehensive (loss)/income for the three-month periods ended October 2, 2022 and October 3, 2021:

The following table summarizes the before and after tax amounts for the various components of other comprehensive (loss)/income for the three-month periods ended April 2, 2023 and April 3, 2022:

Three months ended

October 2, 2022

April 2, 2023

Three months ended

October 3, 2021

April 3, 2022

Benefit After Tax

2 unchanged sentences

Foreign currency items:

Other comprehensive loss before

reclassifications $ ( 81,457 ) $ — $ ( 81,457 ) $ ( 37,077 ) $ — $ ( 37,077 )

Amounts reclassified from accumulated other

comprehensive loss to net income (a)

Net other comprehensive loss from

foreign currency items ( 81,457 ) — ( 81,457 ) — ( 37,077 ) — ( 37,077 )

Net other comprehensive income/(loss) from foreign currency items $ 31,569 $ — $ 31,569 $ ( 185 ) $ — $ ( 185 )

Defined benefit pension items:

2 unchanged sentences

Amounts reclassified from accumulated other

comprehensive loss to net income (b)

comprehensive loss to net income (a)

1,757 ( 448 ) 1,309 1,527 ( 365 ) 1,162

5 unchanged sentences

Amounts reclassified from accumulated other

comprehensive loss to net income (c)

comprehensive loss to net income (b)

( 576 ) 145 ( 431 ) ( 3,721 ) 1,067 ( 2,654 )

1 unchanged sentence

comprehensive loss to fixed assets 401 ( 101 ) 300 117 ( 32 ) 85

Net other comprehensive (loss)/ income from

Net other comprehensive income/(loss) from

cash flow hedges 3,361 ( 847 ) 2,514 3,575 ( 1,025 ) 2,550

Other comprehensive (loss)/income $ ( 81,838 ) $ ( 10 ) $ ( 81,848 ) $ ( 33,589 ) $ ( 865 ) $ ( 34,454 )

Other comprehensive income/ (loss) $ 35,927 $ ( 928 ) $ 34,999 $ 3,641 $ ( 1,085 ) $ 2,556

(a) See Note 11 for additional details.

(b) See Note 9 for additional details.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The following table summarizes the before and after tax amounts for the various components of other comprehensive (loss)/income for the nine-month periods ended October 2, 2022 and October 3, 2021:

Nine-month period ended October 2, 2022 Nine-month period ended October 3, 2021

Benefit After Tax

Amount Before Tax

Benefit After Tax

Foreign currency items:

Other comprehensive loss before

reclassifications $ ( 155,179 ) $ — $ ( 155,179 ) $ ( 57,261 ) $ — $ ( 57,261 )

Amounts reclassified from accumulated other

comprehensive loss to net income/(loss) (a)

3,747 — 3,747 — — —

Net other comprehensive loss from

foreign currency items ( 151,432 ) — ( 151,432 ) ( 57,261 ) — ( 57,261 )

Defined benefit pension items:

Other comprehensive (loss)/income before

reclassifications ( 5,257 ) 1,309 ( 3,948 ) 14,923 ( 3,621 ) 11,302

Amounts reclassified from accumulated other

comprehensive loss to net income/(loss) (b)

4,085 ( 1,013 ) 3,072 562,625 ( 144,104 ) 418,521

Net other comprehensive (loss)/income from

defined benefit pension items ( 1,172 ) 296 ( 876 ) 577,548 ( 147,725 ) 429,823

Gains and losses on cash flow hedges:

Other comprehensive income/(loss) before

reclassifications 5,607 ( 1,471 ) 4,136 10,536 ( 2,732 ) 7,804

Amounts reclassified from accumulated other

comprehensive loss to net income/(loss) (c)

( 5,657 ) 1,371 ( 4,286 ) ( 3,263 ) 860 ( 2,403 )

Amounts reclassified from accumulated other

comprehensive loss to fixed assets ( 864 ) 222 ( 642 ) ( 42 ) 11 ( 31 )

Net other comprehensive (loss)/income from

cash flow hedges ( 914 ) 122 ( 792 ) 7,231 ( 1,861 ) 5,370

Other comprehensive (loss)/ income $ ( 153,518 ) $ 418 $ ( 153,100 ) $ 527,518 $ ( 149,586 ) $ 377,932

(a) See Note 5 for additional details.

(b) See Note 11 for additional details.

Goodwill and Other Intangible Assets

A summary of the changes in goodwill for the nine-month period ended October 2, 2022 is as follows:

A summary of the changes in goodwill for the three-month period ended April 2, 2023 is as follows:

Packaging Industrial Paper Packaging All Other Total

Goodwill at December 31, 2022 $ 898,625 $ 394,826 $ 381,860 $ 1,675,311

2022 Acquisitions 366,098 5,414 — 371,512

Dispositions — ( 3,042 ) — ( 3,042 )

Foreign currency translation 2,145 5,520 621 8,286

Measurement period adjustments 439 ( 1,447 ) — ( 1,008 )

Goodwill at October 2, 2022 $ 907,326 $ 355,610 $ 379,012 $ 1,641,948

Goodwill activity reflected under the captions “2022 Acquisitions” and “Measurement period adjustments” relate to the January 26, 2022 acquisition of Metal Packaging and the August 31, 2022 acquisition of Nordeste.

Goodwill at April 2, 2023 $ 901,209 $ 395,857 $ 382,481 $ 1,679,547

Goodwill activity reflected under the caption “Dispositions” relates to the sale of the Company's S3 business on January 25, 2023.

Goodwill activity reflected under the caption “Measurement period adjustments” relates to the prior year acquisitions of Metal Packaging and Skjern.

See Note 3 for additional information.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The Company assesses goodwill for impairment annually during the third quarter, or from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole.

4 unchanged sentences

Although no reporting units failed the annual impairment test, in management’s opinion the goodwill balances of the Plastics - Healthcare and Protexic reporting units are at risk of impairment in the near term if each reporting unit's operations do not perform in line with management's expectations, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate.

In the annual goodwill impairment analysis completed during the third quarter of 2022, projected future cash flows for the Plastics - Healthcare reporting unit were discounted at 9.8 % and its estimated fair value was determined to exceed its carrying value by approximately 18.0 %.

Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rate would have to be increased to 11.0 % in order for the estimated fair value of the reporting unit to fall below carrying value.

Total goodwill associated with this reporting unit was $ 60,710 at October 2, 2022.

In the annual goodwill impairment analysis completed during the third quarter of 2022, projected future cash flows for the Protexic reporting unit were discounted at 9.5 % and its estimated fair value was determined to exceed its carrying value by approximately 18.3 %.

Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rate would have to be increased to 11.5 % in order for the estimated fair value of the reporting unit to fall below carrying value.

Total goodwill associated with this reporting unit was $ 29,051 at October 2, 2022.

During the time subsequent to the annual evaluation, and at October 2, 2022, the Company considered whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its reporting units may have been impaired.

At April 2, 2023, the t otal goodwill associated with the Plastics - Healthcare reporting uni t was $ 62,963 and the tot al goodwill associated with the Protexic reporting unit w as $ 29,051 .

During the time subsequent to the annual evaluation, and at April 2, 2023, the Company considered whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its reporting units may have been impaired.

It is management's opinion that no such events and/or changes in circumstances have occurred.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Other Intangible Assets

A summary of other intangible assets as of October 2, 2022 and December 31, 2021 is as follows:

A summary of other intangible assets as of April 2, 2023 and December 31, 2022 is as follows:

2023 December 31,

14 unchanged sentences

Other Intangible Assets, net $ 717,784 $ 741,598

The acquisition of Metal Packaging on January 26, 2022 resulted in the addition of $ 498,000 of intangible assets, primarily customer lists and proprietary technology, which are expected to be amortized over their average useful lives of approximately 13.6 years.

See Note 3 for additional information about the Metal Packaging acquisition.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Other Intangible Assets are amortized on a straight-line basis over their respective useful lives, which generally range from three to forty years .

Other intangible assets are amortized using the straight-line method over their respective useful lives when management has determined that the straight-line method approximates the pattern of consumption of the respective intangible assets.

These lives generally range from three to forty years .

The Company has no intangible assets with indefinite lives.

Aggregate amortization expense was $ 20,690 and $ 12,257 for the three-month periods ended October 2, 2022 and October 3, 2021, respectively, and $ 60,361 and $ 37,117 for the nine-month periods ended October 2, 2022 and October 3, 2021, respectively.

Aggregate amortization expense was $ 21,164 and $ 18,800 for the three-month periods ended April 2, 2023 and April 3, 2022, respectively.

Amortization expense on other intangible assets is expected to total approximately $ 81,900 in 2023, $ 74,000 in 2024, $ 64,900 in 2025, $ 61,600 in 2026 and $ 60,100 in 2027.

Details of the Company's debt at October 2, 2022 and December 31, 2021 are as follows:

2022 December 31,

Commercial paper $ 285,000 $ 349,000

Syndicated term loan due February 2025 299,602 —

1.800 % notes due February 2025

2.250 % notes due February 2027

2.850 % notes due February 2032

3.125 % notes due May 2030

Supply Chain Financing

The Company facilitates voluntary supply chain financing programs (the “SCF Programs”) to provide certain of its suppliers with the opportunity to sell receivables due from the Company to the participating financial institutions in the programs.

Such sales are conducted at the sole discretion of both the suppliers and the financial institutions on a nonrecourse basis at a rate that leverages the Company's credit rating and thus might be more beneficial to the supplier.

No guarantees are provided by the Company or any of its subsidiaries under the SCF Programs.

The Company's responsibility under the agreements is limited to making payment to the financial institutions for confirmed invoices based on the terms originally negotiated with its suppliers.

Both the Company and the financial institutions have the right to terminate the SCF Programs by providing 30 days prior written notice to the other party.

The Company does not enter into any agreements with suppliers regarding their participation in the SCF Programs.

The following table sets forth the balance sheet location and values of the Company’s SCF Program obligations at April 2, 2023 and December 31, 2022:

Balance Sheet Line Item April 2, 2023 December 31, 2022

Payable to suppliers (a)

$ 51,884 $ 52,415

5.750 % notes due November 2040

Notes payable and current portion of long-term debt (b)

$ 1,350 $ 63,448

Other foreign denominated debt 32,478 55,432

Finance lease obligations 103,027 60,282

Other debt 96,866 14,425

Total debt $ 3,140,030 $ 1,610,663

Less current portion and short-term notes 416,929 411,557

Long-term debt $ 2,723,101 $ 1,199,106

On January 21, 2022, the Company completed a registered public offering of green bonds with an aggregate principal amount of $ 1,200,000 .

These unsecured notes (the “Notes”) consisted of the following:

Principal Amount Issuance Costs and Discounts Net Proceeds Interest Rate Maturity

2025 Notes $ 400,000 $ ( 2,356 ) $ 397,644 1.800 % February 1, 2025

2027 Notes 300,000 ( 2,565 ) 297,435 2.250 % February 1, 2027

2032 Notes 500,000 ( 5,220 ) 494,780 2.850 % February 1, 2032

Total $ 1,200,000 $ ( 10,141 ) $ 1,189,859

The Notes are senior unsecured obligations and rank equal in right of payment to the Company’s other senior unsecured debt from time to time outstanding.

The indenture governing the Notes contains certain covenants with respect to the Company that, among other things, restrict the entry into additional secured indebtedness, sale and leaseback transactions and certain mergers, consolidations and transfers of all or substantially all of the Company’s assets.

The Company used an amount equal to the net proceeds from the Notes to partially fund the January 26, 2022 acquisition of Metal Packaging.

Also on January 21, 2022, the Company entered into a $ 300,000 three-year term loan facility (the “Term Loan Facility”) with a syndicate of eight banks.

The full $ 300,000 was drawn from this facility on January 26, 2022, and the proceeds used to partially fund the acquisition of Metal Packaging.

Interest is assessed at the Secured Overnight Financing Rate (“SOFR”) plus a margin based on a pricing grid that uses the Company’s credit ratings.

The current SOFR margin is 122.5 basis points.

There is no required amortization and repayment can be accelerated at any time without penalty at the Company's discretion.

Borrowings under the Term Loan Facility mature on January 27, 2025.

On April 28, 2021, the Company commenced a cash tender offer to purchase up to $ 300,000 of the $ 600,000 then-outstanding principal amount of its 5.750 % notes due November 2040.

Upon expiration of the tender offer on May 25, 2021, the Company repurchased 10.53 % of its outstanding 5.750 % notes for a total cash cost of $ 81,961 , as shown below:

(a) The payment of these obligations is included in net cash provided by operating activities in the Company's Consolidated Statements of Cash Flows.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

Principal Amount Tendered Premium and Other Amounts Paid Total

5.750 % notes due November 2040

$ 63,206 $ 18,755 $ 81,961

On April 28, 2021, the Company entered into a reverse treasury lock agreement intended to fix the cash cost to fund approximately $ 100,000 of the maximum $ 300,000 principal amount subject to being tendered.

The settlement of the reverse treasury lock on May 13, 2021 resulted in a loss of $ 1,356 .

In addition, the Company wrote off a proportional share of unamortized bond issuance costs and unamortized original issue discounts associated with the 5.750 % notes.

These non-cash writeoffs net to $ 73 , which combined with the hedge loss and premium and other amounts paid, resulted in a pretax loss from the early extinguishment of debt totaling $ 20,184 during the second quarter of 2021.

The Company's 150,000 euro-denominated loan, which bore 1 % annual interest, matured on May 25, 2021, and a U.S.

dollar equivalent cash payment of $ 177,780 was made to settle the debt.

On April 7, 2021, the Company entered into two forward contracts to buy a total of 150,000 euros in order to manage foreign currency risk related to the Company's funding of the debt repayment upon maturity.

The Company recognized a gain of $ 4,387 upon the May 21, 2021 maturity of these forward contracts.

The gain is included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income for the nine-month period ended October 3, 2021 and the proceeds from the settlement of the contracts and the debt maturity payment are reflected in “Net cash provided/(used) by financing activities” in the Company’s Condensed Consolidated Statement of Cash Flows for the nine months ended October 3, 2021.

Certain of the Company’s debt agreements impose restrictions with respect to the maintenance of financial ratios and the disposition of assets.

The most restrictive covenants currently require the Company to maintain a minimum level of interest coverage and a minimum level of net worth, as defined in the agreements.

As of October 2, 2022, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

(b) The payment of these obligations is included in net cash used in financing activities in the Company's Consolidated Statements of Cash Flows .

Financial Instruments and Derivatives

The following table sets forth the carrying amounts and fair values of the Company’s significant financial instruments for which the carrying amount differs from the fair value.

October 2, 2022 December 31, 2021

April 2, 2023 December 31, 2022

Value Carrying

3 unchanged sentences

Cash Flow Hedges

At October 2, 2022 and December 31, 2021, the Company had derivative financial instruments outstanding to hedge anticipated transactions and certain asset and liability related cash flows.

These contracts, which have maturities ranging to December 2024, qualify as cash flow hedges under U.S.

At April 2, 2023 and December 31, 2022, the Company had derivative financial instruments outstanding to hedge anticipated transactions and certain asset and liability related cash flows.

These contracts, w hich have maturities ranging to December 2024, qualify as cash flow hedges under U.S.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Commodity Cash Flow Hedges

Certain derivative contracts entered into to manage the cost of anticipated purchases of natural gas and aluminum have been designated by the Company as cash flow hedges.

At October 2, 2022, these contracts included natural gas swaps covering approximately 600,000 MMBTUs.

These contracts represented approximately 24 % of anticipated usage in North America for the remainder of 2022 and 1 % of anticipated usage in both 2023 and 2024.

At April 2, 2023, these contracts included natural gas swaps covering approximately 0.1 million metric million British thermal units (“MMBTUs”).

These contracts represented approximately 1 % of anticipated usage in North America for both 2023 and 2024.

The Company also has certain natural gas hedges that it does not treat as cash flow hedges.

See “Non-Designated Derivatives” below for a discussion of these hedges.

The fair value of the Company’s commodity cash flow hedges netted to a gain position of $ 1,892 and $ 1,491 at October 2, 2022 and December 31, 2021, respectively.

The amount of the gain included in Accumulated Other Comprehensive Income at October 2, 2022 expected to be reclassified to the income statement during the next twelve months is $ 1,881 .

At April 2, 2023, the Company has also designated swap contracts covering 715 metric tons of aluminum as cash flow hedges.

The fair value of the Company’s commodity cash flow hedges netted to a loss position of $( 218 ) and $( 172 ) at April 2, 2023 and December 31, 2022, respectively.

The amount of the loss included in accumulated other comprehensive loss at April 2, 2023 expected to be reclassified to the income statement during the next twelve months is $( 178 ).

Foreign Currency Cash Flow Hedges

The Company has entered into forward contracts to hedge certain anticipated foreign currency denominated sales, purchases, and capital spending expected to occur in 2023 and 2024.

The net positions of these contracts at October 2, 2022 were as follows (in thousands):

The net positions of these contracts at April 2, 2023 were as follows (in thousands):

Currency Action Quantity

3 unchanged sentences

Czech koruna purchase 60,331

Canadian dollar purchase 18,828

Euro purchase 9,974

Turkish lira purchase 7,478

Canadian dollar purchase 3,798

Brazilian real purchase 5,202

British pound purchase 4,701

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a loss position of $( 36 ) and a gain position of $ 336 at October 2, 2022 and December 31, 2021, respectively.

Losses of $( 36 ) are expected to be reclassified from accumulated other comprehensive loss to the income statement during the next twelve months.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a gain position of $ 2,560 and a loss position of $( 299 ) at April 2, 2023 and December 31, 2022, respectively.

Gains of $ 2,560 are expected to be reclassified from accumulated other comprehensive income to the income statement during the next twelve months.

In addition, the Company has entered into forward contracts to hedge certain foreign currency cash flow transactions related to construction in progress.

As of October 2, 2022 and December 31, 2021, the net position of these contracts was $( 1,476 ) and $( 457 ), respectively.

During the nine-month period ended October 2, 2022, losses from these hedges totaling $ 864 were reclassified from accumulated other comprehensive loss and included in the carrying value of the capitalized expenditures.

As of April 2, 2023 and December 31, 2022, the net position of these contracts was $( 16 ) and $( 564 ), respectively.

During the three-month period ended April 2, 2023, losses from these hedges of $( 401 ) were reclassified from accumulated other comprehensive loss and included in the carrying value of the capitalized expenditures.

Losses of $( 22 ) are expected to be reclassified from accumulated other comprehensive loss and included in the carrying value of the related fixed assets acquired during the next twelve months.

4 unchanged sentences

The Company routinely enters into forward contracts or swaps to economically hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables.

The net currency positions of these non-designated contracts at October 2, 2022, were as follows (in thousands):

The net currency positions of these non-designated contracts at April 2, 2023, were as follows (in thousands):

Currency Action Quantity

Colombian peso purchase 24,748,486

Indonesian rupiah purchase 23,069,325

Colombian peso purchase 20,729,300

Mexican peso purchase 563,953

1 unchanged sentence

Canadian dollar purchase 8,104

Thai baht sell ( 11,143 )

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Commodity Hedges

The Company has entered into non-designated derivative contracts to manage the cost of anticipated purchases of natural gas.

At October 2, 2022, these contracts consisted of natural gas swaps covering approximately 8.2 million MMBTUs and represented approximately 47 % of anticipated usage in North America for the remainder of 2022 and 69 % and 17 % of anticipated usage in 2023 and 2024, respectively.

At April 2, 2023, these contracts consisted of natural gas swaps covering approximately 8.3 million MMBTUs and represented approximately 78 % and 54 % of anticipated usage for 2023 and 2024, respectively.

Interest Rate Hedges

1 unchanged sentence

These instruments had the risk management objective of reducing exposure to the Company of increases in the underlying Treasury index up to the date of pricing of the notes.

The fair value of the contracts was a net loss position of $( 550 ) at December 31, 2021.

The derivatives were settled when the bonds priced on January 11, 2022, with the Compan y recognizing a gain on the settlement of $ 5,201 .

The gain is included in “ Selling, general and administrative expenses ” on the Company's Condensed Consolidated Statements of Income for the nine-month period ended October 2, 2022.

The fair value of the Company’s non-designated derivatives position was a gain of $ 2,369 and $ 92 at October 2, 2022 and December 31, 2021, respectively.

The following table sets forth the location and fair values of the Company’s derivative instruments at October 2, 2022 and December 31, 2021:

Description Balance Sheet Location October 2, 2022 December 31, 2021

The derivatives were settled when the bonds priced on January 11, 2022, with the Company recognizing a gain on the settlement of $ 5,201 .

The gain is included in “Selling, general and administrative expenses” on the Company's Condensed Consolidated Statements of Income for t he three-month period ended April 3, 2022.

The fair value of the Company’s non-designated derivatives position was a loss of $( 14,691 ) and $( 8,692 ) at April 2, 2023 and December 31, 2022, respectively.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The following table sets forth the location and fair values of the Company’s derivative instruments at April 2, 2023 and December 31, 2022:

Description Balance Sheet Location April 2, 2023 December 31, 2022

Derivatives designated as hedging instruments:

4 unchanged sentences

Foreign Exchange Contracts Prepaid expenses $ 5,176 $ 1,251

Foreign Exchange Contracts Other assets $ 6 $ —

Foreign Exchange Contracts Accrued expenses and other $ ( 2,637 ) $ ( 2,114 )

6 unchanged sentences

Foreign Exchange Contracts Accrued expenses and other $ ( 54 ) $ ( 169 )

Interest Rate Lock Contract Accrued expenses and other $ — $ ( 550 )

While certain of the Company’s derivative contract arrangements with its counterparties provide for the ability to settle contracts on a net basis, the Company reports its derivative positions on a gross basis.

There are no collateral arrangements or requirements in these agreements.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the three-month periods ended October 2, 2022 and October 3, 2021, excluding the amount of foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the three-month periods ended April 2, 2023 and April 3, 2022, excluding the amount of foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:

Description Amount of Gain or

8 unchanged sentences

Derivatives in Cash Flow Hedging Relationships:

Three-month period ended October 2, 2022

Three-month period ended April 2, 2023

Foreign Exchange Contracts $ 3,613 Net sales $ 1,062

1 unchanged sentence

Commodity Contracts $ ( 77 ) Cost of sales $ ( 32 )

Three-month period ended October 3, 2021

Three-month period ended April 3, 2022

Foreign Exchange Contracts $ 955 Net sales $ 566

5 unchanged sentences

Derivatives not Designated as Hedging Instruments:

Three-month period ended October 2, 2022

Three-month period ended April 2, 2023

Commodity Contracts $ ( 9,708 ) Cost of sales

Foreign Exchange Contracts $ 2,137 Selling, general and administrative

Three-month period ended October 3, 2021

Three-month period ended April 3, 2022

Commodity Contracts $ 6,992 Cost of sales

Foreign Exchange Contracts $ 1,343 Selling, general and administrative

Three-month period ended October 2, 2022 Three-month period ended October 3, 2021

Description Revenue Cost of

sales Revenue Cost of

Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income $ 559 $ 2,001 $ 937 $ 1,340

Gain or (loss) on cash flow hedging relationships:

Foreign exchange contracts:

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into net income $ 559 $ ( 433 ) $ 937 $ ( 711 )

Commodity contracts:

Amount of gain reclassified from accumulated other comprehensive loss into net income $ — $ 2,434 $ — $ 2,051

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the nine months ended October 2, 2022 and October 3, 2021, excluding the amount of foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:

Description Amount of Gain or

(Loss) Recognized

Derivatives Location of Gain

Reclassified from

Accumulated OCI

Into Income Amount of Gain or

(Loss) Reclassified

from Accumulated

OCI Into Income

Derivatives in Cash Flow Hedging Relationships:

Nine-month period ended October 2, 2022

Foreign Exchange Contracts $ ( 202 ) Net sales $ 2,425

Cost of sales $ ( 2,139 )

Commodity Contracts $ 5,809 Cost of sales $ 5,371

Nine-month period ended October 3, 2021

Foreign Exchange Contracts $ 156 Net sales $ 2,766

Cost of sales $ ( 2,129 )

Commodity Contracts $ 10,801 Cost of sales $ 2,626

Description Gain or (Loss)

Recognized Location of Gain or (Loss) Recognized in

Income Statement

Derivatives not Designated as Hedging Instruments:

Nine-month period ended October 2, 2022

Commodity Contracts $ 10,072 Cost of sales

Foreign Exchange Contracts $ ( 283 ) Selling, general and administrative

Nine-month period ended October 3, 2021

Commodity Contracts $ 3,295 Cost of sales

Foreign Exchange Contracts $ ( 906 ) Selling, general and administrative

Nine-month period ended October 2, 2022 Nine-month period ended October 3, 2021

Three-month period ended April 2, 2023 Three-month period ended April 3, 2022

Description Revenue Cost of

3 unchanged sentences

Foreign exchange contracts:

Amount of gain/(loss) reclassified from accumulated other comprehensive income into net income $ 2,425 $ ( 2,139 ) $ 2,766 $ ( 2,129 )

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into net income $ 1,062 $ ( 454 ) $ 566 $ ( 695 )

Commodity contracts:

Amount of gain reclassified from accumulated other comprehensive income into net income $ — $ 5,371 $ — $ 2,626

Amount of gain reclassified from accumulated other comprehensive loss into net income $ — $ ( 32 ) $ — $ 3,850

SONOCO PRODUCTS COMPANY

10 unchanged sentences

The following table sets forth information regarding the Company’s financial assets and financial liabilities, excluding retirement and postretirement plan assets, measured at fair value on a recurring basis:

Description October 2, 2022 Assets measured

Description April 2, 2023 Assets measured

at NAV Level 1 Level 2 Level 3

16 unchanged sentences

Fair value measurements for the Company’s derivatives are classified under Level 2 because such measurements are estimated based on observable inputs such as interest rates, yield curves, spot and future commodity prices and spot and future exchange rates.

The Company does not currently have any non-financial assets or liabilities that are recognized or disclosed at fair value on a recurring basis.

None of the Company’s financial assets or liabilities are measured at fair value using significant unobservable inputs.

There were no transfers in or out of Level 1 or Level 2 fair value measurements during the three- and nine-month periods ended October 2, 2022.

There were no transfers in or out of Level 1 or Level 2 fair value measurements during the three-month period ended April 2, 2023.

The Company measures certain non-financial assets and non-financial liabilities at fair value on a recurring basis.

See Note 3 for a discussion of assets acquired and liabilities assumed in acquisitions and Note 5 for a discussion of asset impairments associated with restructuring activities.

The fair value of assets determined based on third-party appraisals and classified as Level 3 measurements due to the use of significant unobservable inputs was not material at April 2, 2023 or December 31, 2022.

SONOCO PRODUCTS COMPANY

6 unchanged sentences

The components of net periodic benefit cost/(income) include the following:

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Retirement Plans

13 unchanged sentences

Settlement Charges

The Company recognized settlement ch arges of $ 430 and $ 361 during the nine-month periods ended October 2, 2022 and October 3, 2021, respectively.

The Company recognized settlement ch arges of $ 686 and $ 356 during the three-month periods ended April 2, 2023 and April 3, 2022, respectively.

These charges resulted from payments made to certain participants in the Company's non-union Canadian pension plan who elected a lump sum distribution option upon retirement.

Additional settlement charges related to the Canadian pension plans may be recognized over the remainder of 2023 as a result of ongoing lump-sum distributions.

The Company terminated the Sonoco Pension Plan for Inactive Participants (the “Inactive Plan”), a tax-qualified defined benefit plan, effective September 30, 2019, and settled the liabilities of the Inactive Plan in the second quarter of 2021 through a combination of lump-sum payments and the purchase of group annuity contracts, resulting in the recognition of non-cash, pre-tax settlement charges totaling $ 547,291 in the second quarter of 2021.

Contributions

The Company made aggregate contributio ns of $ 11,600 and $ 142,615 to its defined benefit retirement and retiree health and life insurance plans during the nine-month periods ended October 2, 2022 and October 3, 2021, respectively.

The 2021 contributions include $ 133,000 contributed to the Inactive Plan during the second quarter of 2021 in order for it to be fully funded upon final settlement.

The Company made aggregate contributions of $ 4,931 and $ 6,147 to its defined benefit retirement and retiree health and life insurance plans during the three-month periods ended April 2, 2023 and April 3, 2022, respectively.

The Company expects to make additional aggregate contributions of approximately $ 10,300 to its defined benefit retirement and retiree health and life insurance plans over the remainder of 2023.

2 unchanged sentences

The plan is comprised of both an elective and non-elective component.

The elective component of the plan, which is designed to meet the requirements of Section 401(k) of the Internal Revenue Code, allows participants to set aside a portion of their wages and salaries for retirement and encourages saving

The plan provides for participant contributions of 1 % to 100 % of gross pay.

Effective December 31, 2021, the Company’s match on elective contributions to the plan increased from 50 % of the first 4 % of compensation contributed by participants to 100 % of the first 6 % as a result of changes to the plan, described below.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

by matching a portion of their contributions with contributions from the Company.

The plan provides for participant contributions of 1 % to 100 % of gross pay.

Effective January 1, 2022, the Company’s match on elective contributions to the plan increased from 50 % of the first 4 % of compensation contributed by participants to 100 % of the first 6 % as a result of changes to the plan, described below.

The non-elective component of the plan, the Sonoco Retirement Contribution (“SRC”), was eliminated effective January 1, 2022.

The non-elective component of the plan, the Sonoco Retirement Contribution (“SRC”), was eliminated effective December 31, 2021.

The SRC provided for an annual Company contribution equal to 4 % of the participant's eligible pay plus 4 % of eligible pay in excess of the social security wage base to eligible participant accounts.

SRC contributions were funded annually in the first quarter, following the year in which the benefit was earned.

SRC contributions totaled $ 21,948 and $ 22,665 during the nine-month periods ended October 2, 2022 and October 3, 2021, respectively.

The Company made SRC contributions totaling $ 21,948 during the three-month period ended April 3, 2022 related to the 2021 fiscal year.

No additional SRC contributions will occur.

The Company recognized expense related to the SRC of $ 5,456 and $ 17,290 for the three- and nine-month periods ended October 3, 2021, respectively.

The Company’s effective tax rates for the three- and nine-month periods ended October 2, 2022 were 23.7 % and 24.5 %, respectively, and its rates for the three- and nine-month periods ended October 3, 2021 were 2.3 % and 37.0 %, respectively.

The Company’s effective tax rates for the three-month periods ended April 2, 2023 and April 3, 2022 were 24.3 % and 23.7 %, respectively.

The Company's effective tax rates varied from the U.S.

1 unchanged sentence

jurisdictions and the relative amounts earned in those jurisdictions, state income taxes, and discrete tax adjustments that were not consistent year over year.

The higher 2022 rate was primarily driven by the absence of the 2021 benefit associated with the amendment of the Company’s 2017 tax return to report increased utilization of its foreign tax credits.

The higher 2023 rate was primarily driven by the absence of a first quarter 2022 deferred tax benefit related to the Metal Packaging acquisition.

The Company and/or its subsidiaries file federal, state and local income tax returns in the United States and various foreign jurisdictions.

1 unchanged sentence

The Company’s reserve for uncertain tax benefits has increased by $ 798 since December 31, 2022 due primarily to an increase in reserves related to existing tax positions.

The Company believes that it is reasonably possible that the amount reserved for unrecognized tax benefits at October 2, 2022 could increase by approximately $ 200 over the next twelve months.

The Company believes that it is reasonably possible that the amount reserved for unrecognized tax benefits at April 2, 2023 could increase by approximately $ 260 over the next twelve months.

Although the Company’s estimate for the potential outcome for any uncertain tax issue is highly judgmental, management believes that any reasonably foreseeable outcomes related to these matters have been adequately provided for.

6 unchanged sentences

The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines).

The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company's lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842.

Most real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years .

2 unchanged sentences

The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years.

The Company completed the acquisition of Metal Packaging on January 26, 2022.

The acquisition included both operating and finance lease assets and liabilities.

The acquired operating lease liabilities of $ 33,910 had a weighted average remaining lease maturity term and discount rate of 11.0 years and 2.8 %, respectively, and the acquired finance

The Company completed the acquisition of Metal Packaging on January 26, 2022, which included the acquisition of $ 33,910 in operating lease liabilities and $ 46,687 in finance lease liabilities as of the date of acquisition.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

lease liabilities of $ 46,687 had a weighted average remaining lease maturity term and discount rate of 3.8 years and 7.5 %, respectively, as of the date of the acquisition.

The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at October 2, 2022 and December 31, 2021:

Classification Balance Sheet Location October 2, 2022 December 31, 2021

The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at April 2, 2023 and December 31, 2022:

Classification Balance Sheet Location April 2, 2023 December 31, 2022

Operating lease assets Right of Use Asset - Operating Leases $ 289,017 $ 296,781

13 unchanged sentences

Because the right of use assets recorded on the balance sheet were determined based upon factors considered at the commencement date of the leases, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.

The following table sets forth the components of the Company’s total lease cost for the three- and nine-month periods ended October 2, 2022 and October 3, 2021:

Three Months Ended Nine Months Ended

Lease Cost October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

The following table sets forth the components of the Company’s total lease cost for the three-month periods ended April 2, 2023 and April 3, 2022:

Three Months Ended

Lease Cost April 2, 2023 April 3, 2022

Operating lease cost (a) $ 13,411 $ 12,797

3 unchanged sentences

Variable lease cost (a) (c) 9,378 7,355

Impairment charges (d) 61 — 293 —

Total lease cost $ 27,253 $ 23,829

2 unchanged sentences

(d) Impairment charges are included in “Restructuring/Asset impairment charges” in the Company’s

Consolidated Statements of Income.

See Note 5 for more information.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The following table sets forth certain lease-related information for the nine-month periods ended October 2, 2022 and October 3, 2021:

Nine Months Ended

October 2, 2022 October 3, 2021

The following table sets forth certain lease-related information for the three-month periods ended April 2, 2023 and April 3, 2022:

Three Months Ended

April 2, 2023 April 3, 2022

Cash paid for amounts included in the measurement of lease liabilities:

6 unchanged sentences

Modification to leased assets for increase in operating lease liabilities $ 3,957 $ 1,484

Modification to leased assets for (decrease)/increase in finance lease liabilities $ ( 642 ) $ 9,586

Modification to leased assets for increase in finance lease liabilities $ — $ 290

Termination reclasses to decrease operating lease assets $ ( 2,029 ) $ ( 1,913 )

18 unchanged sentences

The Company does provide prompt payment discounts to certain customers if invoices are paid within a predetermined period.

Prompt payment discounts are treated as a reduction of revenue and are determinable within a short time period following the sale.

The following tables set forth the effects of contract assets and liabilities from contracts with customers.

Prompt payment discounts are treated as a reduction of estimated revenue and are determinable within a short time period following the sale.

The following table sets forth the effects of contract assets and liabilities from contracts with customers.

Contract assets and liabilities are reported in “Other receivables” and “Accrued expenses and other,” respectively, on the Company’s Condensed Consolidated Balance Sheets.

October 2, 2022 December 31, 2021

April 2, 2023 December 31, 2022

Contract Assets $ 60,047 $ 56,008

Contract Liabilities $ ( 23,538 ) $ ( 22,423 )

Significant changes in the contract assets and liabilities balances during the nine-month period ended October 2, 2022 and the year ended December 31, 2021 were as follows:

October 2, 2022 December 31, 2021

Significant changes in the contract assets and liabilities balances during the three-month period ended April 2, 2023 and the year ended December 31, 2022 were as follows:

April 2, 2023 December 31, 2022

Asset Contract

9 unchanged sentences

Ending Balance $ 60,047 $ ( 23,538 ) $ 56,008 $ ( 22,423 )

Contract assets and liabilities are generally short in duration given the nature of products produced by the Company.

Contract assets represent goods produced without alternative use for which the Company is entitled to payment with margin prior to shipment.

Upon shipment, the Company is entitled to bill the customer, and therefore amounts included in contract assets will be reduced with the recording of an account receivable as they represent an unconditional right to payment.

Contract liabilities represent revenue deferred due to pricing mechanisms utilized by the Company in certain multi-year arrangements, volume rebates, and payments received in advance.

For multi-year arrangements with pricing

SONOCO PRODUCTS COMPANY

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(Dollars and shares in thousands except per share data)

mechanisms, the Company will generally defer revenue during the first half of the arrangement and will release the deferral over the back half of the contract term.

The Company’s reportable segments are aligned by product nature as disclosed in Note 15 .

The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended October 2, 2022 and October 3, 2021.

The tables also include a reconciliation of disaggregated revenue with reportable segments.

Three-month period ended October 2, 2022 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

United States $ 837,048 $ 405,382 $ 165,476 $ 1,407,906

Europe 101,665 99,804 19,811 221,280

Canada 30,154 28,471 — 58,625

Asia 25,492 65,475 185 91,152

Other 36,190 62,320 12,743 111,253

Total $ 1,030,549 $ 661,452 $ 198,215 $ 1,890,216

Three-month period ended October 3, 2021 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

United States $ 408,295 $ 370,659 $ 145,029 $ 923,983

Europe 109,566 99,573 24,033 233,172

Canada 31,612 24,187 — 55,799

Asia 20,728 81,097 393 102,218

Other 28,768 59,714 11,539 100,021

Total $ 598,969 $ 635,230 $ 180,994 $ 1,415,193

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The following tables set forth information about revenue disaggregated by primary geographic regions for the nine-month periods ended October 2, 2022 and October 3, 2021.

Contract assets represent goods produced without alternative use for which the Company is entitled to payment with margin prior to shipment.

Contract liabilities represent revenue deferred due to pricing mechanisms utilized by the Company in certain multi-year arrangements, volume rebates, and receipts of advance payments.

For multi-year arrangements with pricing mechanisms, the Company will generally defer revenue during the first half of the arrangement and will release the deferral over the back half of the contract term.

Contract assets and liabilities are generally short in duration given the nature of products produced by the Company.

The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended April 2, 2023 and April 3, 2022.

The tables also include a reconciliation of disaggregated revenue with reportable segments.

Nine-month period ended October 2, 2022 Consumer

Packaging Industrial

Packaging All Other Total

The Company’s reportable segments are aligned by product nature as disclosed in Note 15 .

Three-month period ended April 2, 2023 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

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Total $ 909,278 $ 615,855 $ 204,650 $ 1,729,783

Nine-month period ended October 3, 2021 Consumer Packaging Industrial Paper Packaging All Other Total

Three-month period ended April 3, 2022 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

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The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

The Consumer Packaging segment primarily serves prepared and fresh food markets along with other packaging for consumer products.

The products produced and sold within the Consumer Packaging segment are generally used to package a variety of consumer products and consist primarily of round and shaped rigid paper containers;

steel tinplate cans and aerosol containers;

thermoformed plastic trays and containers;

and flexible packaging.

Total assets of the Consumer Packaging segment increased by $ 1,661,573 upon the acquisition of Metal Packaging on January 26, 2022.

The Industrial Paper Packaging segment serves customers who use its products to package their goods for transport, storage or sale or to produce similar fiber-based products.

The primary products produced and sold within this segment include fiber-based tubes, cones, and cores;

fiber-based protective packaging and components;

and recycled paperboard.

Businesses grouped as All Other include healthcare packaging, protective and retail security packaging and industrial plastic products.

These businesses include the following products and services:

thermoformed rigid plastic trays and devices;

custom-engineered molded foam protective packaging and components;

temperature-assured packaging;

injection molded and extruded containers, spools and parts;

retail security packaging, including printed backer cards, thermoformed blisters and heat-sealing equipment;

and paper amenities.

Pr ior to the divestiture of the Company’s U.S.

display and packaging business on April 4, 2021, this business, which included point-of-purchase displays, fulfillment operations, and contract packaging, was reported in All Other.

The products produced and sold within the Consumer Packaging segment are generally used to package a variety of consumer pro ducts and consist primarily of round and shaped rigid paper, steel and plastic containers;

metal and peelable membrane ends, closures, and components;

thermoformed plastic trays;

and high-barrier flexible packaging.

The primary products produced and sold within the Industrial Paper Packaging segment include paperboard tubes, cones, and cores;

paper-based protective packaging;

and uncoated recycled paperboard.

The primary products produced with the All Other group of businesses consist of a variety of packaging materials, including plastic, paper, foam, and various other specialty materials.

SONOCO PRODUCTS COMPANY

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(Dollars and shares in thousands except per share data)

The following table sets forth net sales, intersegment sales and operating profit for the Company’s reportable segments and All Other.

“Segment operating profit” is defined as the segment’s portion of “Operating profit” excluding restructuring and asset impairment charges, acquisition expenses, amortization of acquisition intangibles, changes in last-in, first-out (“LIFO”) inventory reserves, losses from the early extinguishment of debt, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis of the financial performance of the business.

The following table sets forth net sales, intersegment sales and operating profit for the Company’s reportable segments and All Other group of businesses.

“Segment operating profit” is defined as the segment’s portion of operating profit excluding restructuring/asset impairment charges, acquisition/divestiture-related expenses, amortization of acquisition intangibles, changes in last-in, first-out (“LIFO”) inventory reserves, gains/losses from the divestiture of businesses or other assets, and certain other items, if any, the exclusion of which the Company believes improves comparability and analysis of the financial performance of the business.

General corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other.

Effective January 1, 2022, the Company changed its measure of segment operating profit to exclude amortization of acquisition intangibles.

Accordingly, the prior year’s segment operating profit has been revised to conform with the current presentation for comparability.

SEGMENT FINANCIAL INFORMATION

Three Months Ended Nine Months Ended

October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021

Three Months Ended

April 2, 2023 April 3, 2022

Consumer Packaging $ 909,278 $ 868,098

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Operating profit:

Segment operating profit:

Consumer Packaging $ 91,821 $ 173,609

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All Other 27,233 14,524

Segment operating profit 225,091 134,687 736,036 427,824

Restructuring/Asset impairment charges ( 28,814 ) ( 12,142 )

Amortization of acquisition intangibles ( 21,164 ) ( 18,800 )

Other non-base (charges)/income, net ( 1,807 ) 7,570 ( 83,838 ) 294

Other non-GAAP income/(charges), net 66,205 ( 60,790 )

Operating profit $ 229,648 $ 169,061

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Since the acquisition, the Company has spent a total of $ 2,005 on remediation of the Spartanburg site.

At October 2, 2022 and December 31, 2021, the Company's accrual for environmental contingencies related to the Spartanburg site totaled $ 5,458 and $ 5,555 , respectively.

At April 2, 2023 and December 31, 2022, the Company's accrual for environmental contingencies related to the Spartanburg site totaled $ 5,395 and $ 5,425 , respectively.

The Company cannot currently estimate its potential liability, damages or range of potential loss, if any, beyond the amounts accrued with respect to this exposure.

However, the Company does not believe that the resolution of this matter has a reasonable possibility of having a material adverse effect on the Company's financial statements.

SONOCO PRODUCTS COMPANY

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(Dollars and shares in thousands except per share data)

The Company cannot currently estimate its potential liability, damages or range of potential loss, if any, beyond the amounts accrued with respect to this exposure.

However, the Company does not believe that the resolution of this matter has a reasonable possibility of having a material adverse effect on the Company's financial statements.

Other environmental matters

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However, the Company does not believe that the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company's financial statements.

At October 2, 2022 and December 31, 2021, the Company's accrual for these other sites totaled $ 1,604 and $ 1,825 , respectively.

As of October 2, 2022 and December 31, 2021, the Company (and its subsidiaries) had accrued $ 7,062 and $ 7,380 , respectively, related to environmental contingencies.

At April 2, 2023 and December 31, 2022, the Company's accrual for these other sites totaled $ 1,790 and $ 1,840 , respectively.

As of April 2, 2023 and December 31, 2022, the Company (and its subsidiaries) had accrued $ 7,185 and $ 7,265 , respectively, related to environmental contingencies.

These accruals are included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets.

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While the outcome of these matters could differ from management’s expectations, the Company does not believe the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company’s financial statements.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Sonoco Products Company,

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Sonoco Products Company and its subsidiaries (the “Company”) as of October 2, 2022, and the related condensed consolidated statements of income, comprehensive income, and changes in total equity for the three-month and nine-month periods ended October 2, 2022 and October 3, 2021 and the condensed consolidated statements of cash flows for the nine-month periods ended October 2, 2022 and October 3, 2021, including the related notes (collectively referred to as the “interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of income, comprehensive income, changes in total equity and of cash flows for the year then ended (not presented herein), and in our report dated February 28, 2022, we expressed an unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our review in accordance with the standards of the PCAOB.

A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.

It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.

Accordingly, we do not express such an opinion.

/s/ PricewaterhouseCoopers LLP

Charlotte, North Carolina

November 2, 2022

SONOCO PRODUCTS COMPANY

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements