What changed in this filing

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Item 1. Financial Statements

2024-11-01 compared with 2024-08-01 · 313 added, 234 removed, 985 unchanged (36% of the section changed)

3 unchanged sentences

(Dollars and shares in thousands)

September 29,

2024 December 31, 2023*

34 unchanged sentences

98,258 and 97,957 shares issued and outstanding

at June 30, 2024 and December 31, 2023 , respectively

at September 29, 2024 and December 31, 2023 , respectively

Capital in excess of stated value 175,532 159,047

10 unchanged sentences

(Dollars and shares in thousands except per share data)

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Net sales $ 1,675,866 $ 1,710,419 $ 4,936,888 $ 5,145,492

3 unchanged sentences

Restructuring/Asset impairment charges 8,190 18,110 59,058 52,981

Gain on divestiture of business and other assets 4,478 7,371 4,478 79,381

(Loss)/Gain on divestiture of business and other assets ( 31,770 ) ( 537 ) ( 27,292 ) 78,844

Operating profit 128,132 162,937 380,957 580,444

22 unchanged sentences

(Dollars in thousands)

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Net income $ 51,209 $ 131,058 $ 207,433 $ 394,071

Other comprehensive (loss)/income:

Other comprehensive income/(loss):

Foreign currency translation adjustments 35,922 ( 49,024 ) ( 17,272 ) 4,474

1 unchanged sentence

Changes in derivative financial instruments, net of tax 60 ( 1,724 ) ( 1,432 ) 2,218

Other comprehensive (loss)/income ( 32,990 ) 21,355 ( 52,564 ) 56,593

Other comprehensive income/(loss) 37,018 ( 47,347 ) ( 15,546 ) 9,246

Comprehensive income:

1 unchanged sentence

Net income attributable to noncontrolling interests ( 288 ) ( 309 ) ( 524 ) ( 354 )

Other comprehensive loss attributable to noncontrolling interests 42 298 509 59

Other comprehensive (income)/loss attributable to noncontrolling interests ( 711 ) 668 ( 202 ) 727

Comprehensive income attributable to Sonoco $ 87,228 $ 84,070 $ 191,161 $ 403,690

12 unchanged sentences

Net income 65,273 65,177 96

Other comprehensive (loss)/income:

Other comprehensive income/(loss):

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

20 unchanged sentences

June 30, 2024 $ 2,441,867 2,441,867 98,258 $ 7,175 $ 167,114 $ ( 418,317 ) $ 2,678,673 $ 7,222

Net income 51,209 50,921 288

Other comprehensive income:

Translation gain

35,922 35,211 711

Defined benefit plan adjustment, net of tax 1,036 1,036

Derivative financial instruments, net of tax 60 60

Other comprehensive income 37,018 36,307 711

Dividends ( 51,352 ) ( 51,352 )

Issuance of stock awards 265 — 265

Shares repurchased ( 10 ) — ( 10 )

Share-based compensation 7,682 7,682

Other 481 481

September 29, 2024 $ 2,487,160 98,258 $ 7,175 $ 175,532 $ ( 382,010 ) $ 2,678,242 $ 8,221

Equity Common Shares Capital in

7 unchanged sentences

Other comprehensive income:

Translation income 31,808 31,569 239

Translation gain 31,808 31,569 239

Defined benefit plan adjustment, net of tax 916 916

8 unchanged sentences

Other comprehensive income/(loss):

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

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

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

6 unchanged sentences

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):

Translation loss ( 49,024 ) ( 48,356 ) ( 668 )

Defined benefit plan adjustment, net of tax 3,401 3,401

Derivative financial instruments, net of tax ( 1,724 ) ( 1,724 )

Other comprehensive loss ( 47,347 ) ( 46,679 ) ( 668 )

Dividends ( 50,185 ) ( 50,185 )

Issuance of stock awards 397 — 397

Shares repurchased ( 3 ) — ( 3 )

Share-based compensation 5,913 5,913

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

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)

2 unchanged sentences

(Dollars in thousands)

Six Months Ended

June 30, 2024 July 2, 2023

Nine Months Ended

September 29, 2024 October 1, 2023

Cash Flows from Operating Activities:

7 unchanged sentences

Net gain on disposition of assets ( 529 ) ( 59,050 )

Net gain on divestiture of business and other assets ( 4,478 ) ( 18,436 )

Net loss/(gain) on divestiture of business and other assets 27,292 ( 54,842 )

Remeasurement gain of investment in affiliated companies ( 6,012 ) —

1 unchanged sentence

Pension and postretirement plan contributions ( 14,680 ) ( 10,311 )

Net (decrease)/increase in deferred tax liabilities ( 11,602 ) 1,429

Net decrease in deferred tax liabilities ( 17,109 ) ( 14,451 )

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

16 unchanged sentences

Cash Flows from Financing Activities:

Proceeds from issuance of debt 32,615 20,071

Net proceeds from issuance of debt 1,813,754 905,601

Principal repayment of debt ( 133,644 ) ( 878,513 )

Net change in commercial paper 33,983 —

Net increase/(decrease) in book cash overdrafts 3,725 ( 441 )

Net (decrease)/increase in book cash overdrafts ( 3,078 ) 1,925

Payment of loan financing costs ( 19,000 ) —

Payment of contingent consideration ( 948 ) —

Cash dividends ( 152,397 ) ( 147,477 )

Payments for share repurchases ( 9,172 ) ( 10,605 )

Net cash used by financing activities ( 177,991 ) ( 184,972 )

Net cash provided/(used) by financing activities 1,529,498 ( 129,069 )

Effects of Exchange Rate Changes on Cash ( 10,381 ) 2,423

Net (Decrease)/Increase in Cash and Cash Equivalents ( 11,704 ) 91,778

Net Increase in Cash and Cash Equivalents 1,778,696 30,502

Cash and cash equivalents at beginning of period 151,937 227,438

6 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 six-month periods ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three- and nine-month periods ended September 29, 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.

22 unchanged sentences

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 six-month period ended June 30, 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 June 30, 2024, there were no other pronouncements pending adoption that are expected to have a material impact on the Company’s condensed consolidated financial statements.

During the nine-month period ended September 29, 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 September 29, 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

2 unchanged sentences

Acquisitions and Divestitures

On June 22, 2024, the Company entered into a definitive agreement to acquire Eviosys from KPS Capital Partners, LP for approximately $ 3,900,000 .

On June 22, 2024, the Company entered into a definitive agreement to acquire all of the issued and outstanding equity interests in Titan Holdings I B.V.

(“Eviosys”) from an affiliate of KPS Capital Partners, LP for € 3,615,000 (approximately $ 3,900,000 ) on a cash-free and debt-free basis and subject to customary adjustments.

Eviosys, a global supplier of metal packaging that produces food cans and ends, aerosol cans, metal closures and promotional packaging with a large metal food can manufacturing footprint in the Europe, Middle East, and Africa region, has approximately 6,300 employees in 44 manufacturing facilities across 17 countries.

This acquisition is expected to accelerate the Company’s strategy to focus on and scale its core businesses.

The acquisition of Eviosys is expected to close by the end of 2024, subject to the completion of required works council consultations, the receipt of required regulatory approvals, and other customary closing conditions.

The acquisition of Eviosys is expected to close by the end of 2024, subject to the satisfaction or waiver of customary closing conditions, including expiration, termination or receipt of the applicable waiting period or clearances, as applicable, under certain specified antitrust laws.

See Note 9 for information regarding how the Company plans to fund the pending Eviosys acquisition.

On June 1, 2024, the Company completed the purchase of a small tube and paper cone manufacturer in Brazil for $ 2,660 .

The financial results of this business are included in the Company’s Industrial Paper Packaging segment .

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 $ 64,390 , including $ 59,228 of cash paid at closing, additional consideration paid of $ 2,340 , and a final net working capital settlement of $ 489 paid during the second quarter of 2024.

Additional obligations to the seller totaling $ 2,333 are expected to be paid before the end of 2024 and are recorded in “Payable to suppliers” in the Company’s Condensed Consolidated Balance Sheet as of June 30, 2024.

(“Inapel”), a manufacturer of single-layer and multilayer materials for flexible packaging in Brazil, for net consideration of $ 64,390 , including $ 59,228 of cash paid at closing.

During the second quarter of 2024, the Company paid additional consideration in the amount of $ 2,340 and a final net working capital settlement in the amount of $ 489 .

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

21 unchanged sentences

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 currently deductible for income tax purposes, is primarily attributable to the assembled workforce and synergies of the combined organization.

The Company expects to complete its valuations during the fourth quarter of 2024.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

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 .

Goodwill for Inapel, none of which is currently 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 % ownership 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.

1 unchanged sentence

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

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:

On September 8, 2023, the fair value of the Company’s 35 % ownership interest in RTS Packaging was determined to be $ 59,472 based on the cash consideration exchanged for acquiring the remaining 65 % ownership interest in RTS Packaging adjusted for the deemed payment of a control premium, and the carrying value of the 35 % ownership interest in RTS Packaging 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 % ownership interest in RTS Packaging out of “Accumulated other comprehensive loss,” including foreign 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 the remaining ownership 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

Fair value of previously held ownership interest in RTS Packaging

Final working capital adjustment 452

1 unchanged sentence

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

During the three-month period ended September 29, 2024, the Company finalized its valuations of the assets acquired and liabilities assumed in the acquisitions of the remaining ownership interest in RTS Packaging and the Chattanooga Mill.

As a result, final fair values reflecting adjustments made during the measurement period are as follows:

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Initial Allocation Measurement Period Adjustments Final Allocation

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

15 unchanged sentences

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

The allocation of the purchase price for the remaining interest in RTS Packaging and the Chattanooga Mill 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.

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

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Goodwill for RTS Packaging and the Chattanooga Mill, of which $ 82,798 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 six-month period ended June 30, 2024.

Goodwill for RTS Packaging and the Chattanooga Mill, of which approximately $ 81,000 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 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.

1 unchanged sentence

Divestiture of Businesses

On April 1, 2024, the Company completed the sale of its Protective Solutions business (“Protexic”), part of the All Other group of businesses, to Black Diamond Capital Management, LLC for cash proceeds of $ 80,267 .

In September 2024, the Company entered into agreements to sell two of its production facilities in China, both of which are part of the Company’s Industrial Paper Packaging segment, for approximately $ 419 .

The sale of these facilities is expected to be completed in the fourth quarter of 2024.

As a result of the pending sale, the Company wrote down the carrying amounts of the asset group to their estimated fair values based on the expected selling price less estimated costs to sell and recognized a loss of $ 29,965 in the third quarter of 2024.

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

The fair value was determined from purchase prices reflected in the purchase and sale agreements, which is considered a Level 2 fair value measurement.

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

1 unchanged sentence

In connection with the Protexic divestiture, the Company wrote off net assets totaling $ 74,126 , including $ 16,559 of allocated goodwill and reclassified $ 2,913 of cumulative translation adjustment losses from Accumulated Other Comprehensive Loss, recognizing a preliminary pretax gain on the divestiture of $ 3,228 during the second quarter of 2024.

The preliminary gain, which is included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income, is expected to be finalized in the third quarter of 2024 upon finalization of the working capital settlement.

In the third quarter of 2024, the Company paid a final net working capital adjustment of $ 1,805 to Black Diamond, resulting in a net pretax gain of $ 1,423 for the nine-month period ended September 29, 2024, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

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

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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

2 unchanged sentences

The cash selling price, as adjusted for the final working capital settlement, was $ 20,271 with cash proceeds totaling $ 18,271 received in 2023, and the remaining $ 2,000 held in escrow to be released to the Company within eighteen months from the date of the sale, pursuant to the settlement of any indemnity claims.

The escrow balance of $ 2,000 is reflected in “Other receivables” on the Company’s Condensed Consolidated Balance Sheet as of September 29, 2024.

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 total pretax gain of $ 6,834 upon completion of the sale.

The gain, of which $ 7,371 was recognized in the second quarter of 2023 as reflected in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income, was reduced by $ 537 in the third quarter of 2023 upon the final working capital settlement.

The escrow balance of $ 2,000 is reflected in “Other receivables” on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2024.

Also on July 1, 2023, the Company agreed to the sale of its Mexico BulkSak business.

The sale closed in December 2023 for a cash selling price, as adjusted for working capital, of $ 1,096 .

As a result of the Mexico BulkSak sale, the Company recognized a pretax gain of $ 85 in the fourth quarter of 2023 which was included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

The gain, of which $ 7,371 was recognized in the second quarter of 2023 as reflected in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income, was reduced by $ 537 in the third quarter of 2023 upon the final working capital settlement.

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 are expected to be released to the Company, pursuant to any indemnification claims, twenty months following the date of the divestiture.

The escrow balance is reflected in “Other receivables” in the Company’s Condensed Consolidated Balance Sheet as of June 30, 2024.

(“Northstar”).

The Company received cash proceeds of $ 13,839 at closing.

An additional $ 1,500 of cash proceeds were released to the Company from escrow in September 2024.

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.

In the second quarter of 2024, upon resolution of certain contingencies, the Company received cash proceeds and recognized an additional pretax gain of $ 1,250 on the sale.

These gains are included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

These gains are included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income for their respective periods.

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 Protexic, U.S.

Bulksak, Mexico Bulksak and S3 businesses did not represent a strategic shift for the Company and did not have a major effect on its operations or financial results.

The sales of the production facilities in China and the Protexic, U.S.

BulkSak, and S3 businesses did not represent a strategic shift for the Company and did not have a major effect on its operations or financial results.

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

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Sale of Assets

1 unchanged sentence

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.

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

Additional Ownership Investment

2 unchanged sentences

The preferred stock investment increased by $ 18,512 during the second quarter of 2024, which included a $ 10,000 cash payment, a $ 5,400 remeasurement of the fair value of the existing investment, and a $ 2,500 conversion of the carrying value of the outstanding convertible notes into a preferred series stock investment, which yielded a $ 467 fair value increase and a $ 145 increase for interest income earned.

The outstanding investment of $ 21,212 as of June 30, 2024 is included within “Other assets” in the Company’s Condensed Consolidated Balance Sheet.

The outstanding investment of $ 21,212 as of September 29, 2024 is included within “Other assets” in the Company’s Condensed Consolidated Balance Sheet.

The remeasurement of the carrying value of the existing investment to fair value during the second quarter of 2024 resulted in a gain of $ 5,867 and interest income of $ 145 , which are included in “Other income, net” and “Interest income,” respectively, in the Company’s Condensed Consolidated Statements of Income.

Acquisition, Integration, and Divestiture-Related Costs

Acquisition, integration, and divestiture-related costs totaled $ 22,269 and $ 4,532 during the three-month periods ended June 30, 2024 and July 2, 2023, respectively, and $ 27,930 and $ 9,720 during the six-month periods ended June 30, 2024 and July 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

1 unchanged sentence

(Dollars and shares in thousands except per share data)

Acquisition, Integration, and Divestiture-Related Costs

Acquisition, integration, and divestiture-related costs totaled $ 49,804 and $ 77,734 during the three- and nine-month periods ended September 29, 2024, respectively, primarily related to the pending Eviosys acquisition.

These costs included $ 19,623 and $ 47,553 incurred during the three- and nine-month periods ended September 29, 2024, respectively, for legal and professional fees and other integration and acquisition adjustments that are included in “Selling, general and administrative expenses,” and losses on treasury lock derivative instruments and amortization of financing fees totaling $ 30,181 related to debt instruments associated with the financing of the pending Eviosys acquisition that are included in “Interest expense” in the Company’s Condensed Consolidated Statements of Income.

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 incurred 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.

Shareholders’ Equity

1 unchanged sentence

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

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Net income attributable to Sonoco $ 50,921 $ 130,749 $ 206,909 $ 393,717

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 six-month periods ended June 30, 2024 and July 2, 2023 were as follows (in thousands):

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

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 September 29, 2024 and October 1, 2023 were as follows (in thousands):

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Anti-dilutive stock appreciation rights 455 338 378 341

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 years ended December 31, 2023 or 2022 or the six-month period ended June 30, 2024.

No shares were repurchased under this authorization during the years ended December 31, 2022 or 2023 or the nine-month period ended September 29, 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 163 shares during the six-month period ended June 30, 2024, at a cost of $ 9,162 , and 175 shares during the six-month period ended July 2, 2023, at a cost of $ 10,602 .

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 163 shares during the nine-month period ended September 29, 2024, at a cost of $ 9,172 , and 175 shares during the nine-month period ended October 1, 2023, at a cost of $ 10,605 .

Dividend Declarations

4 unchanged sentences

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

This dividend is payable on September 10, 2024 to all shareholders of record as of August 9, 2024.

This dividend was paid on September 10, 2024 to all shareholders of record as of August 9, 2024.

On October 15, 2024, the Board declared a regular quarterly dividend of $ 0.52 per share.

This dividend is payable on December 10, 2024 to all shareholders of record as of November 8, 2024.

Restructuring and Asset Impairments

3 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Restructuring and restructuring-related asset impairment charges $ 8,190 $ 18,110 $ 59,058 $ 52,981

1 unchanged sentence

Restructuring/Asset impairment charges $ 8,190 $ 18,110 $ 59,058 $ 52,981

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 Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Severance and termination benefits $ 2,649 $ 9,736 $ 26,742 $ 19,370

3 unchanged sentences

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 Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Consumer Packaging $ 4,509 $ 9,784 $ 20,597 $ 16,479

3 unchanged sentences

Restructuring and restructuring-related asset impairment charges $ 8,190 $ 18,110 $ 59,058 $ 52,981

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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

9 unchanged sentences

Foreign currency translation 191 — ( 16 ) 175

Liability at June 30, 2024

Liability at September 29, 2024

$ 17,355 $ — $ 2,365 $ 19,720

“Severance and termination benefits” during the first six months of 2024 includes the cost of severance for approximately 220 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, Greec e (the “Kilkis Mill”), 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 six months of 2024 consists primarily of asset impairment charges related to the closures of the Sumner Mill and the Kilkis Mill, both part of the Industrial Paper Packaging segment, and the exit of a small metal canning lid business within Sonoco Metal Packaging, part of the Consumer Packaging segment.

“Other costs” during the first six 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 previously announced plant closures.

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

The Company also expects to recognize future additional charges totaling approximately $ 3,500 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2024.

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

“Severance and termination benefits” during the first nine months of 2024 includes the cost of severance for approximate ly 220 e mployees 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, Greec e (the “Kilkis Mill”), the closures of two small industrial converted products facilities in China, and the closure of an industrial converted products facility in Mississauga, Canada, all part of the Industrial Paper Packaging segment.

“Asset impairments” during the first nine months of 2024 consists primarily of asset impairment charges related to the closures of the Sumner Mill and the Kilkis Mill, both part of the Industrial Paper Packaging segment, and the exit of a small metal canning lid business within Metal Packaging, part of the Consumer Packaging segment.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

“Other costs” during the first nine 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 previously announced plant closures.

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

The Company also expects to recognize future additional charges totaling approximately $ 3,700 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2024.

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

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 six-month periods ended June 30, 2024 and July 2, 2023:

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 September 29, 2024 and October 1, 2023:

Items Defined

8 unchanged sentences

Other comprehensive (loss)/income ( 17,474 ) 3,158 ( 1,432 ) ( 15,748 )

Balance at June 30, 2024

Balance at September 29, 2024

$ ( 285,052 ) $ ( 96,469 ) $ ( 489 ) $ ( 382,010 )

4 unchanged sentences

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

Other comprehensive income/(loss) 53,557 ( 847 ) 3,942 56,652

Balance at July 2, 2023

Other comprehensive income

5,201 2,554 2,218 9,973

Balance at October 1, 2023

$ ( 333,115 ) $ ( 88,419 ) $ 1,424 $ ( 420,110 )

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(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 six-month periods ended June 30, 2024 and July 2, 2023:

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 September 29, 2024 and October 1, 2023:

Amount Reclassified from Accumulated

Other Comprehensive Loss

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

Details about Accumulated Other

Comprehensive

Loss Components June 30,

2023 June 30,

Loss Components September 29,

2024 October 1,

2023 September 29,

2024 October 1,

2023 Affected Line Item in

2 unchanged sentences

Foreign currency items

Loss on RTS Packaging investment (a)

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

Currency translation adjustment loss on Protexic sale (a)

$ ( 2,913 ) $ — $ ( 2,913 ) $ — Gain on divestiture of business and other assets

( 2,913 ) — ( 2,913 ) —

— — ( 2,913 ) — (Loss)/Gain on divestiture of business and other assets

— ( 2,033 ) ( 2,913 ) ( 2,033 ) Net income

Gains/(losses) on cash flow hedges

9 unchanged sentences

Defined benefit pension items

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

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

Effect of settlement loss (c)

12 unchanged sentences

(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 June 30, 2024 and July 2, 2023:

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 September 29, 2024 and October 1, 2023:

Three Months Ended

June 30, 2024

September 29, 2024

Three Months Ended

October 1, 2023

Benefit After Tax

2 unchanged sentences

Foreign currency items:

Net other comprehensive (loss)/income from foreign currency items $ ( 35,280 ) $ ( 999 ) $ ( 36,279 ) $ 21,988 $ — $ 21,988

Net other comprehensive income/(loss) from foreign currency items $ 30,458 $ 4,753 $ 35,211 $ ( 50,389 ) $ — $ ( 50,389 )

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

— — — 2,033 — 2,033

Net other comprehensive loss from foreign currency items ( 32,367 ) ( 999 ) ( 33,366 ) 21,988 — 21,988

Net other comprehensive income/(loss) from foreign currency items 30,458 4,753 35,211 ( 48,356 ) — ( 48,356 )

Defined benefit pension items:

Other comprehensive income/(loss) before reclassifications 671 80 751 ( 3,689 ) 1,033 ( 2,656 )

Other comprehensive (loss)/income before reclassifications ( 82 ) 10 ( 72 ) ( 1,137 ) 141 ( 996 )

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

6 unchanged sentences

620 ( 185 ) 435 ( 2,015 ) 558 ( 1,457 )

Net other comprehensive (loss)/income from cash flow hedges ( 2,310 ) 649 ( 1,661 ) 1,747 ( 319 ) 1,428

Other comprehensive (loss)/income $ ( 32,296 ) $ ( 652 ) $ ( 32,948 ) $ 21,241 $ 412 $ 21,653

Net other comprehensive income/(loss) from cash flow hedges 155 ( 95 ) 60 ( 2,384 ) 660 ( 1,724 )

Other comprehensive income/(loss) $ 31,747 $ 4,560 $ 36,307 $ ( 46,002 ) $ ( 677 ) $ ( 46,679 )

(a) See Note 3 for additional details.

4 unchanged sentences

(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 six-month periods ended June 30, 2024 and July 2, 2023:

Six Months Ended June 30, 2024 Six Months Ended July 2, 2023

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 September 29, 2024 and October 1, 2023:

Nine Months Ended September 29, 2024 Nine Months Ended October 1, 2023

Benefit After Tax

27 unchanged sentences

Goodwill and Other Intangible Assets

A summary of the changes in goodwill for the six-month period ended June 30, 2024 is as follows:

A summary of the changes in goodwill for the nine-month period ended September 29, 2024 is as follows:

Packaging Industrial Paper Packaging All Other Total

3 unchanged sentences

Measurement period adjustments ( 7,454 ) — — ( 7,454 )

Goodwill at June 30, 2024 $ 1,041,129 $ 497,148 $ 231,242 $ 1,769,519

Goodwill at September 29, 2024 $ 1,048,416 $ 500,828 $ 231,723 $ 1,780,967

Goodwill activity reflected under the caption “Divestitures” relates to the April 2024 divestiture of Protexic.

7 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 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 June 30, 2024, the total goodwill associated with the Plastics-Medical reporting unit was $ 63,900 .

During the time subsequent to the annual evaluation, and at June 30, 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.

Although no reporting units failed the annual impairment test, in management’s opinion, the goodwill balances of the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units are individually at risk of impairment in the near term if each reporting unit’s operation does not perform in line with management’s expectations, or if there is a negative change in the long-term financial outlook for each reporting unit or in other factors such as the particular discount rates used.

In the case of Metal Packaging, t he lower differential between the fair value and carrying value of the reporting unit is due to the acquisition of Ball Metalpack Holding, LLC in 2022, at which time the majority of assets and liabilities acquired were recorded at fair value.

At September 29, 2024, the total goodwill associated with the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units was $ 64,881 , $ 198,807 , and $ 384,315 , respectively.

In the annual goodwill impairment analysis completed during the third quarter of 2024, projected future cash flows for the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units were discounted at 11.5 % , 10.5 % , and 11.0 % , respectively, and their estimated fair values were determined to exceed their individual carrying values by approximately 18.7 %, 18.9 %, and 12.6 %, respectively .

Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rates for the Plastics-Medical, Plastics-Food and Metal Packaging reporting units would have to increase t o 13.8 %, 12.4 %, and 12.1 %, respectively, in order for the estimated fair values of the reporting units to fall below carrying values.

During the time subsequent to the annual evaluation, and at September 29, 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 June 30, 2024 and December 31, 2023 is as follows:

A summary of other intangible assets as of September 29, 2024 and December 31, 2023 is as follows:

September 29,

2024 December 31,

14 unchanged sentences

Other Intangible Assets, net $ 785,616 $ 853,670

“Total Other Intangibles Assets, gross” and “Total Accumulated Amortization” were both reduced by $ 54,860 during the first six months of 2024 as a result of the divestiture of Protexic in April 2024.

“Total Other Intangibles Assets, gross” and “Total Accumulated Amortization” were both reduced by $ 54,860 during the first nine months of 2024 as a result of the divestiture of Protexic in April 2024.

These fully amortized intangible assets consisted primarily of customer lists.

3 unchanged sentences

The Company has no intangible assets with indefinite lives.

Aggregate amortization expense was $ 22,511 and $ 20,539 for the three-month periods ended June 30, 2024 and July 2, 2023, respectively, $ 45,450 and $ 41,703 for the six-month periods ended June 30, 2024 and July 2, 2023, respectively.

Aggregate amortization expense was $ 22,645 and $ 21,379 for the three-month periods ended September 29, 2024 and October 1, 2023, respectively, and $ 68,095 and $ 63,082 for the nine-month periods ended September 29, 2024 and October 1, 2023, respectively.

Amortization expense on other intangible assets is expected to total approximately $ 90,200 in 2024, $ 78,600 in 2025, $ 74,800 in 2026, $ 73,800 in 2027 and $ 73,000 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 June 30, 2024 and December 31, 2023:

Balance Sheet Line Item June 30, 2024 December 31, 2023

The following table sets forth the balance sheet location and values of the Company’s SCF Program obligations at September 29, 2024 and December 31, 2023:

Balance Sheet Line Item September 29, 2024 December 31, 2023

Payable to suppliers (a)

1 unchanged sentence

(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.

Details of the Company’s debt at June 30, 2024 and December 31, 2023 are as follows:

Details of the Company’s debt at September 29, 2024 and December 31, 2023 are as follows:

September 29,

2024 December 31, 2023

3 unchanged sentences

399,734 399,149

2.250 % notes due February 2027

298,676 298,421

4.450 % notes due September 2026

2.250 % notes due February 2027

298,800 298,421

4.600 % notes due September 2029

3.125 % notes due May 2030

596,812 596,480

2.850 % notes due February 2032

496,169 495,785

5.000 % notes due September 2034

5.750 % notes due November 2040

10 unchanged sentences

The commercial paper program will continue to be supported by the revolving credit facility.

Borrowings under the revolving credit facility will 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 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 Agreement) of 10 basis points.

At June 30, 2024, t he applicable margin based on the pricing grid in the Agreement and the Company’s current credit rating, together with the SOFR Adjustment, was 122.5 basis points.

At June 30, 2024 , the Company had $ 28,000 in commercial paper balances outstanding;

accordingly, the committed capacity available for drawdown under its revolving credit facility at June 30, 2024 was $ 1,222,000 .

On June 22, 2024, in conjunction with the announcement of the acquisition of Eviosys, to secure funding of the acquisition, the Company entered into a 364-day senior unsecured bridge term loan facility (the “Bridge Loan Facility”) with JPMorgan Chase and Morgan Stanley in an amount of $ 4,000,000 comprised of two tranches, Tranche A of $ 700,000 and Tranche B of $ 3,300,000 .

At September 29, 2024 , the Company had $ 33,983 in commercial paper balances outstanding;

accordingly, the committed capacity available for drawdown under its revolving credit facility at September 29, 2024 was $ 1,216,017 .

On July 12, 2024 , the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Term Credit Agreement”).

The Term Credit Agreement provides the Company with the ability to borrow up to $ 700,000 on an unsecured basis (the “Term Loan Facility”) to finance a portion of the cash consideration for the Company’s pending acquisition of Eviosys.

Funding of the Term Loan Facility is expected to take place substantially concurrently with the closing of the acquisition of Eviosys.

Borrowings under the Term Loan Facility, net of any prepayments, will become payable in full on the second anniversary of the Funding Date (as defined in the Term Credit Agreement) and will 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 (such borrowings, “Term SOFR Loans”), (ii) a base rate, 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, an adjustment of 10 basis points.

As of September 29, 2024, no draws have been made under the Term Loan Facility.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

On July 12, 2024, subsequent to the end of the quarter, the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Term Credit Agreement”).

Funding of the Term Loan Facility is expected to take place substantially concurrently with the closing of the acquisition of Eviosys.

The aggregate amount of the commitments under the Term Credit Agreement have replaced a corresponding amount of the commitments in respect of the Bridge Loan Facility in accordance with the terms of the Bridge Loan Facility commitment letter.

As a result, an aggregate amount of up to $ 3,300,000 in Bridge Loan Facility commitments remain.

No draws have been made under the Term Loan Facility.

In June 2024, the Company paid $ 19,000 in fees related to the Bridge Loan Facility.

These fees were recorded in “Prepaid expenses” on the Company’s Condensed Consolidated Balance Sheets and are being amortized to interest expense over the commitment period ending March 2025.

A total of $ 18,578 of unamortized fees relating to the Bridge Loan Facility remained in prepaid expenses at June 30, 2024.

On September 16, 2024, the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “ 364-Day Term Credit Agreement”).

The 364-Day Term Credit Agreement provides the Company with the ability to borrow up to $ 1,500,000 on an unsecured basis (the “364-Day Term Loan Facility”) to finance a portion of the cash consideration for the Company’s pending acquisition of Eviosys.

Funding of the 364-Day Term Loan Facility is expected to take place substantially concurrently with the closing of the Eviosys acquisition.

Borrowings under the 364-Day Term Loan Facility will bear interest under the same terms as the Term Loan Facility and will become payable in full 364 days following the funding date.

On September 19, 2024, the Company completed a registered public offering of senior unsecured notes (the “Notes”) in a combined aggregate principal amount of $ 1,800,000 .

The Notes consisted of the following:

Principal Amount Issuance Costs and Discounts Net Proceeds Interest Rate Maturity

2026 Notes $ 500,000 ( 3,697 ) $ 496,303 4.450 % September 1, 2026

2029 Notes 600,000 ( 5,851 ) 594,149 4.600 % September 1, 2029

2034 Notes 700,000 ( 10,542 ) 689,458 5.000 % September 1, 2034

Total $ 1,800,000 $ ( 20,090 ) $ 1,779,910

The Company intends to use an amount equal to the net proceeds from the offering of the Notes, together with borrowings under its Term Loan Facility and 364-Day Term Loan Facility and, if needed, cash on hand or additional borrowings under its existing revolving credit facility, to fund the cash consideration payable by the Company in connection with the Company’s pending acquisition of Eviosys and to pay related fees and expenses.

In conjunction with the announcement of the acquisition of Eviosys, the Company entered into a commitment letter with certain financial institutions that provided for a 364-day senior unsecured bridge term loan facility (the “Bridge Loan Facility”) on June 22, 2024 in an aggregate amount of up to $ 4,000,000 to secure funding of the acquisition.

As a result of obtaining financing for the Eviosys acquisition through the Term Loan Facility, the 364-Day Term Loan Facility, and the Notes, the Company terminated the commitments under the Bridge Loan Facility and the related commitment letter effective September 19, 2024.

Fees related to the Bridge Loan Facility of $ 18,578 and $ 19,000 were amortized to interest expense during the three- and nine-month periods ended September 29, 2024.

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 June 30, 2024, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

As of September 29, 2024, 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.

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

Value Carrying

2 unchanged sentences

The fair value of long-term debt is determined based on recent trade information in the financial markets of the Company’s public debt or is determined by discounting future cash flows using interest rates available to the Company for issues with similar terms and maturities which is considered a Level 2 fair value measurement.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Cash Flow Hedges

At June 30, 2024 and December 31, 2023, the Company had derivative financial instruments outstanding to hedge anticipated transactions and certain asset and liability related cash flows.

At September 29, 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 July 2024 to December 2024, qualify as cash flow hedges under U.S.

2 unchanged sentences

Cash flows from derivative financial instruments designated as cash flow hedges are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

Commodity Cash Flow Hedges

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

At June 30, 2024, these contracts included natural gas swaps covering approximatel y 30 thousand metric million British thermal units (“MMBTUs”).

At September 29, 2024, these contracts included natural gas swaps covering approximatel y 20 thousand metric million British thermal units (“MMBTUs”).

These contracts represented approximately 0.9 % of anticipated u sage in North America for the remainder of 2024 .

1 unchanged sentence

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

At June 30, 2024 , the Company had also designated swap contracts covering 222 metric tons of aluminum as cash flow hedges.

The fair value of the Company’s commodity cash flow hedges netted to loss positions of $( 4 ) and $( 41 ) at June 30, 2024 and December 31, 2023, respectively.

The amount of the loss included in accumulated other comprehensive loss at June 30, 2024 expected to be reclassified to the income statement during the next twelve months is $( 4 ).

At September 29, 2024 , the Company had also designated swap contracts covering 133 metric tons of aluminum as cash flow hedges.

The fair value of the Company’s commodity cash flow hedges netted to loss positions of $( 4 ) and $( 41 ) at September 29, 2024 and December 31, 2023, respectively.

The amount of the loss included in accumulated other comprehensive loss at September 29, 2024 expected to be reclassified to the income statement during the next twelve months is $( 4 ).

Foreign Currency Cash Flow Hedges

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 June 30, 2024 were as follows (in thousands):

The net positions of these contracts at September 29, 2024 were as follows (in thousands):

Currency Action Quantity

10 unchanged sentences

British pound sell ( 331 )

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a loss position of $( 859 ) and a gain position of $ 1,502 at June 30, 2024 and December 31, 2023, respectively.

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a loss position of $( 654 ) and a gain position of $ 1,502 at September 29, 2024 and December 31, 2023, respectively.

Losses of $( 654 ) are expected to be reclassified from accumulated other comprehensive income to the income statement during the next twelve months.

20 unchanged sentences

dollar exchange rate market.

The fair value of the Company’s net investment hedges were loss positions of $ 301 and $ 5,073 at June 30, 2024 and December 31, 2023, respectively.

Translation losses of $ 224 (net of income taxes of $ 77 ) and $ 3,779 (net of income taxes of $ 1,294 ) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at June 30, 2024 and December 31, 2023, respectively.

The fair value of the Company’s net investment hedges were loss positions of $( 18,941 ) and $( 5,073 ) at September 29, 2024 and December 31, 2023, respectively.

Translation losses of $ 14,111 (net of income taxes of $ 4,830 ) and $ 3,779 (net of income taxes of $ 1,294 ) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at September 29, 2024 and December 31, 2023, respectively.

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 June 30, 2024, were as follows (in thousands):

The net currency positions of these non-designated contracts at September 29, 2024, were as follows (in thousands):

Currency Action Quantity

Indonesian rupiah purchase 21,474,722

Colombian peso purchase 64,773,834

Mexican peso purchase 364,260

Turkish lira purchase 16,609

Canadian dollar purchase 6,979

Thai baht sell ( 11,455 )

Commodity Hedges

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

At June 30, 2024, these contracts consisted of natural gas swaps covering approximately 6.3 million MMBTUs and represented approximately 87 % and 48 % of anticipated usage for the remainder of 2024 and 2025, respectively.

At September 29, 2024, these contracts consisted of natural gas swaps covering approximately 7.3 million MMBTUs and represented approximately 92 % and 74 % of anticipated usage for the remainder of 2024 and 2025, respectively.

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The fair value of the Company’s non-designated derivatives position was a lo ss of $( 3,329 ) a nd $( 6,790 ) at June 30, 2024 and December 31, 2023, respectively.

The following table sets forth the location and fair values of the Company’s derivative instruments at June 30, 2024 and December 31, 2023:

Description Balance Sheet Location June 30, 2024 December 31, 2023

Interest Rate Hedges

In anticipation of the offering of the Notes , th e Company entered into treasury lock derivative instruments with eleven banks, with a total notional principal amount of $ 900,000 , on August 29, 2024.

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

The derivatives were settled when the Notes priced on September 17, 2024, with the Company recognizing a loss on the settlement of $( 11,088 ).

T he loss is included in “Interest expense” in the Company’s Condensed Consolidated Statements of Income for the three- and nine-month periods ended September 29, 2024 .

The fair value of the Company’s non-designated deriva tives position was a loss of $( 3,183 ) and $( 6,790 ) at September 29, 2024 and December 31, 2023, respectively.

The following table sets forth the location and fair values of the Company’s derivative instruments at September 29, 2024 and December 31, 2023:

Description Balance Sheet Location September 29, 2024 December 31, 2023

Derivatives designated as hedging instruments:

17 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 June 30, 2024 and July 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:

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the three-month periods ended September 29, 2024 and October 1, 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 June 30, 2024

Three-month period ended September 29, 2024

Foreign Exchange Contracts $ ( 444 ) Net sales $ ( 513 )

1 unchanged sentence

Commodity Contracts ( 21 ) Cost of sales ( 21 )

Three-month period ended July 2, 2023

Three-month period ended October 1, 2023

Foreign Exchange Contracts $ ( 509 ) Net sales $ 3,195

5 unchanged sentences

Derivatives not Designated as Hedging Instruments:

Three-month period ended June 30, 2024

Three-month period ended September 29, 2024

Commodity Contracts $ ( 1,377 ) Cost of sales

Foreign Exchange Contracts ( 1,573 ) Selling, general and administrative

Three-month period ended July 2, 2023

Three-month period ended October 1, 2023

Commodity Contracts $ ( 2,118 ) Cost of sales

Foreign Exchange Contracts 579 Selling, general and administrative

Three-month period ended June 30, 2024 Three-month period ended July 2, 2023

Three-month period ended September 29, 2024 Three-month period ended October 1, 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 six-month periods ended June 30, 2024 and July 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:

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the nine-month periods ended September 29, 2024 and October 1, 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:

Six-month period ended June 30, 2024

Nine-month period ended September 29, 2024

Foreign Exchange Contracts $ ( 2,094 ) Net sales $ 153

1 unchanged sentence

Commodity Contracts 16 Cost of sales ( 21 )

Six-month period ended July 2, 2023

Nine-month period ended October 1, 2023

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

5 unchanged sentences

Derivatives not Designated as Hedging Instruments:

Six-month period ended June 30, 2024

Nine-month period ended September 29, 2024

Commodity Contracts $ ( 3,465 ) Cost of sales

Foreign Exchange Contracts ( 4,039 ) Selling, general and administrative

Six-month period ended July 2, 2023

Nine-month period ended October 1, 2023

Commodity Contracts $ ( 13,635 ) Cost of sales

Foreign Exchange Contracts 4,651 Selling, general and administrative

Six-month period ended June 30, 2024 Six-month period ended July 2, 2023

Nine-month period ended September 29, 2024 Nine-month period ended October 1, 2023

Description Revenue Cost of

18 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 June 30, 2024 Assets measured

Description September 29, 2024 Assets measured

at NAV Level 1 Level 2 Level 3

18 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 six-month periods ended June 30, 2024.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

There were no transfers in or out of Level 1 or Level 2 fair value measurements during the three- and nine-month periods ended September 29, 2024.

The Company has an investment in the preferred stock of a nonaffiliated private company.

1 unchanged sentence

Observable price changes would consist of Lev el 2 inputs based on privately negotiated transactions with the nonaffiliated company.

The total investment in p referred stock of $ 21,212 is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheet as of June 30, 2024.

The total investment in p referred stock of $ 21,212 is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheet as of September 29, 2024.

SONOCO PRODUCTS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars and shares in thousands except per share data)

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 June 30, 2024 or December 31, 2023.

See Note 3 for a discussion of assets acquired and liabilities assumed in acquisitions and sold in dispositions, 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 September 29, 2024 or December 31, 2023.

Employee Benefit Plans

Retirement Plans and Retiree Health and Life Insurance Plans

The Company provides non-contributory defined benefit pension plans for certain of its employees in the United States, Mexico, Belgium, Germany, Greece, France, and Turkey.

The Company provides non-contributory defined benefit pension plans for certain of its employees in the United States, Mexico, Belgium, Germany, France, and Turkey.

The Company also sponsors contributory defined benefit pension plans covering certain of its employees in the United Kingdom, Canada and the Netherlands, and provides postretirement healthcare and life insurance benefits to a limited number of its retirees and their dependents in the United States and Canada, based on certain age and/or service eligibility requirements.

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

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Retirement Plans

12 unchanged sentences

Amortization of net actuarial gain ( 223 ) ( 194 ) ( 670 ) ( 584 )

Net periodic benefit (income)/cost $ ( 61 ) $ ( 98 ) $ 95 $ ( 176 )

Net periodic benefit cost/(income) $ 48 $ ( 88 ) $ 143 $ ( 264 )

Settlement Charges

The Company recognized settlement ch arges of $ 511 and $ 749 during the six-month periods ended June 30, 2024 and July 2, 2023, respectively.

The Company recognized settlement ch arges of $ 529 and $ 765 during the nine-month periods ended September 29, 2024 and October 1, 2023, respectively.

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

Contributions

The Company made aggregate contributions of $ 9,125 and $ 7,456 to its defined benefit retirement and retiree health and life insurance plans during the six-month periods ended June 30, 2024 and July 2, 2023, respectively.

The Company made aggregate contributions of $ 14,680 and $ 10,311 to its defined benefit retirement and retiree health and life insurance plans during the nine-month periods ended September 29, 2024 and October 1, 2023, respectively.

The Company expects to make additional aggregate contributions of approximately $ 6,050 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 , resulting in an unfunded pension obligation of $ 10,438 .

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

The Company’s effective tax rates for the three- and six-month periods ended June 30, 2024 were 23.5 % and 22.6 %, respectively, and its rates for the three- and six-month periods ended July 2, 2023 were 26.8 % and 25.4 %, respectively.

Since the formation of the original joint venture, as a result of its 35 % ownership interest, the Company had recognized a 35 % share of actuarial gains and losses related to the RTS Plan in “Accumulated other comprehensive loss.” Upon the acquisition of the remaining 65 % ownership 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.

The Company’s effective tax rates for the three- and nine-month periods ended September 29, 2024 were 30.4 % and 24.6 %, respectively, and its rates for the three- and nine-month periods ended October 1, 2023 were 23.6 % and 24.8 %, respectively.

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

statutory rate due primarily to rate differences between U.S.

jurisdictions and the relative amounts earned in those jurisdictions, state income taxes, and discrete tax adjustments.

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

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

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 increased by $ 938 from December 31, 2023 to June 30, 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 June 30, 2024 could decrease by approximately $ 9,392 over the next twelve months.

The Company’s reserve for uncertain tax benefits increased by $ 3,400 from December 31, 2023 to September 29, 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 September 29, 2024 could increase by approximately $ 1,400 over the next twelve months.

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

6 unchanged sentences

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

The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company’s lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842 - “Leases.” Most of the Company’s real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to 5 years.

The Company’s leases do not have any significant residual value guarantees or restrictive covenants.

1 unchanged sentence

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

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

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

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

The acquisitions included operating lease assets of $ 34,894 and operating lease liabilities of $ 34,604 .

For additional information about these acquisitions, see Note 3.

2 unchanged sentences

For more information about this divestiture, 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 June 30, 2024 and December 31, 2023:

The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at September 29, 2024 and December 31, 2023:

SONOCO PRODUCTS COMPANY

1 unchanged sentence

(Dollars and shares in thousands except per share data)

Classification Balance Sheet Location June 30, 2024 December 31, 2023

Classification Balance Sheet Location September 29, 2024 December 31, 2023

Operating lease assets Right of Use Asset - Operating Leases $ 314,611 $ 314,944

12 unchanged sentences

In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index.

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 six-month periods ended June 30, 2024 and July 2, 2023:

Three Months Ended Six Months Ended

Lease Cost June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

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 for certain leases with rate or index-related terms 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 September 29, 2024 and October 1, 2023:

Three Months Ended Nine Months Ended

Lease Cost September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Operating lease cost (a) $ 14,653 $ 14,075 $ 44,242 $ 41,377

3 unchanged sentences

Variable lease cost (a) (c) 11,691 9,525 34,719 30,198

Impairment charges 281 — 281 —

Total lease cost $ 31,282 $ 28,214 $ 92,895 $ 85,281

(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively.

(b) Included in interest expense.

(a) Production-related costs are included in “Cost of sales” and administrative costs are included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Income.

(b) Included in “Interest expense” in the Condensed Consolidated Statements of Income.

2 unchanged sentences

(Dollars and shares in thousands except per share data)

The following table sets forth certain lease-related information for the six-month periods ended June 30, 2024 and July 2, 2023:

Six Months Ended

June 30, 2024 July 2, 2023

The following table sets forth certain lease-related information for the nine-month periods ended September 29, 2024 and October 1, 2023:

Nine Months Ended

September 29, 2024 October 1, 2023

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

27 unchanged sentences

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

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

Contract Assets $ 57,513 $ 54,334

3 unchanged sentences

(Dollars and shares in thousands except per share data)

Significant changes in the contract assets and liabilities balances during the six-month period ended June 30, 2024 and the year ended December 31, 2023 were as follows:

June 30, 2024 December 31, 2023

Significant changes in the contract assets and liabilities balances during the nine-month period ended September 29, 2024 and the year ended December 31, 2023 were as follows:

September 29, 2024 December 31, 2023

Asset Contract

15 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 June 30, 2024 and July 2, 2023.

The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended September 29, 2024 and October 1, 2023.

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 June 30, 2024 Consumer Packaging Industrial Paper Packaging All Other Total

Three-month period ended September 29, 2024 Consumer Packaging Industrial Paper Packaging All Other Total

Primary Geographical Markets:

8 unchanged sentences

(Dollars and shares in thousands except per share data)

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

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

Primary Geographical Markets:

5 unchanged sentences

Total $ 984,840 $ 580,035 $ 145,544 $ 1,710,419

The following tables set forth information about revenue disaggregated by primary geographic regions for the six-month periods ended June 30, 2024 and July 2, 2023.

The following tables set forth information about revenue disaggregated by primary geographic regions for the nine-month periods ended September 29, 2024 and October 1, 2023.

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

Six-month period ended June 30, 2024 Consumer

Nine-month period ended September 29, 2024 Consumer

Packaging Industrial

7 unchanged sentences

Total $ 2,821,817 $ 1,778,912 $ 336,159 $ 4,936,888

Six-month period ended July 2, 2023 Consumer Packaging Industrial Paper Packaging All Other Total

Nine-month period ended October 1, 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.

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.

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.”

Accordingly, 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 below have been recast to conform to the new presentation.

Also 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 were recorded and the margin from the operations reduced “Cost of sales” for the three- and nine-month periods ended September 29, 2024.

SONOCO PRODUCTS COMPANY

8 unchanged sentences

and uncoated recycled paperboard.

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

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.

The primary products produced within 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 segment operating profit.

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 FINANCIAL INFORMATION

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Consumer Packaging $ 983,511 $ 984,840 $ 2,821,817 $ 2,914,168

26 unchanged sentences

(Dollars and shares in thousands except per share data)

RECONCILIATION OF SEGMENT OPERATING PROFIT TO INCOME BEFORE INCOME TAXES

Three Months Ended Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

The following table sets forth the reconciliation of segment operating profit to “Income before income taxes” for the periods presented.

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Segment operating profit

3 unchanged sentences

Amortization of acquisition intangibles ( 22,645 ) ( 21,379 ) ( 68,095 ) ( 63,082 )

Gains from divestiture of business and other assets 4,478 7,371 4,478 79,381

(Loss)/Gain on divestiture of business and other assets

( 31,770 ) ( 537 ) ( 27,292 ) 78,844

Acquisition, integration and divestiture-related costs (4)

( 19,623 ) ( 12,472 ) ( 47,553 ) ( 22,192 )

Changes in LIFO inventory reserves ( 790 ) 3,186 197 10,186

Derivative gains/(losses) 3,485 4,288 3,771 ( 1,796 )

Net gains from derivatives 210 3,308 3,981 1,513

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

4 unchanged sentences

Interest expense (4)

( 61,643 ) ( 32,847 ) ( 122,503 ) ( 101,363 )

Interest income 6,014 3,173 13,127 6,679

Income before income taxes $ 69,556 $ 166,782 $ 267,036 $ 512,279

(3) Primarily consists of insurance gains offset by consulting fees in 2024 and losses related to highly inflationary accounting in Turkey and consulting fees, partially offset by insurance gains, in 2023.

(3) Primarily consists of consulting and professional fees in 2023.

(4) Interest expense includes losses on treasury lock derivative instruments and amortization of financing fees totaling $ 30,181 for the three- and nine-month periods ended September 29, 2024, respectively, related to debt instruments associated with the financing of the pending Eviosys acquisition.

Commitments and Contingencies

5 unchanged sentences

The Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates.

In connection with its acquisition of Tegrant in November 2011, the Company identified potential environmental contamination at a site in Spartanburg, South Carolina.

In connection with its acquisition of Tegrant in November 2011, the Co mpany identified potential environmental contamination at a site in Spartanburg, South Carolina.

Since the acquisition, the Company has spent a total of $ 2,257 on remediation of the Spartanburg site.

At June 30, 2024 and December 31, 2023, the Company’s accrual for environmental contingencies related to the Spartanburg site totaled $ 5,195 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.

At September 29, 2024 and December 31, 2023, the Company’s accrual for environmental contingencies related to the Spartanburg site totaled $ 5,143 and $ 5,259 , respectively.

The Company cannot currently estimate its potential liability, damages or ra nge 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.

6 unchanged sentences

The potential remediation liabilities are shared with such other parties, and, in most cases, the Company’s share, if any, cannot be reasonably estimated at the current time.

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 June 30, 2024 and December 31, 2023, the Company’s accrual for these other sites totaled $ 1,785 and $ 1,992 , respectively.

As of June 30, 2024 and December 31, 2023, the Company and its subsidiaries had accrued $ 6,980 and $ 7,251 , respectively, related to environmental contingencies.

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 fi nancial statements.

At September 29, 2024 and December 31, 2023, the Company’s accrual for these other sites totaled $ 1,730 and $ 1,992 , respectively.

As of September 29, 2024 and December 31, 2023, the Company and its subsidiaries had accrued $ 6,873 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.

4 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