PACKAGING CORP OF AMERICA
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
PKG$249.70+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001193125-26-339405
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001193125-26-449161
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 132 previous paragraphs and 141 current paragraphs.
73 unchanged; 46 reworded; 22 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Looking ahead as we move from the third quarter into the fourth quarter, we expect solid corrugated products demand with some seasonal improvement. Shipments per day are expected to be at or around last year’s fourth quarter level with two fewer shipping days than the third quarter and total shipments are expected to be higher than the third quarter. Prices for containerboard and corrugated products are expected to improve as we continue to implement earlier price increases, but corrugated products mix will be seasonally weaker with higher e-commerce volumes, partially offsetting the benefit from higher prices. Containerboard production will be lower with maintenance outages at three of our mills, and mill maintenance outage expenses, including the impact on production volume from those fourth quarter outages, will be significantly higher in the fourth quarter. We expect seasonally lower volume and slightly higher prices in the Paper segment. We expect freight costs to increase across our business with diesel fuel prices increasing above third quarter levels. We also expect costs for recycled fiber to continue to increase as well as higher wood fiber costs due to winter yields and mill mix. Costs for chemicals and energy will increase due to higher prices and higher seasonal energy usage. Considering these items, we expect fourth quarter earnings to be lower than the third quarter of 2026, excluding special items.
Current report
Net sales increased $288 million, or 12.5%, to $2,602 million during the three months ended September 30, 2026, compared to $2,313 million during the same period in 2025.
Current report
Paper. Net sales increased $2 million, or 1.2%, to $163 million, compared to $161 million in the third quarter of 2025, due to higher prices and mix ($6 million), partially offset by lower volume ($4 million).
Current report
Other Expense, Net
Current report
Other expense, net, for the three months ended September 30, 2026 and 2025 are set forth below (dollars in millions):
Current report
Income from operations increased $61 million, or 18.7%, during the three months ended September 30, 2026 compared to the same period in 2025. The third quarter of 2026 included $13 million of special items expense related to corrugated products facility closures, the impact of a fire at a corrugated products facility, acquisition and integration-related costs, and Wallula mill restructuring, compared to $26 million of special items expense related to the Greif Acquisition and corrugated facility closures in the third quarter of 2025.
Current report
Packaging. Packaging segment operating income increased $70 million to $398 million, compared to $328 million during the three months ended September 30, 2025. Operating income included $10 million of special items expense related to corrugated products facility closures, the impact of a fire at a corrugated products facility, acquisition and integration-related costs, and Wallula mill restructuring compared to $20 million of special items expense related to the Greif Acquisition and corrugated facility closures in the third quarter of 2025. Excluding special items, operating income increased $60 million. The increase was driven primarily by higher containerboard and corrugated products prices and mix ($89 million), higher contribution from the acquired Greif operations ($41 million), and favorable sales and production volume ($20 million). These items were partially offset by higher freight expenses ($28 million), higher labor and operating costs ($21 million), higher fixed and other expenses ($19 million), higher fiber costs ($16 million), and higher depreciation expense ($7 million).
Current report
Nine Months Ended September 30, 2026, compared to Nine Months Ended September 30, 2025
Current report
Net sales increased $834 million, or 12.6%, to $7,459 million during the nine months ended September 30, 2026, compared to $6,626 million during the same period in 2025.
Current report
Other Expense, Net
Current report
Other expense, net, for the nine months ended September 30, 2026 and 2025 are set forth below (dollars in millions):
Current report
Income from operations decreased $11 million, or (1.2%), during the nine months ended September 30, 2026 compared to the same period in 2025. The first nine months of 2026 included $96 million of special items expense related to Wallula mill restructuring, corrugated products facility closures, acquisition and integration-related costs, and the impact of a fire at a corrugated products facility, compared to $9 million of special items expense related to the Greif Acquisition and corrugated facility closures, partially offset by income related to gains on sales of corrugated products facilities in the same period in 2025. Excluding special items, income from operations increased $76 million or 8.0%.
Current report
Packaging. Packaging segment operating income increased $19 million to $971 million during the nine months ended September 30, 2026, compared to $952 million in the same period in 2025. Operating income included $81 million of special items expense in 2026 related to Wallula mill restructuring, corrugated products facility closures, the impact of a fire at a corrugated products facility and acquisition and integration-related costs, compared to $2 million of expense related to the Greif Acquisition and corrugated facility closures, partially offset by income related to gains on sales of corrugated products facilities in 2025. Excluding special items, operating income increased $98 million. The increase was driven primarily by higher containerboard and corrugated products prices and mix ($96 million), higher earnings from the acquired Greif operations ($89 million), higher sales and production volume ($38 million), and lower maintenance outage expenses ($5 million). These items were partially offset by higher freight expenses ($70 million), higher fixed and other expenses ($26 million), higher depreciation expense ($15 million), higher labor and operating costs ($13 million), and higher fiber costs ($5 million).
Current report
a net favorable change in income taxes during the first nine months of 2026 compared to the same period in 2025 resulting from income tax accruals exceeding tax payments during the first nine months of 2026 and an increase in income tax receivables during the first nine months of 2025 related to the reduction of taxable income due to bonus depreciation taken on assets acquired as part of the Greif Acquisition; and
Current report
a net unfavorable change in inventories primarily due to an increase in Packaging segment inventory levels driven by stronger demand and anticipated volumes during the first nine months of 2026 compared to the same period in 2025.
Current report
During the nine months ended September 30, 2025, we entered into two credit agreements and borrowed $500 million under each of the new three-year and seven-year unsecured term loan facilities. We also issued $500 million of 5.20% Senior Notes due 2035 and used the net proceeds from these borrowings and the notes issuance, together with cash on hand, to finance the Greif Acquisition. The net proceeds received from these financing activities were $1,494 million. We also paid $7 million of debt issuance costs, excluding lender fees, related to the Greif Acquisition financing, including $3 million for the bridge loan, $2 million for the credit agreements, and $2 million for the 5.20% Senior Notes due 2035.
Current report
For the three and nine months ended September 30, 2026, includes $3.0 million of charges related to fire damage at a corrugated products facility.
Current report
(e)
Current report
(f)
Current report
(g)
Current report
For the three and nine months ended September 30, 2026, includes charges related to fire damage at a corrugated products facility.
Removed paragraphs (13)
Previous report
We expect continued strong demand in the Packaging segment and corrugated products volume to increase with one more shipping day in the third quarter of 2026 compared to the second quarter. We expect continued Packaging segment price and mix improvement in the third quarter as we complete the implementation of the first price increase and begin to implement the second price increase to corrugated products customers. Packaging mill production will be higher with one more operating day and lower impact to production from maintenance outages with fewer mills having annual outages as well as expected improved operating performance in our containerboard mill system. Mill maintenance outage expenses will be lower in total and in the Packaging segment and higher in the Paper segment with our single Paper segment mill having its maintenance outage in the third quarter. We expect lower volume and higher prices in the Paper segment as a result of the maintenance outage and the continued implementation of our previously announced paper price increases. We expect costs for freight to remain at or around the elevated levels we experienced later in the second quarter and higher on average for the third quarter. We expect prices for recycled fiber to continue to increase and higher mill production will drive increased usage and higher costs. Costs for chemicals and purchased electricity will be higher and will remain relatively flat for wood fiber and natural gas. We expect improvement in benefits costs due to second quarter unfavorability that is not expected to repeat in the third quarter. Considering these items, we expect third quarter earnings to be higher than the second quarter of 2026, excluding special items.
Previous report
Net sales increased $319 million, or 14.7%, to $2,490 million during the three months ended June 30, 2026, compared to $2,171 million during the same period in 2025.
Previous report
Paper. Net sales increased $11 million, or 7.9%, to $157 million, compared to $146 million in the second quarter of 2025, due to higher volumes ($9 million) and higher prices and mix ($2 million).
Previous report
Other Income (Expense), Net
Previous report
Other income (expense), net, for the three months ended June 30, 2026 and 2025 are set forth below (dollars in millions):
Previous report
Income from operations decreased $43 million, or (12.7%), during the three months ended June 30, 2026 compared to the same period in 2025. The second quarter of 2026 included $24 million of special items expense related to corrugated facility closures, Wallula mill restructuring, and recent acquisitions, compared to $23 million of special items income related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs and costs related to the Greif acquisition in the second quarter of 2025.
Previous report
Packaging. Packaging segment operating income decreased $33 million to $313 million, compared to $346 million during the three months ended June 30, 2025. The decrease related primarily to $15 million of special items expense related to the Wallula mill restructuring and corrugated facility closures, compared to $25 million of special items income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs in the second quarter of 2025. Excluding special items, operating income increased $6 million compared to the same period last year. The increase was driven primarily by the impact of newly acquired Greif operations ($36 million) and higher sales and production volume ($31 million), partially offset by higher freight expenses ($28 million), lower containerboard and corrugated products prices and mix ($14 million), higher fixed and other expenses ($8 million), higher maintenance outage expenses ($5 million), higher depreciation expense ($2 million), higher fiber costs ($2 million), and higher labor and operating costs ($1 million).
Previous report
Six Months Ended June 30, 2026, compared to Six Months Ended June 30, 2025
Previous report
Net sales increased $546 million, or 12.7%, to $4,858 million during the six months ended June 30, 2026, compared to $4,312 million during the same period in 2025.
Previous report
Other Income (Expense), Net
Previous report
Other income (expense), net, for the six months ended June 30, 2026 and 2025 are set forth below (dollars in millions):
Previous report
Income from operations decreased $72 million, or (11.6%), during the six months ended June 30, 2026 compared to the same period in 2025. The first six months of 2026 included $83 million of special items expense related to Wallula mill restructuring, corrugated products facility closures, and recent acquisitions, compared to $17 million of special items income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs and costs related to the Greif acquisition in the same period in 2025.
Previous report
Packaging. Packaging segment operating income decreased $51 million to $574 million during the six months ended June 30, 2026, compared to the same period in 2025. The decrease related primarily to $71 million of special items expense related to the Wallula mill restructuring and corrugated products facility closures, compared to $19 million of special items income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs in the same period in 2025. Excluding special items, operating income increased $39 million compared to the same period last year. The increase was driven primarily by the impact of newly acquired Greif operations ($48 million), higher containerboard and corrugated products prices and mix ($18 million), lower fiber costs ($11 million), lower labor and operating costs ($8 million), higher sales and production volume ($7 million), and lower maintenance outage expenses ($5 million), partially offset by higher freight expenses ($42 million), higher depreciation expense ($8 million) and higher fixed and other expenses ($7 million).
Reworded paragraphs (46)
Previous wording
PCA is the third largest producer of containerboard products and a leading producer of UFS paper in North America. We operate ten mills and 90 corrugated products manufacturing plants. Our containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. We also manufacture and sell UFS papers, including both commodity and specialty papers, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. We are headquartered in Lake Forest, Illinois and operate in the United States.
Current wording
PCA is the third largest producer of containerboard products and a leading producer of UFS paper in North America. We operate ten mills and 89 corrugated products manufacturing plants. Our containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. We also manufacture and sell UFS papers, including both commodity and specialty papers, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. We are headquartered in Lake Forest, Illinois and operate in the United States.
Previous wording
This Item 2 is intended to supplement, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.
Current wording
This Item 2 is intended to supplement, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q for the first and second quarters of 2026.
Previous wording
Second quarter net sales were $2.49 billion in 2026 and $2.17 billion in 2025. We reported $192 million of net income, or $2.15 per diluted share, during the second quarter of 2026, compared to $242 million, or $2.67 per diluted share, during the same period in 2025. Net income included $18 million of expense for special items in the second quarter of 2026, primarily related to facility closure costs, Wallula mill restructuring activities, and acquisition and integration-related costs, compared to $17 million of income for special items in 2025. Please see “Non-GAAP Financial Measures” elsewhere in this Item 2 for a description of special items. Excluding special items, net income was $210 million, or $2.35 per diluted share, during the second quarter of 2026, compared to $224 million, or $2.48 per diluted share, in the second quarter of 2025.1 The decrease was driven by lower earnings in the legacy business of ($0.27) per share, partially offset by $0.14 per share of earnings from the acquired Greif containerboard business. The decrease in the earnings of the legacy PCA business was driven primarily by higher freight costs, higher corporate and other expenses due to higher deferred compensation benefit costs and stock compensation expenses, unfavorable price and mix in the Packaging segment, higher labor and operating costs, higher depreciation and amortization expense, higher fiber costs, higher tax rate, and higher interest expense, excluding Greif acquisition indebtedness. These items were partially offset by higher production and sales volume in the Packaging segment, lower maintenance outage expense, and higher production and sales volume and prices and mix in the Paper segment. For additional detail on special items included in reported GAAP results and other non-GAAP measures, see “Item 2. Non-GAAP Financial Measures.”
Current wording
Third quarter net sales were $2.60 billion in 2026 and $2.31 billion in 2025. We reported $262 million of net income, or $2.93 per diluted share, during the third quarter of 2026, compared to $227 million, or $2.51 per diluted share, during the same period in 2025. Net income included $10 million of expense for special items in the third quarter of 2026, primarily related to facility closure costs, acquisition and integration-related costs, the impact of a fire at a corrugated products facility, and Wallula mill restructuring activities, compared to $20 million of expense for special items in 2025. Please see “Non-GAAP Financial Measures” elsewhere in this Item 2 for a description of special items. Excluding special items, net income was $272 million, or $3.04 per diluted share, during the third quarter of 2026, compared to $247 million, or $2.73 per diluted share, in the third quarter of 2025.1 The increase was driven by $0.24 per share of higher contribution from the acquired Greif containerboard business and $0.07 per share of higher earnings in the legacy business. The increase in the earnings of the legacy PCA business was driven primarily by favorable price and mix in the Packaging segment, favorable production and sales volume in the Packaging segment, including the benefit of a higher volume of containerboard supplied by the legacy mills to the acquired Greif operations, favorable price and mix in the Paper segment, and a lower share count. These items were partially offset by higher labor and operating expenses, higher freight expense, higher corporate and other expenses, higher fiber costs, higher depreciation and amortization expense, higher maintenance outage expense in the Paper segment, lower volume in the Paper segment, and higher interest expense, excluding Greif acquisition indebtedness. For additional detail on special items included in reported GAAP results and other non-GAAP measures, see “Item 2. Non-GAAP Financial Measures.”
Previous wording
Packaging segment operating income was $313 million in the second quarter of 2026, compared to $346 million in the second quarter of 2025. Packaging segment EBITDA excluding special items was $489 million in the second quarter of 2026 compared to $453 million in the second quarter of 2025.1 The increase in EBITDA excluding special items was driven by contribution from the acquired business and higher sales and production volume in the legacy business, partially offset by higher freight and logistics expenses, lower price and mix, higher fixed and other expenses, higher maintenance outage expense, and higher operating and converting costs. Prices and mix began to improve in the second quarter and are expected to further improve in the third and fourth quarters due to two containerboard and corrugated products price increases that we notified to customers during the first half of the year and the increase in reported containerboard prices described below under “Industry and Business Conditions.” PCA’s agreements with corrugated products customers generally include price change provisions based upon the change in reported containerboard prices at negotiated amounts and times. PCA expects to realize the majority of the price and mix improvement from the first price increase during the third quarter and expects that the price and mix improvement from the second price increase will be divided between the third and fourth quarters. Freight rates increased significantly during the second quarter primarily as a result of higher diesel fuel prices and recycled fiber prices have increased throughout the first half of the year.
Current wording
Packaging segment operating income was $398 million in the third quarter of 2026, compared to $328 million in the third quarter of 2025. Packaging segment EBITDA excluding special items was $578 million in the third quarter of 2026 compared to $492 million in the third quarter of 2025.1 The increase in EBITDA excluding special items was driven by higher prices and mix, contribution from the acquired business, and higher volumes in the legacy business, partially offset by higher freight and logistics expenses, higher labor and operating costs, higher fixed and other expenses, and higher fiber costs. Prices and mix continued to improve in the third quarter and are expected to further improve in the fourth quarter due to previously announced containerboard and corrugated products price increases. In addition to continued increases in freight costs, as a result of higher diesel fuel prices, we saw significant increases in recycled fiber, purchased power, and chemical costs during the third quarter, which we expect to continue at elevated levels.
Previous wording
Corrugated product shipments were up 24.3% per day and in total compared to the second quarter of 2025. Shipments from the legacy PCA business were up 4.1% per day and in total compared to the second quarter of 2025. Containerboard production in the second quarter of 2026 was approximately 1,415,000 tons, and containerboard inventory was down (5.3%) compared to the first quarter, and up 9.9% compared to the second quarter of 2025, primarily due to the acquisition.
Current wording
Corrugated product shipments were up 10.6% per day and in total compared to the third quarter of 2025. Shipments from the legacy PCA business were down (0.5%) per day and in total compared to the third quarter of 2025. Containerboard production in the third quarter of 2026 was approximately 1,489,000 tons, and containerboard inventory was up 7.8% compared to the second quarter, and down (5.8%) compared to the third quarter of 2025.
Previous wording
Paper segment operating income was $34 million in the second quarter of 2026, compared to $26 million in the second quarter of 2025. Paper segment EBITDA excluding special items was $39 million in the second quarter of 2026, compared to $30 million in the second quarter of 2025.1 The increase in EBITDA excluding special items was primarily due to lower maintenance outage expense in 2026 due to the timing of annual maintenance outages, higher sales and production volume, and higher prices and mix, partially offset by higher freight and operating costs, with freight rates rising significantly during the quarter.
Current wording
Paper segment operating income was $29 million in the third quarter of 2026, compared to $36 million in the third quarter of 2025. Paper segment EBITDA excluding special items was $34 million in the third quarter of 2026, compared to $40 million in the third quarter of 2025.1 The decrease in EBITDA excluding special items was primarily due to higher maintenance outage expense in 2026 due to the timing of annual maintenance outages, higher operating and freight costs, and lower sales volume, partially offset by higher prices and mix and lower fiber costs.
Previous wording
Packaging segment operating income was $574 million in the first six months of 2026, compared to $624 million in the same period in 2025. Packaging segment EBITDA excluding special items was $970 million in the first six months of 2026 compared to $862 million in the first six months of 2025.1 The increase in EBITDA excluding special items was driven by contribution from the acquired business and higher sales and production volume in the legacy business, lower fiber costs, higher prices and mix, and lower maintenance outage expense, partially offset by higher freight and logistics expense, higher fixed and other costs, and higher operating and converting costs with the addition of the acquired business.
Current wording
Packaging segment operating income was $971 million in the first nine months of 2026, compared to $952 million in the same period in 2025. Packaging segment EBITDA excluding special items was $1,548 million in the first nine months of 2026 compared to $1,354 million in the first nine months of 2025.1 The increase in EBITDA excluding special items was driven by contribution from the acquired business, higher prices and mix, higher sales and production volume in the legacy business, and lower maintenance outage expense, partially offset by higher freight and logistics expense, higher fixed and other costs, higher labor and operating costs, and higher fiber costs.
Previous wording
Paper segment operating income was $67 million in the first six months of 2026, compared to $61 million in the first six months of 2025. Paper segment EBITDA excluding special items was $77 million in the first six months of 2026, compared to $71 million in the first six months of 2025.1 The increase in EBITDA excluding special items was due to lower maintenance outage expense, higher sales and production volume, and higher prices and mix, partially offset by higher operating costs and higher freight and logistics expense.
Current wording
Paper segment operating income was $96 million in the first nine months of 2026, compared to $97 million in the first nine months of 2025. Paper segment EBITDA excluding special items was $110 million in the first nine months of 2026, compared to $111 million in the first nine months of 2025.1 EBITDA excluding special items was essentially flat due to higher labor and operating costs, higher freight and logistics expense, and higher fixed and other costs, offset by higher prices and mix, lower maintenance outage expense, higher sales and production volume, and lower fiber costs.
Previous wording
Trade publications reported North American industry-wide corrugated products shipments were up 0.9% in total and per workday during the second quarter of 2026 compared to the same quarter of 2025. Reported industry containerboard production decreased (2.3%) compared to the second quarter of 2025. Reported industry containerboard inventories at the end of the second quarter of 2026 were approximately 2.40 million tons, down (12.5%) compared to the same period in 2025. Reported containerboard export shipments were down (27.3%) compared to the second quarter of 2025. Reported containerboard prices increased a net $20 per ton for linerboard and for corrugating medium during the first quarter of 2026, an additional $30 per ton in April 2026 and an additional $50 per ton in June 2026.
Current wording
Trade publications reported North American industry-wide corrugated products shipments were down (1.6%) in total and per workday during the third quarter of 2026 compared to the same quarter of 2025. Reported industry containerboard production decreased (1.6%) compared to the third quarter of 2025. Reported industry containerboard inventories at the end of the third quarter of 2026 were approximately 2.59 million tons, down (6.1%) compared to the same period in 2025. Reported containerboard export shipments were down (29.4%) compared to the third quarter of 2025. Reported containerboard prices increased a net $20 per ton for linerboard and for corrugating medium during the first quarter and an additional $80 per ton during the second quarter of 2026. In September, reported linerboard prices increased $70 per ton and corrugating medium increased $100 per ton.
Previous wording
The market for communication papers competes heavily with electronic data transmission and document storage alternatives. Increasing shifts to these alternatives have reduced usage of traditional print media and communication papers. Trade publications reported North American UFS paper shipments were down (9.1%) in the first six months of 2026, compared to the same period of 2025. Average prices reported by a trade publication for cut size office papers were higher by $87 per ton, or 5.8%, in the second quarter of 2026, compared to the first quarter of 2026, and higher by $107 per ton, or 7.2%, compared to the second quarter of 2025. Reported index prices increased $60 per ton in March 2026, $40 per ton in April 2026 and $20 per ton in June 2026 for cut size office papers and for offset printing papers.
Current wording
The market for communication papers competes heavily with electronic data transmission and document storage alternatives. Increasing shifts to these alternatives have reduced usage of traditional print media and communication papers. Trade publications reported North American UFS paper shipments were down (9.8%) in the first nine months of 2026, compared to the same period of 2025. Average prices reported by a trade publication for cut size office papers were higher by $13 per ton, or 0.8%, in the third quarter of 2026, compared to the second quarter of 2026, and higher by $120 per ton, or 8.1%, compared to the third quarter of 2025. Reported index prices increased $60 per ton in March 2026, $40 per ton in April 2026 and $20 per ton in June 2026 for cut size office papers and for offset printing papers.
Previous wording
Packaging. Net sales increased $305 million, or 15.2%, to $2,311 million, compared to $2,006 million in the second quarter of 2025 due to higher volume related to the acquired business ($258 million) and higher legacy volume ($58 million), partially offset by lower containerboard and corrugated products prices and mix ($11 million). In the second quarter of 2026, export and domestic containerboard outside shipments decreased (19.0%) compared to the second quarter of 2025, with more containerboard being integrated into PCA’s corrugated products system. Our total corrugated products shipments were up 24.3% per day and in total, compared to the same period in 2025. Shipments from the legacy PCA business were up 4.1% per day and in total. In the second quarter of 2026, our domestic containerboard prices were 3.2% higher, while export prices were 1.8% higher compared to the same period in 2025.
Current wording
Packaging. Net sales increased $286 million, or 13.4%, to $2,414 million, compared to $2,128 million in the third quarter of 2025 due to higher volume related to the acquired Greif operations ($175 million) and higher prices and mix ($117 million), partially offset by lower legacy volume ($6 million). In the third quarter of 2026, export and domestic containerboard outside shipments decreased (6.6%) compared to the third quarter of 2025, with more containerboard being integrated into PCA’s corrugated products system. Our total corrugated products shipments were up 10.6% per day and in total, compared to the same period in 2025. Shipments from the legacy PCA business were down (0.5%) per day and in total. In the third quarter of 2026, our domestic containerboard prices were 11.5% higher, while export prices were 12.2% higher compared to the same period in 2025.
Previous wording
Gross profit increased $30 million during the three months ended June 30, 2026, compared to the same period in 2025. The increase was driven primarily by higher volumes in the Packaging and Paper segments, lower maintenance outage expense, and higher prices and mix in the Paper segment, partially offset by higher freight expense, lower prices and mix in the Packaging segment, higher operating costs, and higher fixed and other costs. In the three months ended June 30, 2026, gross profit included $5 million of special items expense related to corrugated products facility closures, compared to $1 million in the three months ended June 30, 2025 related to corrugated products facility closures.
Current wording
Gross profit increased $100 million during the three months ended September 30, 2026, compared to the same period in 2025. The increase was driven primarily by higher prices and mix in the Packaging segment, the contribution from the acquired Greif operations, favorable production and sales volume in the legacy Packaging business, and higher prices and mix in the Paper segment. These items were partially offset by higher freight expense, higher labor and operating expenses, higher fiber costs, higher maintenance outage expense in the Paper segment, and lower sales volume in the Paper segment. In the three months ended September 30, 2026, gross profit included $2 million of special items expense related to corrugated products facility closures and acquisition and integration-related costs, compared to $19 million in the three months ended September 30, 2025 related to the Greif Acquisition.
Previous wording
Selling, general, and administrative expenses (“SG&A”) increased $45 million during the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to higher depreciation related to the acquired business and higher employee-related expenses.
Current wording
Selling, general, and administrative expenses (“SG&A”) increased $28 million during the three months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to higher employee-related expenses, higher depreciation related to the acquired business, and higher information technology and other expenses.
Previous wording
We discuss these items in more detail in Note 6, Other Income (Expense), Net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.
Current wording
We discuss these items in more detail in Note 6, Other expense, net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.
Previous wording
Paper. Paper segment operating income increased $8 million to $34 million, compared to $26 million during the three months ended June 30, 2025. The increase primarily related to lower maintenance outage expenses ($9 million), higher sales and production volume ($3 million), and higher prices and mix ($2 million), partially offset by higher freight expenses ($3 million), and higher operating costs ($2 million). There were no significant special items in the second quarter of 2026 or 2025.
Current wording
Paper. Paper segment operating income decreased $7 million to $29 million, compared to $36 million during the three months ended September 30, 2025. The decrease primarily related to higher maintenance outage expenses ($5 million), higher labor and operating costs ($3 million), higher freight expenses ($3 million), higher fixed and other expenses ($2 million), and lower sales volume ($1 million), partially offset by higher prices and mix ($6 million) and lower fiber costs ($1 million). There were no significant special items in the third quarter of 2026 or 2025.
Previous wording
Interest expense, net for the three months ended June 30, 2026 increased $20 million when compared to the same period in 2025. The increase in interest expense, net was primarily due to higher interest expense in 2026 as a result of the Company’s financing for the Greif Acquisition and lower interest income as a result of lower interest rates on lower cash balances.
Current wording
Interest expense, net for the three months ended September 30, 2026 increased $13 million when compared to the same period in 2025. The increase in interest expense, net was primarily due to higher interest expense in 2026 as a result of the Company’s financing for the Greif Acquisition and lower interest income as a result of lower interest rates on lower cash balances.
Previous wording
During the six months ended June 30, 2026, we recorded $116 million of income tax expense, compared to $143 million of expense during the six months ended June 30, 2025. The effective tax rate for the six months ended June 30, 2026 and 2025 was 24.2% and 24.3%, respectively. The decrease in our effective tax rate for the six months ended June 30, 2026 compared to the same period in 2025 was primarily due to higher excess tax benefits associated with employee restricted stock and performance unit vests and favorable state law changes partially offset by higher non-deductible employee remuneration paid to covered employees.
Current wording
During the three months ended September 30, 2026, we recorded $92 million of income tax expense, compared to $78 million of expense during the three months ended September 30, 2025. The effective tax rate for the three months ended September 30, 2026 and 2025 was 25.9% and 25.6%, respectively. The increase in our effective tax rate for the three months ended September 30, 2026 compared to the same period in 2025 was primarily due to higher non-deductible employee remuneration paid to covered employees.
Previous wording
The historical results of operations of PCA for the six months ended June 30, 2026 and 2025 are set forth below (dollars in millions):
Current wording
The historical results of operations of PCA for the nine months ended September 30, 2026 and 2025 are set forth below (dollars in millions):
Previous wording
Packaging. Net sales increased $524 million, or 13.2%, to $4,500 million, compared to $3,976 million in the six months ended June 30, 2025, due to higher volume related to the acquired business ($483 million), higher legacy volumes ($34 million), and higher containerboard and corrugated products prices and mix ($7 million). In the first six months of 2026, export and domestic containerboard outside shipments decreased (17.3%) compared to the first six months of 2025, with more containerboard being integrated into PCA’s corrugated products system. Our total corrugated products shipments were up 23.1% per day and 22.1% in total, compared to the same period in 2025. Shipments from the legacy PCA business were up 3.5% per day and up 2.7% in total. In the first six months of 2026, our domestic containerboard prices were 3.0% higher, while export prices were 0.5% higher compared to the same period in 2025.
Current wording
Packaging. Net sales increased $810 million, or 13.3%, to $6,914 million, compared to $6,104 million in the nine months ended September 30, 2025, due to higher volume related to the acquired Greif operations ($658 million), higher containerboard and corrugated products prices and mix ($124 million), and higher legacy volumes ($28 million). In the first nine months of 2026, export and domestic containerboard outside shipments decreased (13.9%) compared to the first nine months of 2025, with more containerboard being integrated into PCA’s corrugated products system. Our total corrugated products shipments were up 18.7% per day and 18.1% in total, compared to the same period in 2025. Shipments from the legacy PCA business were up 2.1% per day and 1.6% in total. In the first nine months of 2026, our domestic containerboard prices were 6.1% higher, while export prices were 4.1% higher compared to the same period in 2025.
Previous wording
Paper. Net sales during the six months ended June 30, 2026 increased $17 million, or 5.7%, to $317 million, compared to $300 million in the six months ended June 30, 2025, due to higher volume ($13 million) and higher prices and mix ($4 million).
Current wording
Paper. Net sales during the nine months ended September 30, 2026 increased $19 million, or 4.2%, to $480 million, compared to $461 million in the nine months ended September 30, 2025, due to higher prices and mix ($10 million) and higher volume ($9 million).
Previous wording
Gross profit increased $28 million during the six months ended June 30, 2026, compared to the same period in 2025. The increase was driven primarily by higher volumes and higher prices and mix in the Packaging and Paper segments, lower maintenance outage expense and lower fiber costs, partially offset by higher freight expense, higher operating costs, and higher fixed and other costs. In the six months ended June 30, 2026, gross profit included $56 million of special items expense related to Wallula mill restructuring and corrugated products facility closures. In the six months ended June 30, 2025, gross profit included $4 million of special items expense related to corrugated products facility closures.
Current wording
Gross profit increased $127 million during the nine months ended September 30, 2026, compared to the same period in 2025. The increase was driven primarily by the contribution from the acquired Greif operations, higher prices and mix in the Packaging and Paper business, higher sales and production volumes in the legacy Packaging and Paper business, and lower maintenance outage expense. These items were partially offset by higher freight expense, higher fixed and other costs, higher labor and operating costs, and higher fiber costs. In the nine months ended September 30, 2026, gross profit included $58 million of special items expense related to Wallula mill restructuring, corrugated products facility closures, and acquisition and integration-related costs. In the nine months ended September 30, 2025, gross profit included $23 million of special items expense related to the Greif Acquisition and corrugated products facility closures.
Previous wording
Selling, general, and administrative expenses (“SG&A”) increased $26 million during the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily due to higher employee-related expenses, higher depreciation related to the acquired business, and higher information technology and outside service expenses.
Current wording
Selling, general, and administrative expenses (“SG&A”) increased $73 million during the nine months ended September 30, 2026, compared to the same period in 2025. The increase was primarily due to higher employee-related expenses, higher depreciation related to the acquired business, and higher information technology and outside service expenses.
Previous wording
We discuss these items in more detail in Note 6, Other Income (Expense), Net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.
Current wording
We discuss these items in more detail in Note 6, Other expense, net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.
Previous wording
Paper. Paper segment operating income increased $6 million to $67 million during the six months ended June 30, 2026, compared to the same period in 2025. The increase primarily related to lower maintenance outage expenses ($9 million), higher prices and mix ($4 million) and higher sales and production volume ($4 million), partially offset by higher operating costs ($6 million) and higher freight expenses ($4 million). There were no significant special items in the first six months of 2026 or 2025.
Current wording
Paper. Paper segment operating income decreased $1 million to $96 million during the nine months ended September 30, 2026, compared to $97 million in the same period in 2025. The decrease primarily related to higher labor and operating costs ($9 million), higher freight expenses ($7 million), and higher fixed and other expenses ($2 million), partially offset by higher prices and mix ($10 million), lower maintenance outage expenses ($4 million), higher sales and production volume ($3 million), and lower fiber costs ($1 million). There were no significant special items in the first nine months of 2026 or 2025.
Previous wording
Non-operating pension income increased $2 million during the six months ended June 30, 2026, compared to the same period in 2025. The increase in non-operating pension income was related to favorable 2025 asset performance and favorable assumption changes.
Current wording
Non-operating pension income increased $4 million during the nine months ended September 30, 2026, compared to the same period in 2025. The increase in non-operating pension income was related to favorable 2025 asset performance and favorable assumption changes.
Previous wording
Interest expense, net for the six months ended June 30, 2026 increased $40 million when compared to the same period in 2025. The increase in interest expense, net was primarily due to higher interest expense in 2026 as a result of the Company’s financing for the Greif Acquisition and lower interest income as a result of lower interest rates on lower cash balances.
Current wording
Interest expense, net for the nine months ended September 30, 2026 increased $53 million when compared to the same period in 2025. The increase in interest expense, net was primarily due to higher interest expense in 2026 as a result of the Company’s financing for the Greif Acquisition and lower interest income as a result of lower interest rates on lower cash balances.
Previous wording
During the three months ended June 30, 2026, we recorded $67 million of income tax expense, compared to $79 million of expense during the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2026 and 2025 was 25.8% and 24.7%, respectively. The increase in our effective tax rate for the three months ended June 30, 2026 compared to the same period in 2025 was primarily due to lower excess tax benefits associated with employee restricted stock and performance unit vests and higher non-deductible employee remuneration paid to covered employees partially offset by favorable state law changes.
Current wording
During the nine months ended September 30, 2026, we recorded $208 million of income tax expense, compared to $221 million of expense during the nine months ended September 30, 2025. The effective tax rate for the nine months ended September 30, 2026 and 2025 was 24.9% and 24.7%, respectively. The increase in our effective tax rate for the nine months ended September 30, 2026 compared to the same period in 2025 was primarily due to higher non-deductible employee remuneration paid to covered employees partially offset by higher excess tax benefits associated with employee restricted stock and performance unit vests and favorable state law changes.
Previous wording
Our primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under our revolving credit facility. At June 30, 2026, we had $443 million of cash and cash equivalents, $224 million of marketable debt securities and other, and $573 million of unused borrowing capacity under the revolving credit facility, net of letters of credit.
Current wording
Our primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under our revolving credit facility. At September 30, 2026, we had $535 million of cash and cash equivalents, $227 million of marketable debt securities and other, and $573 million of unused borrowing capacity under the revolving credit facility, net of letters of credit.
Previous wording
During the six months ended June 30, 2026, net cash provided by operating activities was $705 million, compared to $639 million in the same period in 2025, an increase of $66 million. Cash from operations excluding changes in cash used for operating assets and liabilities increased $96 million due to higher net income adjusted for depreciation, depletion and amortization of intangibles and losses on asset disposals in 2026, and higher deferred income tax liabilities in 2026. Cash from operations decreased by $30 million when comparing the first six months of 2026 to the same period in 2025 due to changes in operating assets and liabilities primarily due to the following:
Current wording
During the nine months ended September 30, 2026, net cash provided by operating activities was $1,177 million, compared to $1,111 million in the same period in 2025, an increase of $66 million. Cash from operations excluding changes in cash used for operating assets and liabilities increased $49 million due to higher net income adjusted for depreciation, depletion and amortization of intangibles, net losses on asset disposals, and share-based compensation in 2026, partially offset by a lower deferred income tax provision in 2026. Cash from operations increased by $17 million when comparing the first nine months of 2026 to the same period in 2025 due to changes in operating assets and liabilities primarily due to the following:
Previous wording
a net favorable change in accounts payable primarily related to an increase in accounts payables levels during the first six months of 2026 compared to the same period in 2025, partially offset by an unfavorable change related to the timing of payments.
Current wording
a net favorable change in accounts payable primarily due to an increase in accounts payables levels during the first nine months of 2026 compared to the same period in 2025 due to higher sales and cost of sales and an increase in days payable outstanding;
Previous wording
a net favorable change in accrued liabilities during the first six months of 2026 compared to the same period in 2025 primarily due to the settlement of litigation and a decrease in accrued liabilities related to Wallula mill restructuring activities during the first six months of 2026; and
Current wording
a net favorable change in accrued liabilities during the first nine months of 2026 compared to the same period in 2025 primarily due to the settlement of litigation in 2025 as well as an increase in compensation and incentive accruals in 2026, partially offset by unfavorability due to a decrease in accrued liabilities related to Wallula mill restructuring activities during the first nine months of 2026.
Previous wording
These unfavorable changes were partially offset by the following:
Current wording
These favorable changes were partially offset by the following:
Previous wording
a net unfavorable change in accounts receivable due to a larger increase in accounts receivable levels during the first six months of 2026 compared to the same period in 2025 primarily due to higher sales volumes in 2026 when compared to 2025, and an increase in days sales outstanding arising out of the ordinary course of business; and
Current wording
a net unfavorable change in accounts receivable due to a larger increase in Packaging segment accounts receivable levels during the first nine months of 2026 compared to the same period in 2025 primarily due to higher sales volumes in 2026 when compared to 2025 and an increase in days sales outstanding arising out of the ordinary course of business;
Previous wording
a net unfavorable change in prepaid expenses and other current assets during the first six months of 2026 compared to the same period in 2025 primarily related to the reduction of receivables against insurance carriers during 2025 related to the settlement of litigation.
Current wording
a net unfavorable change in prepaid expenses and other current assets during the first nine months of 2026 compared to the same period in 2025 primarily related to the reduction of receivables against insurance carriers during 2025 related to the settlement of litigation; and
Previous wording
We used $478 million for investing activities during the six months ended June 30, 2026 compared to $287 million during the same period in 2025. We spent $371 million for internal capital investments during the six months ended June 30, 2026, compared to $318 million during the same period in 2025. We completed acquisitions in the Packaging segment during the first six months ended June 30, 2026 for $21 million, including working capital adjustments. In March 2026, we used $50 million of cash on hand to invest in a time deposit.
Current wording
We used $723 million for investing activities during the nine months ended September 30, 2026 compared to $2,287 million during the same period in 2025. We spent $618 million for internal capital investments during the nine months ended September 30, 2026, compared to $510 million during the same period in 2025. We completed acquisitions in the Packaging segment during the first nine months ended September 30, 2026 for $21 million, including working capital adjustments, compared to $1,804 million, net of cash acquired, during the same period in 2025 for the Greif Acquisition. During the first nine months of 2026, we invested an aggregate of $100 million in time deposits. An initial $50 million time deposit was purchased in March 2026 and matured in September 2026. Upon maturity, we reinvested the proceeds in a new $50 million time deposit. We did not invest in any time deposits during the first nine months in 2025.
Previous wording
We expect capital investments in 2026 to be within a range of $840 million to $870 million. These expenditures could increase or decrease as a result of a number of factors, including our financial results, strategic opportunities, future economic conditions, and our regulatory compliance requirements. We currently estimate capital expenditures to comply with environmental regulations will be about $21 million in 2026. Our estimated environmental expenditures could vary significantly depending upon the enactment of new environmental laws and regulations. For additional information, see “Environmental Matters” in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report on Form 10-K.
Current wording
We expect capital investments in 2026 to be within a range of $865 million to $890 million. These expenditures could increase or decrease as a result of a number of factors, including our financial results, strategic opportunities, future economic conditions, and our regulatory compliance requirements. We currently estimate capital expenditures to comply with environmental regulations will be about $21 million in 2026. Our estimated environmental expenditures could vary significantly depending upon the enactment of new environmental laws and regulations. For additional information, see “Environmental Matters” in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report on Form 10-K.
Previous wording
During the six months ended June 30, 2026, net cash used for financing activities was $314 million, compared to $249 million during the same period in 2025. We paid $223 million of dividends during the first six months of 2026, compared to $225 million of dividends paid during the comparable period in 2025. In addition, we withheld shares to cover $30 million of employee restricted stock taxes during the first six months of 2026 compared to $23 million of employee restricted stock taxes withheld during the same period in 2025. We repurchased and retired 0.3 million shares of the Company’s common stock for $59 million during the first six months of 2026. We did not have any repurchases and retirements of the Company’s common stock during the same period in 2025.
Current wording
During the nine months ended September 30, 2026, net cash used for financing activities was $449 million, compared to $1,126 million of net cash provided by financing activities during the same period in 2025. We paid $357 million of dividends during the first nine months of 2026, compared to $337 million of dividends paid during the comparable period in 2025. In addition, we withheld shares to cover $30 million of employee restricted stock taxes during the first nine months of 2026 compared to $23 million of employee restricted stock taxes withheld during the same period in 2025. We repurchased and retired 0.3 million shares of the Company’s common stock for $59 million during the first nine months of 2026. We did not have any repurchases and retirements of the Company’s common stock during the same period in 2025.
Previous wording
For the three and six months ended June 30, 2026, includes $14.1 million and $17.0 million, respectively, of charges consisting of closure costs related to corrugated products facilities and the write-off of expenditures related to sustainability and renewable energy projects. The write-off of expenditures related to sustainability and renewable energy projects was recorded following the Company’s decision to defer a specific carbon capture initiative at this time. For the three and six months ended June 30, 2025, includes $24.6 million and $18.8 million, respectively, of income related to gains on sales of corrugated products facilities, partially offset by closure costs related to corrugated products facilities.
Current wording
For the three and nine months ended September 30, 2026, includes $6.2 million and $23.1 million, respectively, of charges consisting of closure costs related to corrugated products facilities and the write-off of expenditures related to sustainability and renewable energy projects. The write-off of expenditures related to sustainability and renewable energy projects was recorded following the Company’s decision to defer a specific carbon capture initiative at this time. For the three and nine months ended September 30, 2025, includes $1.3 million of charges and $17.5 million of income, respectively, related to the closure of certain corrugated products facilities. For the three months ended September 30, 2025, the charges were partially offset by a gain on an asset disposal related to a closed corrugated products facility. For the nine months ended September 30, 2025, the charges were completely offset by gains on sales of corrugated products facilities during the second quarter of 2025.
Previous wording
For the three and six months ended June 30, 2026, includes $3.3 million and $6.7 million, respectively, of charges for acquisition and integration costs related to recent acquisitions. For the three and six months ended June 30, 2025, includes $1.6 million of charges related to the Greif Acquisition.
Current wording
For the three and nine months ended September 30, 2026, includes $3.0 million and $9.8 million, respectively, of charges for acquisition and integration costs related to recent acquisitions. For the three and nine months ended September 30, 2025, includes $25.0 million and $26.6 million, respectively, of charges and costs related to the Greif Acquisition.
Previous wording
For the three and six months ended June 30, 2026, includes $6.3 million and $59.7 million, respectively, of charges related to the announced discontinuation of the No. 2 machine and kraft pulping facilities at the Wallula, Washington mill.
Current wording
For the three and nine months ended September 30, 2026, includes $0.3 million and $60.0 million, respectively, of charges related to the announced discontinuation of the No. 2 machine and kraft pulping facilities at the Wallula, Washington mill.
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