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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 FORM 10-Q
 
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2023
or 
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File No. 001-11261
Sonoco Products Company
(Exact name of registrant as specified in its charter)
South Carolina
57-0248420
(State or other jurisdiction of incorporation of organization)
(I.R.S. Employer Identification No.)
1 N. Second St., Hartsville, South Carolina
29550
(Address of principal executive offices)
(Zip Code)
(843) 383-7000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
No par value common stockSONNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒   No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer
☐
Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
The number of shares outstanding of the registrant's no par value common stock as of October 20, 2023 was 97,956,364.



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

2


Part I. FINANCIAL INFORMATION 
Item 1. Financial Statements.
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars and shares in thousands)
October 1,
2023		December 31, 2022*
Assets
Current Assets
Cash and cash equivalents$257,940 $227,438 
Trade accounts receivable, net of allowances964,054 862,712 
Other receivables100,772 99,492 
Inventories, net:
Finished and in process363,914 453,981 
Materials and supplies462,118 641,577 
Prepaid expenses91,090 76,054 
2,239,888 2,361,254 
Property, Plant and Equipment, Net1,826,230 1,710,399 
Goodwill1,762,411 1,675,311 
Other Intangible Assets, Net873,518 741,598 
Deferred Income Taxes30,935 29,878 
Right of Use Asset-Operating Leases311,642 296,781 
Other Assets225,375 237,719 
Total Assets$7,269,999 $7,052,940 
Liabilities and Equity
Current Liabilities
Payable to suppliers$695,550 $818,885 
Accrued expenses and other420,935 405,671 
Notes payable and current portion of long-term debt42,279 502,440 
Accrued taxes26,435 16,905 
1,185,199 1,743,901 
Long-term Debt, Net of Current Portion3,212,454 2,719,783 
Noncurrent Operating Lease Liabilities262,667 250,994 
Pension and Other Postretirement Benefits131,668 120,084 
Deferred Income Taxes98,100 107,293 
Other Liabilities40,756 38,088 
Commitments and Contingencies
Sonoco Shareholders’ Equity
Common stock, no par value
Authorized 300,000 shares
97,956 and 97,645 shares issued and outstanding
at October 1, 2023 and December 31, 2022, respectively
7,175 7,175 
Capital in excess of stated value152,148 140,539 
Accumulated other comprehensive loss(420,110)(430,083)
Retained earnings2,593,332 2,348,183 
Total Sonoco Shareholders’ Equity2,332,545 2,065,814 
Noncontrolling Interests6,610 6,983 
Total Equity2,339,155 2,072,797 
Total Liabilities and Equity$7,269,999 $7,052,940 
*The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (the “United States” or “U.S.”).
See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
3


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share data)
 
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Net sales$1,710,419 $1,890,216 $5,145,492 $5,574,530 
Cost of sales1,346,163 1,523,070 4,049,490 4,448,818 
Gross profit364,256 367,146 1,096,002 1,125,712 
Selling, general and administrative expenses182,672 164,552 541,421 533,875 
Restructuring/Asset impairment charges18,110 20,652 52,981 43,357 
(Loss)/Gain on divestiture of business and other assets(537)— 78,844 — 
Operating profit162,937 181,942 580,444 548,480 
Other income, net36,943 — 36,943 — 
Non-operating pension costs3,424 1,249 10,424 4,251 
Interest expense32,847 26,714 101,363 71,242 
Interest income3,173 1,148 6,679 3,450 
Income before income taxes166,782 155,127 512,279 476,437 
Provision for income taxes39,351 36,824 127,003 116,712 
Income before equity in earnings of affiliates127,431 118,303 385,276 359,725 
Equity in earnings of affiliates, net of tax3,627 4,199 8,795 10,151 
Net income131,058 122,502 394,071 369,876 
Net income attributable to noncontrolling interests(309)(273)(354)(642)
Net income attributable to Sonoco$130,749 $122,229 $393,717 $369,234 
Weighted average common shares outstanding:
Basic98,337 98,013 98,276 97,978 
Diluted98,912 98,762 98,800 98,669 
Per common share:
Net income attributable to Sonoco:
Basic$1.33 $1.25 $4.01 $3.77 
Diluted$1.32 $1.24 $3.98 $3.74 

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


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (unaudited)
(Dollars in thousands)
 
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Net income$131,058 $122,502 $394,071 $369,876 
Other comprehensive income/(loss):
     Foreign currency translation adjustments(49,024)(81,972)4,474 (151,580)
     Changes in defined benefit plans, net of tax3,401 861 2,554 (876)
Changes in derivative financial instruments, net of tax(1,724)(1,252)2,218 (792)
Other comprehensive (loss)/income(47,347)(82,363)9,246 (153,248)
Comprehensive income:83,711 40,139 403,317 216,628 
Less: Net income attributable to noncontrolling interests(309)(273)(354)(642)
Less: Other comprehensive loss attributable to noncontrolling interests668 515 727 148 
Comprehensive income attributable to Sonoco$84,070 $40,381 $403,690 $216,134 

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

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN TOTAL EQUITY (unaudited)
(Dollars and shares in thousands)
Total EquityCommon SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2022$2,072,797 97,645 $7,175 $140,539 $(430,083)$2,348,183 $6,983 
Net income/(loss)148,264 148,319 (55)
Other comprehensive income:
Translation income31,808 31,569 239 
Defined benefit plan adjustment, net of tax916 916 
Derivative financial instruments, net of tax2,514 2,514 
Other comprehensive income$35,238 $34,999 $239 
Dividends(48,203)(48,203)
Issuance of stock awards472 485 472 
Shares repurchased(10,576)(175)(10,576)
Share-based compensation7,573 7,573 
April 2, 2023$2,205,565 97,955 $7,175 $138,008 $(395,084)$2,448,299 $7,167 
Net income114,749 114,649 100 
Other comprehensive income/(loss):
Translation income/(loss)21,690 21,988 (298)
Defined benefit plan adjustment, net of tax(1,763)(1,763)
Derivative financial instruments, net of tax1,428 1,428 
Other comprehensive income/(loss)$21,355 $21,653 $(298)
Dividends(50,180)(50,180)
Issuance of stock awards222 1 222 
Shares repurchased(26)— (26)
Share-based compensation7,637 7,637 
July 2, 2023$2,299,322 97,956 $7,175 $145,841 $(373,431)$2,512,768 $6,969 
Net income131,058 130,749 309 
Other comprehensive income/(loss):
Translation loss(49,024)(48,356)(668)
Defined benefit plan adjustment, net of tax3,401 3,401 
Derivative financial instruments, net of tax(1,724)(1,724)
Other comprehensive loss$(47,347)$(46,679)$(668)
Dividends(50,185)(50,185)
Issuance of stock awards397 — 397 
Shares repurchased(3)— (3)
Share-based compensation5,913 5,913 
October 1, 2023$2,339,155 97,956 $7,175 $152,148 $(420,110)$2,593,332 $6,610 

6

Total
Equity		Common SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2021$1,849,541 97,370 $7,175 $119,690 $(359,425)$2,070,005 $12,096 
Net income115,607 115,333 274 
Other comprehensive income/(loss):
Translation income/(loss)706 (185)891 
Defined benefit plan adjustment, net of tax191 191 
Derivative financial instruments, net of tax2,550 2,550 
Other comprehensive loss$3,447 $2,556 $891 
Dividends(44,124)(44,124)
Issuance of stock awards377 182 377 
Shares repurchased(3,410)(60)(3,410)
Share-based compensation10,689 10,689 
Purchase of noncontrolling interest(13,196)(7,080)(6,116)
April 3, 2022$1,918,931 97,492 $7,175 $120,266 $(356,869)$2,141,214 $7,145 
Net income131,767 131,672 $95 
Other comprehensive loss:
Translation loss(70,314)(69,790)(524)
Defined benefit plan adjustment, net of tax(1,928)(1,928)
Derivative financial instruments, net of tax(2,090)(2,090)
Other comprehensive loss$(74,332)$(73,808)$(524)
Dividends(48,041)(48,041)
Issuance of stock awards263 13 263 
Shares repurchased(574)(10)(574)
Share-based compensation8,377 8,377 
July 3, 2022$1,936,391 97,495 $7,175 $128,332 $(430,677)$2,224,845 $6,716 
Net income122,502 122,229 273 
Other comprehensive income/(loss):
Translation loss(81,972)(81,457)(515)
Defined benefit plan adjustment, net of tax861 861 — 
Derivative financial instruments, net of tax(1,252)(1,252)— 
Other comprehensive loss$(82,363)$(81,848)$(515)
Dividends(48,034)(48,034)
Issuance of stock awards270 18 270 
Shares repurchased(72)(1)(72)
Share-based compensation6,387 6,387 
October 2, 2022$1,935,081 97,512 $7,175 $134,917 $(512,525)$2,299,040 $6,474 
See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
7

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
Nine Months Ended
October 1, 2023October 2, 2022
Cash Flows from Operating Activities:
Net income$394,071 $369,876 
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments26,122 13,857 
Depreciation, depletion and amortization249,387 231,095 
Share-based compensation expense21,123 25,453 
Equity in earnings of affiliates, net(8,795)(10,151)
Cash dividends from affiliated companies7,881 6,076 
Net gain on disposition of assets(59,050)(178)
Net gain on divestiture of business and other assets(54,842)— 
Pension and postretirement plan expense12,679 6,951 
Pension and postretirement plan contributions(10,311)(33,548)
Increase in net deferred tax liabilities(14,451)(1,745)
Change in assets and liabilities, net of effects from acquisitions and foreign currency adjustments:
Trade accounts receivable(84,342)(143,221)
Inventories277,389 (287,609)
Payable to suppliers(125,712)113,820 
Prepaid expenses(14,285)(28,854)
Income taxes payable and other income tax items9,549 44,493 
Accrued expenses and other assets and liabilities(9,536)15,740 
Net cash provided by operating activities616,877 322,055 
Cash Flows from Investing Activities:
Purchases of property, plant and equipment(254,874)(236,772)
Cost of acquisitions, net of cash acquired(313,362)(1,337,704)
Proceeds from the sale of business, net31,147 — 
Proceeds from the sale of assets, net72,737 6,040 
Other net investing activities4,623 (1,976)
Net cash used in investing activities(459,729)(1,570,412)
Cash Flows from Financing Activities:
Proceeds from issuance of debt905,601 1,579,750 
Principal repayment of debt(878,513)(70,556)
Net change in commercial paper— (64,000)
Net increase/(decrease) in outstanding checks1,925 (16,509)
Cash dividends(147,477)(139,289)
Purchase of noncontrolling interest— (14,474)
Payments for share repurchases(10,605)(4,056)
Net cash (used in)/provided by financing activities(129,069)1,270,866 
Effects of Exchange Rate Changes on Cash2,423 (11,249)
Net Increase in Cash and Cash Equivalents30,502 11,260 
Cash and cash equivalents at beginning of period227,438 170,978 
Cash and cash equivalents at end of period$257,940 $182,238 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
8
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


Note 1: Basis of Interim Presentation
In the opinion of the management of Sonoco Products Company (the “Company” or “Sonoco”), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments, unless otherwise stated) necessary to state fairly the consolidated financial position, results of operations and cash flows for the interim periods reported herein. Operating results for the three- and nine-month periods ended October 1, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
On September 8, 2023, the Company completed its previously announced acquisition of the remaining 65% interest in RTS Packaging, LLC (“RTS Packaging”), from joint venture partner WestRock Company (“WestRock”). This acquisition has been accounted for as a business combination resulting in the consolidation of RTS Packaging. Prior to September 8, 2023, the Company reported its 35% interest in the RTS Packaging joint venture using the equity method of accounting. See Note 3 for additional information.
Note 2: New Accounting Pronouncements
In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” The amendments in this ASU require that a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs in each annual reporting period, including a description of key payment terms, amounts outstanding, and a rollforward of the outstanding obligation. In each interim reporting period, the amount outstanding requires disclosure. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted this standard in the first quarter of 2023, with the exception of the amendment on rollforward information, which will be adopted in the first quarter of 2024. The adoption of the new standard did not have a material effect on the condensed consolidated financial statements.
During the nine-month period ended October 1, 2023, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a material impact on the Company’s financial statements. Further, at October 1, 2023, there are no other pronouncements pending adoption that are expected to have a material impact on the Company’s condensed consolidated financial statements.

Note 3: Acquisitions and Divestitures
Acquisitions
On September 8, 2023, the Company completed the acquisition of the remaining 65% interest in RTS Packaging from joint venture partner WestRock and the acquisition of a paper mill in Chattanooga, Tennessee (“Chattanooga Mill”) from WestRock for net cash consideration of $313,362, subject to customary working capital adjustments. Prior to completing the acquisitions, the Company held a 35% ownership interest in the RTS Packaging joint venture which was formed in 1997 and combined the former protective packaging operations of WestRock and Sonoco to market recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals. With the acquisitions of RTS Packaging and the Chattanooga Mill, the Company added approximately 1,100 employees and fourteen converting operations, including ten in the United States, two in Mexico, and two in South America and one paper mill in the United States. The Company funded the acquisitions with borrowings under a new term loan credit facility (See Note 9 for more information) and cash on hand. The financial results of RTS Packaging and the Chattanooga Mill are included in the Company’s Industrial Paper Packaging segment.
On September 8, 2023, the fair value of the Company’s 35% interest in RTS Packaging was determined to be $59,472 based on the cash consideration exchanged for acquiring the remaining 65% equity interest in RTS Packaging adjusted for the deemed payment of a control premium, and the carrying value of the 35% interest was $8,654. The Company recognized a net gain of $44,029 resulting from this remeasurement to fair value and the reclassification of certain amounts related to the Company’s 35% interest out of “Accumulated other comprehensive loss,” including foreign
9
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

currency translation losses of $2,033 and losses related to defined benefit pension plans of $4,756. The net gain from such remeasurement and reclassification was recorded in “Other income, net” in the Company’s Condensed Consolidated Statements of Income for the period ended October 1, 2023.
The Company also recognized a loss of $7,086 on the settlement of a contract associated with the Chattanooga Mill. The contract was determined to have unfavorable terms given market conditions at the time of the acquisition. This loss is reflected in “Other income, net” in the Company’s Condensed Consolidated Statements of Income for the period ended October 1, 2023. This loss, along with the settlement of a note receivable from RTS Packaging held by the Company on the acquisition date, are reflected as components of purchase consideration transferred in connection with these acquisitions.
The following table provides a summary of the purchase consideration (as defined under Accounting Standards Codification (“ASC”) 805) transferred for the acquisitions of RTS Packaging and the Chattanooga Mill:
Purchase Consideration
Cash consideration, net of cash acquired $313,362 
Fair value of previously held interest in RTS Packaging59,472 
Settlement of preexisting relationships(1,479)
     Purchase consideration transferred$371,355 
The provisional fair values of the assets acquired and liabilities assumed in connection with the acquisitions of RTS Packaging and the Chattanooga Mill in total are as follows:
Initial Allocation
Trade accounts receivable$17,488 
Inventories20,209 
Prepaid expenses2,720 
Property, plant and equipment73,483 
Right of use asset - operating leases34,604 
Other intangible assets199,560 
Goodwill92,657 
Other net tangible assets2,465 
Payable to suppliers(7,320)
Accrued expenses and other(15,167)
Notes payable and current portion of long-term debt(24)
Noncurrent operating lease liabilities(29,905)
Long-term debt(1,942)
Deferred income taxes(3,419)
Other long-term liabilities(14,054)
     Net assets acquired$371,355 
The initial allocation of the purchase price of RTS Packaging and the Chattanooga Mill 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 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; and deferred income taxes, and expects to complete its valuations within one year of the date of acquisition.
10
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Goodwill for RTS Packaging and the Chattanooga Mill, of which $81,435 is expected to be deductible for income tax purposes, consists of increased manufacturing capacity, access to certain markets, and the capability to support marquee customers in growing markets.
The Company has accounted for these acquisitions as a business combination under the acquisition method and has included the results of operations of the acquired businesses in the Company’s Condensed Consolidated Statements of Income from the date of acquisition. The Company does not believe that these acquisitions were material to the periods presented and are therefore not subject to the ASC 805 requirement to provide supplemental pro-forma financial information. Accordingly, this information is not presented herein.
On November 15, 2022, the Company completed the acquisition of S.P. Holding, Skjern A/S (“Skjern”), a privately owned manufacturer of paper based in Skjern, Denmark for $88,647, net of cash acquired. Skjern produces high-grade paperboard from recycled paper for rigid paper containers, tubes and cores, and other applications. Goodwill for Skjern, none of which is expected to be deductible for income tax purposes, consists of increased access to certain markets and existing customer relationships. Skjern’s financial results are included in the Company’s Industrial Paper Packaging segment.
The Company’s initial fair value estimates of the assets acquired and the liabilities assumed in the Skjern acquisition, as well as updated preliminary fair value allocations reflecting adjustments made during the measurement period to date, are as follows:
Initial EstimateMeasurement Period AdjustmentsPreliminary Allocation
Trade accounts receivable$8,055 $— $8,055 
Other receivables193 — 193 
Inventories2,595 14 2,609 
Prepaid expenses349 — 349 
Property, plant and equipment24,334 4,921 29,255 
Right of use asset - operating leases28 — 28 
Other intangible assets42,818 (3,488)39,330 
Goodwill29,059 2,932 31,991 
Payable to suppliers(3,466)(963)(4,429)
Accrued expenses and other(1,173)— (1,173)
Taxes payable(576)(3,416)(3,992)
Noncurrent operating lease liabilities(20)— (20)
Deferred income taxes(13,549)— (13,549)
Total purchase price, net of cash acquired$88,647 $— $88,647 
The allocation of the purchase price of Skjern to the tangible and intangible assets acquired and liabilities assumed, as reflected under the heading “Preliminary Allocation” in the table above, is based on the Company’s preliminary allocations of their fair value, 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; and deferred income taxes, and expects to complete its valuations within one year of the date of acquisition.
The Company has accounted for this acquisition as a business combination under the acquisition method and has included the results of operations of the acquired business in the Company’s Condensed Consolidated Statements of Income from the date of acquisition.
11
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

On August 31, 2022, the Company completed the acquisition of Nordeste Tubetes and NE Tubetes (collectively “Nordeste”), two small tube and core operations in Brazil. Management completed its final valuation of the acquired assets in the third quarter of 2023, and total consideration for the two businesses was $6,419. Tangible assets totaled $1,374, intangible assets totaled $3,031, and Goodwill totaled $2,014. The Company paid $3,933 at closing and recorded a deferred payment obligation totaling $2,486, which is expected to be paid by the end of 2028, in “Other liabilities” on the Company’s Condensed Consolidated Balance Sheets. Goodwill for Nordeste, all of which is expected to be deductible for income tax purposes, consists of increased access to certain markets and existing customer relationships. The Company has accounted for this acquisition as a business combination under the acquisition method and has included the results of operations of the acquired business in the Company’s Condensed Consolidated Statements of Income from the date of acquisition.
On January 26, 2022, the Company completed the acquisition of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging (“Metal Packaging”), a leading supplier of sustainable metal packaging for food and household products and the largest aerosol can producer in North America, for $1,348,589, net of cash acquired. Prior to the Company’s acquisition of Metal Packaging, Ball Metalpack Holding, LLC was a joint venture formed in 2018 and owned by Platinum Equity (51%) and Ball Corporation (49%). Metal Packaging consists of eight manufacturing plants in the United States and a headquarters facility in Broomfield, Colorado.
During the three-month period ended April 2, 2023, the Company finalized its valuations of the assets and liabilities assumed in the acquisition of Metal Packaging. As a result, the following measurement period adjustments were made to the previously disclosed provisional fair values of assets acquired and liabilities assumed during the nine-month period ended October 1, 2023:
Measurement Period AdjustmentsNine Months Ended October 1, 2023
Inventories$(73)
Property, plant and equipment(247)
Goodwill439 
Accrued expenses and other(119)
Additional cash consideration$— 
The Company has accounted for this acquisition as a business combination under the acquisition method and has included the results of operations of the acquired business in the Company’s Condensed Consolidated Statements of Income from the date of acquisition. Metal Packaging’s financial results are included in the Company’s Consumer Packaging segment.
The following table presents the unaudited financial results for Metal Packaging from the prior year date of acquisition through the end of the reporting period ended October 2, 2022:

Supplemental Information (unaudited)Three Months EndedJanuary 26 to
Metal PackagingOctober 2, 2022October 2, 2022
Net sales$335,468 $798,018 
Net income$16,769 $61,216 
The following table presents the Company’s estimated unaudited pro forma consolidated results for the three- and nine-month periods ended October 2, 2022, assuming the acquisition of Metal Packaging had occurred on January 1, 2021. This unaudited 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 2021, nor is it necessarily indicative of future consolidated results.
12
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Pro Forma Supplemental Information (unaudited)Three Months EndedNine Months Ended
ConsolidatedOctober 2, 2022October 2, 2022
Net sales$1,890,216 $5,624,118 
Net income attributable to Sonoco$123,047 $428,287 
The unaudited 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. Unaudited pro forma information for the three- and nine-month periods ended October 2, 2022 includes adjustments to depreciation, amortization, and income taxes based upon the final fair value allocation of the purchase price to Metal Packaging’s tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2021. 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 unaudited pro forma information as if the acquisition had occurred on January 1, 2021.
Metal Packaging acquisition-related costs of $310 and $1,463 were recognized during the three- and nine-month periods ended October 1, 2023, respectively.
Metal Packaging acquisition-related costs of $793 and $27,195 were recognized during the three- and nine-month periods ended October 2, 2022, respectively, and charges related to fair value adjustments to acquisition-date inventory of $33,155 were recognized during the nine-month period ended October 2, 2022. These costs are excluded from 2022 unaudited pro forma net income as though the acquisition had occurred on January 1, 2021.
Divestiture of Businesses
On July 1, 2023, the Company completed the sale of its U.S. BulkSak business, which consisted of the manufacturing and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners and was a part of the Company’s Industrial Paper Packaging segment, to U.S. BulkSak Holdings, LLC. The cash selling price, as adjusted for working capital, was $20,271 with cash proceeds totaling $16,808 received on July 3, 2023 and the remaining $3,463 held in escrow to be released to the Company within 18 months from the date of the sale, pursuant to working capital adjustments and the settlement of any indemnity claims. In September 2023, the Company agreed to a working capital adjustment with the buyers that reduced the amount to be released from escrow by $537 with a corresponding reduction in the previously recognized gain. This reduction is reflected in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.
As a result of the U.S. BulkSak divestiture, the Company wrote off net assets totaling $13,437, including $3,333 of allocated goodwill, and recognized a pretax gain of $6,834 during the nine-month period ended October 1, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income. The escrow balance is reflected as a receivable on the Company’s Condensed Consolidated Balance Sheets as of October 1, 2023 with the current portion of $1,463 in “Other receivables” and the non-current portion of $2,000 in “Other assets.”
Also on July 1, 2023, the Company agreed to the sale of its Mexico BulkSak business for a total cash selling price of $1,500. The sale of Mexico BulkSak is expected to close at a later date upon the satisfactory completion of certain buyer and seller commitments. Although the transaction has not yet closed, the Company received cash proceeds of $500 on July 3, 2023 and has deferred recognition of the resulting gain pending the completion of the transaction.
On January 26, 2023, the Company completed the sale of its Sonoco Sustainability Solutions (“S3”) business, a provider of customized waste and recycling management programs and part of the Company’s Industrial Paper Packaging segment, to Northstar Recycling Co. (“Northstar”), for total cash proceeds of $13,839. An additional $1,500 of proceeds are being held in escrow and will be released to the Company, pursuant to any indemnification claims, 20 months following the date of the divestiture. These escrow proceeds are included in “Other assets” in the Company’s Condensed Consolidated Balance Sheets as of October 1, 2023. The Company wrote off net assets totaling $4,274 as part of the divestiture of the business, including $3,042 of allocated goodwill, and recognized a pretax gain of $11,065 during the nine-month period ended October 1, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income. The Company is also entitled to receive additional proceeds of $3,200 in the second quarter of 2024 if certain conditions are met. This contingent consideration will be recognized as additional gain on the sale at the point the contingencies are resolved.
13
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

In addition, the Company purchased a 2.7% equity interest in Northstar for $5,000. This investment is being accounted for under the measurement alternative (i.e., cost less impairment, adjusted for any qualifying observable price changes).
The sales of the S3 and U.S. BulkSak businesses did not represent a strategic shift for the Company or have a major effect on its operations or financial results. Consequently, these sales did not meet the criteria for reporting as discontinued operations. The cash proceeds from the sales were used for general corporate purposes.
The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to be suboptimal or nonstrategic.
Sale of Assets
With the completion of Project Horizon, the Company’s project to convert the corrugated medium machine in Hartsville, South Carolina, to produce uncoated recycled paperboard, the Company now produces paper exclusively from recycled fibers and no longer requires natural tree fiber for production. Accordingly, on March 29, 2023, the Company sold its timberland properties, approximately 55,000 acres, to Manulife Investment Management for net cash proceeds of $70,802. The Company disposed of assets with a net book value of $9,857 as part of the sale, and recognized a pretax gain from the sale of these assets of $60,945 during the nine-month period ended October 1, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.
Acquisition, Integration, and Divestiture-Related Costs
Acquisition, integration, and divestiture-related costs totaled $12,472 and $22,192 during the three- and nine-month periods ended October 1, 2023, respectively. These costs included $7,525 and $17,245 during the three- and nine-month periods ended October 1, 2023, respectively, for legal and professional fees, investment banking fees, and other transaction costs that are included in “Selling, general and administrative expenses,” and $4,947 of amortization of the fair value step-up of inventory, which is included in “Cost of sales” in the Company’s Condensed Consolidated Statements of Income.
Acquisition and divestiture-related costs totaled $2,022 and $62,655 during the three- and nine-month periods ended October 2, 2022, respectively, primarily related to the Metal Packaging acquisition. The costs for the nine-month period ended October 2, 2022, included the partial amortization of the fair value step-up of finished goods inventory of $33,155, included in “Cost of sales” in the Company’s Condensed Consolidated Statements of Income, and other acquisition-related charges of $2,022 and $29,500, respectively. These other charges consisted primarily of investment banking fees, representation and warranty insurance premiums, legal and professional fees, and other transaction costs and are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

14
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 4: Shareholders’ Equity
Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share:
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Numerator:
Net income attributable to Sonoco$130,749 $122,229 $393,717 $369,234 
Denominator:
Weighted average common shares outstanding:
Basic98,337 98,013 98,276 97,978 
Dilutive effect of share-based compensation575 749 524 691 
Diluted98,912 98,762 98,800 98,669 
Net income attributable to Sonoco per common share:
Basic$1.33 $1.25 $4.01 $3.77 
Diluted$1.32 $1.24 $3.98 $3.74 
Cash dividends$0.51 $0.49 $1.51 $1.43 
No adjustments were made to “Net income attributable to Sonoco” in the computations of net income attributable to Sonoco per common share.
Anti-dilutive Securities
Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes the proceeds from the exercise of all dilutive stock appreciation rights (“SARs”) are used to repurchase the Company’s common stock. Certain SARs are not dilutive because either the exercise price is greater than the average market price of the stock during the reporting period or assumed repurchases from proceeds from the exercise of the SARs were anti-dilutive. These SARs may become dilutive in the future if the market price of the Company’s common stock appreciates.
The average numbers of SARs that were anti-dilutive and, therefore, not included in the computation of diluted earnings per share during the three- and nine-month periods ended October 1, 2023 and October 2, 2022 were as follows (in thousands):
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Anti-dilutive stock appreciation rights338366341380
Stock Repurchases
On April 20, 2021, the Company’s Board of Directors (the “Board”) authorized the repurchase of the Company’s common stock in an aggregate amount of up to $350,000. Following several repurchase transactions in 2021, a total of $137,972 remained available for share repurchases under this authorization as of December 31, 2021. No shares were repurchased under this authorization during the year ended December 31, 2022 or the nine-month period ended October 1, 2023.
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 175 shares during the nine-month period ended October 1, 2023, at a cost of $10,605, and 71 shares during the nine-month period ended October 2, 2022, at a cost of $4,056.
15
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Dividend Declarations
On February 8, 2023, the Board declared a regular quarterly dividend of $0.49 per share. This dividend was paid on March 10, 2023 to all shareholders of record as of February 22, 2023.
On April 19, 2023, the Board declared a regular quarterly dividend of $0.51 per share. This dividend was paid on June 9, 2023 to all shareholders of record as of May 10, 2023.
On July 19, 2023, the Board declared a regular quarterly dividend of $0.51 per share. This dividend is payable on September 8, 2023 to all shareholders of record as of August 10, 2023.
On October 17, 2023, the Board declared a regular quarterly dividend of $0.51 per share. This dividend is payable on December 8, 2023 to all shareholders of record as of November 10, 2023.
Noncontrolling Interests
In April 2015, the Company acquired a 67% controlling interest in Graffo Paranaense de Embalagens S/A (“Graffo”). Prior to March 31, 2022, the Company consolidated 100% of Graffo, with the partner’s 33% share included in “Noncontrolling Interests” within the equity section of the balance sheet. On March 31, 2022, the Company paid $14,474 in cash to acquire the remaining 33% ownership interest from the three noncontrolling partners, which resulted in a $6,116 reduction in noncontrolling interest, a $7,080 charge to capital in excess of stated value, and a $1,278 reduction to accrued expenses and other.
Note 5: Restructuring and Asset Impairments
Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking more cost-effective means and structures to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company’s operating costs. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope, nature, and location of the restructuring activities.
Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Restructuring and restructuring-related asset impairment charges$18,110 $20,652 $52,981 $33,262 
Other asset impairments— — — 10,095 
Restructuring/Asset impairment charges$18,110 $20,652 $52,981 $43,357 

16
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Severance and termination benefits$9,736 $9,265 $19,370 $13,578 
Asset impairments6,123 3,301 26,122 4,533 
Other costs2,251 8,086 7,489 15,151 
Restructuring and restructuring-related asset impairment charges$18,110 $20,652 $52,981 $33,262 
The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:
Three Months EndedNine Months Ended
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Consumer Packaging$8,288 $4,350 $11,792 $8,529 
Industrial Paper Packaging6,430 7,674 32,961 10,029 
All Other1,766 18 5,875 (399)
Corporate1,626 8,610 2,353 15,103 
Restructuring and restructuring-related asset impairment charges$18,110