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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 FORM 10-Q
 
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 2024
or 
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File No. 001-11261
Sonoco Products Company
(Exact name of registrant as specified in its charter)
South Carolina
57-0248420
(State or other jurisdiction of incorporation of organization)
(I.R.S. Employer Identification No.)
1 N. Second St., Hartsville, South Carolina
29550
(Address of principal executive offices)
(Zip Code)
(843) 383-7000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
No par value common stock
SON
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒   No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer
☐
Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
The number of shares outstanding of the registrant’s no par value common stock as of October 18, 2024 was 98,259,598.



SONOCO PRODUCTS COMPANY
INDEX
 
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 5.
Item 6.

2


Part I. FINANCIAL INFORMATION 
Item 1. Financial Statements.
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars and shares in thousands)
September 29,
2024		December 31, 2023*
Assets
Current Assets
Cash and cash equivalents$1,930,633 $151,937 
Trade accounts receivable, net of allowances1,042,520 904,898 
Other receivables110,042 106,644 
Inventories, net:
Finished and in process304,042 324,910 
Materials and supplies451,210 448,591 
Prepaid expenses130,584 113,385 
Total Current Assets
3,969,031 2,050,365 
Property, Plant and Equipment, Net1,930,025 1,906,137 
Goodwill1,780,967 1,810,654 
Other Intangible Assets, Net785,616 853,670 
Deferred Income Taxes28,682 31,329 
Right of Use Asset-Operating Leases314,611 314,944 
Other Assets233,929 224,858 
Total Assets$9,042,861 $7,191,957 
Liabilities and Equity
Current Liabilities
Payable to suppliers$748,193 $707,490 
Accrued expenses and other438,296 400,014 
Notes payable and current portion of long-term debt481,706 47,132 
Accrued taxes10,084 10,641 
Total Current Liabilities
1,678,279 1,165,277 
Long-term Debt, Net of Current Portion4,320,442 3,035,868 
Noncurrent Operating Lease Liabilities269,251 265,454 
Pension and Other Postretirement Benefits137,302 142,900 
Deferred Income Taxes84,048 100,788 
Other Liabilities66,379 49,835 
Commitments and Contingencies
Sonoco Shareholders’ Equity
Common stock, no par value
Authorized 300,000 shares
       98,258 and 97,957 shares issued and outstanding
at September 29, 2024 and December 31, 2023, respectively
7,175 7,175 
Capital in excess of stated value175,532 159,047 
Accumulated other comprehensive loss(382,010)(366,262)
Retained earnings2,678,242 2,624,380 
Total Sonoco Shareholders’ Equity2,478,939 2,424,340 
Noncontrolling Interests8,221 7,495 
Total Equity2,487,160 2,431,835 
Total Liabilities and Equity$9,042,861 $7,191,957 
*The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (the “United States” or “U.S.”).
See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
3


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share data)
 
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Net sales$1,675,866 $1,710,419 $4,936,888 $5,145,492 
Cost of sales1,317,129 1,346,163 3,883,244 4,049,490 
Gross profit358,737 364,256 1,053,644 1,096,002 
Selling, general and administrative expenses190,645 182,672 586,337 541,421 
Restructuring/Asset impairment charges8,190 18,110 59,058 52,981 
(Loss)/Gain on divestiture of business and other assets(31,770)(537)(27,292)78,844 
Operating profit128,132 162,937 380,957 580,444 
Other income, net— 36,943 5,867 36,943 
Non-operating pension costs2,947 3,424 10,412 10,424 
Interest expense61,643 32,847 122,503 101,363 
Interest income6,014 3,173 13,127 6,679 
Income before income taxes69,556 166,782 267,036 512,279 
Provision for income taxes21,154 39,351 65,821 127,003 
Income before equity in earnings of affiliates48,402 127,431 201,215 385,276 
Equity in earnings of affiliates, net of tax2,807 3,627 6,218 8,795 
Net income51,209 131,058 207,433 394,071 
Net income attributable to noncontrolling interests(288)(309)(524)(354)
Net income attributable to Sonoco$50,921 $130,749 $206,909 $393,717 
Weighted average common shares outstanding:
Basic98,683 98,337 98,616 98,276 
Diluted99,267 98,912 99,221 98,800 
Per common share:
Net income attributable to Sonoco:
Basic$0.52 $1.33 $2.10 $4.01 
Diluted$0.51 $1.32 $2.09 $3.98 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
4


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (unaudited)
(Dollars in thousands)
 
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Net income$51,209 $131,058 $207,433 $394,071 
Other comprehensive income/(loss):
     Foreign currency translation adjustments35,922 (49,024)(17,272)4,474 
     Changes in defined benefit plans, net of tax1,036 3,401 3,158 2,554 
Changes in derivative financial instruments, net of tax60 (1,724)(1,432)2,218 
Other comprehensive income/(loss)37,018 (47,347)(15,546)9,246 
Comprehensive income:88,227 83,711 191,887 403,317 
Less: Net income attributable to noncontrolling interests(288)(309)(524)(354)
Less: 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 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
5

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN TOTAL EQUITY (unaudited)
(Dollars and shares in thousands)

Total EquityCommon SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2023$2,431,835 97,957 $7,175 $159,047 $(366,262)$2,624,380 $7,495 
Net income65,273 65,177 96 
Other comprehensive income/(loss):
Translation loss(19,786)(19,319)(467)
Defined benefit plan adjustment, net of tax43 43 
Derivative financial instruments, net of tax169 169 
Other comprehensive loss(19,574)(19,107)(467)
Dividends(50,348)(50,348)
Issuance of stock awards204 460 204 
Shares repurchased(9,139)(162)(9,139)
Share-based compensation8,325 8,325 
Other906 906 
March 31, 2024$2,427,482 98,255 $7,175 $159,343 $(385,369)$2,639,209 $7,124 
Net income90,951 90,811 140 
Other comprehensive income/(loss):
Translation loss(33,408)(33,366)(42)
Defined benefit plan adjustment, net of tax2,079 2,079 
Derivative financial instruments, net of tax(1,661)(1,661)
Other comprehensive loss(32,990)(32,948)(42)
Dividends(51,347)(51,347)
Issuance of stock awards181 4 181 
Shares repurchased(23)(1)(23)
Share-based compensation6,656 6,656 
Other957 957 
June 30, 2024$2,441,867 2,441,867 98,258 $7,175 $167,114 $(418,317)$2,678,673 $7,222 
Net income51,209 50,921 288 
Other comprehensive income:
Translation gain
35,922 35,211 711 
Defined benefit plan adjustment, net of tax1,036 1,036 
Derivative financial instruments, net of tax60 60 
Other comprehensive income37,018 36,307 711 
Dividends(51,352)(51,352)
Issuance of stock awards265 — 265 
Shares repurchased(10)— (10)
Share-based compensation7,682 7,682 
Other481 481 
September 29, 2024$2,487,160 98,258 $7,175 $175,532 $(382,010)$2,678,242 $8,221 

6

Total
Equity		Common SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2022$2,072,797 97,645 $7,175 $140,539 $(430,083)$2,348,183 $6,983 
Net income/(loss)148,264 148,319 (55)
Other comprehensive income:
Translation gain31,808 31,569 239 
Defined benefit plan adjustment, net of tax916 916 
Derivative financial instruments, net of tax2,514 2,514 
Other comprehensive income35,238 34,999 239 
Dividends(48,203)(48,203)
Issuance of stock awards472 485 472 
Shares repurchased(10,576)(175)(10,576)
Share-based compensation7,573 7,573 
April 2, 2023$2,205,565 97,955 $7,175 $138,008 $(395,084)$2,448,299 $7,167 
Net income114,749 114,649 $100 
Other comprehensive income/(loss):
Translation gain/(loss)21,690 21,988 (298)
Defined benefit plan adjustment, net of tax(1,763)(1,763)
Derivative financial instruments, net of tax1,428 1,428 
Other comprehensive income/(loss)21,355 21,653 (298)
Dividends(50,180)(50,180)
Issuance of stock awards222 1 222 
Shares repurchased(26)— (26)
Share-based compensation7,637 7,637 
July 2, 2023$2,299,322 97,956 $7,175 $145,841 $(373,431)$2,512,768 $6,969 
Net income131,058 130,749 $309 
Other comprehensive income/(loss):
Translation loss(49,024)(48,356)(668)
Defined benefit plan adjustment, net of tax3,401 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 awards397 — 397 
Shares repurchased(3)— (3)
Share-based compensation5,913 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)
7

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
Nine Months Ended
September 29, 2024October 1, 2023
Cash Flows from Operating Activities:
Net income$207,433 $394,071 
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments23,195 26,122 
Depreciation, depletion and amortization270,691 249,387 
Share-based compensation expense22,663 21,123 
Equity in earnings of affiliated companies, net(6,218)(8,795)
Cash dividends from affiliated companies5,624 7,881 
Net gain on disposition of assets(529)(59,050)
Net loss/(gain) on divestiture of business and other assets27,292 (54,842)
Remeasurement gain of investment in affiliated companies(6,012)— 
Pension and postretirement plan expense13,068 12,679 
Pension and postretirement plan contributions(14,680)(10,311)
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:
Trade accounts receivable(182,626)(84,342)
Inventories(6,703)277,389 
Payable to suppliers73,504 (125,712)
Prepaid expenses(38,851)(14,285)
Income taxes payable and other income tax items23,274 9,549 
Accrued expenses and other assets and liabilities43,622 (9,536)
Net cash provided by operating activities437,638 616,877 
Cash Flows from Investing Activities:
Purchases of property, plant and equipment(271,332)(254,874)
Cost of acquisitions, net of cash acquired(3,743)(313,362)
Proceeds from the sale of business, net81,212 31,147 
Proceeds from the sale of assets, net4,515 72,737 
Proceeds from settlement of net investment hedge9,068 — 
Investment in affiliated companies(10,000)(7,500)
Other net investing activities12,221 12,123 
Net cash used by investing activities(178,059)(459,729)
Cash Flows from Financing Activities:
Net proceeds from issuance of debt1,813,754 905,601 
Principal repayment of debt(133,644)(878,513)
Net change in commercial paper33,983 — 
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 provided/(used) by financing activities1,529,498 (129,069)
Effects of Exchange Rate Changes on Cash(10,381)2,423 
Net Increase in Cash and Cash Equivalents1,778,696 30,502 
Cash and cash equivalents at beginning of period151,937 227,438 
Cash and cash equivalents at end of period$1,930,633 $257,940 
See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
8
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


Note 1: Basis of Interim Presentation
In the opinion of the management of Sonoco Products Company (the “Company” or “Sonoco”), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments, unless otherwise stated) necessary to state fairly the consolidated financial position, results of operations and cash flows for the interim periods reported herein. Operating results for the three- and nine-month periods ended 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.
As previously disclosed, effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within its Consumer Packaging segment in order to streamline operations, enhance customer service, and better position the business for accelerated growth. As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources. As a result of these changes, the Company’s consumer thermoformed businesses moved from the All Other group of businesses to the Consumer Packaging segment. The Company’s Industrial Paper Packaging segment was not affected by these changes. All prior year segment results presented herein have been recast to conform to the new presentation.

Note 2: New Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which modifies the rules on income tax disclosures to require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company will begin providing the enhanced reportable segment financial disclosures effective with its Annual Report on Form 10-K for the year ending December 31, 2024.
In September 2022, the FASB issued ASU 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” The amendments in this ASU require that a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs in each annual reporting period, including a description of key payment terms, amounts outstanding, and a rollforward of the outstanding obligation. In each interim reporting period, the amount outstanding requires disclosure. The amendments were effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this standard in the first quarter of 2023, with the exception of the amendment on rollforward information, which will be provided in the Company’s Annual Report on Form 10-K for the year ending December 31, 2024.
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.

9
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 3: Acquisitions and Divestitures
Acquisitions
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 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. 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. 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 September 29, 2024. With the acquisition of Inapel, the Company added approximately 500 employees and two manufacturing locations in the São Paulo region of Brazil. The financial results of Inapel are included in the Company’s Consumer Packaging segment.
The Company’s initial allocation of the assets acquired and liabilities assumed in the acquisition of Inapel, as well as revised preliminary fair values reflecting adjustments made during the measurement period, are as follows:
Initial AllocationMeasurement Period AdjustmentsPreliminary Allocation
Trade accounts receivable$30,301 $(133)$30,168 
Other receivables6,088 (465)5,623 
Inventories9,269 — 9,269 
Prepaid expenses1,430 — 1,430 
Property, plant and equipment11,456 17,425 28,881 
Right of use asset - operating leases217 — 217 
Other intangible assets8,653 188 8,841 
Goodwill15,704 (7,454)8,250 
Other assets793 — 793 
Payable to suppliers(15,899)2,951 (12,948)
Accrued expenses and other(5,733)(1,350)(7,083)
Noncurrent operating lease liabilities(117)— (117)
Deferred income taxes(2,934)(6,000)(8,934)
Total purchase price, net of cash acquired$59,228 $5,162 $64,390 
The allocation of the purchase price of Inapel to the tangible and intangible assets acquired and liabilities assumed, as reflected under the heading “Preliminary Allocation” in the table above, is based on the Company’s preliminary determinations of fair value using information currently available. Management is continuing to finalize its valuation of certain assets and liabilities including, but not limited to, inventory; property, plant and equipment; goodwill; other intangible assets; and deferred income taxes. The Company expects to complete its valuations during the fourth quarter of 2024.
10
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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. Prior to completing the acquisitions, the Company held a 35% ownership interest in the RTS Packaging joint venture which was formed in 1997 and combined the former protective packaging operations of WestRock and Sonoco to market recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals. The financial results of RTS Packaging and the Chattanooga Mill are included in the Company’s Industrial Paper Packaging segment.
On September 8, 2023, the fair value of the Company’s 35% 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 ownership interest in RTS Packaging
59,472 
Final working capital adjustment452 
Settlement of preexisting relationships1,235 
Purchase consideration transferred$374,547 
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:
11
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Initial AllocationMeasurement Period AdjustmentsFinal Allocation
Trade accounts receivable$17,488 $— $17,488 
Inventories20,209 (947)19,262 
Prepaid expenses2,720 (589)2,131 
Property, plant and equipment73,483 753 74,236 
Right of use asset - operating leases34,604 290 34,894 
Other intangible assets199,560 (8,995)190,565 
Goodwill92,657 14,909 107,566 
Other assets2,465 (412)2,053 
Payable to suppliers(7,320)— (7,320)
Accrued expenses and other(15,167)(25)(15,192)
Notes payable and current portion of long-term debt(24)— (24)
Noncurrent operating lease liabilities(29,905)— (29,905)
Pension and other postretirement benefits(10,761)(768)(11,529)
Long-term debt(1,942)— (1,942)
Deferred income taxes(3,419)(2,502)(5,921)
Other long-term liabilities(3,293)1,478 (1,815)
Net assets acquired$371,355 $3,192 $374,547 
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 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 nine-month period ended September 29, 2024. The Company believes that these acquisitions were not material to the periods presented and are therefore not subject to the ASC 805 requirement to provide supplemental pro-forma financial information. Accordingly, this information is not presented herein.
Divestiture of Businesses
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.
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 (“Black Diamond”) for cash proceeds of $80,267. This business provided foam components and integrated material solutions for various industrial end markets. This sale was the result of the Company’s continuing evaluation of its business portfolio and is consistent with the Company’s strategic and investment priorities. 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. 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.
12
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

On July 1, 2023, the Company completed the sale of its U.S. BulkSak business, which consisted of the manufacturing and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners and was a part of the Company’s Industrial Paper Packaging segment, to U.S. BulkSak Holdings, LLC. The cash selling price, as adjusted for 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 “(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”). 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 “(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 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.
Sale of Assets
With the completion of Project Horizon, the Company’s project to convert the corrugated medium machine in Hartsville, South Carolina, to produce uncoated recycled paperboard, the Company now produces paper exclusively from recycled fibers and no longer requires natural tree fiber for production. Accordingly, on March 29, 2023, the Company sold its timberland properties, 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 “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.
Additional Ownership Investment
During the second quarter of 2024, the Company increased its ownership investment in a small South Carolina-based designer and manufacturer of sustainable protective packaging solutions from 20.5% to 39.9%. The Company acquired its initial ownership interest in June 2022. 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 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.
13
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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.
Note 4: Shareholders’ Equity
Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Numerator:
Net income attributable to Sonoco$50,921 $130,749 $206,909 $393,717 
Denominator:
Weighted average common shares outstanding:
Basic98,683 98,337 98,616 98,276 
Dilutive effect of share-based compensation584 575 605 524 
Diluted99,267 98,912 99,221 98,800 
Net income attributable to Sonoco per common share:
Basic$0.52 $1.33 $2.10 $4.01 
Diluted$0.51 $1.32 $2.09 $3.98 
Cash dividends$0.52 $0.51 $1.55 $1.51 
No adjustments were made to “Net income attributable to Sonoco” in the computations of net income attributable to Sonoco per common share.
Anti-dilutive Securities
Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes the proceeds from the exercise of all dilutive stock appreciation rights (“SARs”) are used to repurchase the Company’s common stock. Certain SARs are not dilutive because either the exercise price is greater than the average market price of the stock during the reporting period or assumed repurchases from proceeds from the exercise of the SARs were anti-dilutive. These SARs may become dilutive in the future if the market price of the Company’s common stock appreciates.
The average numbers of SARs that were anti-dilutive and, therefore, not included in the computation of diluted earnings per share during the three- and nine-month periods ended September 29, 2024 and October 1, 2023 were as follows (in thousands):
14
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Anti-dilutive stock appreciation rights455338378341
Stock Repurchases
On April 20, 2021, the Company’s Board of Directors (the “Board”) authorized the repurchase of the Company’s common stock in an aggregate amount of up to $350,000. 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, 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 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
On February 14, 2024, the Board declared a regular quarterly dividend of $0.51 per share. This dividend was paid on March 8, 2024 to all shareholders of record as of February 28, 2024.
On April 17, 2024, the Board declared a regular quarterly dividend of $0.52 per share. This dividend was paid on June 10, 2024 to all shareholders of record as of May 10, 2024.
On July 17, 2024, the Board declared a regular quarterly dividend of $0.52 per share. 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.
Note 5: Restructuring and Asset Impairments
Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking more cost-effective means and structures to serve its customers and to respond to changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company’s operating costs. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope, nature, and location of the restructuring activities.
Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Restructuring and restructuring-related asset impairment charges$8,190 $18,110 $59,058 $52,981 
Other asset impairments— — — — 
Restructuring/Asset impairment charges$8,190 $18,110 $59,058 $52,981 

15
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Severance and termination benefits$2,649 $9,736 $26,742 $19,370 
Asset impairments2,501 6,123 22,844 26,122 
Other costs3,040 2,251 9,472 7,489 
Restructuring and restructuring-related asset impairment charges$8,190 $18,110 $59,058 $52,981 
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 EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Consumer Packaging$4,509 $9,784 $20,597 $16,479 
Industrial Paper Packaging3,798 6,430 34,138 32,961 
All Other— 270 1,362 1,188 
Corporate(117)1,626 2,961 2,353 
Restructuring and restructuring-related asset impairment charges$8,190 $18,110 $59,058 $52,981 
Restructuring and restructuring-related asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company’s Condensed Consolidated Statements of Income.
The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” in the Company’s Condensed Consolidated Balance Sheets:
Severance
and
Termination
Benefits		Asset
Impairments/
Disposal
of Assets		Other
Costs		Total
Accrual Activity
Liability at December 31, 2023
$14,315 $— $1,638 $15,953 
2024 charges26,742 22,844 9,472 59,058 
Cash (payments)/receipts(23,893)4,221 (8,729)(28,401)
Asset writedowns/disposals— (27,065)— (27,065)
Foreign currency translation191 — (16)175 
Liability at September 29, 2024
$17,355 $— $2,365 $19,720 
“Severance and termination benefits” during the first nine 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, Greece (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.
16
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

“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.

Note 6: Accumulated Other Comprehensive Loss
The following table summarizes the components of accumulated other comprehensive loss and the changes in the balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the nine-month periods ended September 29, 2024 and October 1, 2023:
Foreign
Currency
Items		Defined
Benefit
Pension Items		Cash
Flow Hedges		Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2023
$(267,578)$(99,627)$943 $(366,262)
Other comprehensive (loss) before reclassifications
(20,387)(253)(1,499)(22,139)
Amounts reclassified from accumulated other comprehensive loss to net income2,913 3,411 67 6,391 
Other comprehensive (loss)/income(17,474)3,158 (1,432)(15,748)
Balance at September 29, 2024
$(285,052)$(96,469)$(489)$(382,010)
Balance at December 31, 2022
$(338,316)$(90,973)$(794)$(430,083)
Other comprehensive income/(loss) before reclassifications3,168 (4,045)5,111 4,234 
Amounts reclassified from accumulated other comprehensive loss to net income2,033 6,599 (3,193)5,439 
Amounts reclassified from accumulated other comprehensive loss to property, plant, and equipment— — 300 300 
Other comprehensive income
5,201 2,554 2,218 9,973 
Balance at October 1, 2023
$(333,115)$(88,419)$1,424 $(420,110)


17
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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 EndedNine Months Ended
Details about Accumulated Other
Comprehensive
Loss Components		September 29,
2024		October 1,
2023		September 29,
2024		October 1,
2023		Affected Line Item in
the Condensed Consolidated
Statements of Income
Foreign currency items
Loss on RTS Packaging investment(a)
$— $(2,033)$— $(2,033)Other income, net
Currency translation adjustment loss on Protexic sale(a)
— — (2,913)— 
(Loss)/Gain on divestiture of business and other assets
— (2,033)(2,913)(2,033)
Net income
Gains/(losses) on cash flow hedges
Foreign exchange contracts(b)
(513)3,195 153 6,772 Net sales
Foreign exchange contracts(b)
(86)(1,180)(225)(2,552)Cost of sales
Commodity contracts(b)
(21)— (21)(32)Cost of sales
(620)2,015 (93)4,188 Income before income taxes
        Income tax impact185 (558)26 (995)Provision for income taxes
(435)1,457 (67)3,193 Net income
Defined benefit pension items
Pension-related loss upon purchase of remaining ownership interest in RTS Packaging joint venture(a)
— (4,756)— (4,756)
Other income, net
Effect of settlement loss(c)
(18)(16)(529)(765)Non-operating pension costs
Amortization of defined benefit pension items(c)
(1,198)(1,103)(3,627)(3,306)Non-operating pension costs
(1,216)(5,875)(4,156)(8,827)Income before income taxes
        Income tax impact108 1,478 745 2,228 Provision for income taxes
(1,108)(4,397)(3,411)(6,599)Net income
Total reclassifications for the period$(1,543)$(4,973)$(6,391)$(5,439)Net income
 
(a) See Note 3 for additional details.
(b) See Note 10 for additional details.
(c) See Note 12 for additional details.

18
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


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
September 29, 2024
Three Months Ended
October 1, 2023
Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount		Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount
Foreign currency items:
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 income/(loss) from foreign currency items30,458 4,753 35,211 (48,356)— (48,356)
Defined benefit pension items:
Other comprehensive (loss)/income before reclassifications(82)10 (72)(1,137)141 (996)
Amounts reclassified from accumulated other comprehensive loss to net income(b)
1,216 (108)1,108 5,875 (1,478)4,397 
Net other comprehensive income/(loss) from defined benefit pension items1,134 (98)1,036 4,738 (1,337)3,401 
Gains and losses on cash flow hedges:
Other comprehensive (loss)/income before reclassifications(c)
(465)90 (375)(369)102 (267)
Amounts reclassified from accumulated other comprehensive loss to net income(c)
620 (185)435 (2,015)558 (1,457)
Net other comprehensive income/(loss) from cash flow hedges155 (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.
(b) See Note 12 for additional details.
(c) See Note 10 for additional details.


19
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


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, 2024Nine Months Ended October 1, 2023
Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount		Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount
Foreign currency items:
Net other comprehensive (loss)/income from foreign currency items$(21,610)$1,223 $(20,387)$3,168 $— $3,168 
Amounts reclassified from accumulated other comprehensive loss to net income(a)
2,913 — 2,913 2,033 — 2,033 
Net other comprehensive (loss)/income from foreign currency items(18,697)1,223 (17,474)5,201 — 5,201 
Defined benefit pension items:
Other comprehensive (loss)/income before reclassifications(287)34 (253)(5,586)1,541 (4,045)
Amounts reclassified from accumulated other comprehensive loss to net income(b)
4,156 (745)3,411 8,827 (2,228)6,599 
Net other comprehensive income/(loss) from defined benefit pension items3,869 (711)3,158 3,241 (687)2,554 
Gains and losses on cash flow hedges:
Other comprehensive (loss)/income before reclassifications(c)
(2,073)574 (1,499)6,511 (1,400)5,111 
Amounts reclassified from accumulated other comprehensive loss to net income(c)
93 (26)67 (4,188)995 (3,193)
Amounts reclassified from accumulated other comprehensive loss to property, plant and equipment(c)
— — — 401 (101)300 
Net other comprehensive (loss)/income from cash flow hedges(1,980)548 (1,432)2,724 (506)2,218 
Other comprehensive (loss)/income$(16,808)$1,060 $(15,748)$11,166 $(1,193)$9,973 

(a) See Note 3 for additional details.
(b) See Note 12 for additional details.
(c) See Note 10 for additional details.

20
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 7: Goodwill and Other Intangible Assets
Goodwill
A summary of the changes in goodwill for the nine-month period ended September 29, 2024 is as follows: 

Consumer
Packaging		Industrial Paper PackagingAll OtherTotal
Goodwill at December 31, 2023$1,056,241 $506,406 $248,007 $1,810,654 
Divestitures— — (16,559)(16,559)
Foreign currency translation(371)(5,578)275 (5,674)
Measurement period adjustments(7,454)— — (7,454)
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. See Note 3 for additional information. Goodwill activity reflected under the caption “Measurement period adjustments” relates to the prior year acquisition of Inapel. See Note 3 for additional information.
The Company assesses goodwill for impairment annually during the third quarter, or from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. The Company completed its most recent annual goodwill impairment testing during the third quarter of 2024 and analyzed certain qualitative and quantitative factors in determining whether a goodwill impairment existed. The Company’s assessments reflected a number of significant management assumptions and estimates including the Company’s forecast of sales growth, gross profit margins, and discount rates. Changes in these assumptions could materially impact the Company’s conclusions. 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 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, the 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 to 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.
21
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Other Intangible Assets
A summary of other intangible assets as of September 29, 2024 and December 31, 2023 is as follows:    
September 29,
2024		December 31,
2023
Other Intangible Assets, gross:
Patents$29,305 $29,304 
Customer lists1,228,536 1,282,689 
Trade names41,896 41,836 
Proprietary technology56,862 56,857 
Other6,703 6,916 
Total Other Intangible Assets, gross$1,363,302 $1,417,602 
Accumulated Amortization:
Patents$(20,755)$(19,549)
Customer lists(499,376)(493,778)
Trade names(22,949)(18,845)
Proprietary technology(31,919)(29,013)
Other(2,687)(2,747)
Total Accumulated Amortization(577,686)(563,932)
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 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. See Note 3 for additional information.
Other intangible assets are amortized using the straight-line method over their respective useful lives when management has determined that the straight-line method approximates the pattern of consumption of the respective intangible assets or in relation to the asset’s specific pattern of consumption if management has determined that the straight-line method does not provide a fair approximation of the consumption of benefits. These lives generally range from three to forty years. The Company has no intangible assets with indefinite lives.
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.

Note 8: Supply Chain Financing
The Company facilitates voluntary supply chain financing programs (the “SCF Programs”) to provide certain of its suppliers with the opportunity to sell receivables due from the Company to the participating financial institutions in the programs. Such sales are conducted at the sole discretion of both the suppliers and the financial institutions on a nonrecourse basis at a rate that leverages the Company’s credit rating and thus might be more beneficial to the supplier. No guarantees are provided by the Company or any of its subsidiaries under the SCF Programs. The Company’s responsibility under the agreements is limited to making payment to the financial institutions for confirmed invoices based on the terms originally negotiated with its suppliers. Both the Company and the financial institutions have the right to terminate the SCF Programs by providing 30 days prior written notice to the other party. The Company does not enter into any agreements with suppliers regarding their participation in the SCF Programs.


22
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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 ItemSeptember 29, 2024December 31, 2023
Payable to suppliers(a)
$48,035 $35,847 
(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.

Note 9: Debt
Details of the Company’s debt at September 29, 2024 and December 31, 2023 are as follows:
September 29,
2024		December 31, 2023
Commercial paper$33,983 $— 
Syndicated term loan due August 2028497,510 572,025 
1.800% notes due February 2025
399,734 399,149 
4.450% notes due September 2026
496,358 — 
2.250% notes due February 2027
298,800 298,421 
4.600% notes due September 2029
594,184 — 
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
689,490 — 
5.750% notes due November 2040
536,274 536,246 
Other foreign denominated debt68,100 78,800 
Finance lease obligations84,220 88,994 
Other debt10,514 17,100 
Total debt4,802,148 3,083,000 
Less current portion and short-term notes(481,706)(47,132)
Long-term debt$4,320,442 $3,035,868 
On May 3, 2024, the Company entered into an Amended and Restated Credit Agreement (the “Agreement”) to extend the maturity and make certain other changes to the terms under the Company’s existing five-year credit agreement dated June 21, 2021. The Agreement increases the commitments under the Company’s revolving credit facility by $350,000 to $1,250,000 and extends the maturity date to May 3, 2029. The Company also increased its $500,000 commercial paper program by $750,000 to $1,250,000. The commercial paper program will continue to be supported by the revolving credit facility. 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.
23
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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 AmountIssuance Costs and DiscountsNet ProceedsInterest RateMaturity
2026 Notes$500,000 (3,697)$496,303 4.450%September 1, 2026
2029 Notes600,000 (5,851)594,149 4.600%September 1, 2029
2034 Notes700,000 (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 September 29, 2024, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

Note 10: 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.
September 29, 2024December 31, 2023
Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Long-term debt, net of current portion$4,320,442 $4,255,117 $3,035,868 $2,890,009 

The carrying value of cash and cash equivalents and short-term debt approximates fair value. 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.
24
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Cash Flow Hedges
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, which have maturities ranging from July 2024 to December 2024, qualify as cash flow hedges under U.S. generally accepted accounting principles (“GAAP”). For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. 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.
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 September 29, 2024, these contracts included natural gas swaps covering approximately 20 thousand metric million British thermal units (“MMBTUs”). These contracts represented approximately 0.9% of anticipated usage in North America for the remainder of 2024. The Company also has certain natural gas hedges that it does not treat as cash flow hedges. See “Non-Designated Derivatives” below for a discussion of these hedges. At 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 September 29, 2024 were as follows (in thousands):
CurrencyActionQuantity
Colombian pesopurchase5,942,202 
Mexican pesopurchase140,315 
Polish zlotypurchase32,938 
Danish kronepurchase11,593 
Swedish kronasell(2,124)
Czech korunapurchase25,869 
Canadian dollarpurchase8,239 
Europurchase593 
Turkish lirapurchase11,092 
Brazilian realpurchase13,088 
British poundsell(331)
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.
25
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Net Investment Hedge
In 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $500,000 to effectively convert a portion of the Company’s fixed-rate U.S. dollar denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The swap agreements, which had a maturity of December 18, 2026, provided for the Company to receive semi-annual interest payments in U.S. dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate. The risk management objective of entering into the swap agreements was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros. The agreements were designated as net investment hedges for accounting purposes. On April 15, 2024, as a result of the strengthening of the U.S. dollar against the euro, as well as a reduction in the differential between U.S. and European interest rates, the Company terminated its swap agreements and received a net cash settlement of $9,068. The foreign currency translation gain of approximately $3,143, net of tax, is included as a component of “Accumulated other comprehensive loss.”
Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500,000 to effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The new swap agreements, which have a maturity of May 1, 2027, share the same risk management objective as the terminated cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.
The gain or loss on the net investment hedge derivative instruments is included in the “Foreign currency translation” component of “Accumulated other comprehensive loss” until the net investment is sold, diluted, or liquidated. Interest payments received for the cross-currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Condensed Consolidated Statements of Income. The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S. dollar exchange rate market.
The fair value of the Company’s net investment hedges 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
The Company routinely enters into other derivative contracts which are not designated for hedge accounting treatment under ASC 815. As such, changes in fair value of these non-designated derivatives are recorded directly to income and expense in the periods that they occur. Cash flows from derivative financial instruments not designated as hedges are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.
Foreign Currency Hedges
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 September 29, 2024, were as follows (in thousands):
CurrencyActionQuantity
Colombian pesopurchase64,773,834 
Mexican pesopurchase364,260 
Canadian dollarpurchase6,979 
Thai bahtsell(11,455)
Commodity Hedges
The Company has entered into non-designated derivative contracts to manage the cost of anticipated purchases of natural gas. 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.
26
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Interest Rate Hedges
In anticipation of the offering of the Notes, the 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). The 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 derivatives 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:
DescriptionBalance Sheet LocationSeptember 29, 2024December 31, 2023
Derivatives designated as hedging instruments:
Commodity ContractsPrepaid expenses$32 $67 
Commodity ContractsAccrued expenses and other(36)(108)
Foreign Exchange ContractsPrepaid expenses480 2,525 
Foreign Exchange ContractsAccrued expenses and other(1,134)(1,024)
Net Investment HedgePrepaid expense4,836 5,567 
Net Investment HedgeOther liabilities(23,777)(10,640)
Derivatives not designated as hedging instruments:
Commodity ContractsPrepaid expenses99 12 
Commodity ContractsOther assets346 — 
Commodity ContractsAccrued expenses and other(3,265)(6,782)
Commodity ContractsOther liabilities(33)— 
Foreign Exchange ContractsPrepaid expenses52 130 
Foreign Exchange ContractsAccrued expenses and other(382)(159)
While certain of the Company’s derivative contract arrangements with its counterparties provide for the ability to settle contracts on a net basis, the Company reports its derivative positions on a gross basis. There are no collateral arrangements or requirements in these agreements.
27
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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:
DescriptionAmount of Gain or
(Loss) Recognized
in OCI on
Derivatives		Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income		Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
Derivatives in Cash Flow Hedging Relationships:
Three-month period ended September 29, 2024
Foreign Exchange Contracts$(444)Net sales$(513)
Cost of sales(86)
Commodity Contracts(21)Cost of sales(21)
Three-month period ended October 1, 2023
Foreign Exchange Contracts$(509)Net sales$3,195 
Cost of sales(1,180)
Commodity Contracts140 Cost of sales— 
 
DescriptionGain or (Loss)
Recognized		Location of Gain or (Loss) Recognized in
Income Statement
Derivatives not Designated as Hedging Instruments:
Three-month period ended September 29, 2024
Commodity Contracts$(1,377)Cost of sales
Foreign Exchange Contracts(1,573)Selling, general and administrative
Three-month period ended October 1, 2023
Commodity Contracts$(2,118)Cost of sales
Foreign Exchange Contracts579 Selling, general and administrative

Three-month period ended September 29, 2024Three-month period ended October 1, 2023
DescriptionRevenueCost of
sales		RevenueCost of
sales
Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income$(513)$(107)$3,195 $(1,180)
Gain or (loss) on cash flow hedging relationships:
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into net income$(513)$(86)$3,195 $(1,180)
Commodity contracts:
Amount of gain reclassified from accumulated other comprehensive loss into net income$— $(21)$— $— 
28
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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:
DescriptionAmount of Gain or
(Loss) Recognized
in OCI on
Derivatives		Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income		Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
Derivatives in Cash Flow Hedging Relationships:
Nine-month period ended September 29, 2024
Foreign Exchange Contracts$(2,094)Net sales$153 
Cost of sales(225)
Commodity Contracts16 Cost of sales(21)
Nine-month period ended October 1, 2023
Foreign Exchange Contracts$6,517 Net sales$6,772 
Cost of sales(2,552)
Commodity Contracts(6)Cost of sales(32)
 
DescriptionGain or (Loss)
Recognized		Location of Gain or (Loss) Recognized in
Income Statement
Derivatives not Designated as Hedging Instruments:
Nine-month period ended September 29, 2024
Commodity Contracts$(3,465)Cost of sales
Foreign Exchange Contracts(4,039)Selling, general and administrative
Nine-month period ended October 1, 2023
Commodity Contracts$(13,635)Cost of sales
Foreign Exchange Contracts4,651 Selling, general and administrative

Nine-month period ended September 29, 2024Nine-month period ended October 1, 2023
DescriptionRevenueCost of
sales		RevenueCost of
sales
Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income$153 $(246)$6,772 $(2,584)
Gain or (loss) on cash flow hedging relationships:
Foreign exchange contracts:
Amount of gain/(loss) reclassified from accumulated other comprehensive income into net income$153 $(225)$6,772 $(2,552)
Commodity contracts:
Amount of gain reclassified from accumulated other comprehensive income into net income$— $(21)$— $(32)

29
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 11: Fair Value Measurements
Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 –Observable inputs such as quoted market prices in active markets;
Level 2 –Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3 –Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
                     
Assets that are calculated at Net Asset Value per share (“NAV”) are not required to be categorized within the fair value hierarchy.
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:
DescriptionSeptember 29, 2024Assets measured
at NAV		Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$(4)$— $— $(4)$— 
Foreign exchange contracts(654)— — (654)— 
Net investment hedge(18,941)— — (18,941)— 
Non-hedge derivatives, net:
Commodity contracts(2,853)— — (2,853)— 
Foreign exchange contracts(330)— — (330)— 
DescriptionDecember 31, 2023Assets measured
at NAV		Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$(41)$— $— $(41)$— 
Foreign exchange contracts1,502 — — 1,502 — 
Net investment hedge(5,073)— — (5,073)— 
Non-hedge derivatives, net:
Commodity contracts(6,770)— — (6,770)— 
Foreign exchange contracts(29)— — (29)— 

As discussed in Note 10, the Company uses derivatives to mitigate the effect of commodity fluctuations, foreign currency fluctuations and, from time to time, interest rate movements. Fair value measurements for the Company’s derivatives are classified under Level 2 because such measurements are estimated based on observable inputs such as interest rates, yield curves, spot and future commodity prices and spot and future exchange rates.
None of the Company’s financial assets or liabilities are measured at fair value using significant unobservable inputs. There were no transfers in or out of Level 1 or Level 2 fair value measurements during the three- and nine-month periods ended September 29, 2024.
The Company has an investment in the preferred stock of a nonaffiliated private company. This investment is accounted for under the measurement alternative of cost less impairment, adjusted for any qualifying observable price changes on a non-recurring basis. Observable price changes would consist of Level 2 inputs based on privately negotiated transactions with the nonaffiliated company. The total investment in preferred stock of $21,212 is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheet as of September 29, 2024.
30
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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 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.

Note 12: 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, 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 EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Retirement Plans
Service cost$1,233 $704 $2,523 $2,083 
Interest cost4,340 4,770 14,175 13,462 
Expected return on plan assets(2,740)(2,515)(8,312)(7,257)
Amortization of prior service cost220 223 660 669 
Amortization of net actuarial loss1,106 1,074 3,350 3,221 
Effect of settlement loss18 16 529 765 
Net periodic benefit cost$4,177 $4,272 $12,925 $12,943 
Retiree Health and Life Insurance Plans
Service cost$45 $57 $133 $172 
Interest cost228 127 685 383 
Expected return on plan assets(97)(78)(292)(235)
Amortization of prior service cost95 — 287 — 
Amortization of net actuarial gain(223)(194)(670)(584)
Net periodic benefit cost/(income)$48 $(88)$143 $(264)
Settlement Charges
The Company recognized settlement charges 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 $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.
31
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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.
Note 13: Income Taxes
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. and non-U.S. 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 $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. However, future results may include favorable or unfavorable adjustments to estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. Additionally, the jurisdictions in which earnings or deductions are realized may differ from current estimates. As a result, the Company’s effective tax rate may fluctuate significantly on a quarterly basis. The Company has operations and pays taxes in many countries outside of the U.S. and taxes on those earnings are subject to varying rates. The Company is not dependent upon the favorable benefit of any one jurisdiction to an extent that the loss of such benefit would have a material effect on the Company’s overall effective tax rate. 
Note 14: Leases
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 five years. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.
As the implicit rate in the Company’s leases is normally not readily determinable, the Company generally calculates its lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. 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 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.
The Company completed the sale of Protexic on April 1, 2024. The divestiture included operating lease assets of $21,989 and operating lease liabilities of $22,396. 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 September 29, 2024 and December 31, 2023:
32
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

ClassificationBalance Sheet LocationSeptember 29, 2024December 31, 2023
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$314,611 $314,944 
Finance lease assetsOther Assets90,951 94,026 
Total lease assets$405,562 $408,970 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$51,702 $54,803 
Current finance lease liabilitiesNotes payable and current portion of debt23,986 18,791 
Total current lease liabilities75,688 73,594 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities269,251 265,454 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion60,234 70,203 
Total noncurrent lease liabilities329,485 335,657 
Total lease liabilities$405,173 $409,251 
Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. 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 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 EndedNine Months Ended
Lease CostSeptember 29, 2024October 1, 2023September 29, 2024October 1, 2023
Operating lease cost(a)$14,653 $14,075 $44,242 $41,377 
Finance lease cost:
     Amortization of lease asset(a)3,640 3,468 10,558 10,187 
     Interest on lease liabilities(b)1,017 1,146 3,095 3,519 
Variable lease cost(a) (c)11,691 9,525 34,719 30,198 
Impairment charges281 — 281 — 
Total lease cost$31,282 $28,214 $92,895 $85,281 
(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.
(c) Also includes short term lease costs, which are deemed immaterial.

33
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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, 2024October 1, 2023
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases $42,869 $41,406 
     Operating cash flows used by finance leases$3,095 $3,519 
     Financing cash flows used by finance leases$12,283 $12,359 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities$51,008 $11,529 
     Leased assets obtained in exchange for new finance lease liabilities$7,911 $5,783 
     Modification to leased assets for increase in operating lease liabilities$12,072 $2,357 
     Modification to leased assets for increase in finance lease liabilities $53 $12 
     Termination reclasses to decrease operating lease assets$(6,628)$(3,334)
     Termination reclasses to decrease operating lease liabilities$(7,011)$(3,834)
     Termination reclasses to decrease finance lease assets$(184)$— 
     Termination reclasses to decrease finance lease liabilities $(186)$(12)
Note 15: Revenue Recognition
The Company records revenue when control is transferred to the customer, which is either upon shipment or over time in cases where the Company is entitled to payment with margin for products produced that are customer specific without alternative use. The Company recognizes over time revenue under the input method as goods are produced. Revenue that is recognized at a point in time is recognized when the customer obtains control of the goods. Customers obtain control either when goods are delivered to the customer facility, if the Company is responsible for arranging transportation, or when picked up by the customer’s designated carrier. The Company commonly enters into Master Supply Arrangements with customers to provide goods and/or services over specific time periods. Customers submit purchase orders with quantities and prices to create a contract for accounting purposes. Shipping and handling expenses are included in “Cost of sales,” and freight charged to customers is included in “Net sales” in the Company’s Condensed Consolidated Statements of Income.
The Company has rebate agreements with certain customers. These rebates are recorded as reductions of revenue and are accrued using sales data and rebate percentages specific to each customer agreement. Accrued customer rebates are included in “Accrued expenses and other” in the Company’s Condensed Consolidated Balance Sheets.
Payment terms under the Company’s sales arrangements are short term, generally no longer than 120 days. The Company does provide prompt payment discounts to certain customers if invoices are paid within a predetermined period. Prompt payment discounts are treated as a reduction of estimated revenue and are determinable within a short time period following the sale.
The following table sets forth the effects of contract assets and liabilities from contracts with customers. Contract assets and liabilities are reported in “Other receivables” and “Accrued expenses and other,” respectively, in the Company’s Condensed Consolidated Balance Sheets.
September 29, 2024December 31, 2023
Contract Assets$57,513 $54,334 
Contract Liabilities(26,841)(24,973)

34
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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, 2024December 31, 2023
Contract
Asset		Contract
Liability		Contract
Asset		Contract
Liability
Beginning Balance$54,334 $(24,973)$56,008 $(22,423)
Acquired/sold as part of a business combination/divestiture
— 194 — (1,436)
Revenue deferred or rebates accrued— (44,757)— (53,464)
Recognized as revenue10,384 11,761 
Rebates paid to customers— 32,311 — 40,589 
Increases due to rights to consideration for customer specific goods produced, but not billed during the period57,513 — 54,334 — 
Transferred to receivables from contract assets recognized at the beginning of the period and acquired as part of business combinations(54,334)— (56,008)— 
Ending Balance$57,513 $(26,841)$54,334 $(24,973)

Contract assets represent goods produced without alternative use for which the Company is entitled to payment with margin prior to shipment. Upon shipment, the Company is entitled to bill the customer, and therefore amounts included in contract assets will be reduced with the recording of an account receivable as they represent an unconditional right to payment. Contract liabilities represent revenue deferred due to pricing mechanisms utilized by the Company in certain multi-year arrangements, volume rebates, and receipts of advance payments. For multi-year arrangements with pricing mechanisms, the Company will generally defer revenue during the first half of the arrangement and will release the deferral over the second half of the contract term. Contract assets and liabilities are generally short in duration given the nature of products produced by the Company.
The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended 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 September 29, 2024Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$754,314 $355,492 $90,483 $1,200,289 
  Europe114,943 91,138 15,952 222,033 
  Canada32,969 22,969 — 55,938 
  Asia25,492 55,888 572 81,952 
  Other55,793 59,595 266 115,654 
Total$983,511 $585,082 $107,273 $1,675,866 
35
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Three-month period ended October 1, 2023Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$765,243 $335,136 $122,494 $1,222,873 
  Europe119,511 91,175 14,941 225,627 
  Canada29,268 24,866 — 54,134 
  Asia24,828 59,284 628 84,740 
  Other45,990 69,574 7,481 123,045 
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 nine-month periods ended September 29, 2024 and October 1, 2023. The tables also include a reconciliation of disaggregated revenue with reportable segments.
Nine-month period ended September 29, 2024Consumer
Packaging		Industrial
Paper
Packaging		All OtherTotal
Primary Geographical Markets:
  United States$2,129,839 $1,073,073 $279,783 $3,482,695 
  Europe337,435 285,266 44,970 667,671 
  Canada99,166 73,155 — 172,321 
  Asia75,886 166,774 1,284 243,944 
  Other179,491 180,644 10,122 370,257 
Total$2,821,817 $1,778,912 $336,159 $4,936,888 
Nine-month period ended October 1, 2023Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$2,252,111 $1,035,849 $370,605 $3,658,565 
  Europe358,183 300,145 51,001 709,329 
  Canada89,860 76,029 — 165,889 
  Asia73,430 173,903 1,322 248,655 
  Other140,584 195,107 27,363 363,054 
Total$2,914,168 $1,781,033 $450,291 $5,145,492 
Note 16: Segment Reporting
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 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 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.
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SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The products produced and sold within the Consumer Packaging segment consist primarily of round and shaped rigid paper, steel and plastic containers; metal and peelable membrane ends, closures, and components; thermoformed plastic trays and applications; and high-barrier flexible packaging.
The primary products produced and sold within the Industrial Paper Packaging segment include paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboard.
The primary products produced 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 EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Net sales:
Consumer Packaging$983,511 $984,840 $2,821,817 $2,914,168 
Industrial Paper Packaging585,082 580,035 1,778,912 1,781,033 
  Total reportable segments1,568,593 1,564,875 4,600,729 4,695,201 
All Other107,273 145,544 336,159 450,291 
  Net Sales$1,675,866 $1,710,419 $4,936,888 $5,145,492 
Intersegment sales(1):
Consumer Packaging$4,163 $2,756 $12,237 $7,127 
Industrial Paper Packaging26,678 3,032 81,982 77,163 
  Total reportable segments30,841 5,788 94,219 84,290 
All Other1,875 1,740 5,525 6,374 
  Intersegment Sales$32,716 $7,528 $99,744 $90,664 
Segment operating profit(2):
Consumer Packaging$123,021 $116,800 $328,190 $314,408 
Industrial Paper Packaging70,206 75,006 203,008 256,413 
  Segment operating profit$193,227 $191,806 $531,198 $570,821 
(1) Intersegment sales are recorded at a market-related transfer price.
(2) Segment operating profit viewed by the Company’s management to evaluate segment performance does not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration and divestiture-related costs; changes in last-in, first-out inventory reserves; gains/losses from the sale of businesses or other assets; derivative gains/losses; or certain other items, if any, the exclusion of which the Company’s management believes improves the comparability and analysis of the ongoing operating performance of the business. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and the All Other group of businesses.






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SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The following table sets forth the reconciliation of segment operating profit to “Income before income taxes” for the periods presented.
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Segment operating profit
$193,227 $191,806 $531,198 $570,821 
All Other operating profit17,440 20,740 48,430 66,085 
Corporate
Restructuring/Asset impairment charges(8,190)(18,110)(59,058)(52,981)
Amortization of acquisition intangibles(22,645)(21,379)(68,095)(63,082)
(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 
         Net gains from derivatives210 3,308 3,981 1,513 
Other operating income/(charges), net(3)
273 (3,605)(851)(8,750)
Operating profit128,132 162,937 380,957 580,444 
Other income, net— 36,943 5,867 36,943 
Non-operating pension costs(2,947)(3,424)(10,412)(10,424)
Interest expense (4)
(61,643)(32,847)(122,503)(101,363)
Interest income6,014 3,173 13,127 6,679 
Income before income taxes$69,556 $166,782 $267,036 $512,279 
(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.

Note 17: Commitments and Contingencies
Pursuant to U.S. GAAP, accruals for estimated losses are recorded at the time information becomes available indicating that losses are probable and that the amounts are reasonably estimable. As is the case with other companies in similar industries, the Company faces exposure from actual or potential claims and legal proceedings from a variety of sources. Some of these exposures, as discussed below, have the potential to be material.
Environmental Matters
The Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates.
Spartanburg
In connection with its acquisition of Tegrant in November 2011, the Company 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 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 range of potential loss, if any, beyond the amounts accrued with respect to this exposure. However, the Company does not believe that the resolution of this matter has a reasonable possibility of having a material adverse effect on the Company’s financial statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Other environmental matters
The Company has been named as a potentially responsible party at several other environmentally contaminated sites. All of the sites are also the responsibility of other parties. 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 September 29, 2024 and December 31, 2023, the Company’s accrual for these other sites totaled $1,730 and $1,992, respectively.
Summary
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.
Other Legal Matters
In addition to those matters described above, the Company is subject to other various legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters could differ from management’s expectations, the Company does not believe the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company’s financial statements.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD LOOKING STATEMENTS
Statements included in this Quarterly Report on Form 10-Q that are not historical in nature, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, Sonoco Products Company (the “Company” or “Sonoco”) and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as “anticipate,” “assume,” “believe,” “can,” “consider,” “continue,” “could,” “develop,” “estimate,” “expect,” “forecast,” “future,” “goal,” “guidance,” “intend,” “is designed to,” “likely,” “maintain,” “may,” “might,” “objective,” “ongoing,” “opportunity,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “strategy,” “will,” “would,” or the negative thereof, and similar expressions identify forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:
•availability and supply of raw materials and energy, and offsetting high raw material and energy costs;
•the effects of economic downturns, inflation, volatility and other macroeconomic factors on the Company and its industry, including effects on consumers and customers;
•the resiliency of the Company’s operating model;
•reduced supply chain disruptions;
•consumer and customer actions in connection with political, social, and economic instability, war and other geopolitical tensions;
•improved productivity and cost containment, including cost savings from the Company’s investments;
•leveraging strong cash flow and financial position;
•costs, timing and effects of restructuring and portfolio simplification activities;
•the Company’s proposed acquisition of Titan Holdings I B.V. (“Eviosys”), including the satisfaction of conditions precedent thereto and the anticipated timing and financing thereof, and the anticipated benefits of the acquisition, including with respect to market leadership, strategic alignment, customer relationships, sustainability, innovation and cost synergies;
•effects and timing of, and anticipated costs, synergies and gains resulting from our other contemplated, pending and completed acquisitions and divestitures, including the Company’s acquisitions of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging, the remaining ownership interest in RTS Packaging, LLC (“RTS Packaging”), a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”), and Inapel Embalagens Ltda. (“Inapel”), the Company’s sale of its Sonoco Sustainability Solutions (“S3”) business, its U.S. and Mexico BulkSak businesses, its South Carolina timberland properties, and its Protective Solutions business (“Protexic”), the pending sale of two of its production facilities in China, and the potential divestitures of the Company’s ThermoSafe and thermoformed and flexible packaging (“TFP”) businesses;
•adequacy and anticipated amounts and uses of cash flows;
•capital allocation, including expected amounts of capital spending;
•the Company’s capital structure, including the incurrence of debt and the refinancing and repayment of debt;
•the Company’s ability to adhere to restrictive covenants in its debt agreements;
•financial and business strategies and the results expected of them;
•producing improvements in earnings;
•profitable sales growth and rates of growth;
•market opportunities and anticipated growth thereof;
•expected impact and costs of resolution of legal proceedings;
•extent of, and adequacy of provisions for, environmental liabilities;
•the Company’s ability to achieve its sustainability goals, including with respect to greenhouse gas emissions;
•adequacy of income tax provisions, realization of deferred tax assets, outcomes of uncertain tax issues and tax rates;
•goodwill impairment charges and fair values of reporting units;
•future asset impairment charges and fair values of assets;
•anticipated contributions to pension and postretirement benefit plans, fair values of plan assets, long-term rates of return on plan assets, and projected benefit obligations and payments;
•expected impact of implementation of new accounting pronouncements;
•creation of near-term and long-term value and returns for shareholders;
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SONOCO PRODUCTS COMPANY
•continued payment of dividends; and
•planned stock repurchases.

Such forward-looking statements are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements. Such risks, uncertainties and assumptions include, without limitation:
•ability to manage the mix of business and execute on the Company’s portfolio simplification strategy, including with respect to divestitures such as the potential divestitures of its ThermoSafe and TFP businesses;
•ability to identify suitable acquisitions at the levels needed to meet growth targets;
•ability to satisfy closing conditions and close acquisitions, including the pending acquisition of Eviosys, and to finance such acquisitions on acceptable terms;
•ability to receive regulatory approvals for the pending acquisition of Eviosys in a timely manner;
•ability to successfully integrate newly acquired businesses, including Eviosys, into the Company’s operations and realize expected cost savings, synergies and other anticipated benefits relating thereto within the expected time period, or at all;
•the potential impact of the consummation of newly acquired businesses, including Eviosys, on relationships with clients and other third parties;
•availability, transportation and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs or sanctions and escalating trade wars, and the impact of war, general regional instability and other geopolitical tensions (such as the ongoing conflict between Russia and Ukraine as well as the economic sanctions related thereto, and the ongoing conflicts in the Middle East), and the Company’s ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;
•costs of labor;
•work stoppages due to labor disputes;
•success of new product development, introduction and sales, including successful timing of new product or product innovation introductions;
•success of implementation of new manufacturing technologies and installation of manufacturing equipment, including the startup of new facilities and lines;
•consumer demand for products and changing consumer preferences, including changes related to inflation and other macroeconomic factors;
•ability to be the low-cost global leader in customer-preferred packaging solutions within targeted segments;
•competitive pressures, including new product development, and technological market leadership, reputation for quality, industry overcapacity, customer and supplier consolidation, and changes in competitors’ pricing for products;
•financial conditions of customers and suppliers;
•ability to maintain or increase productivity levels, contain or reduce costs, and maintain positive price/cost relationships;
•ability to negotiate or retain contracts with customers, including in segments with concentration of sales volume;
•inventory management strategies of customers;
•collection of receivables from customers;
•ability to improve margins and leverage cash flows and financial position;
•ability to attract and retain talented and qualified employees, managers, and executives;
•ability to profitably maintain and grow existing domestic and international business and market share;
•availability of credit to us, our customers and suppliers in needed amounts and on reasonable terms;
•effects of our indebtedness on our cash flow and business activities;
•fluctuations in interest rates and our borrowing costs;
•fluctuations in obligations and earnings of pension and postretirement benefit plans, including the timing of funding plan obligations, and the accuracy of assumptions of underlying projections of benefit plan obligations and payments, valuation of plan assets, and projections of long-term rates of return;
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SONOCO PRODUCTS COMPANY
•foreign currency exchange rate fluctuations, interest rate and commodity price risk and the effectiveness of related hedges;
•cost of employee and retiree medical, health, and life insurance benefits;
•resolution of income tax contingencies;
•changes in U.S. and foreign tariffs, tax rates, tax laws, regulations and interpretations thereof, including income, sales and use, property, value added, employment, and other taxes;
•accuracy in valuation of deferred tax assets;
•the adoption of new, or changes in, accounting standards or interpretations;
•accuracy of assumptions underlying projections related to goodwill impairment testing, and accuracy of management’s assessment of goodwill impairment;
•accuracy of assumptions underlying fair value measurements, accuracy of management’s assessments of fair value and fluctuations in fair value;
•ability to maintain effective disclosure controls and internal controls, including with regard to financial reporting, to prevent or detect errors or acts of fraud;
•liability for and costs of resolution of litigation, regulatory actions, or other legal proceedings;
•liability for and anticipated costs of environmental remediation actions;
•effects of environmental laws and regulations, including with respect to climate change and emissions reporting and the effectiveness of the final rules adopted by the Securities and Exchange Commission to enhance public company climate disclosures;
•operational disruptions at our major facilities;
•failure or disruptions in our information technology systems;
•loss of consumer or investor confidence;
•ability to protect our intellectual property rights;
•changes in laws and regulations relating to packaging for food products and foods packaged therein, other actions and public concerns about products packaged in our containers, or chemicals or substances used in raw materials or in the manufacturing process;
•changing consumer attitudes toward plastic packaging;
•changing climate and greenhouse gas effects;
•ability to meet environmental, sustainability and other social and governmental goals, including with respect to greenhouse gas emissions, and challenges in implementation thereof;
•actions of domestic or foreign government agencies, changes in laws and regulations affecting the Company, and increased costs of compliance;
•international, national, and local economic and market conditions and levels of unemployment;
•economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine and the ongoing conflict in Israel and Gaza), public health events, terrorist activities, and natural disasters; and
•inflation and the activities and operations in highly inflationary economies.
More information about the risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or forecasted in forward-looking statements is provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under Item 1A - “Risk Factors” and throughout other sections of that report and in other reports filed with the Securities and Exchange Commission. In light of these various risks, uncertainties and assumptions, the forward-looking events discussed in this Quarterly Report on Form 10-Q might not occur.
The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. You are, however, advised to review any further disclosures we make on related subjects, and about new or additional risks, uncertainties and assumptions, in our future filings with the Securities and Exchange Commission on Forms 10-K, 10-Q, and 8-K.
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COMPANY OVERVIEW
Sonoco is a multi-billion dollar global designer, developer, and manufacturer of a variety of highly-engineered and sustainable packaging products serving multiple end markets. As of September 29, 2024, the Company had more than 300 locations in 33 countries, serving some of the world’s best-known brands in some 85 nations. 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.
Sonoco competes in multiple product categories, with the majority of the Company’s revenues arising from products and services sold to consumer and industrial products companies for use in the packaging of their products for sale or shipment. The Company also manufactures uncoated recycled paperboard for both internal use and open market sale. Each of the Company’s operating units has its own sales staff and maintains direct sales relationships with its customers.
Sonoco’s goal is to increase its long-term profitability and return capital to its shareholders. Over the past several years, the Company has simplified its business portfolio around fewer, bigger businesses, which has reduced operating complexity and improved agility. For example, in June 2024, the Company announced it had entered into an agreement to acquire all of the issued and outstanding equity interests in Eviosys, a leading European manufacturer of food cans, ends and closures, for approximately €3.6 billion (approximately $3.9 billion). The transaction is expected to expand Sonoco’s global leadership in metal food can and aerosol packaging and to facilitate Sonoco’s ability to partner with customers and advance innovation and sustainability in metal packaging offerings. In addition, in September 2023, the Company acquired the remaining ownership interest in RTS Packaging from joint venture partner WestRock Company, to further strengthen and expand the Company’s 100% recycled fiber-based packaging solutions. In addition, the Company acquired Inapel in December 2023, significantly expanding its presence in the flexibles packaging services market in Latin America.
Sonoco’s portfolio transformation strategy also includes significant divestitures. For example, in September 2024, the Company entered into agreements to divest two of its production facilities in China. In April 2024, Sonoco completed the divestiture of Protexic, which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets. In 2023, the Company completed the divestitures of its U.S. and Mexico Bulksak businesses, which consisted of the manufacture and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners, and its S3 business, which provided customized waste and recycling management programs.
In addition to the completed divestitures discussed above, the Company has initiated reviews of strategic alternatives for ThermoSafe, its leading temperature assured packaging business, and TFP, its leading thermoformed and flexible packaging business (together, the “Potential Divestitures”). On a standalone basis, ThermoSafe, which is part of the All Other group of businesses, had revenue of $283 million in 2023. On a standalone basis, TFP, which was formed by integrating the Company’s flexible packaging and thermoforming packaging businesses within the Consumer Packaging segment effective as of January 1, 2024, had revenue of $1.3 billion in 2023. The Company expects to complete its review of strategic alternatives for TFP in the fourth quarter of 2024 and to complete its review of strategic alternatives for ThermoSafe by the end of the third quarter of 2025. The Company intends to use the net proceeds from the Potential Divestitures, if completed, to reduce its indebtedness if the pending Eviosys acquisition closes, or to pursue other strategic initiatives if the pending Eviosys acquisition does not close.
The Company believes that these completed and potential divestitures will enable greater strategic clarity and operational focus while also generating proceeds to fund deleveraging and capital investments in core businesses.
The Company is focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets. In parallel, Sonoco has continued to work on commercial, operational, and supply chain excellence programs intended to shift the mix of our business towards higher-valued products and increase overall productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, as well as strategic pricing initiatives intended to better capture input costs and the value of the services provided.
Effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within the Consumer Packaging segment in order to streamline operations, enhance customer service, and better position the business for accelerated growth. As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources. Accordingly, the Company’s consumer
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thermoformed businesses moved from the All Other group of businesses to the Consumer Packaging segment. 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 are recorded and the margin from the Company’s recycling operations reduces “Cost of sales.”
RESULTS OF OPERATIONS
The Company’s financial statements are prepared in conformity with generally accepted accounting principles (“GAAP”). Sonoco’s management considers a variety of both GAAP and non-GAAP financial and operating measures in assessing the Company’s financial performance. The key GAAP measures used are net sales, operating profit, gross profit margin, net income attributable to Sonoco and diluted earnings per share. The key non-GAAP measures used are Adjusted operating profit, Adjusted net income attributable to Sonoco, Adjusted diluted earnings per share, Adjusted EBITDA and Adjusted EBITDA margin. For information about the Company’s use of non-GAAP measures and reconciliations of these measures to the most directly comparable GAAP measures see “Non-GAAP Financial Measures” below.
Third Quarter 2024 Compared with Third Quarter 2023
The following discussion provides a review of results for the three-month period ended September 29, 2024 versus the three-month period ended October 1, 2023.
Overview
Net sales for the third quarter of 2024 declined by $34.6 million or 2.0%, to $1.68 billion, compared to $1.71 billion in the same period last year. The decline was primarily driven by the absence of $39.5 million sales related to the Protexic divestiture in April 2024, the absence of $32.6 million sales related to the closure of a thermoformed food packaging plant in November 2023, lower sales of $20.6 million resulting from the accounting for the Company’s recycling operations as a procurement function effective January 1, 2024, and lower selling prices of $16.8 million. Partially offsetting these decreases were increases in overall volumes, including net sales from acquisitions, of $76.0 million over the prior-year period.
GAAP operating profit for the third quarter of 2024 was $128.1 million, a decrease of 21.4% from the $162.9 million reported in the third quarter of 2023. The decrease in GAAP operating profit was primarily due to lower net sales of $52.0 million and a $30.0 million loss on the pending sale of two production facilities in China, partially offset by decreased manufacturing expenses of $56.7 million. Adjusted Operating Profit for the third quarter of 2024 was $210.7 million, a decrease of 0.9% from the $212.5 million reported for the same period in 2023.
GAAP net income attributable to Sonoco for the third quarter of 2024 decreased to $50.9 million, or $0.51 per diluted share, compared to $130.7 million, or $1.32 per diluted share, for the same period of 2023. This decrease was primarily due to a decrease in GAAP operating profit as described above, the absence of a $44.0 million gain from the step-up to fair value of the Company’s 35% ownership interest in RTS Packaging upon acquiring the remaining 65% ownership interest in September 2023, and additional interest expense of $26.0 million primarily related to the financing of the pending Eviosys acquisition. These decreases were partially offset by a reduction in income tax expense of $18.2 million. Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share for the third quarter of 2024 were $147.9 million ($1.49 per diluted share), compared with $144.9 million ($1.46 per diluted share) for the same period in 2023.

Costs and Expenses
Cost of goods sold decreased by $29.0 million, or 2.2%, in the third quarter of 2024 compared with the same period last year. The decrease was primarily driven by lower manufacturing expense and lower costs related to the sale of Protexic, partially offset by cost of sales related to the acquisitions of Inapel, the Chattanooga Mill and the remaining ownership interest in RTS Packaging, higher depreciation expense, and higher employee-related costs.
Gross profit decreased by $5.5 million, or 1.5%, in the third quarter of 2024 compared with the same period last year, primarily due to a decline in net sales. Gross profit as a percent of sales increased slightly to 21.4% from 21.3% in the prior-year quarter.
Selling, general and administrative costs increased by $8.0 million, or 4.4%, in the third quarter of 2024 compared with the same period last year, primarily due to higher year-over-year acquisition, integration and divestiture-related costs of $7.2 million and net incremental costs of $1.7 million associated with the prior year acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging, and the current year divestiture of Protexic.
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Restructuring/Asset impairment charges totaled $8.2 million in the third quarter of 2024, compared with $18.1 million during the same period last year. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Loss on divestiture of business and other assets of $31.8 million in the third quarter of 2024 primarily reflects a loss on the pending sale of two production facilities in China. Loss on divestiture of business and other assets of $0.5 million in the second quarter of 2023 reflects a loss from the divestiture of the Company’s U.S. BulkSak business. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Other income, net decreased $36.9 million in the third quarter of 2024, primarily due to the absence of a $44.0 million gain in the prior year from the step-up to fair value of the Company’s 35% ownership interest in RTS Packaging upon acquiring the remaining 65% ownership interest in September 2023.
Non-operating pension costs were $0.5 million lower in the third quarter of 2024 compared to the third quarter of 2023, primarily attributable to lower year-over-year interest cost and increased expected returns on assets. Additional information regarding costs of the Company’s retirement plans is provided in Note 12 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Net interest expense for the third quarter of 2024 increased to $55.6 million, compared with $29.7 million during the third quarter of 2023. The increase of $26.0 million was primarily due to higher interest from financing transactions relating to the pending Eviosys acquisition.
The effective tax rates reflected in GAAP net income and Adjusted net income attributable to Sonoco in the third quarter of 2024 were 30.4% and 21.3%, respectively, compared with 23.6% and 22.7%, respectively, in the corresponding prior year quarter. The increase in the GAAP effective tax rate was primarily due to the absence of a tax benefit on a one-time loss in China as well as an unfavorable adjustment on acquisition costs related to the pending Eviosys acquisition. The effective tax rate on Adjusted net income attributable to Sonoco was lower primarily due to favorable provision-to-return adjustments.
Reportable Segments
The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. The following table summarizes net sales attributable to each of the Company’s segments and the All Other group of businesses for the third quarters of 2024 and 2023:
Three Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023%
 Change
Net sales:
Consumer Packaging$983,511 $984,840 (0.1)%
Industrial Paper Packaging585,082 580,035 0.9 %
Total reportable segments1,568,593 1,564,875 0.2 %
All Other107,273 145,544 (26.3)%
Net sales$1,675,866 $1,710,419 (2.0)%
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SONOCO PRODUCTS COMPANY

The following table summarizes operating profit attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the third quarters of 2024 and 2023:

Three Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023%
Change
Operating profit:
Consumer Packaging$123,021 $116,800 5.3 %
Industrial Paper Packaging70,206 75,006 (6.4)%
Segment operating profit193,227 191,806 0.7 %
All Other17,440 20,740 (15.9)%
Corporate
   Restructuring/Asset impairment charges(8,190)(18,110)
   Amortization of acquisition intangibles(22,645)(21,379)
Loss on divestiture of business and other assets
(31,770)(537)
   Acquisition, integration and divestiture-related costs(19,623)(12,472)
   Other operating (charges)/gains, net(307)2,889 
Operating profit$128,132 $162,937 (21.4)%

The following table summarizes Adjusted EBITDA attributable to each of the Company’s reportable segments and the All Other group of businesses during the third quarters of 2024 and 2023:
Three Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023%
Change
Adjusted EBITDA1:
Consumer Packaging$159,673 $150,917 5.8 %
Industrial Paper Packaging101,633 104,907 (3.1)%
All Other20,169 24,540 (17.8)%
Adjusted EBITDA$281,475 $280,364 0.4 %
1 Adjusted EBITDA is a non-GAAP financial measure. See the Company’s reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure in “Non-GAAP Financial Measures — Quarterly Reconciliations of GAAP to Non-GAAP Financial Measures” below.
The following table summarizes restructuring/asset impairment charges attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the third quarters of 2024 and 2023:
Three Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023
Restructuring/Asset impairment charges:
Consumer Packaging$4,509 $9,784 
Industrial Paper Packaging3,798 6,430 
All Other— 270 
Corporate(117)1,626 
Restructuring/Asset impairment charges$8,190 $18,110 
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SONOCO PRODUCTS COMPANY
Consumer Packaging
The products produced and sold within the Consumer Packaging segment are generally used to package a variety of consumer products and consist primarily of round and shaped rigid paper, steel and plastic containers; metal and peelable membrane ends, closures, and components; thermoformed plastic trays and applications; and high-barrier flexible packaging. These products primarily serve the consumer staples market, focused on food, beverage, household, personal, and pharmaceutical products.
Segment sales remained flat compared to the corresponding prior year quarter as the absence of $32.6 million in sales related to the closure of a thermoformed food packaging plant in November 2023 and lower pricing of $21.4 million were offset by a $53.1 million increase in sales driven by higher net volumes, including an increase in sales from acquisitions.
Segment operating profit and Adjusted EBITDA increased by 5.3% and 5.8%, respectively. The increase was largely due to higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, of $17.5 million, which was partially offset by lower price/cost and higher employee-related expenses. As a result, segment operating profit margin increased to 12.5% in the third quarter of 2024 from 11.9% in the same period last year.
Industrial Paper Packaging    
The primary products produced and sold within the Industrial Paper Packaging segment include goods produced from recycled fiber, including paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboard for folding cartons, can board and laminated structures. Products across this segment support end markets, primarily in paper, textile, and films.
Segment sales increased 0.9% from the corresponding prior year quarter primarily due to the acquisitions of the remaining ownership interest in RTS Packaging and the Chattanooga Mill and the reduction in sales related to the treatment of the segment’s recycling operations as a procurement function effective January 1, 2024.
Segment operating profit and Adjusted EBITDA decreased 6.4% and 3.1%, respectively, as continued price/cost pressures lowered profitability by $23.4 million and higher employee-related expenses were only partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, of $17.7 million and the benefit of higher volumes, including acquisitions, of $8.4 million. As a result, segment operating profit margin decreased to 12% in the third quarter of 2024 from 13% in the same period last year.
All Other    
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 serving a wide variety of end markets including consumer staples, consumer discretionary, and industrial.
Sales declined 26.3% from the same quarter of the prior year primarily due to the sale of Protexic.
All Other operating profit and Adjusted EBITDA dropped by 15.9% and 17.8%, respectively, in the third quarter of 2024 compared to the same period last year, primarily due to the sale of Protexic and negative price/cost, partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives. As a result, operating margin increased to 16.3% in the third quarter of 2024 compared to 14.2% in the same quarter last year.

Nine Months Ended September 29, 2024 Compared with Nine Months Ended October 1, 2023
The following discussion provides a review of results for the nine-month period ended September 29, 2024 compared with the nine-month period ended October 1, 2023.
Overview
Net sales for the first nine months of 2024 decreased 4.1% to $4.9 billion, compared with $5.1 billion in the same period last year. The decline was primarily attributable to the absence of $90.5 million in sales related to the Protexic divestiture in April 2024, the absence of $73.6 million in sales related to the closure of a thermoformed food packaging plant in November 2023, lower sales of $76.8 million resulting from the accounting for the Company’s recycling operations as a procurement function beginning January 1, 2024, and lower pricing of $106.3 million. Partially offsetting these decreases was an increase in overall volume, including net sales from acquisitions, of $159.2 million over the prior-year period.

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SONOCO PRODUCTS COMPANY
GAAP operating profit for the first nine months of 2024 was $381.0 million, a decrease of 34.4% from the $580.4 million reported in the same period last year. The decrease in GAAP operating profit was primarily due to lower net sales of $337.8 million, a $30.0 million loss in the current period on the pending sale of two production facilities in China, the absence of a net $77.5 million benefit from the sale of the Company’s timberland properties and the divestitures of the S3 and U.S. BulkSak businesses in 2023, and additional acquisition, integration and divestiture-related costs of $25.4 million in the first nine months of 2024, partially offset by decreased manufacturing expenses of $297.9 million. Adjusted operating profit for the first nine months of 2024 was $579.6 million, a decrease of 9.0% from the $636.9 million reported for the same period in 2023.
GAAP net income attributable to Sonoco for the first nine months of 2024 decreased to $206.9 million, or $2.09 per diluted share, compared to $393.7 million, or $3.98 per diluted share, reported for the same period of 2023. This decrease was primarily due to a decrease in GAAP operating profit as described above and the absence of a $44.0 million gain from the step-up to fair value of the Company’s 35% ownership interest in RTS Packaging upon acquiring the remaining 65% ownership interest in September 2023, partially offset by a reduction in income tax expense of $61.2 million. Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share for the nine-month period ended September 29, 2024 decreased 7.7% to $386.1 million, or $3.89 per diluted share, from $418.5 million, or $4.24 per diluted share, in the nine-month period ended October 1, 2023.
Costs and Expenses
Cost of goods sold decreased $166.2 million, or 4.1%, primarily related to the sale of Protexic and improved productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, partially offset by cost of sales related to the acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging.
Gross profit decreased $42.4 million, or 3.9%, year over year, while the Company’s gross profit margin percentage remained flat at 21.3% for the first nine months of 2024, compared to the prior-year period. The decrease in gross profit was driven by volume and price declines, partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives and positive margin related to the acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging.
Selling, general and administrative costs for the first nine months of 2024 increased $44.9 million, or 8.3%, year over year. The increase was largely driven by higher year-over-year acquisition, integration and divestiture-related costs of $25.4 million, and net incremental costs of $13.6 million associated with the prior year acquisitions of Inapel, the Chattanooga Mill, and the remaining ownership interest in RTS Packaging, and the current year divestiture of Protexic.
Restructuring/Asset impairment charges totaled $59.1 million in the first nine months of 2024, compared with $53.0 million of net charges in the same period last year. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Loss on divestiture of business and other assets of $27.3 million in the first nine months of 2024 primarily reflects a loss on the pending sale of two production facilities in China, partially offset by gains from the Company’s divestitures of Protexic and the S3 business. Gain on divestiture of business and other assets of $78.8 million in the first nine months of 2023 reflects net gains from the sale of the Company’s timberland properties and the divestitures of its S3 and U.S. BulkSak businesses. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Other income, net was $5.9 million in the first nine months of 2024, reflecting a gain upon the remeasurement to fair value of one of the Company’s investments in affiliates. Other income, net was $36.9 million in the first nine months of 2023, reflecting a gain of $44.0 million resulting from the remeasurement of the Company’s previously held ownership interest in RTS Packaging to fair value, partially offset by a loss of $7.1 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition. See Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Non-operating pension costs remained flat year over year. Additional information regarding costs of the Company’s retirement plans is provided in Note 12 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
GAAP net interest expense for the first nine months of 2024 increased to $109.4 million, compared with $94.7 million during the first nine months of 2023. The increase of $14.7 million was primarily due to higher interest from financing
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SONOCO PRODUCTS COMPANY
transactions relating to the pending Eviosys acquisition, partially offset by lower year-over-year average debt balances and interest income from the Company’s cross-currency swaps.
The effective tax rates reflected in GAAP net income and Adjusted net income attributable to Sonoco in the first nine months of 2024 were 24.6% and 24.0%, respectively, compared with 24.8% and 24.4%, respectively, in the prior-year period. The decrease in the effective tax rates on GAAP and Adjusted net income attributable to Sonoco was primarily due to favorable provision-to-return adjustments.
Reportable Segments
The following table summarizes net sales attributable to each of the Company’s reportable segments, and the All Other group of businesses during the first nine months of 2024 and 2023: 
Nine Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023% Change
Net sales:
Consumer Packaging$2,821,817 $2,914,168 (3.2)%
Industrial Paper Packaging1,778,912 1,781,033 (0.1)%
All Other336,159 450,291 (25.3)%
Net sales$4,936,888 $5,145,492 (4.1)%
The following table summarizes operating profit attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the first nine months of 2024 and 2023:
Nine Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023% Change
Operating profit:
Consumer Packaging$328,190 $314,408 4.4 %
Industrial Paper Packaging203,008 256,413 (20.8)%
Segment operating profit531,198 570,821 (6.9)%
All Other48,430 66,085 (26.7)%
Corporate
Restructuring/Asset impairment charges(59,058)(52,981)
Amortization of acquisition intangibles(68,095)(63,082)
(Loss)/Gain on divestiture of business and other assets
(27,292)78,844 
Acquisition, integration and divestiture-related costs(47,553)(22,192)
Other operating gains, net3,327 2,949 
Operating profit$380,957 $580,444 (34.4)%
The following table summarizes Adjusted EBITDA attributable to each of the Company’s reportable segments and the All Other group of businesses during the first nine months of 2024 and 2023:
Nine Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023%
Change
Adjusted EBITDA1:
Consumer Packaging$435,971 $413,748 5.4 %
Industrial Paper Packaging294,943 341,159 (13.5)%
All Other57,528 77,098 (25.4)%
Adjusted EBITDA$788,442 $832,005 (5.2)%
1 Adjusted EBITDA is a non-GAAP financial measure. See the Company’s reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure in “Non-GAAP Financial Measures — Year-to-Date Reconciliations of GAAP to Non-GAAP Financial Measures” below.

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SONOCO PRODUCTS COMPANY

The following table summarizes restructuring/asset impairment charges attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the first nine months of 2024 and 2023:
Nine Months Ended
(Dollars in thousands)September 29, 2024October 1, 2023
Restructuring/Asset impairment charges:
Consumer Packaging$20,597 $16,479 
Industrial Paper Packaging34,138 32,961 
All Other1,362 1,188 
Corporate2,961 2,353 
Restructuring/Asset impairment charges$59,058 $52,981 
Consumer Packaging
Segment sales decreased 3.2% year to date compared to the prior-year period due to the absence of $73.6 million in sales related to the closure of a thermoformed food packaging plant in November 2023 and lower pricing of $61.3 million, partially offset by an increase of $43.2 million in net volumes, including an increase in sales related to the Inapel acquisition.
Year-to-date segment operating profit increased 4.4% as higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives of $58.0 million was partially offset by unfavorable net volumes of $5.2 million and higher employee-related expenses. As a result, segment operating profit margin increased from 10.8% in the first nine months of 2023 to 11.6% in the first nine months of 2024.
Industrial Paper Packaging
Segment sales remained fairly flat year to date compared to the prior-year period as net increases in sales of $141.5 million related to the acquisitions of the remaining ownership interest in RTS Packaging and the Chattanooga Mill, reduced by the disposition of the U.S. BulkSak business, were offset by lower index-related pricing of $45.0 million and the reduction in sales of $76.8 million related to the treatment of the segment’s recycling operations as a procurement function effective January 1, 2024.
Segment operating profit decreased 20.8% versus the prior-year period primarily due to pricing pressures resulting in lower profitability of $125.6 million and higher employee-related costs, which were only partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives of $69.2 million and higher volumes from acquisitions of $31.1 million. As a result, segment operating margin decreased from 14.4% in the first nine months of 2023 to 11.4% in the first nine months of 2024.
All Other
Sales for the All Other group of businesses declined 25.3% year to date compared to the prior-year period primarily due to the sale of Protexic and lower volumes in temperature assured packaging.
All Other operating profit declined 26.7% year to date compared to the prior-year period due to the sale of Protexic, lower volumes and negative price/cost, partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives. Segment operating margin declined to 14.4% year to date compared to 14.7% in 2023.
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SONOCO PRODUCTS COMPANY

NON-GAAP FINANCIAL MEASURES
To assess and communicate the financial performance of the Company, Sonoco’s management uses, both internally and externally, certain financial performance measures that are not in conformity with GAAP. These “non-GAAP” financial measures reflect adjustments to the Company’s GAAP operating results to exclude amounts, including the associated tax effects, relating to:
•restructuring/asset impairment charges1;
•acquisition, integration and divestiture-related costs;
•gains or losses from the divestiture of businesses and other assets;
•losses from the early extinguishment of debt;
•non-operating pension costs;
•amortization expense on acquisition intangibles;
•changes in last-in, first-out (“LIFO”) inventory reserves;
•certain income tax events and adjustments;
•derivative gains/losses;
•other non-operating income and losses; and
•certain other items, if any.
1 Restructuring and restructuring-related asset impairment charges are a recurring item as the Company’s restructuring programs usually require several years to fully implement, and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.
The Company’s management believes the exclusion of these amounts improves the period-to-period comparability and analysis of the underlying financial performance of the business. Non-GAAP figures are identified using the term “Adjusted,” for example, “Adjusted Operating Profit,” “Adjusted Net Income Attributable to Sonoco” and “Adjusted Diluted EPS.” More information about the Company’s use of non-GAAP financial measures is provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, under Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Use of Non-GAAP Financial Measures.”
In addition to the “Adjusted” results described above, the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA is defined as net income excluding the following: interest expense; interest income; provision for income taxes; depreciation, depletion and amortization expense; non-operating pension costs; net income/loss attributable to noncontrolling interests; restructuring/asset impairment charges; changes in LIFO inventory reserves; gains/losses from the divestiture of businesses and other assets; acquisition, integration and divestiture-related costs; other income; derivative gains/losses; and other non-GAAP adjustments, if any, that may arise from time to time. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.
The Company’s non-GAAP financial measures are not calculated in accordance with, nor are they an alternative for, measures conforming to generally accepted accounting principles, and they may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.
The Company presents these non-GAAP financial measures to provide investors with information to evaluate Sonoco’s operating results in a manner similar to how management evaluates business performance. The Company consistently applies its non-GAAP financial measures presented herein and uses them for internal planning and forecasting purposes, to evaluate its ongoing operations, and to evaluate the ultimate performance of management and each business unit against plans/forecasts. In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.
Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances that the investor may find material and view differently.
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SONOCO PRODUCTS COMPANY
To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in evaluating the Company’s results to review both GAAP information, which includes all of the items impacting financial results, and the related non-GAAP financial measures that exclude certain elements, as described above. Further, Sonoco management does not, nor does it suggest that investors should, consider any non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Whenever reviewing a non-GAAP financial measure, investors are encouraged to review the related reconciliation to understand how it differs from the most directly comparable GAAP measure.
Quarterly Reconciliations of GAAP to Non-GAAP Financial Measures
The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures in the Company’s Condensed Consolidated Statements of Income for the three-month period ended September 29, 2024 and the three-month period ended October 1, 2023.
Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Net Income Attributable to Sonoco, and Adjusted Diluted Earnings Per Share (“EPS”)
For the three-month period ended September 29, 2024
Dollars in thousands, except per share dataOperating ProfitIncome Before Income TaxesProvision for Income TaxesNet Income Attributable to SonocoDiluted EPS
As Reported$128,132 $69,556 $21,154 $50,921 $0.51 
   Acquisition, integration and divestiture-related costs1
19,623 49,804 6,512 43,292 0.44 
   Changes in LIFO inventory reserves790 790 199 591 0.01 
   Amortization of acquisition intangibles22,645 22,645 5,563 17,082 0.17 
   Restructuring/Asset impairment charges8,190 8,190 1,497 6,560 0.07 
   Loss on divestiture of business and other assets31,770 31,770 454 31,316 0.31 
   Non-operating pension costs— 2,947 738 2,209 0.02 
   Net gains from derivatives
(210)(210)(53)(157)— 
   Other adjustments(273)(695)3,233 (3,928)(0.04)
Total adjustments82,535 115,241 18,143 96,965 0.98 
Adjusted$210,667 $184,797 $39,297 $147,886 $1.49 
Due to rounding, individual items may not sum appropriately.
1 Acquisition, integration and divestiture related costs include 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. These amortization costs are included in “Interest expense” in the Company’s Condensed Consolidated Statements of Income.
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SONOCO PRODUCTS COMPANY
For the three-month period ended October 1, 2023
Dollars in thousands, except per share dataOperating ProfitIncome Before Income TaxesProvision for Income TaxesNet Income Attributable to SonocoDiluted EPS
As Reported$162,937 $166,782 $39,351 $130,749 $1.32 
   Acquisition, integration and divestiture-related costs12,472 12,472 1,979 10,493 0.10 
   Changes in LIFO inventory reserves(3,186)(3,186)(816)(2,370)(0.02)
   Amortization of acquisition intangibles21,379 21,379 5,197 16,182 0.16 
   Restructuring/Asset impairment charges18,110 18,110 4,385 13,974 0.14 
Loss on divestiture of business and sale of other assets537 537 125 412 — 
Other income, net— (36,943)(8,929)(28,014)(0.28)
   Non-operating pension costs— 3,424 852 2,572 0.03 
   Net gains from derivatives
(3,310)(3,310)(830)(2,480)(0.03)
   Other adjustments3,607 3,607 252 3,355 0.04 
Total adjustments49,609 16,090 2,215 14,124 0.14 
Adjusted$212,546 $182,872 $41,566 $144,873 $1.46 
Due to rounding, individual items may not sum appropriately.

Adjusted EBITDA and Adjusted EBITDA Margin
Three Months Ended
Dollars in thousandsSeptember 29, 2024October 1, 2023
Net income attributable to Sonoco$50,921 $130,749 
Adjustments
     Interest expense61,643 32,847 
     Interest income(6,014)(3,173)
     Provision for income taxes21,154 39,351 
     Depreciation, depletion and amortization
90,646 85,570 
     Non-operating pension costs2,947 3,424 
 Net income attributable to noncontrolling interests288 309 
     Restructuring/Asset impairment charges8,190 18,110 
     Changes in LIFO inventory reserves790 (3,186)
     Loss on divestiture of business and other assets31,770 537 
     Acquisition, integration and divestiture-related costs19,623 12,472 
Other income, net
— (36,943)
     Net gains from derivatives
(210)(3,310)
     Other adjustments(273)3,607 
Adjusted EBITDA$281,475 $280,364 
Net Sales$1,675,866 $1,710,419 
Net Income Margin
3.0 %7.6 %
Adjusted EBITDA Margin16.8 %16.4 %

The Company does not calculate net income by segment; therefore, Adjusted EBITDA by segment is reconciled to the closest GAAP measure of segment profitability, 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
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SONOCO PRODUCTS COMPANY
resources to the segments and assessing their performance in accordance with Accounting Standards Codification (“ASC”) 280 - “Segment Reporting,” as prescribed by the Financial Accounting Standards Board.
Segment results viewed by the Company’s management to evaluate segment performance do not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration and divestiture-related costs; changes in LIFO inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses from derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other.
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Three Months Ended September 29, 2024
Dollars in thousandsConsumer Packaging segmentIndustrial Paper Packaging segmentAll OtherCorporateTotal
Segment and Total Operating Profit $123,021 $70,206 $17,440 $(82,535)$128,132 
Adjustments:
  Depreciation, depletion and amortization1
36,283 28,989 2,729 22,645 90,646 
  Equity in earnings of affiliates, net of tax369 2,438 — — 2,807 
  Restructuring/Asset impairment charges2
— — — 8,190 8,190 
  Changes in LIFO inventory reserves3
— — — 790 790 
  Acquisition, integration and divestiture-related costs4
— — — 19,623 19,623 
  Loss on divestiture of business and other assets5
— — — 31,770 31,770 
  Net gains from derivatives6
— — — (210)(210)
  Other adjustments— — — (273)(273)
Segment Adjusted EBITDA $159,673 $101,633 $20,169 $— $281,475 
Net Sales$983,511 $585,082 $107,273 
Segment Operating Profit Margin12.5 %12.0 %16.3 %
Segment Adjusted EBITDA Margin16.2 %17.4 %18.8 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $16,131, the Industrial Paper Packaging segment of $6,306, and the All Other group of businesses of $208.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $4,509 and the Industrial Paper Packaging segment of $3,798.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $758 and the Industrial Paper Packaging segment of $32.
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $465 and the Industrial Paper Packaging segment of $(4,529).
5 Included in Corporate are losses on the divestiture of business associated with the Industrial Paper Packaging segment of $29,965 related to the pending sale of two production facilities in China, and the All Other group of businesses of $1,805 related to the sale of Protexic.
6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(41), the Industrial Paper Packaging segment of $(160), and the All Other group of businesses of $(9).

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SONOCO PRODUCTS COMPANY
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Three Months Ended October 1, 2023
Dollars in thousandsConsumer Packaging segmentIndustrial Paper Packaging segmentAll OtherCorporateTotal
Segment and Total Operating Profit $116,800 $75,006 $20,740 $(49,609)$162,937 
Adjustments:
   Depreciation, depletion and amortization1
33,833 26,558 3,800 21,379 85,570 
   Equity in earnings of affiliates, net of tax284 3,343 — — 3,627 
   Restructuring/Asset impairment charges2
— — — 18,110 18,110 
   Changes in LIFO inventory reserves3
— — — (3,186)(3,186)
   Acquisition, integration and divestiture-related costs4
— — — 12,472 12,472 
Loss on divestiture of business and other assets5
— — — 537 537 
   Net gains from derivatives6
— — — (3,310)(3,310)
   Other adjustments— — — 3,607 3,607 
Segment Adjusted EBITDA$150,917 $104,907 $24,540 $— $280,364 
Net Sales$984,840 $580,035 $145,544 
Segment Operating Profit Margin11.9 %12.9 %14.2 %
Segment Adjusted EBITDA Margin15.3 %18.1 %16.9 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $15,980, the Industrial Paper Packaging segment of $3,414, and the All Other group of businesses of $1,985.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $9,784, the Industrial Paper Packaging segment of $6,430, and the All Other group of businesses of $270.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer segment of $(3,325) and the Industrial Paper Packaging segment of $139.
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $410 and the Industrial Paper Packaging segment of $5,046.
5 Included in Corporate is a loss from the sale of the Company’s U.S. BulkSak business, associated with the Industrial Paper Packaging segment, in the amount of $537.
6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(507), the Industrial Paper Packaging segment of $(2,178), and the All Other group of businesses of $(625).

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SONOCO PRODUCTS COMPANY

Year-to-Date Reconciliations of GAAP to Non-GAAP Financial Measures
The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures in the Company’s Condensed Consolidated Statements of Income for the nine-month period ended September 29, 2024 and the nine-month period ended October 1, 2023.
Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Net Income Attributable to Sonoco, and Adjusted Diluted EPS
For the nine-month period ended September 29, 2024
Dollars in thousands, except per share dataOperating ProfitIncome Before Income TaxesProvision for Income TaxesNet Income Attributable to SonocoDiluted EPS
As Reported$380,957 $267,036 $65,821 $206,909 $2.09 
  Acquisition, integration and divestiture-related costs1
47,553 77,734 13,670 64,064 0.64 
  Changes in LIFO inventory reserves(197)(197)(49)(148)— 
  Amortization of acquisition intangibles68,095 68,095 16,672 51,423 0.52 
  Restructuring/Asset impairment charges59,058 59,058 11,754 47,260 0.48 
  Loss on divestiture of business and other assets27,292 27,292 1,676 25,616 0.26 
Other income, net
— (5,867)— (5,867)(0.06)
  Non-operating pension costs— 10,412 2,593 7,819 0.08 
  Net gains from derivatives
(3,981)(3,981)(1,001)(2,980)(0.03)
  Other adjustments851 851 8,812 (7,961)(0.09)
Total adjustments198,671 233,397 54,127 179,226 1.80 
Adjusted$579,628 $500,433 $119,948 $386,135 3.89 
Due to rounding, individual items may not sum appropriately.
1 Acquisition, integration and divestiture related costs include 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. These amortization costs are included in “Interest expense” in the Company’s Condensed Consolidated Statements of Income.

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SONOCO PRODUCTS COMPANY
For the nine-month period ended October 1, 2023
Dollars in thousands, except per share dataOperating ProfitIncome Before Income TaxesProvision for Income TaxesNet Income Attributable to SonocoDiluted EPS
As Reported$580,444 $512,279 $127,003 $393,717 $3.98 
   Acquisition, integration and divestiture-related costs22,192 22,192 4,249 17,943 0.18 
   Changes in LIFO inventory reserves(10,186)(10,186)(2,564)(7,622)(0.08)
   Amortization of acquisition intangibles63,082 63,082 15,312 47,770 0.48 
   Restructuring/Asset impairment charges52,981 52,981 12,344 40,658 0.41 
Gain on divestiture of business and other assets(78,844)(78,844)(18,823)(60,021)(0.61)
Other income, net— (36,943)(8,929)(28,014)(0.28)
   Non-operating pension costs— 10,424 2,589 7,835 0.08 
 Net gains from derivatives(1,513)(1,513)(381)(1,132)(0.01)
   Other adjustments8,750 8,750 1,423 7,327 0.09 
Total adjustments56,462 29,943 5,220 24,744 0.26 
Adjusted$636,906 $542,222 $132,223 $418,461 $4.24 
Due to rounding, individual items may not sum appropriately.

Adjusted EBITDA and Adjusted EBITDA Margin
Nine Months Ended
Dollars in thousandsSeptember 29, 2024October 1, 2023
Net income attributable to Sonoco$206,909 $393,717 
Adjustments
     Interest expense122,503 101,363 
     Interest income(13,127)(6,679)
     Provision for income taxes65,821 127,003 
     Depreciation, depletion and amortization
270,691 249,387 
     Non-operating pension costs10,412 10,424 
 Net income attributable to noncontrolling interests524 354 
     Restructuring/Asset impairment charges59,058 52,981 
     Changes in LIFO inventory reserves(197)(10,186)
     Loss/(Gain) on divestiture of business and other assets
27,292 (78,844)
     Acquisition, integration and divestiture-related costs47,553 22,192 
Other income, net
(5,867)(36,943)
     Net gains from derivatives(3,981)(1,514)
     Other adjustments
851 8,750 
Adjusted EBITDA$788,442 $832,005 
Net Sales$4,936,888 $5,145,492 
Net Income Margin
4.2 %7.7 %
Adjusted EBITDA Margin16.0 %16.2 %

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SONOCO PRODUCTS COMPANY
The following tables reconcile segment operating profit, the closest GAAP measure of profitability, to Segment Adjusted EBITDA.
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Nine Months Ended September 29, 2024
Dollars in thousandsConsumer Packaging segmentIndustrial Paper Packaging segmentAll OtherCorporateTotal
Segment and Total Operating Profit $328,190 $203,008 $48,430 $(198,671)$380,957 
Adjustments:
  Depreciation, depletion and amortization1
107,365 86,133 9,098 68,095 270,691 
  Equity in earnings of affiliates, net of tax416 5,802 — — 6,218 
  Restructuring/Asset impairment charges2
— — — 59,058 59,058 
  Changes in LIFO inventory reserves3
— — — (197)(197)
  Acquisition, integration and divestiture-related costs4
— — — 47,553 47,553 
  Loss on divestiture of business and other assets5
— — — 27,292 27,292 
  Net gains from derivatives6
— — — (3,981)(3,981)
  Other adjustments
— — — 851 851 
Segment Adjusted EBITDA $435,971 $294,943 $57,528 $— $788,442 
Net Sales$2,821,817 $1,778,912 $336,159 
Segment Operating Profit Margin11.6 %11.4 %14.4 %
Segment Adjusted EBITDA Margin15.5 %16.6 %17.1 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $48,307, the Industrial Paper Packaging segment of $19,168, and the All Other group of businesses of $620.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $20,597, the Industrial Paper Packaging segment of $34,138, and the All Other group of businesses of $1,362.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $388 and the Industrial Paper Packaging segment of $(585).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $518 and the Industrial Paper Packaging segment of $(3,658).
5 Included in Corporate are net losses on the divestiture of businesses associated with the Industrial Paper Packaging segment of $28,715, including a loss of $29,965 from the pending sale of two production facilities in China, partially offset by a gain of $(1,250) from the sale of the S3 business, and a gain on the divestiture of businesses associated with the All Other group of businesses of $(1,423) related to the sale of Protexic.
6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(624), the Industrial Paper Packaging segment of $(2,628), and the All Other group of businesses of $(729).

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SONOCO PRODUCTS COMPANY
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Nine Months Ended October 1, 2023
Dollars in thousandsConsumer Packaging segmentIndustrial Paper Packaging segmentAll OtherCorporateTotal
Segment and Total Operating Profit $314,408 $256,413 $66,084 $(56,461)$580,444 
Adjustments:
   Depreciation, depletion and amortization1
98,847 76,444 11,014 63,082 249,387 
   Equity in earnings of affiliates, net of tax493 8,302 — — 8,795 
   Restructuring/Asset impairment charges2
— — — 52,981 52,981 
   Changes in LIFO inventory reserves3
— — — (10,186)(10,186)
   Acquisition, integration and divestiture-related costs4
— — — 22,192 22,192 
  Gain on divestiture of business and other assets5
— — — (78,844)(78,844)
   Net gains from derivatives6
— — — (1,514)(1,514)
   Other adjustments
— — — 8,750 8,750 
Segment Adjusted EBITDA$413,748 $341,159 $77,098 $— $832,005 
Net Sales$2,914,168 $1,781,033 $450,291 
Segment Operating Profit Margin10.8 %14.4 %14.7 %
Segment Adjusted EBITDA Margin14.2 %19.2 %17.1 %
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $48,193, the Industrial Paper Packaging segment of $8,913, and the All Other group of businesses of $5,976.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $16,480, the Industrial Paper Packaging segment of $32,961, and the All Other group of businesses of $1,188.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(9,428) and the Industrial Paper Packaging segment of $(758).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $1,302 and the Industrial Paper Packaging segment of $5,394.
5Included in Corporate are gains from the sale of the Company’s timberland properties of $(60,945), the sale of its S3 business of $(11,065), and the sale of its U.S. BulkSak business of $(6,834), all of which are associated with the Industrial Paper Packaging segment.
6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(210), the Industrial Paper Packaging segment of $(1,045), and the All Other group of businesses of $(259).


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SONOCO PRODUCTS COMPANY
Financial Position, Liquidity and Capital Resources
Cash generated from operations for the first nine months of 2024 was $437.6 million, compared with $616.9 million in the same period of 2023, a year-over-year decrease of $179.2 million. GAAP net income decreased by $186.6 million year over year as described in the “Results of Operations” section above. Net working capital used $115.8 million of cash in the first nine months of 2024, while providing $67.3 million in the same period last year, for a year-over-year decrease in operating cash flow of $183.2 million. Accounts receivable used $98.3 million more cash during the first nine months of 2024 than in the same period last year as a result of the impact of the changing mix in customer payment terms more than offsetting the impact of lower revenues year over year. Inventory was a use of cash of $6.7 million in the first nine months of 2024, while last year was a source of cash of $277.4 million. This lower year-over-year use of cash was expected as the Company ended 2022 with a substantial inventory position driven by pandemic-related supply chain uncertainty. Accounts payable was a source of cash of $73.5 million in the first nine months as compared to a use of cash of $125.7 million in the same period last year. As inventories and supply chain normalized in the second half of 2023 and first half of 2024, purchasing activity has normalized. The Company has continued to actively manage inventories and review payment terms with customers and suppliers to address risk and balance economic benefit. Changes in accrued expenses and other assets and liabilities provided cash totaling $43.6 million in the nine-month period ended September 29, 2024, and used $9.5 million of cash in the same period last year. The $53.2 million lower use of cash in the current year was largely driven by the lower year-over-year payout of management incentive compensation.
Investing activities used $178.1 million of cash in the first nine months of 2024, compared with $459.7 million in the same period last year, a lower year-over-year use of cash of $281.7 million. The lower year-over-year use of cash was primarily attributable to lower acquisition spending as the Company invested $313.4 million in the RTS Packaging and Chattanooga Mill acquisitions in the first nine months of 2023 while acquisition spending in the current year was only $3.7 million. Capital expenditures during the first nine months of 2024 were $271.3 million, $16.5 million higher than the same period last year. Proceeds from sale of businesses provided $81.2 million in the first nine months of 2024, primarily driven by the sale of Protexic, compared with $31.1 million in the prior year, from the sales of the Company’s S3 and U.S. BulkSak businesses. Proceeds from the sale of assets were $72.7 million in the first nine months of 2023, primarily from the March 2023 sale of the Company’s timberland properties. Additionally, proceeds from the settlement of a net investment hedge provided $9.1 million of cash in the first nine months of 2024. Investing cash flows in the first nine months of 2024 also reflect the Company’s $10.0 million investment in a small South Carolina-based designer and manufacturer of sustainable protective packaging solutions. In the same period last year, the Company used $5.0 million of cash to purchase a 2.7% equity interest in Northstar Recycling Co. Net capital spending for 2024 is expected to be approximately $350 million to $375 million compared to $283 million in 2023.
Financing activities provided $1,529.5 million of cash in the nine-month period ended September 29, 2024, compared with using $129.1 million of cash in the corresponding prior-year period. The primary driver of the $1,658.6 million year-over-year increase was higher proceeds from the issuance of debt net of repayments, which provided an additional $1,687.0 million of cash compared to the previous year. Significant activity in the current year includes $1,779.9 million of net proceeds from the issuance of senior unsecured notes in September 2024 intended to fund a portion of the cash consideration for the pending Eviosys acquisition and to pay related fees and expenses, partially offset by repayments of the Company’s syndicated term loan totaling $74.5 million. Other financing costs included $19.0 million in fees related to the Bridge Loan Facility (as defined below) obtained in connection with the pending Eviosys acquisition. Cash used to pay dividends increased by $4.9 million year over year reflecting the increase in the quarterly dividend payment from $0.51 per share to $0.52 per share approved by the Company’s Board of Directors in April 2024. Cash used to repurchase the Company’s common stock to satisfy employee tax withholding obligations in association with the exercise of certain share-based compensation awards was $9.2 million in the nine-month period ended September 29, 2024, compared to $10.6 million in the same period last year.
During the nine-month period ended September 29, 2024, the Company reported a net decrease in cash and cash equivalents of $10.4 million due to currency translation adjustments resulting from a stronger U.S. dollar relative to certain foreign currencies in which cash and cash equivalents were held.
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SONOCO PRODUCTS COMPANY
The Company’s cash balances are held in numerous locations throughout the world. At September 29, 2024 and December 31, 2023, approximately $117.1 million and $93.8 million, respectively, of the Company’s reported cash and cash equivalents balances of $1.9 billion and $151.9 million, respectively, were held outside of the United States by its foreign subsidiaries. Cash held outside of the United States is available to meet local liquidity needs or for capital expenditures, acquisitions, and other offshore growth opportunities. As the Company has maintained sufficient domestic liquidity through a combination of operating cash flow generation and access to bank and capital market borrowings, management has generally considered its foreign unremitted earnings to be indefinitely invested outside the United States and currently has no plans to repatriate such earnings, other than excess cash balances that can be repatriated at minimal tax cost. Accordingly, as of September 29, 2024, the Company is not providing for taxes on these amounts for financial reporting purposes. Computation of the potential deferred tax liability associated with unremitted earnings considered to be indefinitely reinvested is not practicable.
The Company uses a notional pooling arrangement with an international bank to help manage global liquidity requirements. Under this pooling arrangement, the Company and its participating subsidiaries may maintain either a cash deposit or borrowing position through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit. Because it maintains a security interest in the cash deposits and has the right to offset the cash deposits against the borrowings, the bank provides the Company and its participating subsidiaries favorable interest terms on both the cash deposit and borrowing positions.
On April 1, 2024, the Company completed the sale of Protexic, part of the All Other group of businesses, to Black Diamond Capital Management, LLC for net cash proceeds of $80.3 million. The Company used the majority of these proceeds to pay down debt. The Company believes that this and other potential divestitures will enable greater strategic clarity and operational focus while also generating proceeds to fund deleveraging and capital investments in core businesses.
On May 3, 2024, the Company increased the commitments under its unsecured revolving credit facility by $350 million to an aggregate amount of $1.25 billion and extended the maturity date to May 3, 2029, and also increased its $500 million commercial paper program by $750 million to $1.25 billion. The commercial paper program is supported by the Company’s revolving credit facility. The Company has the contractual right to draw funds directly on the underlying revolving credit facility, which could possibly occur if there were a disruption in the commercial paper market.
On June 22, 2024, the Company entered into a definitive agreement to acquire all of the issued and outstanding equity interests in Eviosys from an affiliate of KPS Capital Partners, LP for €3.6 billion (approximately $3.9 billion) on a cash-free and debt-free basis and subject to customary adjustments. In anticipation of closing on the Eviosys acquisition, which is expected to occur in the fourth quarter of 2024, the Company took the following steps to secure the cash consideration for the acquisition and 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 $4.0 billion.
•On July 12, 2024, the Company entered into a credit agreement (the “Term Credit Agreement”), providing the Company with the ability to borrow up to $700 million on an unsecured basis (the “Term Loan Facility”). Funding of the Term Loan Facility is expected to occur substantially concurrently with the closing of the acquisition. 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.
•On September 16, 2024, the Company entered into a credit agreement (the “364-Day Term Credit Agreement”), providing the Company with the ability to borrow up to $1.5 billion on an unsecured basis (the “364-Day Term Loan Facility”). Funding of the 364-Day Term Loan Facility is expected to occur substantially concurrently with the closing of the 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.
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SONOCO PRODUCTS COMPANY
•On September 19, 2024, the Company completed a registered public offering of senior unsecured notes (the “Notes”) in a combined aggregate principal amount of $1.8 billion. The Notes consisted of the following:
Principal AmountIssuance Costs and DiscountsNet ProceedsInterest RateMaturity
2026 Notes$500,000 (3,697)$496,303 4.450%September 1, 2026
2029 Notes600,000 (5,851)594,149 4.600%September 1, 2029
2034 Notes700,000 (10,542)689,458 5.000%September 1, 2034
Total$1,800,000 $(20,090)$1,779,910 
Cash and cash equivalents on hand at September 29, 2024 include $1.8 billion of net proceeds from the issuance of the Notes, which are held in money market accounts. This cash is unrestricted but designated for use towards funding the pending acquisition of Eviosys.
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 $18.6 million and $19.0 million were amortized to interest expense during the three- and nine-month periods ended September 29, 2024.
At September 29, 2024, the Company had scheduled debt maturities of approximately $482 million over the next twelve months, including $400 million aggregate principal amount of its 1.80% notes due February 2025. As the Company had $34.0 million in commercial paper balances outstanding at September 29, 2024, $1.2 billion in committed capacity under its revolving credit facility was available for draw down. The Company believes that cash and cash equivalents on hand, expected net cash flows generated from operating and investing activities, and expected proceeds from divestitures, together with proceeds from the issuance and sale of the Notes the Term Loan Agreement and 364-Day Term Credit Agreement, available capacity under the Company’s increased borrowing arrangements, and the opportunity to raise additional capital through one or more capital markets transactions, will provide sufficient liquidity to fund the Eviosys acquisition and cover debt maturities and other cash flow needs of the Company over the next twelve months and beyond.
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 September 29, 2024, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.
The Company continually explores strategic acquisition opportunities that may result in the use of cash. Given the nature of the acquisition process, the timing and amounts of such expenditures are not always predictable. The Company expects that any additional acquisitions requiring funding in excess of cash on hand would be financed using existing credit facilities or additional borrowings.
The Company anticipates making additional contributions to its other pension and postretirement plans of approximately $6 million during the remainder of 2024, resulting in expected total contributions to these plans of approximately $21 million in 2024. Future funding requirements beyond the current year will vary depending largely on investment performance, future actuarial assumptions, and legislative actions.
Fair Value Measurements, Foreign Exchange Exposure and Risk Management
Certain assets and liabilities are reported in the Company’s financial statements at fair value, the fluctuation of which can impact the Company’s financial position and results of operations. Items reported by the Company at fair value on a recurring basis include derivative contracts and pension-related assets. The valuation of the vast majority of these items is based either on quoted prices in active and accessible markets or on other observable inputs.
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SONOCO PRODUCTS COMPANY
As a result of operating globally, the Company is exposed to changes in foreign exchange rates. The exposure is well diversified, as the Company’s facilities are located throughout the world, and the Company generally sells in the same countries where it produces with both revenue and costs transacted in the local currency. The Company monitors these exposures and uses foreign currency forward contracts and other risk management instruments to manage exposure to changes in foreign currency cash flows and the translation of monetary assets and liabilities on the Company’s condensed consolidated financial statements by hedging a portion of forecasted transactions that are denominated in foreign currencies, foreign currency assets and liabilities, or its net investment in foreign subsidiaries. The Company’s foreign operations are exposed to political, geopolitical, and cultural risks, but these risks are mitigated by diversification and the relative stability of the countries in which the Company has significant operations.
Because the economy in Venezuela is considered highly inflationary under U.S. GAAP, the Company considers the U.S. dollar to be the functional currency of its Venezuelan operations and uses the official exchange rate when remeasuring the financial results of those operations. Economic conditions in Venezuela have worsened considerably over the past several years and there are no indications that conditions are likely to improve in the foreseeable future. Further deterioration could result in the recognition of an impairment charge or a deconsolidation of the subsidiary. At September 29, 2024, the carrying value of the Company’s net investment in its Venezuelan operations was approximately $2.1 million. In addition, at September 29, 2024, the Company’s “Accumulated other comprehensive loss” included a cumulative translation loss of $3.8 million related to its Venezuelan operations which would need to be reclassified to net income in the event of a complete exit of the business or a deconsolidation of the Venezuelan operations.
Turkey has also been deemed to be a highly inflationary economy under U.S. GAAP since the first quarter of 2022. Accordingly, the Company considers the U.S. dollar to be the functional currency of its operations in Turkey and has remeasured monetary assets and liabilities denominated in Turkish lira to U.S. dollars with changes recorded through earnings. The cumulative impact of applying highly inflationary accounting to Turkey has been a pretax charge to earnings of $7.7 million ($6.0 million after tax), including $1.2 million ($1.0 million after tax) during the nine-month period ended September 29, 2024. The magnitude of future earnings impacts, however, is uncertain as such impacts are dependent upon unpredictable movements in the Turkish lira relative to the U.S. dollar. In addition to remeasurement-related charges, significant deterioration in the Turkish economy could result in the recognition of future impairment charges. However, the Company believes its exposure is limited to its net investment in Turkey which was approximately $22.6 million as of September 29, 2024.
The Company is a purchaser of various raw material inputs such as recovered paper, energy, steel, aluminum, and plastic resin. The Company generally does not engage in significant hedging activities for these purchases other than for energy and, from time to time, aluminum, because there is usually a high correlation between the primary input costs and the ultimate selling price of its products. Inputs are generally purchased at market or at fixed prices that are established with individual suppliers as part of the purchase process for quantities expected to be consumed in the ordinary course of business. On occasion, where the correlation between selling price and input price is less direct, the Company may enter into derivative contracts such as futures or swaps to manage the effect of price fluctuations. In addition, the Company may occasionally use traditional, unleveraged interest-rate swaps to manage its mix of fixed and variable rate debt and control its exposure to interest rate movements within select ranges.
At September 29, 2024, the Company had derivative contracts outstanding to hedge the prices on a portion of anticipated natural gas and aluminum purchases. These contracts, some of which qualify as cash flow hedges, include natural gas swaps totaling approximately 7.3 million metric million British thermal units (“MMBTUs”) and aluminum swaps totaling 133 metric tons. These contracts have various maturity dates ranging through December 2025. The total fair market value of these instruments resulted in a net loss position of $2.9 million and $6.8 million at September 29, 2024 and December 31, 2023, respectively.
The Company routinely enters into derivative currency contracts to mitigate the risk of unfavorable fluctuations in the exchange rate on certain anticipated foreign currency cash flows. These contracts qualify as cash flow hedges and have various maturity dates ranging through December 2024. The total market value of these instruments resulted in a net loss position of $1.0 million at September 29, 2024 and a net gain position of $1.5 million at December 31, 2023. In addition, at September 29, 2024, the Company had various currency contracts outstanding to hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables. Although placed as economic hedges, the Company does not apply hedge accounting to these instruments. As such, changes in fair value are recorded directly to income and expense in the periods that they occur.
In 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S. dollar denominated debt, including the semi-annual
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SONOCO PRODUCTS COMPANY
interest payments, to fixed-rate euro-denominated debt. The swap agreements, which had a maturity of December 18, 2026, provided for the Company to receive semi-annual interest payments in U.S. dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate. The risk management objective of entering into the swap agreements was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros. The agreements were designated as net investment hedges for accounting purposes.
The gain or loss on the net investment hedge derivative instruments is included in the “Foreign currency translation” component of “Accumulated other comprehensive loss” until the net investment is sold, diluted, or liquidated. Interest payments received for the cross-currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Condensed Consolidated Statements of Income. The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S. dollar exchange rate market.
On April 15, 2024, as a result of the strengthening of the U.S. dollar against the euro, as well as a reduction in the differential between U.S. and European interest rates, the Company terminated its swap agreements and received a net cash settlement of $9.1 million. The foreign currency translation gain of approximately $3.1 million, net of tax, is included as a component of “Accumulated other comprehensive loss.”
Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The new swap agreements, which have a maturity of May 1, 2027, share the same risk management objective as the terminated cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.
The fair value of the Company’s net investment hedges was a loss position of $18.9 million and $5.1 million at September 29, 2024 and December 31, 2023, respectively. Translation losses of $14.1 million (net of income taxes of $4.8 million) and $3.8 million (net of income taxes of $1.3 million) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at September 29, 2024 and December 31, 2023, respectively.
In anticipation of the offering of the Notes, the Company entered into treasury lock derivative instruments with eleven banks, with a total notional principal amount of $900 million, 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 $(11.1) million. The loss is included in “Interest expense” on the Company’s Condensed Consolidated Statements of Income for the three- and nine-month periods ended September 29, 2024.
The Company has an investment in preferred stock of a nonaffiliated private company that is accounted for under the measurement alternative of cost less impairment, adjusted for any qualifying observable price changes. Observable price changes would consist of Level 2 inputs based on privately negotiated transactions with the nonaffiliated company. The preferred stock balance of $21.2 million is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheet as of September 29, 2024.
During the first nine months of 2024, the U.S. dollar strengthened against the Canadian dollar, the Mexican peso, the Brazilian real, and the Colombian peso, functional currencies in which a large amount of the Company’s foreign investments are held. During this same period, the U.S. dollar weakened against the euro, the British pound, the Polish zloty, the Malaysian ringgit, and the Danish krone. The net impact of these changes, and the changes in the net investment hedge discussed above, resulted in translation losses of $20.4 million being recorded in “Accumulated other comprehensive loss” during the nine-month period ended September 29, 2024.
Restructuring and Impairment
Information regarding restructuring charges and restructuring-related asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Form 10-Q.
New Accounting Pronouncements
Information regarding new accounting pronouncements is provided in Note 2 to the Company’s Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Form 10-Q.

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OTHER ITEMS
Critical Accounting Estimates
Impairment of Goodwill
The Company assesses its goodwill for impairment annually and from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. If the fair value of a reporting unit exceeds the carrying value of that reporting unit, there is no impairment. If the carrying value of a reporting unit exceeds the fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess. The Company’s reporting units, as determined in accordance with ASC 350, “Intangibles-Goodwill and Other,” are the same as, or one level below, its operating segments, as determined in accordance with ASC 280, “Segment Reporting.”
The Company completed its most recent annual goodwill impairment testing during the third quarter of 2024. For testing purposes, the Company performed an assessment of each reporting unit using either a qualitative evaluation or a quantitative test. The qualitative evaluations involved consideration of factors such as the macroeconomic environment, the industry, the Company’s overall financial performance, the current and projected financial performance of specific reporting units, and business strategy changes. The quantitative tests, described further below, relied on management’s long-term financial projections for the reporting units and took into consideration, among other things, specific business unit risk, the countries in which the reporting units operate, and implied fair values based on comparable trading multiples.
When performing a quantitative analysis, the Company estimates the fair value of its reporting units using a weighted average of the income and market approaches. Under the income approach, the Company uses a discounted cash flow model based on projections of future years’ operating results and associated cash flows. The Company’s assessments reflect significant management assumptions and estimates related to the Company’s forecast of sales growth, gross profit margins and discount rates, which are validated by observed comparable trading and transaction multiples based on guideline public companies under the market approach. The Company’s model discounts projected future cash flows, forecasted over a five-year period, with an estimated residual growth rate. The Company’s projections incorporate management’s estimates of the most-likely expected future results. Projected future cash flows are discounted to present value using a discount rate that management believes is appropriate for the reporting unit.
The Company’s assessments, whether qualitative or quantitative, incorporate management’s expectations for the future, including forecasted growth rates and/or margin improvements. Therefore, should there be changes in the relevant facts and circumstances and/or expectations, management’s conclusions regarding goodwill impairment may change as well.
In considering the level of uncertainty regarding the potential for goodwill impairment, management has concluded that any such impairment would, in most cases, likely be the result of adverse changes in more than one assumption. Management considers the assumptions used to be its best estimates across a range of possible outcomes based on available evidence at the time of the assessment. Other than in the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units, which are discussed below, there is no specific singular event or single change in circumstances management has identified that it believes could reasonably result in a change to the expected future results in any of its reporting units significant enough to result in goodwill impairment. In the case of Metal Packaging, the 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. In management’s opinion, a change of such magnitude would more likely be the result of changes to some combination of the factors identified above, a general deterioration in competitive position, introduction of a superior technology, significant unexpected changes in customer preferences, an inability to pass through significant raw material cost increases, and other such items as identified in “Item 1A. Risk Factors” in the Company’s 2023 Annual Report on Form 10-K.
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.
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Sensitivity Analysis
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 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 to 13.8%, 12.4%, and 12.1%, respectively, in order for the estimated fair values of the reporting units to fall below their individual carrying values. Total goodwill associated with the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units was $64.9 million, $198.8 million, and $384.3 million, respectively, at September 29, 2024.
Other Critical Accounting Estimates
See Part II, Item 7, “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
Information about the Company’s exposure to market risk is discussed under Part I, Item 2 in this Quarterly Report on Form 10-Q and was disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission on February 28, 2024. There have been no other material quantitative or qualitative changes in market risk exposure since the date of that filing. 
Item 4.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision, and with the participation, of our management, including our Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation pursuant to Rule 13a-15(b) under the Exchange Act of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, our CEO and CFO concluded that such controls and procedures, as of September 29, 2024, the end of the period covered by this Quarterly Report on Form 10-Q, were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information that is required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting occurring during the quarter ended September 29, 2024, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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SONOCO PRODUCTS COMPANY


PART II. OTHER INFORMATION
Item 1.Legal Proceedings.
Information with respect to legal proceedings and other exposures appears in Part I - Item 3 - “Legal Proceedings” and Part II - Item 8 - “Financial Statements and Supplementary Data” (Note 17 - “Commitments and contingencies”) in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and in Part I - Item 1 - “Financial Statements” (Note 17 - “Commitments and Contingencies”) of this Quarterly Report on Form 10-Q.
Environmental Matters
The Company has been named as a potentially responsible party (“PRP”) at several environmentally contaminated sites not owned by the Company. All of the sites are also the responsibility of other parties. The Company’s liability, if any, is shared with such other parties, but the Company’s share has not been finally determined in most cases. In some cases, the Company has cost-sharing arrangements with other PRPs with respect to a particular site. Such agreements relate to the sharing of legal defense costs or cleanup costs, or both. The Company has assumed, for purposes of estimating amounts to be accrued, that the other parties to such cost-sharing agreements will perform as agreed. It appears that final resolution of some of the sites is years away, and actual costs to be incurred for these environmental matters in future periods is likely to vary from current estimates because of the inherent uncertainties in evaluating environmental exposures. Accordingly, the ultimate cost to the Company with respect to such sites, beyond what has been accrued at September 29, 2024, cannot be determined. As of September 29, 2024 and December 31, 2023, the Company had accrued $6.9 million and $7.3 million, respectively, related to environmental contingencies. The Company periodically reevaluates the assumptions used in determining the appropriate reserves for environmental matters as additional information becomes available and, when warranted, makes appropriate adjustments.
Other Legal Matters
Information regarding other legal proceedings is provided in Note 17 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. 
Item 5.Other Information.
Insider Trading Arrangements
During the three months ended September 29, 2024, none of the Company’s officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

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SONOCO PRODUCTS COMPANY
Item 6.Exhibits.
Exhibit Index
2.1*
3.1
3.2
4.1*
10.1*
10.2*
10.3*
31
32
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Certain schedules and attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide, on a supplemental basis, a copy of any omitted schedules and attachments to the Securities and Exchange Commission or its staff upon request.


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SONOCO PRODUCTS COMPANY
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
 
SONOCO PRODUCTS COMPANY
(Registrant)
Date:November 1, 2024By:/s/ Robert R. Dillard
Robert R. Dillard
Chief Financial Officer
(principal financial officer)
/s/ Aditya Gandhi
Aditya Gandhi
Chief Accounting Officer
(principal accounting officer)

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