SONOCO PRODUCTS CO

Note 1: Basis of Interim Presentation

On April 1, 2025, subsequent to the three-month period ended March 30, 2025, Sonoco Products Company (the “Company” or “Sonoco”) completed the previously announced sale of its Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”) to TOPPAN Holdings Inc. (“Toppan”) for approximately $1,800,000 on a cash-free and debt-free basis and subject to customary adjustments. In accordance with applicable accounting guidance, the results of TFP, previously part of the Company’s Consumer Packaging segment, are presented as discontinued operations in the Condensed Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Quarterly Report on Form 10-Q. Further, the Company reclassified the assets and liabilities of TFP as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets as of March 30, 2025 and December 31, 2024. The Condensed Consolidated Statements of Comprehensive Income, Changes in Total Equity, and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. All amounts, percentages and disclosures for all periods presented in this Quarterly Report on Form 10-Q reflect only the continuing operations of Sonoco unless otherwise noted. See Note 2 for additional information.

In the opinion of the management of the Company, 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-month period ended March 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. 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 year ended December 31, 2024.

Note 2: Discontinued Operations

As disclosed in Note 1, the Company completed the previously announced sale of TFP on April 1, 2025. The following table presents the assets and liabilities that are classified as discontinued operations in the Condensed Consolidated Balance Sheets as of March 30, 2025 and December 31, 2024:

The following table presents key components of “Net income from discontinued operations” for the three months ended March 30, 2025 and March 31, 2024:

The following table presents significant cash flow items from discontinued operations for the three months ended March 30, 2025 and March 31, 2024:

(a) Subsequent to entering the agreement on December 8, 2024 to sell TFP, depreciation was not recognized on TFP’s property, plant and equipment, and amortization was not recognized on TFP’s other intangible assets or right of use assets-operating leases, in accordance with Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment.”

Note 3: New Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires companies to disclose disaggregated amounts relating to (a) inventory purchases; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization. Further, this guidance will require companies to include certain amounts that are already required to be disclosed under current U.S. generally accepted accounting principles (“GAAP”) in the same disclosure as the other disaggregation requirements, disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The standard is intended to benefit investors by providing more detailed expense disclosures that would be useful in making capital allocation decisions. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 but early adoption is permitted. ASU 2024-03 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 December 2023, the FASB issued 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.

During the three-month period ended March 30, 2025, 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 condensed consolidated financial statements. Further, at March 30, 2025, there were no other pronouncements pending adoption that are expected to have a material impact on the Company’s condensed consolidated financial statements.

Note 4: Acquisitions and Divestitures

Eviosys Acquisition

On December 4, 2024, the Company completed the acquisition of all issued and outstanding equity interests in Titan Holdings I B.V. (“Eviosys”) from an affiliate of KPS Capital Partners, LP for net cash consideration of $3,789,826. Eviosys is 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. The Company funded the Eviosys acquisition, including related fees and expenses, with the net proceeds from the registered public offering of senior unsecured notes, borrowings fromtwo term loan facilities, and cash on hand. See Note 11 to the Company’s Consolidated Financial Statements included in Part IV, Item 15 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information. The financial results of Eviosys are included in the Company’s Consumer Packaging segment.

The Company’s preliminary fair values of the assets acquired and liabilities assumed in the acquisition of Eviosys, are as follows:

The preliminary allocation of the purchase price of Eviosys to the tangible and intangible assets acquired and liabilities assumed, as reflected in the table above, is based on the Company’s preliminary allocations of their respective fair values, based on 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; operating leases; and deferred income taxes, and expects to complete its valuations within one year of the date of acquisition.

Factors comprising goodwill for Eviosys, none of which is expected to be deductible for income tax purposes, include increased access to certain markets and the value of the assembled workforce.

The following table presents the Company’s pro forma consolidated results for the three-month period ended March 31, 2024, assuming the acquisition of Eviosys had occurred on January 1, 2023. This pro forma information is presented for informational purposes only and does not purport to represent the results of operations that would have been achieved if the acquisition had been completed at the beginning of 2023, nor is it necessarily indicative of future consolidated results.

1 Includes results of discontinued operations

The pro forma information above does not project the Company’s expected results for any future period and gives no effect to any future synergistic benefits that may result from the combination or the costs of integrating the acquired operations with those of the Company. Pro forma information for the period ended March 31, 2024 includes adjustments to depreciation, amortization, and income taxes based upon the preliminary fair value allocation of the purchase price to Eviosys’ tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2023. Interest expense on the additional debt issued by the Company to fund the acquisition and retention bonuses incurred related to the acquisition are also included in the pro forma information as if the acquisition had occurred on January 1, 2023. Acquisition-related costs are excluded from 2024 pro forma net income and are instead reflected in 2023 pro forma net income as though the acquisition had occurred on January 1, 2023.

Divestiture of Businesses

On April 1, 2025, subsequent to the three-month period ended March 30, 2025, the Company completed the previously announced sale of its TFP businesses to Toppan for approximately $1,800,000 on a cash-free and debt-free basis and subject to customary adjustments. In accordance with applicable accounting guidance, the results of TFP, previously part of the Company’s Consumer Packaging segment, are presented as discontinued operations in the Condensed Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Quarterly Report on Form 10-Q. The Company preliminarily expects to recognize an estimated gain on the divestiture of TFP of at least $375,000, net of tax, in the second quarter of 2025.

On March 2, 2025, the Company completed the sale of its tube and core operations in Venezuela, part of the Industrial Paper Packaging segment, in exchange for a receivable in the amount of $145. The sale resulted in a loss of $5,390, including $3,792 of cumulative translation losses that were reclassified from accumulated other comprehensive income. This loss is included in “Loss on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

In February 2025, the remaining $2,000 of proceeds from the July 1, 2023 sale of the Company’s U.S. BulkSak business were released to the Company from escrow.

On January 17, 2025, the Company completed the sale of a small construction tube operation in France, part of the Industrial Paper Packaging segment, for cash proceeds of $1,513 and recognized a gain of $1,207, which is included in “Loss on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.

The sales of the operations in Venezuela and France do 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.

Acquisition, Integration, and Divestiture-Related Costs

Acquisition, integration, and divestiture-related costs from continuing operations totaled $27,266 and $5,504 during the three-month periods ended March 30, 2025 and March 31, 2024, respectively. These costs included $9,317 and $5,504 during the three-month periods ended March 30, 2025 and March 31, 2024, respectively, for legal and professional fees, representation and warranty insurance premiums, as well as employee-related costs, and other integration activity costs that are included in “Selling, general and administrative expenses.” In addition, amortization of the fair value step-up of finished goods inventory totaled $17,949 during the three-month period ended March 30, 2025 and is included in “Cost of sales” in the Company’s Condensed Consolidated Statements of Income.

Note 5: Shareholders’ Equity

Earnings per Share

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

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

Anti-dilutive Securities

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-month periods ended March 30, 2025 and March 31, 2024 were as follows (in thousands):

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. Subsequent to 2021, no additional shares have been repurchased under this authorization.

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 220 shares during the three-month period ended March 30, 2025, at a cost of $10,573, and 162 shares during the three-month period ended March 31, 2024, at a cost of $9,139.

Dividend Declarations

On February 12, 2025, the Board declared a regular quarterly dividend of $0.52 per share. This dividend was paid on March 10, 2025 to all shareholders of record as of February 26, 2025.

On April 16, 2025, the Board declared a regular quarterly dividend of $0.53 per share. This dividend is payable on

June 10, 2025 to all shareholders of record as of May 9, 2025.

Note 6: 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 significant changes in its markets. As such, plant closures in connection with footprint rationalization and headcount reductions are an important component of the Company’s cost control initiatives. 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:

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

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:

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” during the three-month period ended March 30, 2025 includes the cost of severance for approximately 80 employees whose positions were eliminated in conjunction with the Company’s ongoing organizational effectiveness efforts, including severance related to the closures of a cone facility in China, a cone facility in Mexico, and a partitions facility in Scarborough, Maine, all part of the Industrial Paper Packaging segment.

“Asset Impairment/Disposal of Assets” during the three-month period ended March 30, 2025 consists primarily of asset write-offs related to the closures of the cone facilities in China and Mexico, and the partitions facility in Scarborough, Maine, all part of the Industrial Paper Packaging segment.

“Other Costs” during the three-month period ended March 30, 2025 consists primarily of equipment removal, utilities, plant security, property taxes, insurance and environmental remediation costs related to the prior year’s closure of the Company’s paper mill in Sumner, Washington, 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 2025 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $5,700 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2025. The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.

Note 7: 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 three-month periods ended March 30, 2025 and March 31, 2024:

The following table summarizes the effects on net income of significant amounts reclassified from each component of accumulated other comprehensive loss for the three-month periods ended March 30, 2025 and March 31, 2024:

(a)See Note 4 for additional details.

(b)See Note 11 for additional details.

(c)See Note 13 for additional details.

The following table summarizes the before and after tax amounts for the various components of other comprehensive income/(loss) for the three-month periods ended March 30, 2025 and March 31, 2024:

(a)See Note 4 for additional details.

(b)See Note 13 for additional details.

(c)See Note 11 for additional details.

Note 8: Goodwill and Other Intangible Assets

Goodwill

A summary of the changes in goodwill for the three-month period ended March 30, 2025 is as follows:

Goodwill activity reflected under the caption “Measurement period adjustments” relates to the prior year acquisition of Eviosys. See Note 4 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 quarterof 2024 andanalyzed 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 wasno impairment of goodwill for any of its reporting units.

Although no reporting units failed the annual impairment test, in management’s opinion, the goodwill balance of the Metal Packaging - US reporting unit is at risk of impairment in the near term if the reporting unit’s operations do not perform in line with management’s expectations, or if there is a negative change in the long-term financial outlook for the reporting unit or in other factors such as the discount rate. The total goodwill associated with the Metal Packaging - US reporting unit was $384,315 at March 30, 2025.

During the time subsequent to the annual evaluation, and at March 30, 2025, 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.

Other Intangible Assets

A summary of other intangible assets as of March 30, 2025 and December 31, 2024 is as follows:

During the first quarter of 2025, the Company recorded measurement period adjustments related to the December 4, 2024 acquisition of Eviosys that reduced the previously reported fair value of customer lists by $5,253. The effect on amortization expense in the prior period was immaterial. See Note 4 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 toforty years. The Company hasno intangible assets with indefinite lives.

Aggregate amortization expense was $41,961 and $17,894 for the three-month periods ended March 30, 2025 and March 31, 2024, respectively. Amortization expense on other intangible assets is expected to total approximately $169,900 in 2025, $168,300 in 2026, $167,600 in 2027, $167,400 in 2028 and $165,100 in 2029.

Note 9: Supply Chain Financing

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

The following table sets forth the balance sheet location and values of the obligations under the Company’s SCF Programs at March 30, 2025 and December 31, 2024:

(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 10: Debt

Details of the Company’s debt at March 30, 2025 and December 31, 2024 are as follows:

Included in “Other foreign denominated debt” at March 30, 2025 and December 31, 2024 are$51,949 and$73,487, respectively, of transfers of certain trade receivables of Eviosys to third-party financial institutions for which the requirements to be accounted for as true sale in accordance with the guidance under ASC 860, “Transfers and Servicing,” were not met. Additions to and settlements of these obligations are reflected as “Proceeds from issuance of debt” and “Principal repayment of debt,” respectively, in “Net cash provided/(used) by financing activities” in the Company’s Condensed Consolidated Statements of Cash Flows.

On February 3, 2025, the Company repaid the$400,000 aggregate principal amount of its 1.800% notes due February 2025 upon maturity using proceeds from the issuance of commercial paper.

The Company maintains a revolving credit facility with total commitments of$1,250,000 and amaturity date of May 3, 2029. The Company’s$1,250,000 commercial paper program is supported by the revolving credit facility. At March 30, 2025, the Company had $528,000 in commercial paper balances outstanding; accordingly, the committed capacity available for drawdown under its revolving credit facility at March 30, 2025 was $722,000.

On April 1, 2025, subsequent to the end of the three-month period ended March 30, 2025, the Company completed the sale of TFP. On April 3, 2025, the Company used a portion of the cash proceeds from the sale to repay the outstanding$1,500,000 principal amount of borrowings under its 364-day term loan facility.

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 March 30, 2025, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

Note 11: 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.

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.

Cash Flow Hedges

At March 30, 2025 and December 31, 2024, 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 April 2025 to December 2025, qualify as cash flow hedges under 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 March 30, 2025, there were no natural gas swaps covering anticipated natural gas usage in 2025, and aluminum swaps covering 4,179 metric tons of aluminum represented approximately 38.0% of anticipated aluminum usage for 2025. The fair value of the Company’s commodity cash flow hedges netted to gain positions of $116 and $652 at March 30, 2025 and December 31, 2024, respectively. The amount of the gain included in accumulated other comprehensive income at March 30, 2025 expected to be reclassified to the income statement during the next twelve months is $116. 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.

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 2025. The net positions of these contracts at March 30, 2025 were as follows (in thousands):

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a gain position of $1,120 and a loss position of $(1,841) at March 30, 2025 and December 31, 2024, respectively. Gains of $1,120 are expected to be reclassified from accumulated other comprehensive income to the income statement during the next twelve months.

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 in April 2024 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.

In December 2024, the Company entered into additional cross-currency swap agreements with a total notional amount of $1,500,000, including $500,000 maturing on September 1, 2026, $500,000 maturing on September 1, 2029, and $500,000 maturing on May 1, 2030. The swaps 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 at the prevailing market rate at execution. The new swap agreements share the same risk management objective as the Company’s previously existing 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 was a loss position of $49,242 and a gain position of $11,919 at March 30, 2025 and December 31, 2024, respectively. A foreign currency translation loss of $36,685 (net of income taxes of $12,557) and a gain of $8,880 (net of income taxes of $3,039) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at March 30, 2025 and December 31, 2024, respectively.

Non-Designated Derivatives

The Company routinely enters into other derivative contracts which are not designated for hedge accounting treatment under ASC 815, “Derivatives and Hedging.” 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 March 30, 2025, were as follows (in thousands):

Commodity Hedges

The Company has entered into non-designated derivative contracts to manage the cost of anticipated purchases of natural gas. At March 30, 2025, these contracts consisted of natural gas swaps covering approximately 3.8 million metric million British thermal units (“MMBTUs”) and represented approximately 74.5% of anticipated usage in North America for the remainder of 2025.

The fair value of the Company’s non-designated deriva tives position was a gain of $2,955 and a loss of $(2,694) at March 30, 2025 and December 31, 2024, respectively.

The following table sets forth the location and fair values of the Company’s derivative instruments at March 30, 2025 and December 31, 2024:

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.

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the three-month periods ended March 30, 2025 and March 31, 2024, 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:

Note 12: 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:

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:

As discussed in Note 11, 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-month period ended March 30, 2025.

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 inpreferred stock of $21,212 is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheet as of March 30, 2025.

The Company measures certain non-financial assets and non-financial liabilities at fair value on a non-recurring basis. See Note 4 for a discussion of assets acquired and liabilities assumed in acquisitions and sold in dispositions, and Note 6 for adiscussion 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 March 30, 2025 or December 31, 2024.

Note 13: 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. Following the acquisition of Eviosys on December 4, 2024, the Company now also provides non-contributory defined benefit pension plans for certain of its employees in Italy, Switzerland, Spain, and Ireland. 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 include the following:

Contributions

The Company made aggregate contributions of $4,223 and $3,989 to its defined benefit retirement and retiree health and life insurance plans during the three-month periods ended March 30, 2025 and March 31, 2024, respectively. The Company expects to make additional aggregate contributions of approximately $18,800 to its defined benefit retirement and retiree health and life insurance plans over the remainder of 2025.

Note 14: Income Taxes

The Company’s effective tax rates for the three-month periods ended March 30, 2025 and March 31, 2024 were 30.9% and 18.6%, 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 2019.

The Company’s reserve for uncertain tax benefits decreased by $358 from December 31, 2024 to March 30, 2025 due primarily to a decrease in reserves related to existing tax positions. 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 15: 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, includeone or more options to renew, with renewal terms that typically extend the lease term in increments fromone tofive 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 Eviosys acquisition on December 4, 2024. The acquisition included operating lease liabilities of$42,468 with a weighted-average remaining lease maturity term of 8.1 years and a weighted-average discount rate of 4.5%. For additional information about this acquisition, see Note 4.

The following table sets forth the balance sheet location and aggregate values of the Company’s lease assets and lease liabilities at March 30, 2025 and December 31, 2024:

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-month periods ended March 30, 2025 and March 31, 2024:

(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.

(d) Impairment charges are included in “Restructuring/asset impairment charges” in the Company’s Condensed Consolidated Statements of Income. See Note 6 for additional information.

The following table sets forth certain lease-related information for the three-month periods ended March 30, 2025 and March 31, 2024:

Note 16: 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.

Significant changes in the contract assets and liabilities balances during the three-month period ended March 30, 2025 and the year ended December 31, 2024 were as follows:

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 March 30, 2025 and March 31, 2024. The tables also include a reconciliation of disaggregated revenue with reportable segments. The Company’s reportable segments are aligned by product nature as disclosedin Note 17.

Note 17: Segment Reporting

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

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; and metal and peelable membrane ends, closures, and components.

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.

Theprimary 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 Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM assesses segment performance and allocates resources to each segment by using each segment’s operating profit. The CODM uses operating profit for each segment in the annual budgeting and forecasting process and reviews segment operating profit quarterly when making decisions about allocating capital and operating resources to segments. Disaggregated assets by segment are not disclosed since segment assets are not regularly provided to the CODM.

Segment operating profit viewed by the Company to evaluate segment performance does not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; gains/losses from the sale of businesses or other assets; acquisition, integration and divestiture-related costs; changes in last-in, first-out (“LIFO”) inventory reserves; 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, except for costs related to discontinued operations.

The following table sets forth financial information about each of the Company’s reportable segments:

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

The following table sets forth the reconciliation of other segment disclosures to consolidated totals for the periods presented.

Note 18: Commitments and Contingencies

In accordance with the requirements of ASC 450, “Contingencies,” the Company records accruals for estimated losses 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$2,345 on remediation of the Spartanburg site. At March 30, 2025 and December 31, 2024, the Company’s accrual for environmental contingencies related to the Spartanburg site totaled$5,055 and $5,096, respectively. The Spartanburg site and related environmental liabilities were part of the sale of TFP to Toppan, which was completed on April 1, 2025, subsequent to the end of the first quarter. Accordingly, these accruals are reflected in “Current liabilities of discontinued operations” on the Company’s Condensed Consolidated Balance Sheets.

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 March 30, 2025 and December 31, 2024, the Company’s accrual for these other sites totaled$1,807 and $1,933, respectively, and are included in “Accrued expenses and other” on 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.