What changed in this filing

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Item 1. Financial Statements

2024-05-01 compared with 2023-11-02 · 318 added, 584 removed, 686 unchanged (57% of the section changed)

12 unchanged sentences

Prepaid expenses 101,288 113,385

Total Current Assets

2,064,604 2,050,365

12 unchanged sentences

Accrued taxes 7,248 10,641

Total Current Liabilities

1,577,309 1,165,277

9 unchanged sentences

98,255 and 97,957 shares issued and outstanding

at October 1, 2023 and December 31, 2022 , respectively

at March 31, 2024 and December 31, 2023 , respectively

Capital in excess of stated value 159,343 159,047

10 unchanged sentences

(Dollars and shares in thousands except per share data)

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Net sales $ 1,637,543 $ 1,729,783

3 unchanged sentences

Restructuring/Asset impairment charges 31,618 28,814

(Loss)/Gain on divestiture of business and other assets ( 537 ) — 78,844 —

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

Operating profit 112,453 229,648

Other income, net 36,943 — 36,943 —

Non-operating pension costs 3,295 3,658

6 unchanged sentences

Net income 65,273 148,264

Net income attributable to noncontrolling interests ( 309 ) ( 273 ) ( 354 ) ( 642 )

Net (income)/loss attributable to noncontrolling interests ( 96 ) 55

Net income attributable to Sonoco $ 65,177 $ 148,319

11 unchanged sentences

(Dollars in thousands)

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Net income $ 65,273 $ 148,264

Other comprehensive income/(loss):

Other comprehensive (loss)/income:

Foreign currency translation adjustments ( 19,786 ) 31,808

4 unchanged sentences

45,699 183,502

Net income attributable to noncontrolling interests ( 309 ) ( 273 ) ( 354 ) ( 642 )

Other comprehensive loss attributable to noncontrolling interests 668 515 727 148

Net (income)/loss attributable to noncontrolling interests ( 96 ) 55

Other comprehensive loss/(income) attributable to noncontrolling interests 467 ( 239 )

Comprehensive income attributable to Sonoco $ 46,070 $ 183,318

11 unchanged sentences

December 31, 2023 $ 2,431,835 97,957 $ 7,175 $ 159,047 $ ( 366,262 ) $ 2,624,380 $ 7,495

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

Other comprehensive income:

Translation income 31,808 31,569 239

Defined benefit plan adjustment, net of tax 916 916

Derivative financial instruments, net of tax 2,514 2,514

Other comprehensive income $ 35,238 $ 34,999 $ 239

Dividends ( 48,203 ) ( 48,203 )

Issuance of stock awards 472 485 472

Shares repurchased ( 10,576 ) ( 175 ) ( 10,576 )

Share-based compensation 7,573 7,573

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

Net income 65,273 65,177 96

Other comprehensive income/(loss):

Translation income/(loss) 21,690 21,988 ( 298 )

Defined benefit plan adjustment, net of tax ( 1,763 ) ( 1,763 )

Derivative financial instruments, net of tax 1,428 1,428

Other comprehensive income/(loss) $ 21,355 $ 21,653 $ ( 298 )

Dividends ( 50,180 ) ( 50,180 )

Issuance of stock awards 222 1 222

Shares repurchased ( 26 ) — ( 26 )

Share-based compensation 7,637 7,637

July 2, 2023 $ 2,299,322 97,956 $ 7,175 $ 145,841 $ ( 373,431 ) $ 2,512,768 $ 6,969

Net income 131,058 130,749 309

Other comprehensive income/(loss):

Other comprehensive (loss)/income:

Translation loss ( 19,786 ) ( 19,319 ) ( 467 )

6 unchanged sentences

Share-based compensation 8,325 8,325

October 1, 2023 $ 2,339,155 97,956 $ 7,175 $ 152,148 $ ( 420,110 ) $ 2,593,332 $ 6,610

Other 906 906

March 31, 2024 $ 2,427,482 98,255 $ 7,175 $ 159,343 $ ( 385,369 ) $ 2,639,209 $ 7,124

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 income 31,808 31,569 239

Defined benefit plan adjustment, net of tax 916 916

Derivative financial instruments, net of tax 2,514 2,514

Other comprehensive loss $ 3,447 $ 2,556 $ 891

Other comprehensive income $ 35,238 $ 34,999 $ 239

Dividends ( 48,203 ) ( 48,203 )

2 unchanged sentences

Share-based compensation 7,573 7,573

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

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 (unaudited)

2 unchanged sentences

(Dollars in thousands)

Nine Months Ended

October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Cash Flows from Operating Activities:

6 unchanged sentences

Cash dividends from affiliated companies 41 1,875

Net gain on disposition of assets ( 59,050 ) ( 178 )

Net loss/(gain) on disposition of assets 18 ( 60,615 )

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

1 unchanged sentence

Pension and postretirement plan contributions ( 3,989 ) ( 4,931 )

Increase in net deferred tax liabilities ( 14,451 ) ( 1,745 )

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

Net (decrease)/increase in deferred tax liabilities ( 4,869 ) 1,588

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

Trade accounts receivable ( 43,334 ) ( 33,485 )

10 unchanged sentences

Proceeds from the sale of assets, net 101 71,405

Investment in affiliated companies — ( 5,000 )

Other net investing activities 5,077 190

Net cash used in investing activities ( 459,729 ) ( 1,570,412 )

Net cash used by investing activities ( 81,732 ) ( 2,967 )

Cash Flows from Financing Activities:

2 unchanged sentences

Net change in commercial paper — 12,000

Net increase/(decrease) in outstanding checks 1,925 ( 16,509 )

Net (decrease)/increase in book cash overdrafts ( 1,614 ) 2,670

Cash dividends ( 50,144 ) ( 47,731 )

Purchase of noncontrolling interest — ( 14,474 )

Payments for share repurchases ( 9,139 ) ( 10,576 )

Net cash (used in)/provided by financing activities ( 129,069 ) 1,270,866

Net cash used by financing activities ( 62,671 ) ( 118,178 )

Effects of Exchange Rate Changes on Cash ( 1,556 ) 5,356

8 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.

Operating results for the three- and nine-month periods ended October 1, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Operating results for the three-month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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, 2023.

On September 8, 2023, the Company completed its previously announced acquisition of the remaining 65 % interest in RTS Packaging, LLC (“RTS Packaging”), from joint venture partner WestRock Company (“WestRock”).

This acquisition has been accounted for as a business combination resulting in the consolidation of RTS Packaging.

Prior to September 8, 2023, the Company reported its 35 % interest in the RTS Packaging joint venture using the equity method of accounting.

See Note 3 for additional information.

As previously disclosed, effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within its Consumer Packaging segment in order to streamline operations, enhance customer service, and better position the business for accelerated growth.

As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources.

As a result of these changes, the Company’s consumer thermoformed businesses moved from the All Other group of businesses to the Consumer Packaging segment.

The Company’s Industrial Paper Packaging segment was not affected by these changes.

All prior year segment results presented herein have been recast to conform to the new presentation.

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):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which modifies the rules on income tax disclosures to require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

The Company will begin providing the enhanced reportable segment financial disclosures effective with its Annual Report on Form 10-K for the year ending December 31, 2024.

In September 2022, the FASB issued ASU 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50):

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.

1 unchanged sentence

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 condensed consolidated financial statements.

During the nine-month period ended October 1, 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 October 1, 2023, there are no other pronouncements pending adoption that are expected to have a material impact on the Company’s condensed consolidated financial statements.

Acquisitions and Divestitures

On September 8, 2023, the Company completed the acquisition of the remaining 65 % interest in RTS Packaging from joint venture partner WestRock and the acquisition of a paper mill in Chattanooga, Tennessee (“Chattanooga Mill”) from WestRock for net cash consideration of $ 313,362 , subject to customary working capital adjustments.

Prior to completing the acquisitions, the Company held a 35 % ownership interest in the RTS Packaging joint venture which was formed in 1997 and combined the former protective packaging operations of WestRock and Sonoco to market recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals.

With the acquisitions of RTS Packaging and the Chattanooga Mill, the Company added approximately 1,100 employees and 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.

The Company funded the acquisitions with borrowings under a new term loan credit facility (See Note 9 for more information) and cash on hand.

The financial results of RTS Packaging and the Chattanooga Mill are included in the Company’s Industrial Paper Packaging segment.

On September 8, 2023, the fair value of the Company’s 35 % interest in RTS Packaging was determined to be $ 59,472 based on the cash consideration exchanged for acquiring the remaining 65 % equity interest in RTS Packaging adjusted for the deemed payment of a control premium, and the carrying value of the 35 % interest was $ 8,654 .

The Company recognized a net gain of $ 44,029 resulting from this remeasurement to fair value and the reclassification of certain amounts related to the Company’s 35 % interest out of “Accumulated other comprehensive loss,” including foreign

The Company adopted this standard in the first quarter of 2023, with the exception of the amendment on rollforward information, which will be provided in the Company’s Annual Report on Form 10-K for the year ending December 31, 2024.

During the three-month period ended March 31, 2024, there were no other newly issued or newly applicable accounting pronouncements that had, or are expected to have, a material impact on the Company’s financial statements.

Further, at March 31, 2024, there were no other pronouncements pending adoption that are expected to have a material impact on the Company’s condensed consolidated financial statements.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

currency translation losses of $ 2,033 and losses related to defined benefit pension plans of $ 4,756 .

The net gain from such remeasurement and reclassification was recorded in “Other income, net” in the Company’s Condensed Consolidated Statements of Income for the period ended October 1, 2023.

The Company also recognized a loss of $ 7,086 on the settlement of a contract associated with the Chattanooga Mill.

The contract was determined to have unfavorable terms given market conditions at the time of the acquisition.

This loss is reflected in “Other income, net” in the Company’s Condensed Consolidated Statements of Income for the period ended October 1, 2023.

This loss, along with the settlement of a note receivable from RTS Packaging held by the Company on the acquisition date, are reflected as components of purchase consideration transferred in connection with these acquisitions.

The following table provides a summary of the purchase consideration (as defined under Accounting Standards Codification (“ASC”) 805) transferred for the acquisitions of RTS Packaging and the Chattanooga Mill:

Purchase Consideration

Cash consideration, net of cash acquired $ 313,362

Fair value of previously held interest in RTS Packaging 59,472

Settlement of preexisting relationships ( 1,479 )

Purchase consideration transferred $ 371,355

The provisional fair values of the assets acquired and liabilities assumed in connection with the acquisitions of RTS Packaging and the Chattanooga Mill in total are as follows:

Initial Allocation

Acquisitions and Divestitures

As previously disclosed, on December 1, 2023, the Company completed the acquisition of Inapel Embalagens Ltda.

(“Inapel”), a manufacturer of single-layer and multilayer materials for flexible packaging in Brazil, for net consideration of $ 64,544 , including $ 59,228 of cash paid at closing and additional obligations to the seller totaling $ 5,316 that will be paid throughout 2024.

This additional purchase consideration is recorded in “Payable to suppliers” in the Company’s Condensed Consolidated Balance Sheet as of March 31, 2024.

With the acquisition of Inapel, the Company added approximately 500 employees and two manufacturing locations in the São Paulo region of Brazil.

The financial results of Inapel are included in the Company’s Consumer Packaging segment .

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

Initial Allocation Measurement Period Adjustments Preliminary Allocation

Trade accounts receivable $ 30,301 $ ( 133 ) $ 30,168

Other receivables 6,088 70 6,158

Inventories 9,269 — 9,269

4 unchanged sentences

Goodwill 15,704 ( 7,130 ) 8,574

Other net tangible assets 2,465

Other assets 793 — 793

Payable to suppliers ( 15,899 ) 3,058 ( 12,841 )

Accrued expenses and other ( 5,733 ) ( 1,350 ) ( 7,083 )

Notes payable and current portion of long-term debt ( 24 )

Noncurrent operating lease liabilities ( 117 ) — ( 117 )

Long-term debt ( 1,942 )

Deferred income taxes ( 2,934 ) ( 5,564 ) ( 8,498 )

Other long-term liabilities ( 14,054 )

Net assets acquired $ 371,355

The initial allocation of the purchase price of RTS Packaging and the Chattanooga Mill to the tangible and intangible assets acquired and liabilities assumed, as reflected in the table above, is based on the Company’s preliminary allocations of their fair values, based on information currently available.

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

Total purchase price, net of cash acquired $ 59,228 $ 5,316 $ 64,544

The allocation of the purchase price of Inapel 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 determinations of fair value using information currently available.

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

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.

and deferred income taxes.

The Company expects to complete its valuations within one year of the date of acquisition.

Goodwill for Inapel, none of which is expected to be deductible for income tax purposes, is primarily attributable to the assembled workforce and synergies of the combined organization.

On September 8, 2023, the Company completed the acquisition of the remaining 65 % interest in RTS Packaging, LLC (“RTS Packaging”) from joint venture partner WestRock Company (“WestRock”) and the acquisition of a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”) from WestRock for net cash consideration of $ 313,388 .

In December 2023, the Company agreed to a final working capital settlement of $ 452 , which was paid to WestRock in January 2024.

The financial results of RTS Packaging and the Chattanooga Mill are included in the Company’s Industrial Paper Packaging segment.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

Goodwill for RTS Packaging and the Chattanooga Mill, of which $ 81,435 is expected to be deductible for income tax purposes, consists of increased manufacturing capacity, access to certain markets, and the capability to support marquee customers in growing markets.

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

The Company does not believe that these acquisitions were material to the periods presented and are therefore not subject to the ASC 805 requirement to provide supplemental pro-forma financial information.

Accordingly, this information is not presented herein.

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.

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 to date, are as follows:

Initial Estimate Measurement Period Adjustments Preliminary Allocation

The following table provides a summary of the purchase consideration (as defined under Accounting Standards Codification (“ASC”) 805) transferred for the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill:

Purchase Consideration

Cash consideration, net of cash acquired $ 313,388

Fair value of previously held interest in RTS Packaging 59,472

Final working capital adjustment 452

Settlement of preexisting relationships 1,235

Purchase consideration transferred $ 374,547

The Company’s initial allocation of the assets acquired and liabilities assumed in the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill, as well as revised preliminary fair values reflecting adjustments made during the measurement period, are as follows:

Initial Allocation Measurement Period Adjustments Preliminary Allocation

Trade accounts receivable $ 17,488 $ — $ 17,488

6 unchanged sentences

Goodwill 92,657 14,909 107,566

Other assets 2,465 ( 412 ) 2,053

Payable to suppliers ( 7,320 ) — ( 7,320 )

Accrued expenses and other ( 15,167 ) ( 25 ) ( 15,192 )

Taxes payable ( 576 ) ( 3,416 ) ( 3,992 )

Notes payable and current portion of long-term debt ( 24 ) — ( 24 )

Noncurrent operating lease liabilities ( 29,905 ) — ( 29,905 )

Pension and other postretirement benefits ( 10,761 ) ( 768 ) ( 11,529 )

Long-term debt ( 1,942 ) — ( 1,942 )

Deferred income taxes ( 3,419 ) ( 2,502 ) ( 5,921 )

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:

Other long-term liabilities ( 3,293 ) 1,478 ( 1,815 )

Net assets acquired $ 371,355 $ 3,192 $ 374,547

The initial allocation of the purchase price of the remaining interest in RTS Packaging and the Chattanooga Mill to the tangible and intangible assets acquired and liabilities assumed, as reflected in the table above, is based on the Company’s preliminary determination of their fair values using information currently available.

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

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.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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.

Management completed its final valuation of the acquired assets in the third quarter of 2023, and total consideration for the two businesses was $ 6,419 .

Tangible assets totaled $ 1,374 , intangible assets totaled $ 3,031 , and Goodwill totaled $ 2,014 .

The Company paid $ 3,933 at closing and recorded a deferred payment obligation totaling $ 2,486 , which is expected to be paid by the end of 2028, in “Other liabilities” on the Company’s Condensed Consolidated Balance Sheets.

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.

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.

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.

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 during the nine-month period ended October 1, 2023:

Measurement Period Adjustments Nine Months Ended October 1, 2023

Inventories $ ( 73 )

Property, plant and equipment ( 247 )

Accrued expenses and other ( 119 )

Additional cash consideration $ —

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 from the prior year date of acquisition through the end of the reporting period ended October 2, 2022:

Supplemental Information (unaudited) Three Months Ended January 26 to

Metal Packaging October 2, 2022 October 2, 2022

Net sales $ 335,468 $ 798,018

Net income $ 16,769 $ 61,216

The following table presents the Company’s estimated unaudited pro forma consolidated results for the three- and nine-month periods ended October 2, 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.

and deferred income taxes.

The Company expects to complete its valuations within one year of the date of acquisition.

Goodwill for RTS Packaging and the Chattanooga Mill, of which $ 87,191 is expected to be deductible for income tax purposes, is primarily attributable to the synergies of the combined organization and the assembled workforce.

The Company has accounted for these acquisitions as business combinations under the acquisition method and has included the results of operations of the acquired businesses in the Company’s Condensed Consolidated Statements of Income for the three-month period ended March 31, 2024.

The Company believes that these acquisitions were not material to the periods presented and are therefore not subject to the ASC 805 requirement to provide supplemental pro-forma financial information.

Accordingly, this information is not presented herein.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

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

Consolidated October 2, 2022 October 2, 2022

Net sales $ 1,890,216 $ 5,624,118

Net income attributable to Sonoco $ 123,047 $ 428,287

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 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.

Metal Packaging acquisition-related costs of $ 310 and $ 1,463 were recognized during the three- and nine-month periods ended October 1, 2023, respectively.

Metal Packaging 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 as though the acquisition had occurred on January 1, 2021.

Divestiture of Businesses

On July 1, 2023, the Company completed the sale of its U.S.

BulkSak business, which consisted of the manufacturing and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners and was a part of the Company’s Industrial Paper Packaging segment, to U.S.

BulkSak Holdings, LLC.

The cash selling price, as adjusted for working capital, was $ 20,271 with cash proceeds totaling $ 16,808 received on July 3, 2023 and the remaining $ 3,463 held in escrow to be released to the Company within 18 months from the date of the sale, pursuant to working capital adjustments and the settlement of any indemnity claims.

In September 2023, the Company agreed to a working capital adjustment with the buyers that reduced the amount to be released from escrow by $ 537 with a corresponding reduction in the previously recognized gain.

This reduction is reflected in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

As a result of the U.S.

BulkSak divestiture, the Company wrote off net assets totaling $ 13,437 , including $ 3,333 of allocated goodwill, and recognized a pretax gain of $ 6,834 during the nine-month period ended October 1, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

The escrow balance is reflected as a receivable on the Company’s Condensed Consolidated Balance Sheets as of October 1, 2023 with the current portion of $ 1,463 in “Other receivables” and the non-current portion of $ 2,000 in “Other assets.”

Also on July 1, 2023, the Company agreed to the sale of its Mexico BulkSak business for a total cash selling price of $ 1,500 .

The sale of Mexico BulkSak is expected to close at a later date upon the satisfactory completion of certain buyer and seller commitments.

Although the transaction has not yet closed, the Company received cash proceeds of $ 500 on July 3, 2023 and has deferred recognition of the resulting gain pending the completion of the transaction.

On April 1, 2024, subsequent to the end of the first quarter, the Company completed the sale of its Protective Solutions business (“Protexic”), which was part of the All Other group of businesses, to Black Diamond Capital Management, LLC for cash proceeds of $ 81,795 .

This business provided foam components and integrated material solutions for various industrial end markets.

This sale was the result of the Company’s continuing evaluation of its business portfolio and is consistent with the Company’s strategic and investment priorities.

The Company is finalizing its calculation but estimates that the gain on the disposition will be approximately $ 3,000 after recognizing foreign currency translation losses and remaining selling costs.

The Company used the majority of the cash proceeds from the sale to pay down debt.

The sale of the Protexic business did not represent a strategic shift for the Company and will not have a major effect on its operations or financial results.

Consequently, this sale will not meet the criteria for reporting as a discontinued operation.

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 October 1, 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 nine-month period ended October 1, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

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

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 first quarter of 2023, which is included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

The escrow balance is reflected as a long-term receivable in “Other assets” in the Company’s Condensed Consolidated Balance Sheets as of March 31, 2024.

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.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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

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

On January 26, 2023, in connection with the sale of the S3 business, the Company acquired a 2.7 % equity interest in Northstar valued at $ 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 sales of the S3 and U.S.

BulkSak businesses did not represent a strategic shift for the Company or have a major effect on its operations or financial results.

Consequently, these sales did not meet the criteria for reporting as discontinued operations.

The cash proceeds from the sales were used for general corporate purposes.

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.

The sale of the S3 business did not represent a strategic shift for the Company or have a major effect on its operations or financial results.

Consequently, this sale did not meet the criteria for reporting as a discontinued operation.

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 nine-month period ended October 1, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

Accordingly, on March 29, 2023, the Company sold its timberland properties, totaling 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-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.

Acquisition, Integration, and Divestiture-Related Costs

Acquisition, integration, and divestiture-related costs totaled $ 12,472 and $ 22,192 during the three- and nine-month periods ended October 1, 2023, respectively.

These costs included $ 7,525 and $ 17,245 during the three- and nine-month periods ended October 1, 2023, respectively, for legal and professional fees, investment banking fees, and other transaction costs that are included in “Selling, general and administrative expenses,” and $ 4,947 of amortization of the fair value step-up of inventory, which is included in “Cost of sales” in the Company’s Condensed Consolidated Statements of Income.

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.

The costs for the nine-month period ended October 2, 2022, included the partial amortization of the fair value step-up of finished goods inventory of $ 33,155 , included in “Cost of sales” in the Company’s Condensed Consolidated Statements of Income, and other acquisition-related charges of $ 2,022 and $ 29,500 , respectively.

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.

Acquisition, integration, and divestiture-related costs totaled $ 5,661 and $ 5,188 during the three-month periods ended March 31, 2024 and April 2, 2023, respectively.

These costs include legal and professional fees, as well as employee-related and other integration activity costs that are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

SONOCO PRODUCTS COMPANY

4 unchanged sentences

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

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Net income attributable to Sonoco $ 65,177 $ 148,319

12 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 1, 2023 and October 2, 2022 were as follows (in thousands):

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

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 March 31, 2024 and April 2, 2023 were as follows (in thousands):

Three Months Ended

March 31, 2024 April 2, 2023

Anti-dilutive stock appreciation rights 340 343

2 unchanged sentences

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 repurchased under this authorization during the year ended December 31, 2022 or the nine-month period ended October 1, 2023.

No shares were repurchased under this authorization during the years ended December 31, 2023 or 2022 or the three-month period ended March 31, 2024.

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 175 shares during the nine-month period ended October 1, 2023, at a cost of $ 10,605 , and 71 shares during the nine-month period ended October 2, 2022, at a cost of $ 4,056 .

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

These repurchases, which are not part of a publicly announced plan or program, totaled 162 shares during the three-month period ended March 31, 2024, at a cost of $ 9,139 , and 175 shares during the three-month period ended April 2, 2023, at a cost of $ 10,576 .

Dividend Declarations

1 unchanged sentence

This dividend was paid on March 8, 2024 to all shareholders of record as of February 28, 2024.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

On April 17, 2024, the Board declared a regular quarterly dividend of $ 0.52 per share.

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

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

This dividend is payable on September 8, 2023 to all shareholders of record as of August 10, 2023.

On October 17, 2023, the Board declared a regular quarterly dividend of $ 0.51 per share.

This dividend is payable on December 8, 2023 to all shareholders of record as of November 10, 2023.

Noncontrolling Interests

In April 2015, the Company acquired a 67 % controlling interest in Graffo Paranaense de Embalagens S/A (“Graffo”).

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.

This dividend is payable on June 10, 2024 to all shareholders of record as of May 10, 2024.

Restructuring and Asset Impairments

Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking more cost-effective means and structures to serve its customers and to respond to fundamental changes in its markets.

As such, restructuring costs have been, and are expected to be, a recurring component of the Company’s operating costs.

1 unchanged sentence

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

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Restructuring and restructuring-related asset impairment charges $ 18,110 $ 20,652 $ 52,981 $ 33,262

Other asset impairments — — — 10,095

Three Months Ended

March 31, 2024 April 2, 2023

Restructuring/Asset impairment charges $ 31,618 $ 28,814

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Severance and termination benefits $ 17,993 $ 5,516

2 unchanged sentences

Restructuring and restructuring-related asset impairment charges $ 31,618 $ 28,814

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

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

The table below sets forth restructuring and restructuring-related asset impairment charges attributable to each reportable segment, the “All Other” group of businesses, and Corporate-related activity:

Three Months Ended

March 31, 2024 April 2, 2023

Consumer Packaging $ 4,925 $ 2,680

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.

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:

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” in the Company’s Condensed Consolidated Balance Sheets:

Benefits Asset

7 unchanged sentences

Foreign currency translation ( 81 ) — ( 15 ) ( 96 )

Liability at October 1, 2023

Liability at March 31, 2024

$ 25,913 $ — $ 4,186 $ 30,099

“Severance and Termination Benefits” during the first nine months of 2023 includes the cost of severance for approximately 300 employees whose positions were eliminated in conjunction with the Company’s ongoing organizational effectiveness efforts and severance related to the following plant closures:

paper mills in Hutchinson, Kansas and Indonesia, part of the Industrial Paper Packaging segment;

a metal packaging facility and a perimeter-of-the-store facility in the United States, both part of the Consumer Packaging segment;

medical plastics facilities in the United States and United Kingdom, part of the All Other group of businesses;

and severance related to the closures of several smaller operations.

“Asset Impairments/Disposal of Assets” during the first nine months of 2023 consists primarily of asset impairment charges related to the closure of paper mills in Hutchinson, Kansas and Indonesia, a metal packaging facility and a perimeter-of-the-store facility in the United States, and medical plastics facilities in the United States and United Kingdom.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

“Other Costs” during the first nine 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.

“Severance and termination benefits” during the first three months of 2024 includes the cost of severance for approximately 95 employees whose positions were eliminated in conjunction with the Company’s ongoing organizational effectiveness efforts, including the relocation of certain facilities in Greece and Germany, and severance related to the closures of paper mills in Sumner, Washington (the “Sumner Mill”) and Kilkis, Greece, the closures of two small industrial converted products facilities in China, and the planned closure of an industrial converted products facility in Mississauga, Canada, all part of the Industrial Paper Packaging segment.

“Asset impairments” during the first three months of 2024 consists primarily of asset impairment charges related to the closure of the Sumner Mill.

“Other costs” during the first three months of 2024 consists primarily of equipment removal, utilities, plant security, property taxes, insurance and environmental remediation costs related to the closure of the Sumner Mill, and ongoing facility carrying costs of plant closures in the prior year.

The Company expects to pay the majority of the remaining restructuring reserves by the end of 2024 using cash generated from operations.

1 unchanged sentence

The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.

Other Asset Impairments

Other asset impairment charges recognized during the nine-month period ended October 2, 2022 include net asset impairment charges totaling $ 9,165 , resulting from the Company’s exit from its operations in Russia as a result of the ongoing Russia-Ukraine conflict.

These operations consisted of two small tube and core plants in the Company’s Industrial Paper Packaging segment.

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

Fixed asset impairments totaling $ 930 , were recognized in the nine-month period ended October 2, 2022, 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.

These impairment charges are included in “Restructuring/Asset impairment charges” in the Company’s Condensed Consolidated Statements of Income.

SONOCO PRODUCTS COMPANY

2 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 periods ended October 1, 2023 and October 2, 2022:

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 March 31, 2024 and April 2, 2023:

Items Defined

4 unchanged sentences

$ ( 267,578 ) $ ( 99,627 ) $ 943 $ ( 366,262 )

Other comprehensive income/(loss) before reclassifications 3,168 ( 4,045 ) 5,111 4,234

Other comprehensive (loss)/income before reclassifications ( 19,319 ) ( 932 ) 518 ( 19,733 )

Amounts reclassified from accumulated other comprehensive loss to net income — 975 ( 349 ) 626

Amounts reclassified from accumulated other comprehensive loss to property, plant, and equipment — — 300 300

Other comprehensive income 5,201 2,554 2,218 9,973

Balance at October 1, 2023

Other comprehensive (loss)/income ( 19,319 ) 43 169 ( 19,107 )

Balance at March 31, 2024

$ ( 286,897 ) $ ( 99,584 ) $ 1,112 $ ( 385,369 )

1 unchanged sentence

$ ( 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 property, plant, and equipment — — 300 300

Other comprehensive loss ( 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 )

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 1, 2023 and October 2, 2022:

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 March 31, 2024 and April 2, 2023:

Amount Reclassified from Accumulated

Other Comprehensive Loss

Three Months Ended Nine Months Ended

Three Months Ended

Details about Accumulated Other

Comprehensive

Loss Components October 1,

2023 October 2,

2022 October 1,

2023 October 2,

Loss Components March 31,

2024 April 2,

2023 Affected Line Item in

1 unchanged sentence

Statements of Income

Foreign currency items

Loss on Russia exit (a)

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

Loss on RTS Packaging investment (b)

( 2,033 ) — ( 2,033 ) — Other income, net

( 2,033 ) — ( 2,033 ) ( 3,747 )

Gains/(losses) on cash flow hedges

Foreign exchange contracts (c)

Foreign exchange contracts (a)

$ 436 $ 1,062 Net sales

Foreign exchange contracts (c)

Foreign exchange contracts (a)

( 75 ) ( 454 ) Cost of sales

Commodity contracts (c)

Commodity contracts (a)

— ( 32 ) Cost of sales

3 unchanged sentences

Defined benefit pension items

Pension-related loss upon purchase of remaining interest in RTS Packaging joint venture (b)

( 4,756 ) — ( 4,756 ) — Other income, net

Effect of settlement loss (d)

Effect of settlement loss (b)

— ( 686 ) Non-operating pension costs

Amortization of defined benefit pension items (d)

Amortization of defined benefit pension items (b)

( 1,230 ) ( 1,071 ) Non-operating pension costs

5 unchanged sentences

(b) See Note 11 for additional details.

(d) See Note 12 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 income/(loss) for the three-month periods ended October 1, 2023 and October 2, 2022:

The following table summarizes the before and after tax amounts for the various components of other comprehensive income/(loss) for the three-month periods ended March 31, 2024 and April 2, 2023:

Three Months Ended

October 1, 2023

March 31, 2024

Three Months Ended

October 2, 2022

Benefit After Tax

Amount Before Tax

Benefit After Tax

Foreign currency items:

Net other comprehensive loss from foreign currency items $ ( 50,389 ) $ — $ ( 50,389 ) $ ( 81,457 ) $ — $ ( 81,457 )

Amounts reclassified from accumulated other comprehensive loss to net income (a)

2,033 — 2,033 — — —

Net other comprehensive loss from foreign currency items ( 48,356 ) — ( 48,356 ) ( 81,457 ) — ( 81,457 )

Defined benefit pension items:

Other comprehensive (loss)/income before reclassifications ( 1,137 ) 141 ( 996 ) ( 74 ) 19 ( 55 )

Amounts reclassified from accumulated other comprehensive loss to net income (a)(b)

5,875 ( 1,478 ) 4,397 1,229 ( 313 ) 916

Net other comprehensive income/(loss) from defined benefit pension items 4,738 ( 1,337 ) 3,401 1,155 ( 294 ) 861

Gains and losses on cash flow hedges:

Other comprehensive (loss)/income before reclassifications ( 369 ) 102 ( 267 ) 1,336 ( 247 ) 1,089

Amounts reclassified from accumulated other comprehensive loss to net income (c)

( 2,015 ) 558 ( 1,457 ) ( 2,560 ) 473 ( 2,087 )

Amounts reclassified from accumulated other comprehensive loss to property, plant and equipment — — — ( 312 ) 58 ( 254 )

Net other comprehensive (loss)/income from cash flow hedges ( 2,384 ) 660 ( 1,724 ) ( 1,536 ) 284 ( 1,252 )

Other comprehensive loss $ ( 46,002 ) $ ( 677 ) $ ( 46,679 ) $ ( 81,838 ) $ ( 10 ) $ ( 81,848 )

(a) See Note 3 for more information on the acquisition of the remaining 65 % interest in the RTS Packaging joint venture.

(b) See Note 12 for additional details.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(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 income/(loss) for the nine-month periods ended October 1, 2023 and October 2, 2022:

Nine Months Ended October 1, 2023 Nine Months Ended October 2, 2022

April 2, 2023

Benefit After Tax

2 unchanged sentences

Foreign currency items:

Net other comprehensive income/(loss) from foreign currency items $ 3,168 $ — $ 3,168 $ ( 155,179 ) $ — $ ( 155,179 )

Amounts reclassified from accumulated other comprehensive loss to net income (a)(b)

2,033 — 2,033 3,747 — 3,747

Net other comprehensive income/(loss) from foreign currency items 5,201 — 5,201 ( 151,432 ) — ( 151,432 )

Net other comprehensive (loss)/income from foreign currency items $ ( 16,788 ) $ ( 2,531 ) $ ( 19,319 ) $ 31,569 $ — $ 31,569

Defined benefit pension items:

Other comprehensive (loss)/income before reclassifications ( 876 ) ( 56 ) ( 932 ) ( 760 ) 367 ( 393 )

Amounts reclassified from accumulated other comprehensive loss to net income (a)(c)

Amounts reclassified from accumulated other comprehensive loss to net income (a)

1,230 ( 255 ) 975 1,757 ( 448 ) 1,309

2 unchanged sentences

Other comprehensive income/(loss) before reclassifications 536 ( 18 ) 518 3,536 ( 891 ) 2,645

Amounts reclassified from accumulated other comprehensive loss to net income (d)

Amounts reclassified from accumulated other comprehensive loss to net income (b)

( 361 ) 12 ( 349 ) ( 576 ) 145 ( 431 )

1 unchanged sentence

Net other comprehensive income/(loss) from cash flow hedges 175 ( 6 ) 169 3,361 ( 847 ) 2,514

Other comprehensive income/(loss) $ 11,166 $ ( 1,193 ) $ 9,973 $ ( 153,518 ) $ 418 $ ( 153,100 )

(a) See Note 3 for more information on the 2023 acquisition of the remaining 65 % interest in the RTS Packaging joint venture.

(b) See Note 5 for more information on the 2022 loss on the exit from Russia.

(d) See Note 10 for additional details.

Other comprehensive (loss)/income $ ( 16,259 ) $ ( 2,848 ) $ ( 19,107 ) $ 35,927 $ ( 928 ) $ 34,999

(a) See Note 11 for additional details.

(b) See Note 9 for additional details.

SONOCO PRODUCTS COMPANY

2 unchanged sentences

Goodwill and Other Intangible Assets

A summary of the changes in goodwill for the nine-month period ended October 1, 2023 is as follows:

A summary of the changes in goodwill for the three-month period ended March 31, 2024 is as follows:

Packaging Industrial Paper Packaging All Other Total

Goodwill at December 31, 2023 $ 1,056,241 $ 506,406 $ 248,007 $ 1,810,654

Acquisitions — 92,657 — 92,657

Divestitures — ( 6,375 ) — ( 6,375 )

Foreign currency translation ( 4,427 ) ( 2,808 ) ( 212 ) ( 7,447 )

Measurement period adjustments ( 7,130 ) — — ( 7,130 )

Goodwill at October 1, 2023 $ 898,042 $ 482,543 $ 381,826 $ 1,762,411

Goodwill activity reflected under the caption “Acquisitions” relates to the September 8, 2023 acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill.

Goodwill activity reflected under the caption “Divestitures” relates to the sales of the Company’s S3 business on January 26, 2023 and the U.S.

BulkSak business on July 1, 2023.

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

Goodwill at March 31, 2024 $ 1,044,684 $ 503,598 $ 247,795 $ 1,796,077

Goodwill activity reflected under the caption “Measurement period adjustments” relates to the prior year acquisition of Inapel.

See Note 3 for additional information.

4 unchanged sentences

Based on its assessments, the Company concluded that there was no impairment of goodwill for any of its reporting units.

Although no reporting units failed the annual impairment test, in management’s opinion the goodwill balance of the Plastics-Medical reporting unit, previously known as Plastics-Healthcare, is at risk of impairment in the near term if the 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.

At October 1, 2023, the total goodwill associated with the Plastics-Medical reporting unit was $ 62,627 .

In the annual goodwill impairment analysis completed during the third quarter of 2023, projected future cash flows for the Plastics-Medical reporting unit were discounted at 12.0 % and its estimated fair value was determined to exceed its carrying value by approximately 29.9 %.

Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rate would have to be increased t o 14.5 % in order for the estimated fair value of the reporting unit to fall below carrying value.

During the time subsequent to the annual evaluation, and at October 1, 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.

Although no reporting units failed the annual impairment test, in management’s opinion the goodwill balance of the Plastics-Medical reporting unit is at risk of impairment in the near term if the 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.

At March 31, 2024, the total goodwill associated with the Plastics-Medical reporting unit was $ 63,991 .

During the time subsequent to the annual evaluation, and at March 31, 2024, 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.

3 unchanged sentences

Other Intangible Assets

A summary of other intangible assets as of October 1, 2023 and December 31, 2022 is as follows:

A summary of other intangible assets as of March 31, 2024 and December 31, 2023 is as follows:

2024 December 31,

14 unchanged sentences

Other Intangible Assets, net $ 828,085 $ 853,670

The acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill on September 8, 2023 resulted in the addition of $ 199,560 of intangible assets, primarily related to customer lists.

These intangibles will be amortized over an average useful life of 17.5 years.

The fair value of intangible assets associated with these acquisitions was determined using an income valuation approach.

Other intangible assets, primarily customer lists, with a net book value of $ 2,704 were written off as a result of the divestiture of the U.S.

BulkSak business on July 1, 2023.

During the first quarter of 2024, the Company recorded measurement period adjustments related to the December 1, 2023 acquisition of Inapel that reduced the previously reported fair value of customer lists by $ 1,094 .

The effect on amortization expense in the prior period was immaterial.

See Note 3 for additional information.

2 unchanged sentences

The Company has no intangible assets with indefinite lives.

Aggregate amortization expense was $ 21,379 and $ 20,690 for the three-month periods ended October 1, 2023 and October 2, 2022, respectively, and $ 63,082 and $ 60,361 for the nine-month periods ended October 1, 2023 and October 2, 2022, respectively.

Aggregate amortization expense was $ 22,939 and $ 21,164 for the three-month periods ended March 31, 2024 and April 2, 2023, respectively.

Amortization expense on other intangible assets is expected to total approximately $ 90,200 in 2024, $ 78,900 in 2025, $ 75,000 in 2026, $ 73,900 in 2027 and $ 72,900 in 2028.

9 unchanged sentences

(Dollars and shares in thousands except per share data)

The following table sets forth the balance sheet location and values of the Company’s SCF Program obligations at October 1, 2023 and December 31, 2022:

Balance Sheet Line Item October 1, 2023 December 31, 2022

The following table sets forth the balance sheet location and values of the Company’s SCF Program obligations at March 31, 2024 and December 31, 2023:

Balance Sheet Line Item March 31, 2024 December 31, 2023

Payable to suppliers (a)

$ 35,645 $ 35,847

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

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

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

Details of the Company’s debt at October 1, 2023 and December 31, 2022 are as follows:

2023 December 31, 2022

Syndicated term loan due December 2023 $ — $ 399,246

Syndicated term loan due January 2025 — 299,644

Syndicated term loan due August 2028 795,457 —

1.800 % notes due February 2025

398,955 398,369

2.250 % notes due February 2027

298,293 297,910

2.850 % notes due February 2032

495,655 495,264

3.125 % notes due May 2030

596,338 595,911

5.750 % notes due November 2040

536,238 536,214

Other foreign denominated debt 22,830 20,668

Finance lease obligations 96,054 102,920

Other debt 14,913 76,077

Total debt $ 3,254,733 $ 3,222,223

Less current portion and short-term notes 42,279 502,440

Long-term debt $ 3,212,454 $ 2,719,783

On August 7, 2023, the Company entered into a credit agreement with a consortium of Farm Credit System institutions and CoBank, ACB, as Administrative Agent (the “Term Loan Agreement”).

The Term Loan Agreement provides the Company with the ability to borrow up to $ 900,000 on an unsecured basis (the “Term Loan Facility”).

A total of $ 600,000 was drawn from the Term Loan Facility on August 7, 2023 and used to repay the syndicated term loans that were due in December 2023 and January 2025, and to make certain capital expenditures and to reimburse the Company for certain capital expenditures it had made in its operation of waste disposal facilities in rural areas .

An additional $ 270,000 was drawn from the T erm Loan Facility on September 8, 2023 and used to partially fund the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill (see Note 3 for more information).

Borrowings under the Term Loan Facility, net of any prepayments, will become payable in full on August 7, 2028.

As of October 1, 2023, the Company has repaid a total of $ 70,000 of the amounts drawn under the Term Loan Facility.

Borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) the forward-looking Secured Overnight Financing Rate term rate (“Term SOFR” and such borrowings, “Term SOFR Loans”), (ii) a base rate set forth in the Term Loan Agreement, or (iii) a combination thereof, plus, in each case, an applicable margin calculated based on the Company’s credit ratings and, in the of case of Term SOFR Loans, a SOFR Adjustment (as defined in the Term Loan Agreement) of 0.1 %.

The Company has designated its borrowings under the Term Loan Facility as Term SOFR Loans.

The margin currently applicable to Term SOFR Loans based on the Company’s credit ratings, together with the SOFR Adjustment, is 1.90 %.

If Term SOFR ceases to be available, the benchmark rate shall switch to Daily Simple SOFR (as defined in the Term Loan Agreement).

There is no required amortization under the Term Loan Facility, and voluntary prepayments are permissible without penalty, subject to certain conditions pertaining to minimum notice and minimum prepayment and reduction amounts as described in the Term Loan Agreement.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The Term Loan Agreement contains various customary representations and warranties and affirmative and negative covenants, as more fully described in the Term Loan Agreement.

The Term Loan Agreement also contains various customary events of default (subject to grace periods, as applicable) including, among others:

nonpayment of principal, interest or fees;

breach of covenant;

payment default on, or acceleration under, certain other material indebtedness;

inaccuracy of the representations or warranties in any material respect;

bankruptcy or insolvency;

inability to pay debts;

certain unsatisfied judgments;

certain ERISA-related events;

the invalidity or unenforceability of the Term Loan Agreement or certain other documents executed in connection therewith;

and the occurrence of a change of control.

The Company entered into a five -year , $ 750,000 unsecured revolving credit facility on June 30, 2021.

On August 7, 2023, the Company increased the commitments under this facility by $ 150,000 to an aggregate amount of $ 900,000 .

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 1, 2023, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

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 1, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Value Carrying

3 unchanged sentences

Cash Flow Hedges

At October 1, 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.

At March 31, 2024 and December 31, 2023, 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 from April 2024 to December 2024, qualify as cash flow hedges under U.S.

generally accepted accounting principles (“GAAP”).

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.

2 unchanged sentences

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 1, 2023, these contracts included natural gas swaps covering approximately 0.08 million metric million British thermal units (“MMBTUs”).

These contracts represented approximatel y 0.9 % o f anticipated usage in North America for both 2023 and 2024.

At March 31, 2024, these contracts included natural gas swaps covering approximately 0.05 million m etric million British thermal units (“MMBTUs”).

These contracts represented approximatel y 0.9 % o f anticipated usage in North America for 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.

At October 1, 2023 , the Company has also designated swap contracts covering 179 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 $( 147 ) and $( 172 ) at October 1, 2023 and December 31, 2022, respectively.

The amount of the loss included in accumulated other comprehensive loss at October 1, 2023 expected to be reclassified to the income statement during the next twelve months is $( 137 ).

At March 31, 2024 , the Company had also designated swap contracts covering 355 metric tons of aluminum as cash flow hedges.

The fair value of the Company’s commodity cash flow hedges netted to loss positions of $( 66 ) and $( 41 ) at March 31, 2024 and December 31, 2023, respectively.

The amount of the loss included in accumulated other comprehensive loss at March 31, 2024 expected to be reclassified to the income statement during the next twelve months is $( 66 ).

SONOCO PRODUCTS COMPANY

2 unchanged sentences

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 1, 2023 were as follows (in thousands):

The Company has entered into forward contracts to hedge certain anticipated foreign currency denominated sales and purchases expected to occur in 2024 and 2025.

The net positions of these contracts at March 31, 2024 were as follows (in thousands):

Currency Action Quantity

2 unchanged sentences

Polish zloty purchase 98,802

Danish krone purchase 34,765

Swedish krona sell ( 4,855 )

Czech koruna purchase 86,121

3 unchanged sentences

Brazilian real purchase 41,819

British pound purchase 1,131

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a gain position of $ 1,844 and a loss position of $( 299 ) at October 1, 2023 and December 31, 2022, respectively.

British pound sell ( 800 )

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to gain positions of $ 1,697 and $ 1,502 at March 31, 2024 and December 31, 2023, respectively.

Gains of $ 1,697 are expected to be reclassified from accumulated other comprehensive income to the income statement during the next twelve months.

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

As of October 1, 2023 and December 31, 2022, the net position of these contracts was $ 0 and $( 564 ), respectively.

During the nine-month period ended October 1, 2023, losses from these hedges totaling $( 401 ) were reclassified from accumulated other comprehensive loss into the carrying value of the capitalized expenditures.

As of October 1, 2023, no amounts are expected to be reclassified from accumulated other comprehensive loss into the carrying value of the related fixed assets during the next twelve months.

Net Investment Hedge

During the fourth quarter of 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $ 500,000 to effectively convert a portion of the Company’s fixed-rate U.S.

dollar denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt.

The swap agreements, which have a maturity of December 18, 2026, provide for the Company to receive semi-annual interest payments in U.S.

dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate.

The risk management objective of entering into the swap agreements is to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros.

The agreements are designated as net investment hedges for accounting purposes.

The gain or loss on the net investment hedge derivative instrument is included in the “Foreign currency translation” component of “Accumulated other comprehensive loss” until the net investment is sold, diluted, or liquidated.

Interest payments received for the cross-currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Condensed Consolidated Statements of Income.

The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S.

dollar exchange rate market.

The fair value of the Company’s net investment hedges was a gain position of $ 4,850 and a loss position of $ 5,073 at March 31, 2024 and December 31, 2023, respectively.

A translation gain of $ 3,613 (net of income taxes of $ 1,237 ) and a translation loss of $ 3,779 (net of income taxes of $ 1,294 ) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at March 31, 2024 and December 31, 2023, respectively.

As a result of continued strengthening of the U.S.

dollar against the euro, as well as a reduction in the differential between U.S.

and European interest rates, the fair value of the Company’s net investment hedge continued to appreciate into the month of April 2024.

On April 15, 2024, subsequent to the end of the first quarter of 2024, the Company terminated the swap agreements and received a cash settlement of $ 11,634 .

The foreign currency translation gain of approximately $ 3,143 , net of tax, will be included as a component of “Accumulated other comprehensive loss” in the second quarter of 2024.

Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $ 500,000 to effectively convert a portion of the Company’s fixed-rate U.S.

dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt.

The new swap agreements have a maturity of May 1, 2027.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Non-Designated Derivatives

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 1, 2023, were as follows (in thousands):

The net currency positions of these non-designated contracts at March 31, 2024, were as follows (in thousands):

Currency Action Quantity

2 unchanged sentences

Mexican peso purchase 412,841

Turkish lira purchase 8,766

Canadian dollar purchase 7,981

British pound purchase 2,784

Polish zloty purchase 8,526

Commodity Hedges

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

At October 1, 2023, these contracts consisted of natural gas swaps covering approximately 5.5 million MMBTUs and represented approximately 76 % and 55 % of anticipated usage for 2023 and 2024, respectively.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Interest Rate Hedges

Pursuant to the registered public offering of unsecured 2.850 % notes with a principal amount of $ 500,000 maturing on February 1, 2032, the Company entered into treasury lock derivative instruments with two banks, with a notional principal amount of $ 150,000 each on December 29, 2021.

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 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 nine-month period ended October 2, 2022 .

The fair value of the Company’s non-designated derivatives position was a loss of $( 6,844 ) and $( 8,692 ) at October 1, 2023 and December 31, 2022, respectively.

The following table sets forth the location and fair values of the Company’s derivative instruments at October 1, 2023 and December 31, 2022:

Description Balance Sheet Location October 1, 2023 December 31, 2022

At March 31, 2024, these contracts consisted of natural gas swaps covering approximately 6.6 million MMBTUs and represented approximately 87 % and 33 % of anticipated usage for 2024 and 2025, respectively.

The fair value of the Company’s non-designated derivatives position was a loss of $( 6,690 ) a nd $( 6,790 ) at March 31, 2024 and December 31, 2023, respectively.

The following table sets forth the location and fair values of the Company’s derivative instruments at March 31, 2024 and December 31, 2023:

Description Balance Sheet Location March 31, 2024 December 31, 2023

Derivatives designated as hedging instruments:

Commodity Contracts Prepaid expenses $ 28 $ 67

Commodity Contracts Other assets $ — $ 8

Commodity Contracts Accrued expenses and other ( 94 ) ( 108 )

Commodity Contracts Other liabilities $ ( 10 ) $ ( 35 )

Foreign Exchange Contracts Prepaid expenses 2,323 2,525

Foreign Exchange Contracts Accrued expenses and other ( 626 ) ( 1,024 )

Net Investment Hedge Prepaid expense 4,192 5,567

Net Investment Hedge Other assets 744 —

Net Investment Hedge Other liabilities ( 86 ) ( 10,640 )

Derivatives not designated as hedging instruments:

10 unchanged sentences

(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 1, 2023 and October 2, 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:

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the three-month periods ended March 31, 2024 and April 2, 2023, 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 1, 2023

Three-month period ended March 31, 2024

Foreign Exchange Contracts $ 561 Net sales $ 436

1 unchanged sentence

Commodity Contracts $ ( 25 ) Cost of sales $ —

Three-month period ended October 2, 2022

Three-month period ended April 2, 2023

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

5 unchanged sentences

Derivatives not Designated as Hedging Instruments:

Three-month period ended October 1, 2023

Three-month period ended March 31, 2024

Commodity Contracts $ ( 2,558 ) Cost of sales

Foreign Exchange Contracts $ 305 Selling, general and administrative

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 1, 2023 Three-month period ended October 2, 2022

Three-month period ended March 31, 2024 Three-month period ended April 2, 2023

Description Revenue Cost of

9 unchanged sentences

(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 1, 2023 and October 2, 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

(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 1, 2023

Foreign Exchange Contracts $ 6,517 Net sales $ 6,772

Cost of sales $ ( 2,552 )

Commodity Contracts $ ( 6 ) Cost of sales $ ( 32 )

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

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 1, 2023

Commodity Contracts $ ( 13,635 ) Cost of sales

Foreign Exchange Contracts $ 4,651 Selling, general and administrative

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 1, 2023 Nine-month period ended October 2, 2022

Description Revenue Cost of

sales Revenue Cost of

Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income $ 6,772 $ ( 2,584 ) $ 2,425 $ 3,232

Gain or (loss) on cash flow hedging relationships:

Foreign exchange contracts:

Amount of gain/(loss) reclassified from accumulated other comprehensive income into net income $ 6,772 $ ( 2,552 ) $ 2,425 $ ( 2,139 )

Commodity contracts:

Amount of gain reclassified from accumulated other comprehensive income into net income $ — $ ( 32 ) $ — $ 5,371

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Fair Value Measurements

7 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 1, 2023 Assets measured

Description March 31, 2024 Assets measured

at NAV Level 1 Level 2 Level 3

2 unchanged sentences

Foreign exchange contracts $ 1,697 $ — $ — $ 1,697 $ —

Net investment hedge $ 4,850 $ — $ — $ 4,850 $ —

Non-hedge derivatives, net:

6 unchanged sentences

Foreign exchange contracts $ 1,502 $ — $ — $ 1,502 $ —

Net investment hedge $ ( 5,073 ) $ — $ — $ ( 5,073 ) $ —

Non-hedge derivatives, net:

4 unchanged sentences

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 1, 2023.

There were no transfers in or out of Level 1 or Level 2 fair value measurements during the three-month period ended March 31, 2024.

The Company measures certain non-financial assets and non-financial liabilities at fair value on a non-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 October 1, 2023 or December 31, 2022.

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 March 31, 2024 or December 31, 2023.

SONOCO PRODUCTS COMPANY

6 unchanged sentences

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

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Retirement Plans

10 unchanged sentences

Expected return on plan assets ( 98 ) ( 79 )

Amortization of prior service cost 96 —

Amortization of net actuarial gain ( 146 ) ( 193 )

Net periodic benefit income $ ( 88 ) $ ( 136 ) $ ( 264 ) $ ( 410 )

Net periodic benefit cost/(income) $ 156 $ ( 80 )

Settlement Charges

The Company recognized settlement ch arges of $ 765 and $ 430 during the nine-month periods ended October 1, 2023 and October 2, 2022, respectively.

The Company recognized settlement ch arges of $ 686 during the three-month period ended April 2, 2023.

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.

No settlement charges were recognized during the three-month period ended March 31, 2024.

Contributions

The Company made aggregate contributions of $ 10,311 and $ 11,600 to its defined benefit retirement and retiree health and life insurance plans during the nine-month periods ended October 1, 2023 and October 2, 2022, respectively.

The Company made aggregate contributions of $ 3,989 and $ 4,931 to its defined benefit retirement and retiree health and life insurance plans during the three-month periods ended March 31, 2024 and April 2, 2023, respectively.

The Company expects to make additional aggregate contributions of approximately $ 16,300 to its defined benefit retirement and retiree health and life insurance plans over the remainder of 2024.

RTS Packaging Pension Plan

On September 8, 2023, the Company completed the acquisition of the remaining 65 % ownership interest of the RTS Packaging joint venture, which included the assumption of the RTS Packaging Pension plan (the “RTS Plan”).

At the time of the acquisition, the RTS Plan had a projected benefit obligation of $ 43,547 and plan assets of $ 33,109 .

The resulting unfunded pension obligation of $ 10,438 was recorded in “Pension and Other Postretirement Benefits” on the Company’s Condensed Consolidated Balance Sheets as of October 1, 2023.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Since the formation of the original joint venture, the Company had recognized its 35 % share of actuarial gains and losses related to the RTS Plan in “Accumulated other comprehensive loss.” Upon the acquisition of the remaining 65 % interest in RTS Packaging, a pre-tax loss of $ 4,756 ($ 3,543 after tax) was reclassified out of “Accumulated other comprehensive loss” into earnings.

The pre-tax loss is reflected in “Other income, net” in the Company’s Condensed Consolidated Statements of Income for the three- and nine-month periods ended October 1, 2023.

Sonoco Retirement and Savings Plan

The Sonoco Retirement and Savings Plan is a defined contribution retirement plan provided for certain of the Company’s U.S.

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 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 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.

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.

The Company made SRC contributions totaling $ 21,948 during the nine-month period ended October 2, 2022 related to the 2021 fiscal year.

No additional SRC contributions will occur.

The Company’s effective tax rates for the three- and nine-month periods ended October 1, 2023 were 23.6 % and 24.8 %, respectively, and its rates for the three- and nine-month periods ended October 2, 2022 were 23.7 % and 24.5 %, respectively.

The Company’s effective tax rates for the three-month periods ended March 31, 2024 and April 2, 2023 were 21.3 % and 24.3 %, respectively.

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

3 unchanged sentences

With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years prior to 2017.

The Company’s reserve for uncertain tax benefits has increased by $ 2,613 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 1, 2023 could increase by approximately $ 878 over the next twelve months.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

The Company’s reserve for uncertain tax benefits increased by $ 137 from December 31, 2023 to March 31, 2024 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 March 31, 2024 could decrease by approximately $ 9,432 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.

5 unchanged sentences

The Company is not dependent upon the favorable benefit of any one jurisdiction to an extent that the loss of such benefit would have a material effect on the Company’s overall effective tax rate.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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).

4 unchanged sentences

The Company completed the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill on September 8, 2023.

The acquisition included operating lease liabilities of $ 34,604 .

For additional information about this acquisition, see Note 3.

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

The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at October 1, 2023 and December 31, 2022:

Classification Balance Sheet Location October 1, 2023 December 31, 2022

The acquisitions included operating lease liabilities of $ 34,604 .

For additional information about these acquisitions, see Note 3.

The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at March 31, 2024 and December 31, 2023:

Classification Balance Sheet Location March 31, 2024 December 31, 2023

Operating lease assets Right of Use Asset - Operating Leases $ 332,587 $ 314,944

16 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 1, 2023 and October 2, 2022:

Three Months Ended Nine Months Ended

Lease Cost October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

The following table sets forth the components of the Company’s total lease cost for the three-month periods ended March 31, 2024 and April 2, 2023:

Three Months Ended

Lease Cost March 31, 2024 April 2, 2023

Operating lease cost (a) $ 16,192 $ 13,411

3 unchanged sentences

Variable lease cost (a) (c) 10,100 9,378

Impairment charges (d) — 61 — 293

Total lease cost $ 30,788 $ 27,253

2 unchanged sentences

The following table sets forth certain lease-related information for the nine-month periods ended October 1, 2023 and October 2, 2022:

Nine Months Ended

October 1, 2023 October 2, 2022

The following table sets forth certain lease-related information for the three-month periods ended March 31, 2024 and April 2, 2023:

Three Months Ended

March 31, 2024 April 2, 2023

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

6 unchanged sentences

Modification to leased assets for increase in operating lease liabilities $ 4,171 $ 3,957

Modification to leased assets for increase/(decrease) in finance lease liabilities $ 12 $ ( 642 )

Termination reclasses to decrease operating lease assets $ ( 1,202 ) $ ( 2,029 )

2 unchanged sentences

Termination reclasses to decrease finance lease liabilities $ — $ ( 12 )

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Revenue Recognition

3 unchanged sentences

Customers obtain control either when goods are delivered to the customer facility, if the Company is responsible for arranging transportation, or when picked up by the customer’s designated carrier.

The Company commonly enters into Master Supply Arrangements with customers to provide goods and/or services over specific time periods.

The Company commonly enters into Master

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Supply Arrangements with customers to provide goods and/or services over specific time periods.

Customers submit purchase orders with quantities and prices to create a contract for accounting purposes.

7 unchanged sentences

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 1, 2023 December 31, 2022

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

March 31, 2024 December 31, 2023

Contract Assets $ 53,170 $ 54,334

Contract Liabilities $ ( 21,758 ) $ ( 24,973 )

Significant changes in the contract assets and liabilities balances during the nine-month period ended October 1, 2023 and the year ended December 31, 2022 were as follows:

October 1, 2023 December 31, 2022

Significant changes in the contract assets and liabilities balances during the three-month period ended March 31, 2024 and the year ended December 31, 2023 were as follows:

March 31, 2024 December 31, 2023

Asset Contract

9 unchanged sentences

Ending Balance $ 53,170 $ ( 21,758 ) $ 54,334 $ ( 24,973 )

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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

3 unchanged sentences

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 October 1, 2023 and October 2, 2022.

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

The Company’s reportable segments are aligned by product nature as disclosed in Note 16 .

Three-month period ended October 1, 2023 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

United States $ 726,137 $ 335,136 $ 161,600 $ 1,222,873

Europe 116,148 91,175 18,304 225,627

Canada 29,268 24,866 — 54,134

Asia 24,828 59,284 628 84,740

Other 42,026 69,574 11,445 123,045

Total $ 938,407 $ 580,035 $ 191,977 $ 1,710,419

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

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(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 1, 2023 and October 2, 2022.

The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended March 31, 2024 and April 2, 2023.

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

Nine-month period ended October 1, 2023 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 March 31, 2024 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

5 unchanged sentences

Total $ 910,577 $ 593,060 $ 133,906 $ 1,637,543

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

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

Primary Geographical Markets:

7 unchanged sentences

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.

Effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within the Consumer Packaging segment in order to streamline operations, enhance customer service and better position the business for accelerated growth.

As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources.

Accordingly, the Company’s consumer thermoformed businesses have moved from the All Other group of businesses to the Consumer Packaging segment.

Prior year segment results presented below have been recast to conform with the current presentation.

In addition, effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function.

As a result, no recycling net sales are recorded and the margin from the operations reduces “Cost of sales.”

The products produced and sold within the Consumer Packaging segment consist primarily of round and shaped rigid paper, steel and plastic containers;

metal and peelable membrane ends, closures, and components;

thermoformed plastic trays;

thermoformed plastic trays and applications;

and high-barrier flexible packaging.

2 unchanged sentences

and uncoated recycled paperboard.

Total assets of the Industrial Paper Packaging segment increased $ 364,566 during the third quarter of 2023 due to the acquisitions of the remaining interest in RTS Packaging and the Chattanooga Mill.

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.

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

Segment operating profit is the measure of segment profit or loss reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance in accordance with ASC 280 - “Segment Reporting,” as prescribed by the FASB.

Segment operating profit viewed by the Company’s management to evaluate segment performance does not include the following:

restructuring/asset impairment charges;

amortization of acquisition intangibles;

acquisition, integration and divestiture-related costs;

changes in last-in, first-out inventory reserves;

gains/losses from the sale of businesses or other assets;

or certain other items, if any, the exclusion of which the Company believes improves the comparability and

The following tables set forth net sales, intersegment sales, segment operating profit, and the reconciliation of segment operating profit to “Income before income taxes.” Segment operating profit is the measure of segment profit or loss reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance in accordance with ASC 280 - “Segment Reporting,” as prescribed by the FASB.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

analysis of the ongoing operating performance of the business.

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

SEGMENT FINANCIAL INFORMATION

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

Consumer Packaging $ 910,577 $ 958,008

Industrial Paper Packaging 593,060 615,855

Total reportable segments $ 1,503,637 $ 1,573,863

All Other 133,906 155,920

3 unchanged sentences

Industrial Paper Packaging 28,417 38,720

Total reportable segments $ 31,962 $ 40,727

All Other 1,791 2,789

Intersegment Sales $ 33,753 $ 43,516

Operating profit:

Segment operating profit (2) :

Consumer Packaging $ 93,027 $ 96,494

Industrial Paper Packaging 65,844 94,367

All Other 25,502 15,373 81,409 46,426

Segment operating profit $ 158,871 $ 190,861

(1) Intersegment sales are recorded at a market-related transfer price.

(2) Segment operating profit viewed by the Company’s management to evaluate segment performance does not include the following:

restructuring/asset impairment charges;

amortization of acquisition intangibles;

Other operating income/(charges), net

acquisition, integration and divestiture-related costs;

changes in last-in, first-out inventory reserves;

gains/losses from the sale of businesses or other assets;

derivative gains/(losses);

or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business.

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

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

RECONCILIATION OF SEGMENT OPERATING PROFIT TO INCOME BEFORE INCOME TAXES

Three Months Ended

March 31, 2024 April 2, 2023

Segment operating profit

$ 158,871 $ 190,861

All Other operating profit 17,125 22,560

Restructuring/Asset impairment charges ( 31,618 ) ( 28,814 )

Amortization of acquisition intangibles ( 22,939 ) ( 21,164 )

Gains from divestiture of business and other assets — 72,010

Acquisition, integration and divestiture-related costs ( 5,661 ) ( 5,188 )

Changes in LIFO inventory reserves ( 431 ) 5,425

Derivative gains/(losses) 286 ( 6,085 )

Other operating (charges)/income, net (3)

Operating profit $ 112,453 $ 229,648

Non-operating pension costs ( 3,295 ) ( 3,658 )

Interest expense ( 31,220 ) ( 34,232 )

Interest income 3,558 1,562

Income before income taxes $ 81,496 $ 193,320

(3) Primarily consists of losses related to highly inflationary accounting in Turkey and consulting fees.

Commitments and Contingencies

7 unchanged sentences

Since the acquisition, the Company has spent a total of $ 2,175 on remediation of the Spartanburg site.

At October 1, 2023 and December 31, 2022, the Company’s accrual for environmental contingencies related to the Spartanburg site totaled $ 5,295 and $ 5,425 , respectively.

At March 31, 2024 and December 31, 2023, the Company’s accrual for environmental contingencies related to the Spartanburg site totaled $ 5,225 and $ 5,259 , 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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Other environmental matters

3 unchanged sentences

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 1, 2023 and December 31, 2022, the Company’s accrual for these other sites totaled $ 1,666 and $ 1,840 , respectively.

As of October 1, 2023 and December 31, 2022, the Company (and its subsidiaries) had accrued $ 6,960 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.

At March 31, 2024 and December 31, 2023, the Company’s accrual for these other sites totaled $ 2,001 and $ 1,992 , respectively.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

As of March 31, 2024 and December 31, 2023, the Company and its subsidiaries had accrued $ 7,226 and $ 7,251 , respectively, related to environmental contingencies.

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

Other Legal Matters

3 unchanged sentences

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