PACKAGING CORP OF AMERICA

Net sales were $9.0 billion for the year ended December 31, 2025 and $8.4 billion for 2024. We reported $774 million of net income, or $8.58 per diluted share, in 2025, compared to $805 million, or $8.93 per diluted share, in 2024. Net income included $114 million of expense for special items in 2025, compared to $9 million of expense for special items in 2024. Special items in both periods are described later in this section. Excluding special items, we recorded $888 million of net income, or $9.84 per diluted share, in 2025, compared to $814 million, or $9.04 per diluted share, in 2024.1 The increase was driven by improvement in legacy PCA’s earnings by $0.96 per share, partially offset by a loss of ($0.16) per share for the first four months of ownership of the Greif containerboard business. The results of the acquired business included approximately $44 million of depreciation and amortization expense, $28 million of additional interest expense, and maintenance expense for initial mill outages to make reliability and quality improvements. The increase in earnings of the legacy PCA business was driven primarily by higher prices and mix in our Packaging and Paper segments, and lower fiber costs, partially offset by higher operating and converting costs, lower sales and production volumes in our Packaging and Paper segments, higher annual outage expense, higher fixed and other expense, higher freight and logistic expenses, and higher interest expense. PCA ended the year with $668 million of cash and marketable debt securities and, including borrowing availability under its revolving credit facility, $1,241 million in liquidity.

1 Net income excluding special items, earnings per diluted share excluding special items, and segment EBITDA excluding special items are non-GAAP financial measures. See “Non-GAAP Financial Measures” later in this item 7.

Packaging segment operating income was $1,125 million in 2025, compared to $1,102 million for 2024. Packaging segment EBITDA excluding special items was $1,830 million in 2025, compared to $1,598 million in 2024.1 The increase was driven primarily by higher containerboard and corrugated products prices and mix, higher volumes as a result of the Greif containerboard business, and lower fiber costs, partially offset by higher operating and converting costs, higher annual outage expense, higher fixed and other expense, and higher freight and logistic expenses. The lower increase in operating income as compared to Packaging segment EBITDA excluding special items was primarily due to higher depreciation and amortization expenses recorded in 2025.

Packaging prices and mix reflected our 2025 price increases for containerboard and corrugated products. Corrugated product shipments were up 6.3% per workday and in total throughout 2025, compared with 2024, with the addition of the acquired Greif business. Legacy corrugated product shipments were flat compared with 2024. Our containerboard production was approximately 305 BSF, and containerboard inventory weeks-of-supply at the end of 2025 was flat compared to year end 2024. For more information on our containerboard production and corrugated products shipments, refer to the table presented under the caption “Production and Shipments” in “Part I, Item 1. Business” of this Form 10-K. We notified customers of a $70 per ton price increase for linerboard and medium effective March 1, 2026.

Paper segment operating income was $130 million in 2025 and in 2024. Paper segment EBITDA excluding special items was $148 million in 2025, compared to $154 million in 2024.1 The decrease was due primarily to higher operating costs and lower paper volumes, partially offset by higher prices and mix. Paper prices and mix reflected our 2025 price increase for office, printing, and converting papers.