Sonoco Products Co: Form 10-K for the period ended Dec 31, 2025

(a) General Development of Business –

Sonoco Products Company (“Sonoco,” “the Company,” “we,” “us,” or “our”) is a South Carolina corporation founded in Hartsville, South Carolina, in 1899 as the Southern Novelty Company with the guiding principle that People Build Businesses by doing the right things. At its beginnings in 1899, a team of 12 people worked from a rented warehouse to produce the Company’s first product, a cone-shaped paper yarn carrier used for winding and transporting yarn. Since most of the textile cones of that day were wooden, paper cones were a novelty. The Company soon became the leading producer of cones in the United States. The Southern Novelty Company continued to diversify its product line and add new operations around the country. In 1923, the Southern Novelty Company name was changed to Sonoco Products Company, or “Sonoco,” using the first two letters from each word of its original name.

Sonoco is now a multi-billion dollar global designer, developer, and manufacturer of a variety of highly engineered and sustainable packaging serving multiple end markets. As of December 31, 2025, the Company had approximately 265 locations in 37 countries, serving some of the world’s best-known brands around the globe. Sonoco is committed to creating sustainable products, services, and programs for the environment and our customers, employees, and communities that support our corporate purpose: Better Packaging. Better Life. Our goal is to bring more to packaging than just the package by offering integrated packaging solutions that help define brand personalities, create unique customer experiences, and enhance the quality of products. We seek to help our customers solve their packaging challenges by connecting insights to innovation and developing customized solutions that are tailored to the customers’ goals and objectives.

On December 4, 2024, the Company completed the acquisition of Eviosys, Europe’s leading food cans, ends and closures manufacturer, from KPS Capital Partners, LP (“KPS”), for an aggregate purchase price of approximately $3.8 billion. The transaction advanced Sonoco’s portfolio transformation strategy to simplify and realign its portfolio. The transaction, the largest in the Company’s history, expanded Sonoco’s global leadership in metal food can and aerosol packaging and facilitates Sonoco’s ability to partner with global customers and advance innovation and sustainability in metal packaging offerings. Eviosys operates under the Consumer Packaging segment as Sonoco Metal Packaging, Europe, Middle East, and Africa (“EMEA”).

The Company’s decision in December 2024 to sell TFP represented a major strategic shift in operations. Therefore, in accordance with applicable accounting guidance, the results of TFP are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K and the assets and liabilities of TFP are classified as assets and liabilities of discontinued operations in the Consolidated Balance Sheets. The Consolidated Statements of Comprehensive Income, Changes in Total Equity, and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted. On April 1, 2025, the Company completed the sale of TFP to TOPPAN Holdings Inc. (“Toppan”) for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments. See Notes 1 and 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.

On November 3, 2025, the Company completed the sale of ThermoSafe, its temperature-assured packaging business and part of the All Other group of businesses, to Arsenal Capital Partners (“Arsenal”), a private equity firm, for net cash consideration of $656 million paid at closing on a cash-free and debt-free basis and subject to customary adjustments. The sale of ThermoSafe substantially concluded the Company’s portfolio transformation goal of streamlining its operations from a large portfolio of diversified businesses into two core global business segments.

(c) Description of Business –

Segment Reporting

The Company currently reports its financial results in two reportable segments – Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. Further information about the Company’s reportable segments is provided in Note 20 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Following the sale of ThermoSafe, the Company’s industrial and specialty plastics business is the only remaining business in the All Other category. Effective January 1, 2026, this business will be reported within the Industrial Paper Packaging segment and the use of the All Other category will be discontinued.

Effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function. As a result, no recycling net sales were recorded and the margin from the Company’s recycling operations reduced “Cost of sales” in the Company’s Consolidated Statements of Income for the years ended December 31, 2025 and 2024 as these activities are no longer a part of ongoing major operations.

Consumer Packaging

The Consumer Packaging segment accounted for approximately 65%, 48%, and 45% of the Company’s consolidated net sales in the years ended December 31, 2025, 2024, and 2023, respectively. The operations in this segment consisted of approximately 102 plants throughout the world as of December 31, 2025. Products within the Consumer Packaging segment consist of rigid packaging (paper, metal, and plastic), primarily serving the consumer staples market focused on food, beverage, household, personal, and pharmaceutical products.

Our rigid paper containers are manufactured from 100% recycled paperboard provided primarily from Sonoco global paper operations. These paper products are primarily used in the food and beverage markets including snacks, baked goods, powdered drinks, and confectionary goods. With the acquisitions of Eviosys in December 2024 and Metal Packaging in January 2022, we expanded our manufacturing capability in steel and aluminum metal fabrication beyond our existing metal ends and closures products to include metal food and household packaging products for vegetables, tomatoes, fruit, spray cleaners, paint, and other products.

In 2025, metal cans and rigid paper containers were the Company’s largest revenue-producing groups of products and services representing approximately 45% and 20%, respectively, of the Company’s consolidated net sales. In 2024 and 2023, rigid paper containers were the Company’s largest revenue-producing group of products and services, representing 27% and 28%, respectively, of consolidated net sales.

The Company is consolidating its global metal packaging and rigid paper containers businesses under one structure based on two geographies - Consumer Packaging, EMEA and Asia-Pacific (“APAC”) and Consumer Packaging, Americas. The Company believes the new geographically integrated structure creates a simpler and more efficient operating model that will lead to further innovation, collaboration and growth opportunities.

Industrial Paper Packaging

The Industrial Paper Packaging segment accounted for approximately 30%, 44%, and 44% of the Company’s consolidated net sales in the years ended December 31, 2025, 2024, and 2023, respectively. This segment served its markets through approximately 158 plants on five continents as of December 31, 2025. Sonoco’s paper operations provide the primary raw material for the Company’s fiber-based packaging. Sonoco uses approximately 56% of the paper it manufactures, and the remainder is sold to third parties. This vertical integration strategy was supported by 19 paper mills with 25 paper machines throughout the world as of December 31, 2025. The Company also operates 16 recycling facilities in the United States capable of recycling old corrugated containers, paper, plastics, metals, and other recyclable materials that can be processed back through the Sonoco manufacturing ecosystem. In 2025, Sonoco had the capacity to manufacture approximately 1.8 million tons of recycled paperboard per year. Products within the Industrial Paper Packaging segment consist primarily of goods produced from recycled fiber including paperboard tubes, cores, cones and cans; partitions; paper-based protective materials; and uncoated recycled paperboard for high-end applications such as folding cartons, can board, and laminated structures.

Products across this segment support multiple end markets in consumer staples (food and beverage, food distribution, household and personal products), consumer discretionary (home building, appliances, apparel, and home furnishings), and industrials (construction and building products, and industrial distribution), as well as various other end markets.

In 2025, Sonoco’s tubes and cores products were the Company’s third largest revenue-producing group of products, representing approximately 16% of the Company’s consolidated net sales in the year ended December 31, 2025. This group comprised 23% of consolidated net sales in both 2024 and 2023.

All Other

The businesses grouped as All Other accounted for approximately 5%, 8%, and 11% of the Company’s consolidated net sales in the years ended December 31, 2025, 2024 and 2023, respectively. The declining percentages reflect the divestitures of the Protective Solutions business (“Protexic”), a business that provided foam components and integrated material solutions for various industrial end markets, on April 1, 2024, and ThermoSafe, the Company’s temperature-assured packaging business, on November 3, 2025.

As of December 31, 2025, the operations in All Other consisted of approximately 5 plants in the Company’s industrial and specialty plastics business. As noted above, effective January 1, 2026, this business will be reported within the Industrial Paper Packaging segment and the use of All Other will be discontinued.

Other Aspects of the Company’s Business

Product Distribution – Each of the Company’s operating units has its own sales staff and maintains direct sales relationships with its customers. Some of the units have service staff at the manufacturing facility that interact directly with customers. The Industrial Paper Packaging segment and certain operations within the Consumer Packaging segment have customer service centers located in Hartsville, South Carolina, which are the main contact points between their North American business units and their customers. Divisional sales personnel also provide sales management, marketing, and product development assistance as needed. Typically, product distribution is directly from the manufacturing plant to the customer, but in some cases, product is warehoused in a mutually advantageous location to be shipped to the customer as needed.

Raw Materials – The principal raw materials used by the Company are recovered paper, paperboard, steel, and aluminum. Raw materials are purchased from several outside sources. After a number of global supply chain challenges in the past several years, the Company considers the supply and availability of raw materials to be adequate to meet its needs.

Patents, Trademarks, and Related Contracts – Most inventions and product and process innovations are generated by Sonoco’s development, marketing, and engineering staff, and are important to the Company’s internal growth. Patents have been granted on many inventions created by Sonoco staff in the United States and in numerous other countries. Patents, trademarks, and proprietary technology are also acquired through acquisitions and business combinations. Patents and proprietary technology are managed globally by a Sonoco intellectual capital management team through the Company’s subsidiary, Sonoco Development, Inc. (“SDI”). SDI globally manages patents, trade secrets, confidentiality agreements, and license agreements. Some patents have been licensed to other manufacturers, often as part of a larger agreement, such as a toll manufacturing agreement. Sonoco also licenses patents from outside companies and universities. U.S. patents typically expire twenty years after filing, and patents on new innovations replace many of the abandoned or expired patents. A second intellectual capital subsidiary of Sonoco, SPC Resources, Inc., globally manages Sonoco’s trademarks, service marks, copyrights, and internet domain names. Most of Sonoco’s products are marketed worldwide under trademarks such as Sonoco ®, Sonotube ®, and Sonopost ®, among others. Sonoco’s registered web domain names provide information about Sonoco, including its people, products, locations, and governance. Trademarks and domain names are licensed to outside companies, utilizing quality control metrics, where appropriate.

Seasonality – Although demand for the Company’s rigid paper containers and tube and cores products is not seasonal to any significant degree, the Company’s Metal Packaging operations generally experience higher sales and operating profits during the second and third quarters of the year as demand for certain products increases during the peak of the food packaging season.

Dependence on Customers – On an aggregate basis during 2025, the five largest customers in the Consumer Packaging and Industrial Paper Packaging segments accounted for approximately 23% and 11%, respectively, of each segment’s net sales. The five largest customers in the All Other group of businesses accounted for approximately 20% of the group’s net sales.

None of the Company’s customers represented 10% or more of consolidated revenues in 2025.

Additional information regarding Sonoco’s customers is provided in Item 1A - Risk Factors under the caption “Risks Related to Competition, Customers and Suppliers.”

Backlog – The Company provides a wide variety of products to multiple end markets and relies on its customers’ forecasts to position raw materials for manufacturing within its facilities. The Company does not carry a significant backlog and, in general, aligns its customer deliveries on a built-to-order basis.

Competition – The Company sells its products in highly competitive markets, which include paper, packaging, textile, film, food, construction, and wire and cable. All of these markets are influenced by the overall rate of economic activity, and their behavior is principally driven by supply and demand. Because we operate in highly competitive markets, we regularly bid for new and continuing business. Losses or awards of business from our largest customers, customer changes to alternative forms of packaging, and the repricing of business can have a significant effect on our operating results. The Company manufactures and sells many of its products globally. The Company, having operated internationally since 1923, considers its ability to serve its customers worldwide in a timely and consistent manner a competitive advantage. The Company also believes that its technological leadership, reputation for quality, and vertical integration are competitive advantages. Expansion of the Company’s product lines and global presence is driven by the rapidly changing needs of its major customers, who demand high-quality, state-of-the-art, environmentally compatible packaging, wherever they choose to do business. It is important to be a low-cost producer in order to compete effectively. The Company is focused on productivity improvements and other cost-reduction initiatives utilizing the latest in technology. Additional information regarding competition is provided in Item 1A - Risk Factors under the caption “Risks Related to Competition, Customers and Suppliers.”

Compliance with Government Regulations and Laws – The Company must comply with extensive laws, rules, and regulations in the United States and in each of the countries where it conducts business with respect to a variety of matters. Information regarding compliance with government regulations, including environmental laws, is provided in Item 1A - Risk Factors, in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption “Risk Management,” and in Note 18 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Culture – At Sonoco, our purpose is ingrained in our culture. In fact, it drives our culture. It drives our product development. It drives how we work with our customers and each other. It drives what we do, and the decisions we make. Our purpose isn’t just a collection of words; it represents the collective spirit of an organization focused on one thing: Better Packaging. Better Life.

Sustainability – Packaging plays a fundamental role in providing safe and hygienic delivery systems for food, medicines, and other essential products around the world. Since 2024, our VP-led Global Sustainability team, which leads the Company’s global sustainability programs, has been part of our Legal & Compliance department, allowing us to continue our focus on global sustainability efforts to provide our customers with a wide selection of sustainable products and support related disclosure requirements.

In partnership with our employees, we are committed to promoting sustainable practices in our business. We emphasize a culture of accountability and strive to conduct our business in a manner that is fair, ethical, and responsible to earn the trust of our employees.

Our sustainability goals include reducing greenhouse gas emissions, energy and water usage, and using life cycle assessment to measure and reduce the environmental impact of our packaging products.

We are working to continue to ensure we can make relevant on-pack recyclability claims for our consumer-based product portfolio, while also ensuring we are closing the loop through continued use of post-consumer recycled content.

We also serve as a valued partner to our customers to reduce the environmental impact of their packaging. We continue to develop a range of products made from renewable materials and materials that can be recycled or composted at the end of their life.

We engage in activities and make investments that we believe will enable us to innovate our products and improve our operational infrastructure as well as drive end-of-life solutions for our products and develop partnerships with key stakeholders across our value chain to help deliver sustainable solutions.

Human Capital Management - Sonoco’s core belief in “People and Packaging with a Purpose” underlies our efforts to attract, develop, integrate, and retain talented employees for our global businesses. We bring more to packaging than just the package.

We depend on our employees to achieve our mission of creating sustainable packaging solutions that help build our customers’ brands, enhance the quality of their products, and improve the quality of life for people around the world. We work towards this goal by establishing a foundation for actions that support sustainability, health and safety, and talent development. Integrity is a hallmark of the Sonoco culture.

We seek to engage, develop, and reward our employees so they can successfully pursue our purpose of Better Packaging. Better Life. The Company believes that a strong focus on human capital through the talent we hire and retain, and the talent we gain and integrate through acquisitions, is critical to maintaining our competitiveness. This focus on human capital is reinforced by our global Policies on Business Conduct and through increasing employee awareness, education, communication, and training.

Following the divestitures of TFP and ThermoSafe in 2025, Sonoco had approximately 22,000 full-time equivalent employees as of December 31, 2025, of which approximately 35% are located in the United States, 42% in Europe, and 23% in other geographies. The majority of our employees were historically concentrated in the United States; however, with the divestitures of TFP and ThermoSafe in 2025 and the acquisition of Eviosys in December 2024, a significant portion of our employees are now also concentrated in Europe.

We have labor unions in all regions of our operations. In North America, approximately 16.5% of our employees were represented by unions as of December 31, 2025. In Europe, many of our employees were represented by unions, work councils or other labor organizations.

We rely on the specialized qualities and talents of our employees to help us meet our strategic priorities. We have focused on attracting qualified candidates, the professional development of our employees, our promotion and compensation structure, and employee retention efforts. We believe talent acquisition remained a strength for the organization in 2025 despite challenging labor market conditions globally.

People Objectives

We rely on the personal relationships and service provided by employees to support our business. As such, we believe attracting, recruiting, developing, integrating and retaining talent is vital to our success. The Company is focused on supporting our employees, and we consider the management of our talent to be essential to the ongoing success of our business. Our Board of Directors (the “Board”) and its Executive Compensation Committee and Employee & Public Responsibility Committee provide oversight of our human capital management strategy.

Health and Safety

We take the health and safety of our employees very seriously. Protecting the health and safety of our employees is a priority, and we are committed to providing a safe and healthy working environment for all our employees.

We use global and local incident data, along with a strong set of leading indicators, to create program and safety improvement action plans to reduce exposures that lead to at-risk situations. Injury rates in 2025 were generally stable year over year with decreases observed in total injuries, high potential injuries and serious injuries compared to 2024. We continue to focus on preventing serious and disabling injuries across the organization and have demonstrated progress in reducing exposure to high-risk hazards within the manufacturing operations. Focused audit processes, detailed standards, executive leadership, and dedicated capital are focused on driving long-term exposure reductions, with a 97% completion rate on our annual safety improvement plans as of December 31, 2025. Our global Doing Safety Differently initiative focuses on further strengthening the culture around safety leadership and employee engagement. In addition, our Making Decisions Differently initiative, which we started in October 2023, aims to enhance employees’ ability to make better safety decisions on the manufacturing floor. This initiative has been administered to manufacturing employees globally and continues to grow as a routine part of our daily operations to identify and communicate about workplace exposures. We believe that this initiative has positively impacted our safety, quality and productivity by increasing engagement using improved decision making techniques.

Other employee well-being resources include wellness courses and a variety of online training classes, as well as other programs to promote mental and physical health. We continue to utilize employee feedback and surveys to gather information to better serve our team members. Members of our human resources department annually review benefits to ensure we can support the well-being of our employees and their families.

Talent Development

Attracting, developing, integrating, and retaining talented employees is critical to our success and is an integral part of our human capital strategy. We have created a Global Talent Acquisition and Organizational Development team to provide a more holistic approach to managing the employee lifecycle through continuous training and comprehensive succession planning. Our focus continues to be on hiring, developing, integrating and promoting talent based on a set of core competencies that drives high performance. Our training and development efforts include SONOCO University, our internal learning platform that offers a wide array of in-person and online learning opportunities to build employee competencies. Our professional training staff curates and delivers foundational leadership training to our employees to focus on leadership development as a core competency. We also utilize external organizations and local universities to support our development needs. We have apprenticeship programs with local technical schools and high schools. Other key components of our talent management system include coaching and a formal mentorship program for emerging leaders and high-potential employees. In addition, we conduct regular talent succession assessments along with individual performance reviews for salaried employees in which managers provide regular feedback and coaching to assist with the development of our employees, including the use of individual development plans to assist with individual career development.

We offer competitive benefits packages that we believe reflect the needs of our workforce. In the United States, we provide medical, dental, and vision benefits, life and disability coverage, education reimbursement, and paid time off. We provide retirement benefits including a 401(k)-match program. Our executive compensation program is designed to align incentives with achievement of the Company’s strategic plan and both short- and long-term operating objectives.

(e) Available Information –

The Company electronically files with the SEC its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its periodic reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, and proxy materials pursuant to Section 14 of the Exchange Act. The SEC maintains a site on the Internet, www.sec.gov (http://www.sec.gov), that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Sonoco also makes its filings available, free of charge, through its Investor Relations website, www.investor.sonoco.com (http://www.investor.sonoco.com), as soon as reasonably practical after the electronic filing of such material with the SEC. Sonoco uses its Investor Relations website as a means of disclosing material non-public information. Accordingly, investors should monitor Sonoco’s Investor Relations website, in addition to following its press releases, SEC filings, and public conference calls and webcasts. The information posted on or accessible through Sonoco’s website is not incorporated into this Annual Report on Form 10-K. All references to Sonoco’s websites are intended to be inactive textual references only.

Information About our Executive Officers –

8 FORM 10-K SONOCO 2025 ANNUAL REPORT

We are subject to risks and uncertainties that could adversely affect our business, reputation, consolidated financial condition, results of operations and cash flows, ability to pay dividends, and the trading price of our securities. These factors could also cause our actual results to materially differ from the results contemplated by forward-looking statements we make in this report, in our other filings with the SEC, and in our public announcements. You should consider the risk factors described below, as well as other factors described elsewhere in this report and in our other filings with the SEC, in evaluating us, our business, and any investment in our securities. Although these are the most significant risk factors of which we are currently aware, they are not the only risk factors to which we are subject. Additional risk factors not currently known to us, or that we currently deem immaterial, could also adversely affect our business operations and financial results.

Risks Related to the Domestic and Global Economies and to Doing Business Globally

Our international operations subject us to various risks that could adversely affect our business operations and financial results.

We have operations throughout North and South America, Europe, Australia and Asia, with approximately 265 owned and leased facilities in 37 countries as of December 31, 2025. In 2025, approximately 52% of consolidated sales came from operations outside of the United States, reflecting the significant expansion of our international operations with the December 2024 acquisition of Eviosys. Management of global operations is extremely complex, and operations in foreign countries are subject to local statutory and regulatory requirements, differing legal environments, and other additional risks that may not exist, or be as significant, in the United States. These additional risks, which can vary substantially by country and by region, can adversely affect our business operations and financial results, and include, without limitation:

• foreign currency exchange rate fluctuations and foreign currency exchange controls;
• hyperinflation and currency devaluation;
• possible limitations on conversion of foreign currencies into dollars, or payment of dividends and other payments by non-U.S. subsidiaries;
• tariffs, non-tariff barriers, duties, taxes, government royalties, including the imposition or increase of withholding and other taxes on remittances and other payments by non-U.S. subsidiaries, or other restrictions on foreign trade or changes in restrictions on trade between the United States and the countries where Sonoco’s products are manufactured or sold;
• the risk that our interpretation of our rights and responsibilities under local statutory and regulatory rules for sales taxes, VAT and similar taxes, statutory accounting requirements, licenses and permits, etc. may prove to be incorrect or unsupportable, resulting in fines, penalties, or other liabilities related to non-compliance, damage to our reputation, unanticipated operational restrictions or other consequences as a result of our actions, or inaction, taken to perform our responsibilities or protect our rights;
• changes in tax laws, or the interpretation of such laws, affecting taxable income, tax deductions, or other attributes relating to our non-U.S. earnings or operations;
• inconsistent product regulation or policy changes by foreign agencies or governments;
• difficulties in enforcement of contractual obligations and intellectual property rights;
• high social benefit costs for labor, including more expansive rights of foreign unions and works councils, and costs associated with restructuring activities;
• national and regional labor strikes;
• changes in immigration and labor laws that may adversely impact our access to technical and professional talent;
• difficulties in staffing and managing international operations;
• geographic, language, and cultural differences between personnel in different areas of the world;
• differences in local business practices;
• foreign governments’ restrictive trade policies, customs, import/export and other trade compliance regulations;
• changes to multilateral conventions, treaties, tariffs and trade measures or other arrangements between or among sovereign nations;
• compliance with and changes in applicable foreign laws and regulations, including with respect to data privacy, AI, consumer protection, environmental and antitrust matters;
• compliance with U.S. laws, including those affecting trade and foreign investment (including economic sanctions compliance) and the Foreign Corrupt Practices Act;
• loss or non-renewal of treaties between foreign governments and the United States;
• product boycotts, including with respect to products of our multi-national customers;
• increased costs of maintaining international manufacturing facilities and undertaking international marketing programs;
• supply chain and distribution challenges, including fluctuations in shipping costs, limitations on shipping and receiving capacity, and other supply chain and distribution disruptions;
• difficulty in collecting international accounts receivable and potentially longer payment cycles;
• the potential for nationalization or expropriation of our enterprises or facilities without appropriate compensation; and
• political, social, legal and economic instability, civil unrest, war, expansion of same and other geopolitical tensions (such as the ongoing conflict between Russia and Ukraine and uncertainty in the Middle East, the potential escalation of tensions between China and Taiwan, and the potential impact of recent events in Venezuela on Latin America), catastrophic events, acts of terrorism, and health emergencies or widespread outbreaks of infectious diseases.

As discussed further elsewhere in this Annual Report on Form 10-K and in our other filings with the SEC, some of these risks have already affected us.

Global economic conditions and disruptions in the credit markets could adversely affect our business, financial condition, and results of operations.

We have extensive international operations and are dependent on customers and suppliers that operate in local economies around the world. In addition, we access global credit markets as part of our capital allocation strategy. Adverse global macroeconomic conditions could adversely impact our ability to access credit, or the price at which funding could be obtained. Likewise, uncertainty about or a decline in global or regional economic conditions has in the past and could in the future have a significant impact on the financial stability of our suppliers and customers, and has and can in the future adversely impact demand for our products. For example, during the COVID-19 pandemic, we experienced adverse effects on customer stability and demand for our products. Potential effects on us include financial instability, inability to obtain credit to finance operations, and insolvency.

We are subject to governmental export and import control laws, economic sanctions, anti-corruption laws and other regulations in certain jurisdictions where we do business that could subject us to liability or impair our ability to compete in these markets.

Certain products are subject to export control laws and regulations and may be exported only with an export license or through an applicable export license exception. If we fail to comply with export licensing, customs regulations, economic sanctions or other laws, we could be subject to substantial civil or criminal fines and penalties, including economic sanctions against us, disgorgement of profits, injunctions, incarceration for responsible employees and managers, the possible loss of export or import privileges, lawsuits and other remedial measures, and reputational harm. In addition, if our distributors fail to obtain appropriate import, export or re-export licenses or permits, we may also be materially and adversely affected through reputational harm and penalties. Obtaining the necessary import, export, and re-export licenses for a particular sale may be time-consuming and expensive and could result in the delay or loss of sales opportunities.

Furthermore, export control laws and economic sanctions may prohibit the shipment of certain products to, and related transactions involving, embargoed or otherwise sanctioned countries, governments and persons, and may prohibit us from engaging in certain activities in connection with such countries, governments, and persons. Despite our efforts to ensure compliance with applicable law, we cannot guarantee that a violation of export control laws or economic sanctions will not occur. A prohibited shipment, transaction, or activity could have adverse consequences, including government investigations, inquiries, or subpoenas, penalties, fines, civil and criminal sanctions, and reputational harm. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons, activities, or technologies targeted by such regulations, could decrease our ability to export or sell our products internationally. Any limitation on our ability to export or sell our products could adversely affect our business. For example, in 2022, following Russia’s invasion of Ukraine and the imposition of economic sanctions against Russia by the United States and other countries, we finalized the exit from our operations in Russia, which consisted of two small manufacturing operations, and incurred asset impairment charges as a result of our exit. We also ceased sourcing from Russian suppliers. As part of the Eviosys acquisition in December 2024, we acquired certain existing operations in Russia. These operations carry a heightened risk from an export controls and sanctions perspective, including export control restrictions and restrictions concerning transactions involving sanctioned persons and the provision of certain services and investments. These export controls and sanctions may impair our ability to leverage these Russian operations. We expect that continuing to operate in Russia in compliance with applicable U.S., EU, UK, and other laws and regulations will require us to expend substantial resources and devote significant management attention. Any failure to comply with applicable requirements could expose us to significant penalties, expenses incurred relating to government investigations, inquiries, or subpoenas, and reputational harm. Although we have policies and procedures in place to promote compliance with such laws, there can be no assurance that they will be followed at all times or effectively detect and prevent all violations of export control laws and economic sanctions in connection with these operations in Russia. U.S., EU, UK, and other economic sanctions, export controls and related laws and regulations may increase and make continuing such Russia operations impracticable or impossible. Further, the Russian government has recently seized the assets of several Western companies, including metal can manufacturers, placing them under state control, or “temporary administration,” and Russia or another country could take similar actions in the future. Our operations in Russia accounted for approximately 1% of the Company’s net sales in 2025 and approximately 0.5% of the Company’s total assets at December 31, 2025.

Export control laws and economic sanctions may also have an indirect adverse effect on our business. For example, some of our customers previously exported their products to Russia, and any reduction in demand for such customers’ products could in turn reduce demand for our products. Economic sanctions against Russia have also contributed to adverse changes in the global price and availability of natural gas, raw materials and finished goods, which could reduce our sales and earnings or otherwise have an adverse effect on our operations. Any future additional export controls or sanctions imposed by the US, the UK, the EU, or other countries could further exacerbate these effects.

Further, our operations are subject to anti-corruption laws and sanctions regulations concerning both private and public-sector corruption in various jurisdictions where we do business. The nature of our operations may bring us, our employees and third parties acting on our behalf into contact with government officials, including employees of state-owned business enterprises and others who may be considered government officials under applicable anti-corruption laws. Although we have policies and procedures in place to promote compliance with such laws, there can be no assurance that they will be followed at all times or effectively detect and prevent all violations of applicable laws by our employees, consultants, third parties or others for which we could be held responsible.

Changes in United States trade policies and global regulations, as well as the overall uncertainty surrounding international trade relations, could materially and adversely affect our consolidated financial condition and results of operations.

We continue to face uncertainty with respect to trade relations between the United States and many of its trading partners. For example, during 2025, the U.S. government announced, delayed, re-imposed and revised a series of broad-based, as well as country-, bloc- and sector-specific, tariffs on imports, as well as other trade policy changes. In August 2025, the U.S. government set firmly established reciprocal tariff rates for various countries that were, for the most part, incremental increases over the previously established baseline rate of 10%. Some countries announced retaliatory actions or plans for retaliatory actions, which gave rise to further escalations of trade measures by the United States and impacted countries. Such tariffs and other trade restrictions, and uncertainty related thereto, have had, and may in the future have, an adverse direct effect on our costs of products sold and margins and have had, and may in the future have, an adverse indirect effect due to reduced demand for our products or other impacts to our customers, suppliers or other business partners. On February 20, 2026, the U.S. Supreme Court invalidated certain of the tariffs implemented by the U.S. government. This ruling and any future changes in tariffs or other trade policies may result in additional changes and have further direct and indirect adverse effects on our consolidated financial condition and results of operations. The Company is continuing to monitor and evaluate the full impact of the U.S. Supreme Court ruling and changing trade policies and regulations.

In addition, in response to the United States-Mexico-Canada Agreement (“USMCA”), other countries may change their own trade policies, including the imposition of additional tariffs and quotas, which could also adversely affect our business outside the United States. If further tariffs are imposed on a broader range of imports, further retaliatory trade measures are taken by countries in response to tariffs, or efforts are made to withdraw from or substantially modify such agreements, then we may be required to raise our prices or incur additional expenses, which may result in the loss of customers and harm our sales, earnings, business, financial condition, and results of operations. Furthermore, the duty preferential treatment for goods that qualify for the USMCA was temporarily exempted from the United States 25% tariff on Mexican and Canadian goods, and although Canada imposed retaliatory tariffs on goods coming from the United States that did not originally exempt USMCA-qualified goods, Canada lifted many of its retaliatory tariffs in September 2025, apart from those on steel, aluminum, and autos. Some of the enumerated goods subject to these tariffs include products and materials shipped to Sonoco’s plants in Canada, and the Company may be unable to claim end-use exemptions to mitigate the impact of such tariffs. These or any future retaliatory measures, the removal of the exemption by the United States, or other changes to the USMCA or other trade arrangements, could impact our operations by increasing the cost of imported raw materials and finished goods from Canada and Mexico.

Tariff increases have in the past had, and we expect that such measures and any additional measures will in the future have, an adverse effect on our costs of products sold and margins, including by increasing the cost of imported raw materials, which costs we may be unable to pass on to our customers without affecting demand, and potentially disrupting supply chains, causing delays and logistical challenges. In order to mitigate the impact of these trade-related increases on our costs of products sold, we have increased, and may further increase in the future, prices in certain markets and, over the longer term, make changes in our supply chain and potentially, our global manufacturing strategy. For example, in 2025, the U.S. government announced the expansion of Section 232 tariffs on steel and aluminum imported into the United States (“Section 232 Tariffs”). As a result, imported steel and aluminum originating from most foreign countries is currently subject to a 50% duty. A portion of the steel and aluminum we purchase for our metal packaging and industrial paper packaging businesses is sourced from outside the United States, and although we generally negotiate agreements to share tariff costs with brokers from which we purchase certain raw materials and have the contractual ability to pass on cost increases due to tariffs to our customers, we may be unable to maintain such cost sharing and cost pass-on practices, and any price increases may cause our customers to find alternative suppliers and result in reduced demand for our products. If we are unable to successfully reduce or pass on these costs through price increases, adjust our supply chain without incurring significant costs, or locate alternative suppliers for raw materials or finished goods at acceptable costs or in a timely manner, our net sales, costs, and margins could be adversely affected.

Higher tariffs also may increase the cost of purchasing and maintaining manufacturing equipment used in our operations. We believe the impact of higher tariffs on purchases of manufacturing equipment, while modest to our results of operations, will result in higher cash costs of such items and may therefore reduce both the number of capital projects we are able to undertake and the return on investment on such capital projects. Further, the Company may incur higher costs due to tariffs on maintenance and repair spending. If we are unable to effectively manage the impact of higher tariffs on our capital expenditures and repairs and maintenance spending through price pass-through mechanisms or locating lower-cost alternative suppliers, our results of operations, including our cash flows, could be materially and adversely affected.

Further, the uncertainty surrounding global trade policy and its broader economic impacts requires significant management attention and makes it difficult to make long-term strategic decisions regarding the best way to respond to these pressures. Such uncertainty has in the past increased, and may in the future increase the volatility of currency exchange rates. In addition, even if we are able to mitigate the direct impacts to our operations from changes in U.S. and foreign trade policy, our sales volumes have been, and may in the future be, adversely affected by reduced sales of or demand for end products incorporating our packaging products or changes in consumer behavior, whether resulting from increased costs of such products attributable to increased tariffs or other trade barriers or the broader economic impact of such measures, such as increased inflation, decreased consumer spending or other adverse macroeconomic trends.

Our inability to effectively manage the adverse impacts of changing U.S. and foreign trade policies could materially and adversely impact our consolidated financial condition and results of operations.

Currency exchange rate fluctuations may adversely affect our results of operations and shareholders’ equity.

Fluctuations in currency exchange rates can cause, and have in the past caused, translation, transaction and other losses that can unpredictably and adversely affect our consolidated results of operations. Our reporting currency is the U.S. dollar. However, as a result of operating globally, a portion of our consolidated net sales, costs, assets, and liabilities are denominated in currencies other than the U.S. dollar. In our consolidated financial statements, we translate the local currency financial results of our foreign operations into U.S. dollars based on their respective exchange rates. Depending on the direction, changes in those rates will either increase or decrease net sales, costs, net income, and other balances reported in U.S. dollars. Our acquisition of Eviosys increased our exposure to the effects of such changes. Although we monitor our exposures and, from time to time, may use forward currency contracts to hedge certain forecasted foreign currency transactions or foreign currency denominated assets and liabilities, our hedging activities do not completely insulate us from the effects of foreign currency fluctuations and also expose us to counterparty risk of nonperformance.

Changes in domestic and global economic conditions may have an adverse impact on our business operations and financial results.

Because of the nature of our products and services, general economic downturns in the United States and globally can adversely affect our business operations and financial results. Current global economic challenges, including inflationary pressures, supply chain disruptions, changing tariffs and other trade restrictions, currency fluctuations, geopolitical uncertainty, military conflicts, increased interest rates and recession risks, as well as the rising debt levels of the United States and other countries, are likely to continue to put pressure on the economy, and on us. For example, the U.S. Federal Reserve raised its benchmark interest rate by a total of 525 basis points during 2022 and 2023 in order to combat inflation. Although the Federal Reserve subsequently lowered rates by a total of 175 basis points during 2024 and 2025, relatively high interest rates may persist and may, among other things, reduce the availability and increase the costs of obtaining new variable rate debt and refinancing existing indebtedness, and adversely impact our financial condition and results of operations. Additionally, such increases in rates put additional pressure on consumers and the economy in general, which can in turn lead, and has in recent periods led, to reduced consumption of products incorporating our packaging. Bank failures or issues in the broader U.S. or global financial systems may have an impact on the broader capital markets and, in turn, our ability to access those markets. As evidenced in recent years, changes in fiscal and monetary policies and tightening of credit availability and financial difficulties, leading to declines in consumer and business confidence and spending, may adversely affect us, or our customers, suppliers, and distributors. When such conditions exist, customers may delay, decrease or cancel purchases from us, and may also delay payment or fail to pay us altogether. Suppliers may have difficulty filling our orders and distributors may have difficulty getting our products to market, which may affect our ability to meet customer demands, and result in loss of business. Weakened global economic conditions may also result in unfavorable changes in our product price/mix and lower profit margins. All of these factors may have a material and adverse effect on our business, results of operations, financial condition, and prospects.

Risks Related to Manufacturing Operations

Raw materials, energy and other price increases or shortages may impact our results of operations.

As a manufacturer, our sales and profitability are dependent on the availability and cost of raw materials, labor, and other inputs. Most of the raw materials we use are purchased from third parties. Principal examples are recovered paper, paperboard, steel, aluminum and plastic resins. Prices and availability of these raw materials are subject to substantial fluctuations that are beyond our control due to factors such as changing economic conditions, inflation, currency and commodity price fluctuations, tariffs, resource availability, transportation costs, weather conditions and natural disasters, war, political unrest and instability (such as the ongoing conflict between Russia and Ukraine and uncertainty in the Middle East, the potential escalation of tensions between China and Taiwan, and the potential impact of recent events in Venezuela on Latin America), and other factors impacting supply and demand pressures. Increases in costs can have an adverse effect on our business and financial results. Our performance depends, in part, on our ability to pass on cost increases to our customers by raising selling prices and to offset the impact by improving productivity. Although many of our long-term contracts and non-contractual pricing arrangements with customers permit limited price adjustments to reflect increased raw material costs, such adjustments may not occur quickly enough, or be sufficient to prevent a material and adverse effect on net income and cash flow. Furthermore, we may not be able to improve productivity or realize sufficient savings from our cost reduction initiatives to offset the impact of increased costs.

In addition, some of our manufacturing operations require the use of substantial amounts of electricity and natural gas, which may be subject to significant price increases as the result of changes in overall supply and demand and the impacts of legislation and regulatory action. In addition, we operate manufacturing sites throughout Europe and, in many instances, continued normal operations at those sites depend on the availability of natural gas and other inputs. Any current and future government sanctions or an escalation or widening of the Russia-Ukraine conflict could contribute to further increased volatility of energy and commodity prices, cause further supply chain disruptions, and further adversely affect the cost and availability of energy supplies and other inputs in our European operations. Any energy shortages could impair our ability to continue our operations at such sites at normal levels or at acceptable cost levels, and therefore adversely affect our business operations, financial condition, and results of operations. We forecast and monitor energy usage, and, from time to time, use commodity futures or swaps in an attempt to reduce the impact of energy price increases. However, these efforts may be insufficient to protect us against fluctuations in energy prices or shortages of natural gas, and we could suffer adverse effects to net income and cash flow should we be unable to either offset or pass higher energy costs through to our customers in a timely manner or at all.

Supply shortages or disruptions in our supply chains could affect our ability to obtain timely delivery of materials, equipment, and supplies from our suppliers, and in turn, adversely affect our ability to supply products to our customers. Such disruptions could have a material and adverse effect on our business and financial results.

We depend on third parties for transportation services.

We rely primarily on third parties for transportation of the products we manufacture and distribute, as well as for delivery of our raw materials. In particular, a significant portion of the goods we manufacture and raw materials we use are transported by railroad or trucks, which are highly regulated. If any of our third-party transportation providers were to fail to deliver the goods that we manufacture or distribute in a timely manner, we might be unable to sell those products at full value, or at all. Similarly, if any of these providers were to fail to deliver raw materials to us in a timely manner, we might be unable to manufacture our products in response to customer demand. In addition, if any of these third parties were to cease operations or cease doing business with us, we might be unable to replace them at a reasonable cost. Any failure of a third-party transportation provider to deliver raw materials or finished products in a timely manner could harm our reputation, adversely impact our customer relationships, and have a material and adverse effect on our financial condition and results of operations.

We may be unable to achieve, or may be delayed in achieving, adequate returns from our efforts to optimize our operations, which could have an adverse effect on our financial condition and results of operations.

We continually strive to serve our customers and increase returns to our shareholders through innovation and improved operating performance by investing in productivity improvements, manufacturing efficiencies, manufacturing cost reductions, and the rationalization of our manufacturing facilities footprints. However, our operations include complex manufacturing systems as well as intricate scheduling and numerous geographic and logistical complexities, and our business initiatives are subject to significant business, economic, and competitive uncertainties and contingencies. We may not meet anticipated implementation timetables or stay within budgeted costs, and we may not fully achieve expected results. These initiatives could also adversely impact customer or employee retention or our operations. Additionally, our business strategies may change from time to time in light of our ability to implement new business initiatives, competitive pressures, economic uncertainties or developments, or other factors. A variety of risks could cause us not to realize some or all of the expected benefits of these initiatives. These risks include, among others, delays in the anticipated timing of activities related to such initiatives, strategies, and operating plans; increased difficulty and costs in implementing these efforts; and the incurrence of other unexpected costs associated with operating the business. As a result, there can be no assurance that we will realize these benefits. If, for any reason, the benefits we realize are substantially less than our estimates, or the implementation of these growth initiatives and business strategies adversely affects our operations, costs significantly more or takes significantly longer to effectuate than we expect, or if our assumptions prove inaccurate, our results of operations may be materially and adversely affected.

Material disruptions in our business operations could adversely affect our financial results.

Although we take measures to minimize the risks of disruption at our facilities, we from time to time encounter an unforeseen material operational disruption in one of our major facilities, which could adversely impact production and our financial results. Such a disruption could occur as a result of any number of events including but not limited to: political events, trade and other international disputes, war (such as the ongoing conflict between Russia and Ukraine as well as the economic sanctions related thereto, and uncertainty in the Middle East, the potential escalation of tensions between China and Taiwan, and the potential impact of recent events in Venezuela on Latin America), terrorism, industrial accidents, major equipment failure, labor stoppages, transportation failures affecting the supply and shipment of materials, disruptions at our suppliers, fire, severe weather conditions (including as a result of climate change), natural disasters and disruptions in utility services, as well as disruptions related to localized or widespread public health events (including epidemics or pandemics). These types of disruptions could materially and adversely affect our earnings to varying degrees depending upon the facility, the duration of the disruption, and our ability to shift business to another facility or find alternative sources of materials or energy. Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles.

Risks Related to Acquisitions, Divestitures and Joint Ventures

We may fail to realize expected benefits from our acquisitions, which could have an adverse effect on our financial condition and results of operations.

We continually evaluate potential acquisitions and strategic investments that are significant to our business both in the United States and internationally. We have invested a substantial amount of capital in acquisitions, joint ventures, and strategic investments, including our acquisition of Eviosys in December 2024, the acquisition of a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”) and the remaining equity interest in RTS Packaging, LLC in September 2023, and the acquisition of Metal Packaging in January 2022, and we expect that we will continue to evaluate potential acquisitions, joint ventures, and strategic investments in the future. Acquisitions, joint ventures, and strategic investments involve numerous risks. As has happened from time to time in the past, acquired businesses may not achieve the expected levels of revenue, profitability or productivity, or otherwise perform as expected, and acquisitions may involve significant cash expenditures, debt incurrence, operating losses, and expenses that could have a material and adverse effect on our financial condition and results of operations. Acquisitions also involve special risks, including, without limitation, the impairment of goodwill and other intangible assets, the potential assumption of unanticipated liabilities and contingencies, and the challenges of effectively integrating acquired businesses.

Other risks and challenges associated with acquisitions include, without limitation:

• substantial costs and indebtedness associated with negotiating and completing acquisitions;
• demands on management related to increase in size of our businesses and additional responsibilities of management;
• diversion of management’s attention;
• disruptions to our ongoing businesses;
• changes to our pricing model;
• inaccurate estimates of fair value in accounting for acquisitions and amortization of acquired intangible assets, which could reduce future reported earnings;
• difficulties in assimilation and retention of employees;
• difficulties in integration of departments, systems, technologies, books and records, controls (including internal financial and disclosure controls), procedures, and policies;
• potential loss of major customers and suppliers;
• challenges associated with operating in new geographic regions and competitive environments;
• challenges associated with the operation of new, different or more complex operations;
• challenges associated with integrating legacy compliance programs;
• difficulties in maintaining uniform standards, controls, procedures, and policies;
• difficulties in servicing and repaying indebtedness and limitations on flexibility from the financing of acquisitions;
• potential failure to anticipate delays or restrictions resulting from regulatory review or required approvals;
• potential failure to consummate an acquisition;
• potential failure to identify material problems and liabilities during due diligence review of acquisition targets; and
• potential failure to obtain sufficient indemnification rights to fully offset possible liabilities associated with acquired businesses.

Even if we are successful in integrating our acquisitions, such acquisitions may not ultimately be successful or accretive to earnings, and we may not realize the expected benefits from such transactions within the anticipated time frame, or at all. If actual performance in an acquisition falls short of the projected results, or the assessment of the relevant facts and circumstances was inaccurate or changes, it is possible that a noncash impairment charge of any related goodwill would be required, and our results of operations and financial condition could be adversely affected.

We may not be able to identify suitable acquisition candidates, or complete acquisitions on our desired timing or terms, which could limit our potential for growth.

We have made numerous acquisitions in recent years and have been actively considering new acquisitions that provide meaningful opportunities for growth. However, we may not be able to identify suitable acquisition candidates or complete acquisitions on acceptable timing, terms, and conditions. Other companies in our industries have similar investment and acquisition strategies to ours, and competition for acquisitions may intensify. If we are unable to identify acquisition candidates that meet our criteria, our potential for growth may be restricted. Even if we do identify acquisition candidates that we believe meet our criteria, we may be unable to complete such acquisitions in a timely manner, on desirable terms or at all, including as a result of an inability to satisfy related closing conditions or obtain necessary government consents, or the expiration or termination of applicable regulatory waiting periods. For example, our ability to close certain of our prior acquisitions have in some cases been delayed due to regulatory review or other constraints. Our efforts to identify suitable acquisition candidates, even if successful, could also cause us to incur substantial search and transaction fees, divert the time and attention of our management, or fail to identify due diligence or other issues affecting the value and suitability of potential acquisition targets. Any of these results could have a material and adverse effect on our business, results of operations, financial condition, and prospects.

In connection with acquisitions, joint ventures, divestitures, or other strategic transactions, we may become subject to liabilities and legal claims.

In connection with acquisitions, joint ventures, divestitures, or other strategic transactions, we have in the past, and may in the future, become subject to liabilities or legal claims, including but not limited to: third party liability and other tort claims; claims for breach of contract; employment-related claims; environmental, health, and safety liabilities, conditions or damage; permitting, regulatory or other legal compliance issues (such as potential liabilities arising from anti-corruption laws and sanctions regulations); claims for contractual indemnification; or tax liabilities. In addition, we may assume risks and liabilities that our due diligence investigations with respect to acquisitions, joint ventures, and other strategic transactions fail to identify, including issues relating to inadequate internal controls and procedures relating to accounting, finance, cybersecurity, and data protection controls issues. If we become subject to any of these liabilities or claims with respect to any acquisition, joint venture, divestiture, or other strategic transaction, and they are not adequately covered by insurance or an enforceable indemnity or similar agreement from a creditworthy counterparty, we may be responsible for significant out-of-pocket expenditures. Such underinsured or non-indemnified liabilities, if they materialize, could have a material and adverse effect on our business, financial condition, and results of operations.

We may encounter difficulties restructuring operations or closing or disposing of facilities, assets or businesses.

From time to time, we have closed higher-cost facilities, implemented reductions in force, sold non-core assets and businesses, and otherwise restructured operations, and are likely to do so again, in an effort to improve cost competitiveness and profitability and reduce leverage. For example, in 2025 we completed the divestitures of TFP and ThermoSafe, and in 2024, we completed the divestiture of Protexic. In addition, during 2024 and 2025, we permanently closed a paper mill in Mexico and a paper mill in the United States as part of our strategy to rationalize our mill network and lower operating costs, closed metal can facilities in France and Spain, and closed several other high-cost operations. As a result, restructuring and divestiture costs have been, and are expected to continue to be, a recurring component of our operating costs, the magnitude of which could vary significantly from year to year depending on the scope of such activities. Divestitures and restructuring may result, and have in the past resulted, in significant financial charges for the write-off or impairment of assets, including goodwill and other intangible assets. Furthermore, such activities may divert the attention of management, disrupt our ordinary operations, or result in a reduction in the volume of products produced and sold, and the impact of divestitures on our revenue growth may be larger than we anticipate if we experience greater dis-synergies than we expect. In addition, in cases where we seek to divest or otherwise dispose of certain facilities, operations, assets, or other components of our business, we may be unable to find buyers or alternative exit strategies on acceptable terms, in a timely manner or at all, and we may dispose of facilities, operations, assets, or other components of our business at prices or on terms that are less desirable than we had anticipated. Moreover, we may be prevented from completing dispositions as a result of our own or our counterparties’ failure to satisfy pre-closing conditions or obtain necessary regulatory or government approvals. We may also be exposed to continuing financial risks from any businesses we divest, including as a result of continuing equity ownership, guarantees, indemnities, responsibility for environmental clean-up, or other financial obligations. There is no guarantee that any such activities will achieve our goals, and if we cannot successfully manage the associated risks, our financial position and results of operations could be adversely affected.

We have investments in joint ventures that are not operated solely for our benefit.

Several of our operations are conducted through joint ventures. In joint ventures, we share ownership and, in some instances, management of a company with one or more parties who may or may not have the same goals, strategies, priorities, or resources as we do. In general, joint ventures are intended to be operated for the benefit of all co-owners, rather than for our exclusive benefit. Operating a business as a joint venture often requires additional organizational formalities, as well as time-consuming procedures for sharing information, accounting, and making decisions. In certain cases, our joint venture partners must agree in order for the applicable joint venture to take certain actions, including acquisitions, the sale of assets, budget approvals, borrowing money, and granting liens on joint venture property. Our inability to take unilateral action that we believe is in our best interests may have an adverse effect on the financial performance of the joint venture and the return on our investment. In joint ventures, we believe our relationship with our co-owners is an important factor to the success of the joint venture, and if a co-owner changes, our relationship may be adversely affected. In addition, the benefits from a successful joint venture are shared among the co-owners, so that we do not receive all the benefits from our successful joint ventures. Finally, we may be required on a legal or practical basis, or both, to accept liability for obligations of a joint venture beyond our economic interest, including in cases where our co-owner becomes bankrupt or is otherwise unable to meet its commitments.

In addition, because we share ownership and management with our joint venture partners, we may have limited control over the actions of a joint venture, particularly when we own a minority interest. As a result, we may be unable to prevent violations of applicable laws or other misconduct by a joint venture, or the failure to satisfy contractual obligations by one or more parties. Moreover, a joint venture may not be subject to or follow the same requirements regarding compliance, internal controls and internal control over financial reporting that we follow. To the extent another party makes decisions that adversely impact the joint venture or internal control issues arise within the joint venture, we may have to take responsive actions, or we may be subject to penalties, fines, or other punitive actions for these activities.

Risks Related to Competition, Customers and Suppliers

We face intense competition, and failure to compete effectively may have an adverse effect on our results of operations.

We sell our products in highly competitive markets. We regularly bid for new and continuing business, and being a responsive, high-quality, low-cost producer is a key component of competing effectively. We also face competition that may be larger, more diversified, or better funded than us. These competitive advantages may enable our competition to adapt more quickly to changing customer or consumer preferences, including with respect to more sustainable products and packaging; changes brought about by public health events, supply chain constraints, inflationary pressures, currency fluctuations, geopolitical uncertainty, and increased interest rates; or the introduction of new products, technologies, and equipment, including advanced technologies such as AI. For example, growing use of AI by our competitors could disrupt our business model and lower the barriers to entry in the markets we serve. If our competitors invest in, develop and utilize AI tools more effectively than us to innovate and introduce go-to-market solutions more rapidly and compete more effectively on quality and price, we could lose business and the profitability of our business could be reduced. We have started to introduce certain AI capabilities via Microsoft CoPilot in our environment, and some of our business solution partners have also added AI capabilities to their tooling, but usage is still minimal. Any impact arising from the use of AI by our competitors, as well as the loss of business from our larger customers, customer changes to alternative forms of packaging, or renewal of business with less favorable terms, could have a significant and adverse effect on our results of operations.

Continuing consolidation of our customer base and suppliers may intensify pricing pressure.

Like us, many of our larger customers have acquired companies with similar or complementary product lines, and many of our customers have been acquired. Additionally, many of our suppliers of raw materials are consolidating. This consolidation of customers and suppliers has increased the concentration of our business with our largest customers, and in some cases, increased pricing pressures. Similarly, consolidation of our larger suppliers has resulted in increased pricing pressures from our suppliers. Further consolidation of customers and suppliers could intensify pricing pressure, reduce our net sales, increase our costs, and adversely affect our results of operations.

The loss of a key customer, or a reduction in its production requirements, could have a significant and adverse effect on our sales and profitability.

Each of our segments has large customers, and the loss of any of these could have a significant and adverse effect on the segment’s sales and, depending on the magnitude of the loss, our results of operations and financial condition. Although a majority of our master customer contracts are long-term, they are terminable under certain circumstances, such as our failure to meet quality, pricing, or volume requirements, and the contracts themselves often do not require a specific level of purchasing. There is no assurance that existing customer relationships will be renewed at the same level of production, or at all, at the end of the contract term. Furthermore, the loss of any of our major customers, a reduction in their purchasing levels, or an adverse change in the terms of supply agreements with these customers could reduce our net sales and net income. Continued consolidation of our customers could exacerbate any such loss. For more information on concentration of sales volume in our reportable segments, see Item1(c), “Description of Business—Other Aspects of the Company’s Business—Dependence on Customers.”

Challenges to, or the loss of, our intellectual property rights could have an adverse effect on our ability to compete effectively.

Our ability to compete effectively depends, in part, on our ability to protect and maintain the proprietary nature of our owned and licensed intellectual property. We own a large number of patents on our products, aspects of our products, methods of use and methods of manufacturing; and we own, or have licenses to use, all of the material trademark and trade name rights used in connection with the packaging, marketing, and distribution of our major products. We also rely on trade secrets, know-how and other unpatented proprietary technology. We attempt to protect and restrict access to our intellectual property and proprietary information by relying on the patent, trademark, copyright, and trade secret laws of the United States and other countries, as well as non-disclosure agreements. However, it may be possible for a third party to obtain our information without our authorization, independently develop similar technologies, or breach a non-disclosure agreement entered into with us. Furthermore, many of the countries in which we operate do not have intellectual property laws that protect proprietary rights as fully as do laws in the United States. The use of our intellectual property by someone else without our authorization could reduce or eliminate certain competitive advantages, cause us to lose sales, or otherwise harm our business. The costs associated with protecting our intellectual property rights could also adversely impact our business.

In addition, we are from time to time subject to claims from third parties suggesting that we may be infringing on their intellectual property rights. If we were held liable for infringement, we could be required to pay damages, obtain licenses, or cease making or selling certain products.

Intellectual property litigation, which could result in substantial costs to us and divert the attention of management, may be necessary to protect our trade secrets or proprietary technology, or for us to defend against claimed infringement of the rights of others and to determine the scope and validity of others’ proprietary rights. We may not prevail in any such litigation, and if we are unsuccessful, we may not be able to obtain any necessary licenses on reasonable terms, or at all. Failure to protect our patents, trademarks, and other intellectual property rights may have a material and adverse effect on our business, consolidated financial condition or results of operations.

Risks Related to Our Products

We may not be able to develop new products acceptable to the market.

For many of our businesses, organic growth depends on product innovation, new product development, and timely response to constantly changing consumer demands and preferences. Sales of our products and services depend heavily on the volume of sales made by our customers to consumers. Consumer preferences for products and packaging formats are constantly changing based on, among other factors, cost and convenience; and health, environmental and social concerns and perceptions. Our failure, or the failure of our customers, to develop new or better products in response to changing consumer preferences in a timely manner and attractive cost may hinder our growth potential and affect our competitive position, and adversely affect our business and results of operations.

Product liability claims and other legal proceedings could adversely affect our operations and financial performance.

We produce products and provide services related to other parties’ products. There can be no assurance that we or our customers will not experience operational process failures that could result in potential product, safety, regulatory, or environmental claims and associated litigation. We are also subject to a variety of legal proceedings and legal compliance risks in our areas of operation around the globe. Any such claims, whether with or without merit, could be time-consuming and expensive to defend, affect our reputation, and could divert management’s attention and resources. In accordance with customary practice, we maintain insurance against some, but not all, of these potential claims; however, in the future, we may not be able to maintain such insurance at acceptable premium cost levels. In addition, the levels of insurance we maintain may not be adequate to fully cover any and all losses or liabilities. If any significant judgment or claim is not fully insured or indemnified against or imposes restrictions on our business operations, it could have a material and adverse effect on our business, financial condition, and results of operations.

We and the industries in which we operate are at times reviewed or investigated by regulators and other governmental authorities, which could lead to enforcement actions, fines and penalties, or the assertion of private litigation claims and damages. Responding to actual or threatened litigation or government investigations of our compliance with regulatory standards may require significant expenditures of time and other resources. While we have adopted risk management and compliance programs, the global and diverse nature of our operations means that legal and compliance risks will continue to exist and that legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, will arise from time to time, which could adversely affect our business, results of operations, and financial condition.

Risks Related to Climate Change and Environmental, Health and Safety, and Corporate Social Responsibility Laws and Regulations

Adverse weather and other effects of climate change may result in lower sales and higher costs. In addition, climate-related regulations may add cost and complexity to our operations.

We manufacture packaging products for foods, as well as products used in construction and industrial manufacturing. Adverse or varying weather conditions associated with climate change have impacted, and could in the future impact, crop yields and harvest timing, which in turn could impact the level and timing of demand for our containers. In addition, poor or extreme weather conditions have temporarily impacted, and could in the future temporarily impact, the level of construction and industrial activity and impact the efficiency of our manufacturing operations. Weather-related events, such as hurricanes, droughts, hail, frost, fires and floods, which may increase in frequency and severity due to climate change, have and could in the future result in lost production, supply chain disruptions, and increased material costs. Such disruptions could have, and have in the past had, a material and adverse effect on our results of operations.

There has been increased focus from investors, customers, the general public, and certain governmental and nongovernmental authorities on climate change and GHG emissions. The increasing concern over climate change has resulted, and will continue to result, in transition risks such as shifting customer preferences in favor of more environmentally friendly products, which we may be unable to address, and increased regulation intended to reduce overall GHG emissions. Such rules and regulations could include, among other things, cap-and-trade programs, carbon taxes, and mandates within certain industries or activities to reduce GHG emissions. Some of our facilities are subject to these regulations, and compliance with such rules and any other regulatory responses to climate change could in the future significantly increase costs and add complexity to our operations.

Additionally, in the United States, several states where we operate manufacturing facilities have enacted or are in the process of enacting regulations limiting GHG emissions or implementing cap-and-trade programs. Our facilities currently fall outside of the scope of these regulations but may be impacted in the future. Several of our manufacturing facilities outside of the United States have entered into GHG emissions trading programs as a result of local regulations. Certain countries where we have manufacturing facilities have set GHG reduction targets to align with an agreement signed in April 2016 between 170 countries establishing a framework to reduce global GHG emissions (also known as the “Paris Agreement”), that became effective in November 2016. Many of the other countries where we conduct business are developing or are expected to develop similar climate change related regulations. To the extent our facilities become subject to additional or changing regulations related to GHG emissions in the United States or internationally, compliance with such regulations could significantly increase costs and add complexity to our operations and limit our flexibility, which could have a material and adverse effect on our business, results of operations, financial condition, and prospects.

Any failure in our procedures to monitor climate related regulatory and policy changes in the jurisdictions in which we operate or in our processes and tools to track our GHG emissions and assess both operational and financial impacts of climate-related regulations, and any failure to comply with any such regulations and policies, could subject us to additional costs and penalties and harm to our reputation. We could also face increased costs related to defending and resolving legal claims and other litigation related to climate change and the alleged impact of our operations on climate change.

Expectations relating to ESG issues, including related reporting obligations, could expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.

In order to align with customer and other stakeholder expectations, we have voluntarily established and publicly disclosed our GHG reduction targets and other environmental, social and governance (“ESG”) goals and sustainability targets. These targets could prove more costly or difficult to achieve than we expect, and we may be unable to achieve these targets at an acceptable cost or at all. If we are unable to meet these targets and goals on our projected timelines or at all, whether as a result of cost, operational or technological limitations, or if such targets or our progress against them are not perceived to be sufficiently robust, our reputation, as well as our relationships with investors, customers and other stakeholders, could be harmed, which could in turn adversely affect our business, results of operations and prospects. In addition, not all of our competitors may seek to establish climate or other ESG targets and goals, or may not establish targets and goals that are comparable to ours, which could result in our competitors achieving competitive advantages through lower supply chain or operating costs, which could adversely affect our business, results of operations, financial condition and prospects.

In addition, ESG matters have recently been the subject of increased regulatory and stakeholder attention, and emerging and evolving regulatory requirements and frameworks regarding ESG matters. The changes to existing or imposition of new laws, regulatory requirements, policies, international accords or changing interpretations thereof, changes in the enforcement priorities of regulators, and differing or competing regulations and standards across the markets where we manufacture, distribute and sell our products, as well as relating to matters beyond our core products, including environmental sustainability, climate change, human capital and employment matters, has in the past and could continue to result in higher production and manufacturing costs, compliance costs, capital expenditures and other costs, resulting in adverse effects on our business. In addition, we expect to need to be prepared to contend with overlapping, yet distinct, climate-related disclosure requirements in multiple jurisdictions. For instance, the State of California has enacted legislation that requires greater transparency on climate-related matters, including legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures starting as early as 2026, and other states are also considering new climate change disclosure requirements. In the European Union, the Corporate Sustainability Reporting Directive, which became effective in 2023, but is in the process of being revised, applies to both E.U. and non-E.U. in-scope entities and would require them to provide expansive disclosures on various sustainability topics. We are assessing our obligations under these laws and expect that compliance with these and other future reporting obligations could require substantial cost and effort. Collecting, measuring, and reporting ESG information and metrics can be costly, difficult, and time-consuming, are subject to evolving reporting standards and interpretive guidance, and can present numerous operational, reputational, financial, legal, and other risks. Globally, a lack of harmonization in relation to ESG legal and regulatory reform across the jurisdictions in which we operate may increase the cost and difficulty of implementing and complying with rapidly developing ESG reporting standards and requirements, and any failure to comply with such legislation and regulations could result in fines to us and could adversely affect our business, financial condition, results of operations, and cash flows.

At the same time, compliance with ESG-related rules and efforts to meet increasingly divergent stakeholder expectations on business practices and company activities, including related to ESG matters, may place strain on our employees, systems, and resources. Within and among different stakeholder groups, including shareholders, customers, government regulators and actors and employees, there are differing views on sustainability and ESG matters, which increases the risk that any action or lack thereof with respect to sustainability or ESG matters will be perceived negatively by at least some stakeholders, could result in reputational harm, litigation, enforcement actions or other adverse consequences which may adversely impact our business. The current sociopolitical landscape has led to rapid and unpredictable shifts in public sentiment, which has resulted in dynamics that increase the risk of reputational damage, boycotts and shifts in consumer behavior, and we may not be able to align our practices with such evolving expectations within the timeframes expected by stakeholders or regulators, or without incurring significant costs to our business and reputation. This could adversely affect our sales and profitability, our ability to attract or retain employees, and our attractiveness as an investment, supplier, or business partner. Our ability to respond effectively, sensitively, and authentically to the expectations of our stakeholders is key to mitigating these risks. In addition, we could experience adverse effects on our reputation, business, and results of operations if we are targeted by those who disagree with our public positions on ESG issues or who inaccurately perceive or mischaracterize our public positions and disclosures on these topics. If we do not successfully manage ESG-related expectations across stakeholders, it could erode stakeholder trust, impact our reputation, and adversely affect our business, financial condition, results of operations and cash flows.

We are subject to costs and potential liabilities related to environmental, health and safety, and corporate social responsibility laws and regulations that could adversely affect our results of operations.

We must comply with extensive and sometimes inconsistent laws, rules, and regulations in the United States, Europe, United Kingdom, and in each of the other countries in which we do business regarding the environment, health and safety, and corporate social responsibility. Compliance with these laws and regulations can require significant expenditures of financial and employee resources.

Federal, state, provincial, foreign and local environmental requirements, including the Comprehensive Environmental Response, Compensation and Liability Act, and particularly those relating to air, soil and water quality, handling, discharge, storage and disposal of a variety of substances, and climate change are significant factors in our business and generally increase our costs of operations. We may be found to have environmental liability for the costs of remediating soil or water that is, or was, contaminated by us or a third party at various sites that we now own, use, or operate, or previously owned, used, or operated. Legal proceedings may result in the imposition of fines or penalties, as well as mandated remediation programs, that require substantial, and in some instances, unplanned capital expenditures.

In addition, existing laws and regulations could be revised or reinterpreted, and new laws and regulations could be adopted or become applicable to us or our facilities, thereby impacting the cost of compliance. Further, in June 2024, the U.S. Supreme Court overturned the Chevron deference doctrine, which provided for judicial deference to an administrative agency’s reasonable statutory interpretation of regulations in litigation against those agencies. As a result, there is additional uncertainty going forward regarding current and future regulatory interpretations of the laws.

We have incurred in the past, and may incur in the future, fines, penalties and legal costs relating to environmental matters, and costs relating to the damage of natural resources, lost property values and toxic tort claims. We have made expenditures to comply with environmental regulations and expect to make additional expenditures in the future. As of December 31, 2025, approximately $1.8 million was reserved for environmental liabilities. Such reserves are established when it is considered probable that we have some liability. However, because the extent of potential environmental damage, and the extent of our liability for the damage, is usually difficult to assess and may only be ascertained over a long period of time, our actual liability in such cases may end up being substantially higher than the currently reserved amount. Accordingly, additional charges could be incurred and could have a material and adverse effect on our results of operations and financial condition.

Many of our products come into contact with the food and beverages packaged within, and therefore we are subject to risks and liabilities related to health and safety matters in connection with those products. Accordingly, our products must comply with various laws and regulations for food and beverages applicable to our customers. Changes in such laws and regulations could adversely impact customers’ demand for our products as they comply with such changes and require us to make changes to our products. Such changes to our products could include modifications to the coatings and compounds we use, possibly resulting in the incurrence of additional costs. Additionally, because many of our products are used to package consumer goods, we are subject to a variety of risks that could influence consumer behavior and adversely impact demand for consumer packaged goods and, consequently, for our products, including changes in consumer preferences driven by various health-related concerns and perceptions.

In addition, our operations and those of our suppliers are governed by regulations focused on “conflict minerals” and restrictions on other materials. Disclosure regulations relating to the use of conflict minerals sourced from the Democratic Republic of the Congo and adjoining countries could affect the sourcing, availability, and cost of materials used in the manufacture of some of our products. We also incur costs associated with supply chain due diligence, and, if applicable, potential changes to products, processes, or sources of supply as a result of such due diligence. Because our supply chain is complex, we may also face reputational risk with our customers and other stakeholders if we are unable to sufficiently verify the origins of all such minerals used in our products.

Changes to laws and regulations dealing with environmental, health and safety, and corporate social responsibility issues (e.g., sustainability) are made or proposed with some frequency, and some of the proposals, if adopted, might, directly or indirectly, result in a material reduction in the results of operations of one or more of our operating units. For example, we may be subject to future policy changes and regulations that discourage the use of single-use plastics and packaging containing per- and polyfluoroalkyl substances (PFAs), mandate certain waste management practices, recycling or the use of recycled content, or place limitations on certain kinds of packaging materials. Such regulations could both result in customers switching to other packaging formats, and therefore result in lost revenue, and result in increased costs associated with sourcing recycled resins and designing and producing products with enhanced recyclability. These or any other such policy changes or new regulations are uncertain and we cannot predict the impact on our markets or the amount of additional capital expenditures or operating expenses that could be necessary for compliance.

Further, future compliance with existing, developing and new laws and requirements has the potential to disrupt our business operations and may require significant expenditures, and our existing reserves for specific matters may not be adequate to cover future costs and we may have to increase our reserves. We could also incur substantial liabilities, including fines or sanctions, enforcement actions, natural resource damages claims, cleanup and closure costs, and third-party claims for property damage and personal injury under environmental and other laws. We have insurance coverage, subject to applicable deductibles or retentions, policy limits and other conditions, for certain environmental matters; however, we may not be successful with respect to any claim regarding these insurance or indemnification rights and, if we are successful, any amounts paid pursuant to the insurance or indemnification rights may not be sufficient to cover all our costs and expenses. To the extent that we face unforeseen compliance costs or remediation expenses or liabilities that are not covered by insurance, we may bear the full effect of such costs, expenses and liabilities, which could materially adversely affect our results of operations and financial condition. Further, we may not be able to obtain future insurance coverage at current levels or at all, and our premiums may increase significantly. The cost of coverage may increase to an extent that we may choose to reduce our policy limits, increase our deductibles or retentions, or agree to certain exclusions from coverage.

Risks Related to Financing Activities

We, or our customers, may not be able to obtain necessary credit or, if so, on reasonable terms.

At December 31, 2025, we had $3.7 billion of fixed-rate debt outstanding. We also operate a $1.25 billion commercial paper program, supported by a $1.25 billion revolving credit facility committed by a syndicate of banks until May 2029. We have the contractual right to draw funds directly on the underlying bank credit facility, which could possibly occur if there were a disruption in the commercial paper market. However, if these obligations were not met, we may be forced to seek more costly or cumbersome forms of credit. Should such credit be unavailable for an extended time, it would significantly affect our ability to operate our business and execute our plans. In addition, our customers may experience liquidity problems as a result of an adverse change in the economic environment, including the ability to obtain credit, that could limit their ability to purchase our products and services or satisfy their existing obligations.

In addition, our ability to issue commercial paper and access the credit markets, and the cost of these borrowings, is affected by the strength of our credit ratings and current market conditions. Failure to maintain credit ratings that are acceptable to investors, including as a result of increased leverage, may adversely affect the cost and other terms upon which we are able to obtain financing, as well as our access to the capital markets. Any downgrade in our credit rating could increase our cost of borrowing, which could have a material and adverse effect on our business, results of operations and financial condition, and our ability to pay dividends.

Our significant indebtedness could adversely affect our cash flow, increase our vulnerability to economic conditions, and limit or restrict our business activities.

We have incurred, and may incur in the future, significant indebtedness, including in connection with mergers or acquisitions, which may impact the manner in which we conduct business or our access to external sources of liquidity. For example, in connection with our December 2024 acquisition of Eviosys, we issued $1.8 billion aggregate principal amount of senior unsecured notes and borrowed a total of $2.2 billion through two unsecured term loan facilities. In addition to interest payments, a significant portion of our cash flow may need to be used to service our indebtedness, and, therefore, may not be available for use in our business. Although we used the net proceeds from our divestitures of TFP and ThermoSafe in 2025 to reduce our indebtedness, as required under the terms of such term loan facilities, our ability to generate cash from the sale of assets or divestitures of business in the future is limited following the simplification of our portfolio into two core global business segments. Our ability to generate cash flow is subject to general economic, financial, competitive, legislative, regulatory, and other factors that may be beyond our control. Our indebtedness could have a significant impact on us, including, but not limited to:

• increasing our vulnerability to general adverse economic and industry conditions;
• requiring us to dedicate a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the amount of our cash flow available to fund working capital, acquisitions and capital expenditures, and for other general corporate purposes;
• limiting our flexibility in planning for, or reacting to, changes in our business and our industry;
• restricting us from making strategic acquisitions or exploiting business opportunities;
• necessitating the divestiture of certain of our assets or businesses in order to generate cash to service our indebtedness;
• limiting our ability to continue paying dividends; or
• limiting our ability to borrow additional funds.

Certain of our debt agreements impose restrictions with respect to the maintenance of financial ratios and the disposition of assets. The most restrictive covenants currently require us to maintain a minimum level of interest coverage, and a minimum level of net worth. These restrictive covenants could adversely affect our ability to engage in certain business activities that would otherwise be in our best long-term interests.

Some of our indebtedness is subject to floating interest rates, which would result in our interest expense increasing if interest rates rise.

We on occasion utilize debt instruments with a variable rate of interest, including term loan facilities, under which we had outstanding indebtedness totaling $0.5 billion as of December 31, 2025. Fluctuations in interest rates can increase borrowing costs and, depending on the magnitude of variable-rate borrowings outstanding, could potentially have a material and adverse effect on our business. Other variable-rate borrowings at December 31, 2025 were approximately $0.1 billion.

We may incur additional debt in the future, which could increase the risks associated with our leverage.

We are continually evaluating and pursuing acquisition opportunities and, as we have in the past, we may from time to time incur additional indebtedness to finance any such acquisitions and to fund any resulting increased operating needs. As new debt is added to our current debt levels, the related risks we face could increase. While we will have to effect any new financing in compliance with the agreements governing our then existing indebtedness, changes in our debt levels and or debt structure may impact our credit rating and costs to borrow, as well as constrain our future financial flexibility in the event of a deterioration in our financial operating performance or financial condition. At December 31, 2025, scheduled debt maturities in 2026 totaled approximately $0.5 billion.

Risks Related to Information Technology and Cybersecurity

We rely on our information technology, and its failure or disruption could disrupt our operations and adversely affect our business, financial condition and results of operations.

We rely on the successful and uninterrupted functioning of our information technologies to securely manage operations and various business functions, and we rely on diverse technologies to process, store and report information about our business, and to interact with customers, vendors and employees around the world. As with all large environments, our IT systems may be susceptible to damage, disruption or shutdown due to natural disaster, hardware or software failure, obsolescence, cyberattack, support infrastructure failure, user errors or malfeasance resulting in malicious or accidental destruction of information or functionality, or other catastrophic events. In addition, we may be subject to cybersecurity-related liabilities from businesses or assets that we acquire.

From time to time, we have been, and we will likely continue to be, subject to cybersecurity-related incidents.

Information system damages, disruptions, shutdowns or compromises could result in production downtimes and operational disruptions, transaction errors, loss of customers and business opportunities, legal liability, regulatory fines, penalties or intervention, reputational damage, reimbursement or compensatory payments, and other costs, any of which could have a material and adverse effect on our business, financial position and operations. Although we attempt to mitigate these risks by employing a number of administrative, physical, technical and process-based measures, including employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our systems, networks, products, and services remain potentially vulnerable to cyber threats. Furthermore, the tactics, techniques, and procedures used by malicious actors to obtain unauthorized access to IT systems and networks change frequently and often are not recognizable until launched against a target. Accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures. It is possible that we may in the future suffer a criminal attack whereby unauthorized parties gain access to our IT networks and systems, including sensitive, confidential or proprietary data, and we may not be able to identify and respond to such an incident in a timely manner.

We have continued to explore AI use cases in our operations, but there is no guarantee that our investment in such technologies will result in improvements in productivity, efficiency, or other anticipated benefits. While we are continuing to analyze potential risks arising from our use of AI, because AI technology is highly complex and rapidly developing, we may not be able to predict all of the risks that may arise relating to our current or any future use of AI.

A security breach of customer, employee, supplier or company information may have a material and adverse effect on our business, financial condition and results of operations.

We maintain and have access to sensitive, confidential, proprietary and personal data and information that is subject to privacy and security laws, regulations and customer controls. This personal data and information is subject to the risk of intrusion, tampering and theft. Although we develop and maintain systems designed to prevent such events from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts to protect such sensitive, confidential, proprietary, and personal data or information, our facilities and systems and those of our customers, suppliers and third-party service providers may be vulnerable to security breaches, misplaced or lost data, and programming or user errors that could lead to the compromise of sensitive, confidential, proprietary or personal data and information. Similar security threats exist with respect to the IT systems of our lenders, suppliers, consultants, advisors and other third parties with whom we conduct business. Additionally, we provide confidential, proprietary and personal data and information to third parties when it is necessary to pursue business objectives and there is a risk that the confidentiality of personal data and information held by third parties may be compromised. Increasing use of AI may increase these risks.

The SEC adopted rules mandating disclosure regarding cybersecurity risk management and governance, as well as material cybersecurity incidents. We continue to see increased regulation of data privacy and security and the adoption of more stringent consumer privacy laws, as well as subject matter specific state laws and national laws regulating the collection and use of data, and security and data breach obligations – including the passage and expansion of data protection laws around the world. It is likely that new laws and regulations will continue to be adopted in the United States and internationally, and existing laws and regulations may be interpreted in new ways that would affect our business. Although we take reasonable efforts to comply with all applicable laws and regulations, the uncertainty and changes in the requirements of multiple jurisdictions may increase the cost of compliance, reduce demand for our services, restrict our ability to offer services in certain locations, and jeopardize business transactions across borders.

As a result of potential cyber threats and existing and new data protection requirements, we have incurred significant costs as part of our efforts to protect and safeguard our sensitive, confidential, proprietary and personal data and information, and the sensitive, confidential, proprietary and personal data and information of our customers, suppliers and third-party service providers. We expect to continue to incur such costs and may face increased costs and be required to expend substantial resources in the event of an actual or perceived security breach or incident and to comply with the SEC cybersecurity disclosure rules. These efforts also may divert management and employee attention from other business and growth initiatives. Failure to provide adequate privacy protections and maintain compliance with data privacy laws could result in interruptions or damage to our operations, legal or reputational risks, create liabilities for us, subject us to sanctions by data protection regulators and result in significant penalties, and increase our cost of doing business, all of which could have a material and adverse impact on our business, financial condition and results of operations.

Risks Related to Accounting, Human Resources, Financial, and Business Matters and Taxation

Changes in pension plan assets or liabilities may reduce our results of operations and shareholders’ equity.

We sponsor various defined benefit plans worldwide and had an aggregate PBO for these plans of approximately $483 million as of December 31, 2025. The difference between defined benefit plan obligations and assets (the funded status of the plans) significantly affects the net periodic benefit costs and the ongoing funding requirements of the plans. Among other factors, changes in discount rates and lower-than-expected investment returns could substantially increase our future plan funding requirements and have an adverse impact on our results of operations and cash flows. As of December 31, 2025, these plans held a total of approximately $320 million in assets consisting primarily of mutual funds and fixed income securities, funding a portion of the PBOs of the plans. If the performance of these assets does not meet our assumptions, or discount rates decline, the net underfunding of the plans may increase and we may be required to contribute additional funds to these plans, and our pension expense may increase, which could adversely affect results of operations and shareholders’ equity.

Our ability to attract, develop and retain talented executives, managers and employees is critical to our success.

Our ability to attract, develop, integrate and retain talented employees, including executives and other key managers, is important to our business. The experience and industry contacts of our management team and other key personnel significantly benefit us, and we need expertise like theirs to carry out our business strategies and plans. We also rely on the specialized knowledge and experience of certain key technical employees. The loss of these key officers and employees, or the failure to attract and develop talented new executives, managers and employees, could have a material and adverse effect on our business. Effective succession planning is also important to our long-term success, and failure to ensure effective transfer of knowledge and smooth transitions involving key officers and employees could hinder our strategic planning and execution. We have from time to time experienced turnover on our senior management team, and if we are unable to attract, motivate and retain qualified personnel, or if we experience excessive turnover, we may experience declining sales, manufacturing delays or other inefficiencies, increased recruiting, training and relocation costs and other difficulties, and our results of operations, cash flows and financial condition may be adversely impacted.

Labor disruptions and a rise in labor costs could impact our business, financial condition and results of operations.

A portion of our workforce is unionized. We may experience labor shortages and work stoppages at one or more of our manufacturing plants due to localized or industry strikes. A prolonged work stoppage or strike at any plant with unionized employees could increase costs and affect our ability to supply products to our customers. In addition, upon the expiration of existing collective bargaining agreements, we may not reach new agreements without union action in certain jurisdictions and any such new agreements may not be on terms satisfactory to us. If we are unable to negotiate acceptable collective bargaining agreements, we may become subject to union-initiated work stoppages, including strikes. In addition, additional groups of employees may seek union representation in the future.

An increase in labor costs could adversely affect our results of operations. Most of the factors affecting labor costs are beyond our control and we may not be able to offset increased labor costs. A shortage of qualified employees, inflationary pressure on wages, increases in minimum wages or union-agreed wages in any of the jurisdictions in which we operate could increase labor costs and have a material and adverse effect on our business, financial condition and results of operations.

Changes in U.S. generally accepted accounting principles (“GAAP”) and SEC rules and regulations could materially impact our reported results.

U.S. GAAP and SEC accounting and reporting changes are common and have become more frequent and significant in the past several years. These changes could have significant effects on our reported results when compared to prior periods and to other companies, and may even require us to retrospectively revise prior periods from time to time. Additionally, material changes to the presentation of transactions in the consolidated financial statements could impact key ratios that analysts and credit rating agencies use to rate our Company, increase our cost of borrowing, and ultimately our ability to access the credit markets in an efficient manner.

Our financial results are based upon estimates and assumptions that may differ from actual results.

In preparing our consolidated financial statements in accordance with U.S. GAAP, we make estimates and assumptions that affect the accounting for and recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must be made due to certain information used in the preparation of our financial statements that is dependent on future events, cannot be calculated with a high degree of precision from data available, or is not capable of being readily calculated based on generally accepted methodologies. We believe that accounting for long-lived assets, defined benefit plans, share-based compensation, contingencies and litigation, and income taxes involves the more significant judgments and estimates used in the preparation of our consolidated financial statements. Actual results for all estimates could differ materially from the estimates and assumptions that we use, which could have a material and adverse effect on our financial condition and results of operations.

We have a significant amount of goodwill and other intangible assets, and a write down would adversely impact our results of operations and shareholders’ equity.

At December 31, 2025, the carrying value of the goodwill and intangible assets of our continuing operations was approximately $5.2 billion. We are required to evaluate our goodwill for impairment annually, or more frequently when evidence of potential impairment exists. The impairment test requires us to analyze a number of factors and make estimates that require judgment. As a result of this testing, we have in the past recognized goodwill impairment charges, and we have identified two reporting units, Metal Packaging EMEA and Global Paper Products APAC, that are currently at risk of a future impairment charge if each does not perform in line with management’s expectations, or if there is a negative change in the long-term financial outlook or in other factors such as each reporting unit’s particular discount rate used. Total goodwill associated with the Metal Packaging EMEA and Global Paper Products APAC reporting units was $1.4 billion at December 31, 2025. Future changes in the cost of capital, expected cash flows, changes in our business strategy, and external market conditions, among other factors, could require us to record an impairment charge for goodwill, which could lead to decreased assets and reduced net income. If a significant write down were required, the charge could have a material and adverse effect on our results of operations and shareholders’ equity.

Full realization of our deferred tax assets may be affected by a number of factors.

We have deferred tax assets, including United States and foreign operating loss carryforwards, capital loss carryforwards, employee and retiree benefit items, foreign tax credits, and other accruals not yet deductible for tax purposes. We have established valuation allowances to reduce those deferred tax assets to an amount that we believe is more likely than not to be realized prior to expiration of such deferred tax assets. Our ability to use these deferred tax assets depends in part upon our having future taxable income during the periods in which these temporary differences reverse or our ability to carry back any losses created by the deduction of these temporary differences. We expect to realize these assets over an extended period. However, if we were unable to generate sufficient future taxable income in the United States and certain foreign jurisdictions, or if there were a significant change in the time period within which the underlying temporary differences became taxable or deductible, we could be required to increase our valuation allowances against our deferred tax assets, which would increase our effective tax rate which could have a material and adverse effect on our reported results of operations.

Our annual effective tax rate and the amount of taxes we pay can change materially as a result of changes in U.S. and foreign tax laws, changes in the mix of our U.S. and foreign earnings, adjustments to our estimates for the potential outcome of any uncertain tax issues, and audits by federal, state and foreign tax authorities.

As a large multinational corporation, we are subject to U.S. federal, state and local, and many foreign tax laws and regulations, all of which are complex and subject to significant change and varying interpretations. Tax laws and regulations are continuously evolving with corporate tax reform, base-erosion efforts, global minimum tax, and increased transparency continuing to be high priorities in many tax jurisdictions in which we operate. For example, on July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States. The OBBBA includes a broad range of tax reform provisions and extends certain provisions of the Tax Cuts and Jobs Act of 2017. While we do not currently anticipate any material effect on our effective tax rate, financial results, or cash flows for 2026 arising from the OBBBA, any changes in tax laws or regulations, or any change in the position of taxing authorities regarding their application, administration or interpretation, could have a material adverse effect on our business, consolidated financial condition or results of our operations.

The Organisation for Economic Co-operation and Development (“OECD”) has issued the Base Erosion and Profit Shifting (“BEPS”) Pillar II rules which generally provide for multinational organizations to have a minimum effective corporate tax rate of 15% in each jurisdiction in which they operate. While it is uncertain whether the United States will enact legislation to adopt Pillar II, certain countries in which we operate have enacted legislation, and other countries have introduced legislation to implement the minimum tax directive. Many aspects of Pillar II were effective for us in 2025, with additional components becoming effective in 2026.

On January 5, 2026, the OECD announced the implementation of a side-by-side (“SbS”) system, which allows U.S.-parented multinationals to be exempt from certain components of the GMT due to having an eligible taxation system already in place under existing U.S. tax rules. The SbS system is effective for fiscal years beginning on or after January 1, 2026. As each country in which we operate evaluates their alignment with the recommendations and enacts GMT rules, the ultimate impact of any such changes on our effective tax rate remains uncertain.

We do not currently anticipate any material effect on our effective tax rate, financial results or cash flows for fiscal 2025 based on currently enacted laws as a result of Pillar II; however, our analysis is ongoing as the OECD continues to release additional guidance and countries enact legislation. To the extent additional legislative changes take place in the countries in which we operate, it is possible that these changes may yield an adverse impact on our effective tax rate, financial results and cash flows.

In the United States, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), which was signed into law on August 16, 2022, includes a number of provisions that may impact us in the future, including a 1% excise tax on share repurchases. In addition, our products, and our customers’ products, are subject to import and excise duties and/or sales or value-added taxes in many jurisdictions in which we operate. Increases in these indirect taxes could affect the affordability of our products and our customers’ products, and, therefore, reduce demand.

Due to widely varying tax rates in the taxing jurisdictions applicable to our business, a change in income generation to higher taxing jurisdictions or away from lower taxing jurisdictions may also have an adverse effect on our financial condition and results of operations.

We make estimates of the potential outcome of uncertain tax issues based on our assessment of relevant risks and facts and circumstances existing at the time, and we use these assessments to determine the adequacy of our provision for income taxes and other tax-related accounts. These estimates are highly judgmental. Although we believe we adequately provide for any reasonably foreseeable outcome related to these matters, future results may include favorable or unfavorable adjustments to estimated tax liabilities, which may cause our effective tax rate to fluctuate significantly.

In addition, our income tax returns are subject to regular examination by domestic and foreign tax authorities. These taxing authorities may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions. If any tax authorities were to successfully challenge the tax treatment or characterization of any of our transactions, it could have a material and adverse effect on our business, consolidated financial condition or results of our operations. Furthermore, regardless of whether any such challenge is resolved in our favor, the final resolution of such matter could be expensive and time consuming to defend or settle. Future changes in tax law could significantly impact our provision for income taxes, the amount of taxes payable, and our deferred tax asset and liability balances.

If we fail to continue to maintain effective internal control over financial reporting at a reasonable assurance level, we may not be able to accurately report our financial results, and may be required to restate previously published financial information, which could have a material and adverse effect on our operations, investor confidence in our business and the trading prices of our securities.

Effective internal controls are necessary to provide reliable financial reports and to assist in the effective prevention of fraud. Any inability to provide reliable financial reports or prevent fraud could harm our business. We are required to assess the effectiveness of our internal control over financial reporting annually, as required by Section 404 of the Sarbanes-Oxley Act. We need to maintain our processes and systems and adapt them as our business grows and changes. This continuous process of maintaining and adapting our internal controls and complying with Section 404 is expensive, time-consuming and requires significant management attention. As we grow our businesses and acquire other businesses, our internal controls will become increasingly complex and we may require significantly more resources. The integration of acquired businesses into our internal control over financial reporting has required, and will continue to require, significant time and resources from our management and other personnel and will increase our compliance costs. Additionally, maintaining effectiveness of our internal control over financial reporting is made more challenging by the fact that as of December 31, 2025, we had approximately 166 subsidiaries and joint ventures in 37 countries around the world. There is no assurance that, in the future, material weaknesses will not be identified that would cause management to change its current conclusion as to the effectiveness of our internal controls. If we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we could be subject to regulatory scrutiny, civil or criminal penalties or litigation. In addition, failure to maintain adequate internal controls could result in financial statements that do not accurately reflect our financial condition, and we may be required to restate previously published financial information, which could have a material and adverse effect on our operations, investor confidence in our business and the trading prices of our securities.

Our disclosure controls and procedures and internal controls may not prevent or detect all errors or acts of fraud.

We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Risk management and strategy.

The Company’s approach to risk management is designed to identify, assess, prioritize, and manage significant risk exposures that could affect the Company’s ability to execute its corporate strategy and fulfill its business objectives. The Company manages enterprise risk through its Risk Management Committee (“RMC”) chaired by the Company’s Vice President of Compliance, Risk and Audit with direct oversight from the Company’s General Counsel. The RMC, which is made up of senior leadership across a variety of business functions, defines the Company’s enterprise risk framework based upon analysis of industry and peer benchmarking as well as company-specific data analysis.

As a component of the Company’s enterprise risk management program, the Company’s cybersecurity risk management program outlines the Company’s cybersecurity risk management practices and capabilities, including the division of responsibilities for reviewing the Company’s cybersecurity risk exposure and risk tolerance, tracking emerging information risks, and ensuring proper escalation of certain key risks for periodic review by the Board and its committees. Cybersecurity risk is evaluated within the population of all enterprise risks in the framework and is included in assessments overseen by the RMC that identify the risks of highest priority to the Company. For these highest priority risks, including cybersecurity risks, the RMC designates risk owners, sets common reporting processes, and monitors risk mitigation and treatment strategies to support business continuity.

The Company’s cybersecurity risk management program leverages the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework for identifying, assessing, and managing material risks from cybersecurity threats. This approach combines prevention and detection techniques, informed by internal and external sources, to identify and analyze potential threat activities. When a threat is identified, a cyber incident response plan outlines the Company’s procedures for containing, remediating, and recovering from the cybersecurity incident. Cybersecurity tenets are also incorporated into the Company’s technology policies.

The Company’s cybersecurity risk management program focuses on vulnerability management, access management, and user awareness training. Among other things, the Company implements scheduled patching and system updates, proactively scans for vulnerabilities, and engages qualified third-party experts to assess the Company’s IT infrastructure and identify vulnerabilities and opportunities for continued focus and improvement. When vulnerabilities are identified, the Company’s IT management team receives reports that assess each vulnerability and track progress in remediating that vulnerability. The IT management team also collaborates with supply chain management and the Company’s third party risk management program to onboard and monitor key third-party service providers to address the potential risk of cybersecurity threats through the use of such third parties. Annual cybersecurity training is mandatory for all users with access to the Company’s IT systems, and the Company conducts targeted monthly tests to promote phishing awareness. In addition to these prevention methods, the Company seeks to detect potential threats through external intelligence and monitoring solutions. External commercial or governmental agencies are also engaged to assess potential threat activity relevant to the Company where appropriate. The Company also monitors server and endpoint devices across the organization to detect signs of a cyberattack.

The Company has implemented and maintains an information security incident response plan (“IR Plan”), which includes processes to assess, escalate, contain, investigate, and remediate cybersecurity incidents. Upon notification of a potential cybersecurity threat, management defines the threat based on its nature as an information security event, alert, incident, or breach, and all cybersecurity incidents are categorized by level of severity based on the impact of the incident to the Company’s operations. A technical incident response team is responsible for technical response activities, including information gathering and forensic analysis, containment, and remediation efforts. The Company’s Crisis

Management Team drives the Company’s enterprise-level crisis response process, leads decisions around response strategies, coordinates resources required to execute such strategies, and oversees all cybersecurity incidents categorized as Critical and High.

Although the Company did not experience a material cybersecurity incident during the year ended December 31, 2025, the scope and impact of any future incident cannot be predicted. See “Item 1A. Risk Factors – Risks Related to Information Technology and Cybersecurity” for more information on the Company’s cybersecurity-related risks.

Governance.

The Company’s day-to-day management of cybersecurity risks is led by the Chief Information Security Officer (“CISO”) with direct oversight from the Chief Information Officer (“CIO”). The Company’s IR Plan includes a defined escalation matrix for critical or high severity information security events involving notifications to the CISO and CIO, who further escalate critical or high severity events to the Company’s Crisis Management Team, which consists of senior management from IT, including the CIO and CISO, Human Resources, Risk and Internal Audit, Marketing and Communications, Legal, and Finance. The Crisis Management Team further elevates sufficiently critical and high severity events to the Company’s Cyber Incident Review Committee (“CIRC”), which consists of the CIO, Chief Financial Officer, Chief Accounting Officer, VP of Investor Relations, VP of Compliance, Risk and Audit, and General Counsel, or their delegates. Additional senior management from relevant business units are added to the CIRC as needed based on the nature of identified cybersecurity incidents. The CIRC preliminarily evaluates whether an incident is material and provides a proposal to the CEO and CFO, who work in consultation with the committee to make a final determination of materiality. Such determination is communicated to the Audit Committee of the Board (the “Audit Committee”).

The Company’s Crisis Management Team has relevant expertise and experience to assess and remediate cyber threats. The CIO has over 18 years of experience in IT and security, and the CISO has over 30 years of IT experience and over 12 years of information security experience.

As part of its broader oversight activities, the Board oversees risks from information security threats and other risks identified by the RMC, both directly and by way of delegation to the Audit Committee. As reflected in its charter, the Audit Committee oversees and specifically discusses the guidelines and policies by which the Company assesses and manages its cybersecurity risk exposures, as well as the steps management has taken to monitor and control such exposures. The Audit Committee also oversees the Company’s internal control over financial reporting, including with respect to financial reporting-related information systems. In addition to any communications of specifically identified cybersecurity events, the Audit Committee receives and discusses quarterly updates on cybersecurity activities, including review of annual external assessment results, training compliance and discussion of cybersecurity risks and resolutions, and is responsible for elevating significant matters to the full Board as events arise. The Board receives an annual update and provides feedback on the Company’s cybersecurity governance processes, risk management plan, and any significant activities related thereto, and also reviews risk management practices in the course of its review of the Company’s corporate strategy, business plans, Board committee reports, and other presentations. In addition to the ordinary-course Board and Audit Committee reporting and oversight described above, the Company also maintains disclosure controls and procedures designed for prompt reporting to the Board and timely public disclosure, as appropriate, of material events covered by our risk management framework, including information security risks.

The Company’s corporate offices are owned and operated in Hartsville, South Carolina. As of December 31, 2025, there were a total of approximately 265 owned and leased facilities used by the Company in 37 countries around the world, including approximately 102 facilities in the Consumer Packaging segment, 158 in the Industrial Paper Packaging segment, and 5 in the All Other group of businesses. Approximately 51% of these facilities are located in North America, primarily the United States, 32% in EMEA, 11% in APAC, and 6% in South America.

The Company believes that its facilities have been well maintained, are generally in good condition and are suitable for the conduct of its business. The Company does not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.

The Company has been named as a potentially responsible party (“PRP”) at several environmentally contaminated sites not owned by the Company. All of the sites are also the responsibility of other parties. The Company’s liability, if any, is shared with such other parties, but the Company’s share has not been finally determined in most cases. In some cases, the Company has cost-sharing agreements with other PRPs relating to the sharing of legal defense costs and cleanup costs for a particular site. The Company has assumed, for accrual purposes, that the other parties to these cost-sharing agreements will perform as agreed. Final resolution of some of the sites is years away, and actual costs to be incurred for these matters in future periods is likely to vary from current estimates because of the inherent uncertainties in evaluating environmental exposures. Accordingly, the ultimate cost to the Company with respect to such sites, beyond what has been accrued as of December 31, 2025, cannot be determined.

As of December 31, 2025 and 2024, the Company had accrued $1.8 million and $7.0 million, respectively, related to environmental contingencies. Of the total amount accrued as of December 31, 2024, $5.1 million was attributable to environmental contingencies at a site in Spartanburg, South Carolina that was part of the Company’s Thermoformed and Flexibles Packaging business and included in the sale of TFP to Toppan on April 1, 2025.

The Company periodically reevaluates the assumptions used in determining the appropriate reserves for environmental matters as additional information becomes available and makes appropriate adjustments when warranted. For further information about legal proceedings, see Note 18 to the Company’s Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.

Other Legal Matters

Additional information regarding other legal matters is provided in Note 18 to the Consolidated Financial Statements of this Annual Report on Form 10-K.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is intended to help the reader understand the Company, its operations and its present business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this Form 10-K. The MD&A contains forward-looking statements, including, without limitation, statements relating to the Company’s plans, strategies, objectives, expectations, intentions and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Forward-Looking Statements” and under “Item 1A. Risk Factors” of this Annual Report on Form 10-K.

The Company’s financial statements are prepared in conformity with U.S. GAAP. Sonoco’s management considers a variety of both GAAP and non-GAAP financial and operating measures in assessing the Company’s financial performance. The key GAAP measures used are net sales, operating profit, gross profit margin, net income attributable to Sonoco and diluted earnings per share. The key non-GAAP measures used are Adjusted operating profit, Adjusted net income attributable to Sonoco, Adjusted diluted earnings per share, and Adjusted EBITDA. For information about the Company’s use of non-GAAP measures and reconciliations of these measures to the most directly comparable GAAP measures see “Non-GAAP Financial Measures” below.

Management may also assess year-over-year changes in operating performance in terms of productivity savings or usage, which is driven by procurement savings or losses, production efficiencies or inefficiencies and the effect of fixed cost reduction initiatives. Management views productivity as a measure of operational excellence of the business and uses it to evaluate improvements in manufacturing efficiency, including automation, and other fixed and variable cost reduction initiatives. Management provides investors with this information to evaluate Sonoco’s operating results in a manner similar to how management evaluates operating performance. The Company calculates productivity savings as the difference between applicable current period costs and prior year costs, excluding the impact of estimated inflation or deflation, and volume changes where appropriate.

The MD&A in this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2024 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Discontinued Operations

The Company’s decision in December 2024 to sell TFP represented a major strategic shift in operations. Therefore, in accordance with applicable accounting guidance, the results of TFP are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K and the assets and liabilities of TFP are classified as assets and liabilities of discontinued operations in the Consolidated Balance Sheets. The Consolidated Statements of Comprehensive Income, Changes in Total Equity, and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted. On April 1, 2025, the Company completed the sale of TFP to TOPPAN for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments. See Note 2 to the Consolidated Financial Statements for additional information.

General Overview

Sonoco is a multi-billion dollar global designer, developer, and manufacturer of a variety of highly-engineered and sustainable packaging products serving multiple end markets. As of December 31, 2025, the Company had approximately 265 locations in 37 countries, serving some of the world’s best-known brands around the globe. The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. Geographically, in 2025, approximately 48% of sales were generated in the United States, 43% in EMEA, 3% in APAC, 1% in Canada, and 5% in other regions.

Sonoco competes in multiple product categories, with the majority of the Company’s revenues attributable to products and services sold to consumer and industrial products companies for use in the packaging of their products for sale or shipment. The Company also manufactures uncoated recycled paperboard for both internal use and open market sale. Each of the Company’s operating units has its own sales staff and maintains direct sales relationships with its customers.

Sonoco’s goal is to increase its long-term profitability and return capital to shareholders. Over the past several years, we have simplified our portfolio into two core global business segments, which has reduced operating complexity and improved agility. On December 4, 2024, Sonoco completed the acquisition of Eviosys, Europe’s leading food cans, ends and closures manufacturer, from KPS, for net cash consideration of approximately $3.8 billion. The transaction was designed to advance Sonoco’s portfolio transformation strategy to simplify and realign its portfolio. The transaction, the largest in the Company’s history, expanded Sonoco’s global leadership in metal food can and aerosol packaging, facilitating our ability to partner with global customers to advance innovation and sustainability in metal packaging offerings. Eviosys operates under the Consumer Packaging segment as Sonoco Metal Packaging EMEA.

Sonoco’s portfolio transformation strategy also includes significant divestitures. For example, in 2023, the Company completed the divestitures of its U.S. and Mexico Bulksak businesses, which consisted of the manufacture and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners, and its Sonoco Sustainability Solutions (“S3”) business, which provided customized waste and recycling management programs.

In April 2024, Sonoco completed the divestiture of Protexic, which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets.

On April 1, 2025, the Company completed the sale of TFP to Toppan for a selling price of approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments. On a standalone basis, TFP had revenue of $1.3 billion in 2024.

On November 3, 2025, the Company completed the sale of ThermoSafe to Arsenal, a private equity firm, for net cash consideration of $656 million paid at closing on a cash-free and debt-free basis and subject to customary adjustments. On a standalone basis, ThermoSafe, which was part of the All Other group of businesses, had revenue of approximately $230 million in 2025, through the date of the divestiture. The sale of ThermoSafe substantially concludes the Company’s portfolio transformation goal of streamlining its operations from a large portfolio of diversified businesses into two core global business segments.

See “Acquisitions and Divestitures—Divestitures” below for more information.

The Company is focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets. For example, in July 2025 the Company announced plans to invest $30 million of capital into three rigid paper can facilities in the United States to increase its production capacity in the adhesives and sealants sector. The investment is intended to improve supply chain reliability and ensure consistent access to materials for customers.

Effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function. As a result, no recycling net sales were recorded and the margin from the Company’s recycling operations reduced “Cost of sales” in the Company’s Consolidated Statements of Income for the year ended December 31, 2025 and 2024 as these activities are no longer a part of ongoing major operations.

In addition, the Company is consolidating its global metal packaging and rigid paper containers businesses under one structure based on two geographies - Consumer Packaging, EMEA/APAC and Consumer Packaging, Americas. The Company believes the new geographically integrated structure creates a simpler and more efficient operating model that will lead to further innovation, collaboration and growth opportunities.

Throughout 2025, the Company continued to work on commercial, operational, and supply chain excellence programs to shift the mix of its business towards higher-valued products and increase overall productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, as well as strategic pricing initiatives intended to better capture input costs and the value of the services provided. In addition, the Company continued to focus on improving its competitive position by reducing its cost structure through targeted restructuring activities for operations and support functions intended to enable the Company’s businesses to better leverage market capabilities and generate cash flow. The Company plans to continue its focus on driving significant costs savings through implementing a profitability performance plan focused on operational improvement, commercial excellence, and structural transformation in 2026.

The Company believes that its simplified structure will enable greater strategic and operational focus, help generate proceeds to fund deleveraging and further focus capital investments in the Company’s core Consumer Packaging and Industrial Paper Packaging businesses, and deliver on its strategic priorities by driving sustainable growth, further expanding margins and efficiently allocating capital, maintaining a strong balance sheet and returning capital to shareholders. By transforming into a simpler, stronger and more sustainable company, the Company believes it is positioned to grow through 2026 and beyond.

Global Trade Developments

Recent developments in U.S. and foreign trade policy have increased uncertainty for the global economy and the Company’s business. On March 4, 2025, the U.S. government imposed a 25% tariff on all imports from Canada or Mexico. After imposing this tariff, the U.S. government allowed for the temporary exemption from the tariff for any goods that comply with the USMCA, which has helped mitigate the impact of the tariff on the Company’s operations in North America. On February 10, 2025, the United States announced the expansion of Section 232 Tariffs on steel and aluminum imported into the United States, effective March 12, 2025, and the termination of the granting of new exclusions to mitigate these tariffs. As a result, imported steel and aluminum originating from most countries is currently subject to a 50% duty.

The United States also imposed reciprocal tariffs at a baseline rate of 10%, effective April 5, 2025, and later set firmly established tariff rates for various countries at the beginning of August 2025. For the most part, these reciprocal tariffs were incremental increases over the previously established 10% temporary reciprocal tariffs. On February 20, 2026, the U.S. Supreme Court invalidated certain of these tariffs. This ruling and any future changes in tariff and trade policy may result in additional changes, and the exact scope of any such additional changes is not known at this time. While the full impact of the recent changes is uncertain, the Company does not currently expect the current tariff environment to have a material direct effect on the Company’s profitability or cash flows over 2026 because the Company’s manufacturing network is designed to serve local markets, reducing its exposure to cross-border disruptions and tariff-related risks. While the Company is actively working with its customers to help manage the impacts of higher input costs driven by tariffs, its business model allows for pricing adjustments when necessary. In addition, the Company believes its transformed portfolio following the Eviosys acquisition and the sales of TFP and ThermoSafe is significantly more resilient, with nearly two-thirds of the Company’s sales in 2025 coming from the Consumer Packaging segment, a segment that has historically demonstrated strong performance across economic cycles. In addition, while the Section 232 Tariffs impact input costs for the Company’s U.S.-based operations with Consumer Packaging, Americas, which source a portion of their steel and aluminum purchases from outside the United States, the Company intends, and has the contractual ability, to pass such increases in cost due to tariffs to its customers.

The ultimate resolution and consequences of these trade policy developments, and their effect on the Company, is uncertain and the Company will continue to monitor trade policy changes closely in order to adapt its strategies and to maintain competitiveness in a challenging market environment. See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Other Recent Developments

On July 4, 2025, the OBBBA, which includes a broad range of tax reform provisions, including the extension of key provisions of the Tax Cuts and Jobs Act of 2017, was signed into law in the United States. The Company has evaluated the impact of the OBBBA as part of its 2025 results, and the effects of the legislation are reflected in its income tax provision for the calendar year 2025. The Company currently does not anticipate any material effect from the OBBBA on its effective tax rate, financial results or cash flows for 2026; however, it will continue to assess the application of the OBBBA and any related regulatory guidance as it becomes available.

Acquisitions and Divestitures

Acquisitions

No acquisitions were completed by the Company in 2025. However, as described above, on December 4, 2024, the Company completed the acquisition of all issued and outstanding equity interests in Eviosys from an affiliate of KPS for net cash consideration of approximately $3.8 billion, net of a final working capital settlement for which the Company received $16.5 million during the second quarter of 2025. Eviosys, now operated as Sonoco Metal Packaging EMEA in the Company’s Consumer Packaging segment, is a global supplier of metal packaging that produces food cans and ends, aerosol cans, metal closures and promotional packaging with a large metal food can manufacturing footprint in the EMEA region, which at the time of the acquisition included approximately 6,500 employees in 44 manufacturing facilities across 17 countries. The Company funded the Eviosys acquisition, including related fees and expenses, with the net proceeds from the registered public offering of senior unsecured notes, borrowings from two term loan facilities, and cash on hand. See Note 11 to the Consolidated Financial Statements for more information.

Acquisition activity in 2024 included the Company’s purchase of a small tube and paper cone manufacturer in Brazil for $2.7 million on June 1, 2024. The financial results of this business are included in the Company’s Industrial Paper Packaging segment.

TFP Divestiture

On April 1, 2025, the Company completed the sale of TFP, part of the Consumer Packaging segment, to Toppan for net cash consideration of $1,807.5 million paid at closing on a cash-free and debt-free basis. A final working capital settlement was reached in January 2026 that will require a payment of $15.2 million to be made to the buyers during the first quarter of 2026. The Company has recorded a liability for this amount in “Accrued expenses and other payables” on its consolidated balance sheet as of December 31, 2025.This sale was the result of the Company’s continuing evaluation of its business portfolio and was consistent with the Company’s strategic and investment priorities. In connection with the TFP divestiture, the Company wrote off net assets totaling $1,112.5 million, reclassified $48.0 million of cumulative translation adjustment losses from accumulated other comprehensive income/(loss) and incurred transaction fees of $25.2 million, resulting in a net pretax gain of $606.6 million. The Company recognized a related tax provision of $199.5 million for an after-tax gain of $407.2 million. The after tax gain is included in “Net income from discontinued operations” in the Company’s Consolidated Statements of Income for the year ended December 31, 2025. See Notes 1 and 2 to the Consolidated Financial Statements for additional information. The majority of cash proceeds generated from this transaction were used to repay debt, as further described in Note 11 to the Consolidated Financial Statements.

ThermoSafe and Other Divestitures

As described above, on November 3, 2025, the Company completed the sale of ThermoSafe, part of the All Other group of businesses, to Arsenal for net cash consideration of $655.8 million paid at closing on a cash-free and debt-free basis and subject to customary adjustments. The sale also allowed for additional consideration of up to $75.0 million if certain performance measures for calendar year 2025 were met. However, as these performance measures were not met, no additional cash consideration is anticipated. In connection with the ThermoSafe divestiture, the Company wrote off net assets totaling $265.8 million, including $173.3 million of goodwill, reclassified $1.2 million of cumulative translation adjustment gains from accumulated other comprehensive income/(loss) and incurred transaction fees of $13.2 million, resulting in a net pretax gain of $378.0 million, which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income. The Company used the majority of the cash proceeds from the sale to pay down debt, as further described in Note 11 to the Consolidated Financial Statements.

On April 30, 2025, the Company completed the sale of a recycling facility in Asheville, North Carolina, part of the Industrial Paper Packaging segment, for cash proceeds of $3.9 million. The sale resulted in a loss of $2.1 million, which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On March 2, 2025, the Company completed the sale of its tube and core operations in Venezuela, part of the Industrial Paper Packaging segment, in exchange for a note receivable in the amount of $0.1 million. The sale resulted in a loss of $5.4 million, including $3.8 million of cumulative translation losses that were reclassified from accumulated other comprehensive income/(loss). This loss is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On January 17, 2025, the Company completed the sale of a small construction tube operation in France, part of the Industrial Paper Packaging segment, for cash proceeds of $1.5 million and recognized a gain of $1.2 million, which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

In November 2024, the Company completed the sale of two production facilities in China, both of which were part of the Company’s Industrial Paper Packaging segment, for $0.3 million. As a result of the sale, the Company reclassified $0.6 million of cumulative translation losses from accumulated other comprehensive income/(loss) and recognized a loss of $25.6 million, which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On April 1, 2024, the Company completed the sale of Protexic, part of the All Other group of businesses, to Black Diamond Capital Management, LLC. This business provided foam components and integrated material solutions for various industrial end markets. This sale was the result of the Company’s continuing evaluation of its business portfolio and is consistent with the Company’s strategic and investment priorities. The cash selling price, as adjusted for the final working capital settlement, was $78.5 million. As a result of the Protexic divestiture, the Company recognized a pretax gain of $0.9 million included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income. The Company used the majority of the cash proceeds from the sale to pay down debt.

Additional Ownership Investment

During the second quarter of 2024, the Company increased its ownership investment in a small South Carolina-based designer and manufacturer of sustainable protective packaging solutions from 20.5% to 39.9%. The Company acquired its initial ownership interest in June 2022. The preferred stock investment increased by $18.5 million during the second quarter of 2024, which included a $10.0 million cash payment, a $5.4 million remeasurement of the fair value of the existing investment, and a $2.5 million conversion of the carrying value of the outstanding convertible notes into a preferred series stock investment, which yielded a $0.5 million fair value increase and a $0.1 million increase for interest income earned. The outstanding investment of $21.2 million as of December 31, 2025 is included within “Other assets” in the Company’s Consolidated Balance Sheet. The remeasurement of the carrying value of the existing investment to fair value during the second quarter of 2024 resulted in a gain of $5.9 million and interest income of $0.1 million, which are included in “Other (expenses)/income, net” and “Interest income,” respectively, in the Company’s Consolidated Statements of Income.

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. See Note 4 to the Consolidated Financial Statements for further information about acquisitions and divestitures.

Restructuring and Asset Impairment Charges

Due to its geographic footprint (approximately 265 locations in 37 countries as of December 31, 2025) and the cost-competitive nature of its businesses, the Company frequently seeks more cost-effective means and structures to serve its customers, to improve profitability, and to respond to fundamental changes in its markets. As such, plant closures in connection with footprint rationalization and headcount reductions are an important component of the Company’s cost control initiatives. The amount of these costs can vary significantly from year to year depending upon the scope and location of the restructuring activities.

The following table summarizes the impact of restructuring and asset impairment charges for each of the years presented:

Dollars in thousands

During 2025, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts, including the relocation of certain facilities. Restructuring actions included severance costs related to the closures of metal can facilities in France and Spain, part of the Consumer Packaging segment, and the closures of a paper mill in Mexico, cone facilities in Taiwan and Mexico, and partitions facilities in Maine and California, all part of the Industrial Paper Packaging segment. Restructuring charges were also incurred during the year for costs related to plant closures, including equipment removal, utilities, plant security, property taxes, insurance and environmental remediation costs related to the prior year’s closure of the Company’s paper mill in Washington, costs related to the current year’s closures of the metal can facilities in France and Spain, the paper mill in Mexico, the cone facility in Taiwan, and ongoing facility carrying costs of previously announced plant closures. Asset impairment charges during the year consist primarily of asset impairment charges related to the closures of the paper mill in Mexico, the cone facilities in China and Mexico, and the partitions facilities in Maine and California, and the closure of the metal packaging facility in France. These charges were offset by gains from the sales of the land and buildings associated with previously closed facilities, primarily the cone facility in Taiwan and the partitions facility in Maine. Also offsetting the impairment charges was a gain from the sale of water rights at our former paper mill in Hutchinson, Kansas, which was closed in 2023.

During 2024, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts, including the relocation of certain facilities. The largest of these plant closures were the closures of the Company’s paper mills in Sumner, Washington (the “Sumner Mill”) and Kilkis, Greece (the “Kilkis Mill”), both of which were part of the Industrial Paper Packaging segment. Restructuring charges were also incurred during the year for costs related to plant closures, including equipment removal, utilities, plant security, property taxes, insurance, and environmental remediation costs related to the closure of the Sumner Mill, and ongoing facility carrying costs of previously announced plant closures. Asset impairment charges were recognized in the Industrial Paper Packaging segment related to the closures of the Sumner Mill and the Kilkis Mill and in the Consumer Packaging segment as a result of exiting a small metal canning lid business.

The Company expects to recognize future additional costs totaling approximately $11.0 million in connection with previously announced restructuring actions that were underway as of December 31, 2025. The Company believes that the majority of these charges will be incurred and paid by the end of 2026. The Company regularly evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken. Restructuring and asset impairment charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the Company operates.

See Note 5 to the Consolidated Financial Statements for further information about restructuring activities and asset impairment charges.

Results of Operations – 2025 Versus 2024

Consolidated net sales from continuing operations for 2025 were $7.5 billion, a $2.2 billion, or 42%, increase from 2024. The year-over-year increase in net trade sales is due primarily to the acquisition of Eviosys on December 4, 2024 which added approximately $2.2 billion in year-over-year sales. Higher selling prices across the Consumer Packaging and Industrial Paper Packaging segments resulted in a $178.0 million year-over-year increase in sales, offset by unfavorable volumes in the Industrial Paper Packaging segment and the impact of divestitures, which lowered year-over-year sales by $80.9 million and $98.5 million, respectively. These divestitures included the November 2025 divestiture of ThermoSafe and the 2024 divestitures of Protexic and two production facilities in China.

GAAP operating profit in 2025 was $1,017.7 million, an increase of $691.2 million, or 212% from the $326.6 million reported in 2024. The increase in GAAP operating profit reflects gains from the sale of businesses totaling $371.7 million in 2025, primarily related to the sale of ThermoSafe, compared to a net loss from the sale of businesses of $23.5 million in the prior year, primarily related to the sale of two production facilities in China. The remaining year-over-year change is primarily due to the Eviosys acquisition and lower acquisition, integration, and divestiture-related costs. Adjusted operating profit for the year ended December 31, 2025 was $954.9 million, an increase of 67% from the $573.1 million reported for the year ended December 31, 2024, primarily as a result of the Eviosys acquisition.

GAAP net income attributable to Sonoco was $1,003.0 million (or $10.07 per diluted share) in 2025, compared with $163.9 million (or $1.65 per diluted share) in 2024. The year-over-year increase was primarily due to the increase in GAAP operating profit as described above, a $316.0 million increase in net income from discontinued operations primarily related to the gain on the sale of TFP, and the non-recurrence of a $113.7 million remeasurement loss in 2024 on Euro denominated cash held by the Company to close the Eviosys acquisition. These increases were partially offset by a $178.1 million increase in income tax expense as discussed further below and a $60.9 million increase in interest expense due to higher levels of debt to fund the Eviosys acquisition. Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share were $568.8 million (or $5.71 per diluted share) in 2025, compared with $485.8 million (or $4.89 per diluted share) in 2024.

Costs and Expenses/Margins

Cost of sales increased $1.78 billion in 2025, or 42.7%, from the prior year. The acquisition of Eviosys on December 4, 2024, increased cost of sales by approximately $1.86 billion year over year, and increases in labor costs, overhead, and fixed operating costs increased cost of sales by approximately $77.1 million year over year. These increases were partially offset by reductions related to divestitures of $89.3 million, primarily related to the sale of ThermoSafe, while lower material costs and improved productivity from procurement savings, production efficiencies and fixed cost reduction initiatives reduced costs by $74.6 million. Gross profit margin decreased to 20.9% in 2025 from 21.5% in the prior year.

Selling, general and administrative expenses (“SG&A”) increased $138.3 million, or 19.1%, and were 11.5% of sales in 2025, compared to 13.6% of sales in 2024. SG&A in 2025 reflected an increase of $228.8 million related to the Eviosys acquisition, partially offset by lower year-over-year acquisition, integration, and divestiture-related costs of $53.7 million, the impact of divestitures of $19.2 million, and other net favorable changes of $17.6 million, primarily related to labor and professional fees.

Restructuring and asset impairment charges, net totaled $66.2 million in 2025, compared with $65.4 million in 2024. The 2025 charges reflect severance costs related to the Company’s ongoing organizational effectiveness efforts, as well as costs related to the closures of metal can facilities in France and Spain, a paper mill in Mexico, cone facilities in Taiwan and Mexico, and partitions facilities in Maine and California. These charges were partially offset by gains from the sales of the land and buildings associated with previously closed facilities, primarily the cone facility in Taiwan and the partitions facility in Maine. Also offsetting the impairment charges was a gain from the sale of water rights at our former paper mill in Hutchinson, Kansas, which was closed in 2023. The 2024 charges reflect severance costs related to the Company’s ongoing organizational effectiveness efforts, the relocation costs of certain facilities in Greece and Germany, and costs related to the closures of paper mills in Sumner, Washington and Kilkis, Greece, two small industrial converted products facilities in China, and the exit of a small metal canning lid business. Additional information regarding restructuring actions and asset impairments is provided in Note 5 to the Company’s Consolidated Financial Statements.

Gain/(Loss) on divestiture of business and other assets reflected a gain of $371.7 million in 2025, compared to a loss of $23.5 million in 2024. The gain recorded in 2025 related primarily to the sale of ThermoSafe. The loss reported in 2024 related primarily to the sale of two production facilities in China. Additional information regarding divestitures is provided in Note 4 to the Company’s Consolidated Financial Statements.

Other (expense)/income, net reflected a net expense of $27.5 million in 2025, compared with $104.2 million in 2024. Other (expense)/income, net reported in 2025 represents charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle primarily within our Consumer Packaging segment. Other (expense)/income, net reported in 2024 included a loss of $113.7 million from the remeasurement of euro-denominated cash balances held in connection with the Eviosys acquisition, partially offset by a gain of $5.9 million from the remeasurement of an equity investment to fair value and a gain of $3.6 million from the sale of the Company’s equity interest in Northstar Recycling Company, LLC (“Northstar”). See Note 4 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $12.2 million in 2025, compared with $13.8 million in 2024. The year-over-year decrease of $1.6 million was primarily due to higher expected returns on plan assets and lower amortization of net actuarial losses, partially offset by higher interest costs on the Company’s defined benefit pension liabilities, resulting from higher year-over-year discount rates. See Note 15 to the Consolidated Financial Statements for further information on employee benefit plans.

Net interest expense totaled $212.9 million for the year ended December 31, 2025, compared with $145.1 million in 2024. The increase was primarily due to higher outstanding debt as a result of the financing transactions related to the Eviosys acquisition on December 4, 2024. Additional information regarding the Company’s indebtedness is provided in Note 11 to the Company’s Consolidated Financial Statements.

The effective tax rates on GAAP and Adjusted net income attributable to Sonoco for the full year 2025 were 24.0% and 24.1%, respectively, compared with 8.7% and 24.3%, respectively for the full year 2024. The year-over-year change in the GAAP effective tax rate was due primarily to the low rate in 2024 as a result of the release of a reserve for uncertain tax positions following the expiration of the applicable statute of limitations, as well as deferred tax adjustments associated with the post-acquisition entity restructuring of the partitions business. The slight decrease in the Adjusted effective tax rate was primarily due to a variance in tax reserve activity, offset by the benefit of purchased tax credits.

Discontinued Operations

Net income from discontinued operations totaled $412.3 million for the year ended December 31, 2025, compared with $96.4 million in 2024. The increase in net income reflects the gain on the divestiture of TFP, partially offset by lower sales following the completion of the sale on April 1, 2025. See Notes 2 and 4 to the Consolidated Financial Statements for further information.

Reportable Segments

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

In accordance with applicable accounting guidance, the results of TFP, previously part of the Consumer Packaging segment, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K. All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted. As of and for the year ended December 31, 2025, there were no changes to the manner in which the Company reviewed financial information at the segment level; therefore, these changes had no impact on the Company’s segment reporting structure.

Total operating profit, reported as “Operating Profit” in the Company’s Consolidated Statements of Income, is comprised of the following:

($ in millions)

Segment results, which are reviewed by Company management to evaluate segment performance, do not include: restructuring/asset impairment charges; amortization of acquired intangibles; acquisition, integration, and divestiture-related costs; changes in last in, first out (“LIFO”) inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations.

See Note 20 to the Company’s Consolidated Financial Statements for more information on reportable segments.

Consumer Packaging

($ in millions)

Segment net sales in 2025 increased 92.5% compared to the prior year. The increase reflects $2.2 billion, including the impact of foreign exchange rates, attributable to Sonoco Metal Packaging EMEA following the December 2024 acquisition of Eviosys and a $93.1 million favorable impact from increased pricing intended to offset the effects of inflation and tariffs. Volume/mix remained relatively flat year over year.

Segment operating profit in 2025 increased 112.7% from 2024, primarily due to the addition of $257.8 million of operating profit from Sonoco Metal Packaging EMEA following the acquisition of Eviosys, favorable price/cost of $62.5 million, and strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives totaling $19.0 million. These favorable factors were partially offset by unfavorable volume/mix in rigid paper North America year over year. As a result, segment operating profit margin increased to 12.9% in 2025 compared to 11.6% during the prior year.

Cost of sales increased year over year due to the additional operating costs associated with Sonoco Metal Packaging EMEA following the acquisition of Eviosys. This increase was partially offset by strong productivity from procurement savings and production efficiencies.

Industrial Paper Packaging

($ in millions)

Segment net sales decreased 2.1% in 2025 compared to 2024, primarily due to unfavorable volume/mix of $78.9 million, primarily in global converted paper products, and the impact of the 2024 divestiture of two production facilities in China of $46.0 million. These declines were partially offset by a $83.7 million favorable impact from higher selling prices.

Segment operating profit increased 15.0% in 2025 versus the prior year, primarily as a result of favorable price/cost of $51.0 million and improved productivity from procurement savings, production efficiencies and fixed cost initiatives of $28.2 million. These favorable impacts were partially offset by an unfavorable impact of $27.6 million from volume declines across the segment and other net unfavorable impacts, including the impact of foreign exchange rates, totaling $5.2 million. As a result, segment operating margin increased to 13.6% during 2025 from 11.6% during the prior year.

Cost of sales decreased year over year due to volume declines, partially offset by strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

All Other

($ in millions)

Net sales for the All Other group of businesses decreased 18.6% in 2025 compared to 2024, primarily due to the divestiture of ThermoSafe on November 3, 2025.

Operating profit in the All Other group of businesses decreased 4.7% year over year, primarily due to the sale of ThermoSafe. Segment operating margin in 2025 increased to 14.7% compared to 12.6% in 2024.

Non-GAAP Financial Measures

The Company uses certain financial performance measures, both internally and externally, that are not in conformity with GAAP (referred to as “non-GAAP financial measures”) to assess and communicate the financial performance of the Company. These “non-GAAP” financial measures, which are identified using the term “Adjusted” (for example, “Adjusted Operating Profit,” “Adjusted Net Income Attributable to Sonoco,” and “Adjusted Diluted EPS”), reflect adjustments to the Company’s GAAP operating results to exclude amounts, including the associated tax effects, where applicable, relating to:

• restructuring/asset impairment charges1;
• acquisition, integration and divestiture-related costs;
• gains or losses from the divestiture of businesses;
• losses from the early extinguishment of debt;
• non-operating pension costs;
• amortization expense on acquisition intangibles;
• changes in last-in, first-out inventory reserves;
• certain income tax events and adjustments;
• derivative gains/losses;
• other non-operating income and losses; and
• certain other items, if any.

1 Restructuring and restructuring-related asset impairment charges are a recurring item as the Company’s restructuring programs usually require several years to fully implement, and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.

The Company’s management believes the exclusion of the amounts related to the above-listed items improves the period-to-period comparability and analysis of the underlying financial performance of the business.

In addition to the “Adjusted” results described above, the Company also uses Adjusted EBITDA, Segment Adjusted EBITDA, and Segment Adjusted EBITDA Margin. Adjusted EBITDA is defined as net income excluding the following: interest expense; interest income; provision for income taxes; depreciation and amortization expense; non-operating pension costs; net income/loss attributable to noncontrolling interests; restructuring/asset impairment charges; changes in LIFO inventory reserves; gains/losses from the divestiture of businesses; acquisition, integration and divestiture-related costs; other income; derivative gains/losses; and other non-GAAP adjustments, if any, that may arise from time to time. Segment Adjusted EBITDA is defined as segment operating profit plus depreciation and amortization expense and equity in earnings of affiliates, net of tax. Segment Adjusted EBITDA Margin is defined as Segment Adjusted EBITDA divided by segment net sales.

The Company’s non-GAAP financial measures are not calculated in accordance with, nor are they an alternative for, measures conforming to GAAP, and they may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.

The Company presents these non-GAAP financial measures to provide investors with information to evaluate Sonoco’s operating results in a manner similar to how management evaluates business performance. The Company consistently applies its non-GAAP financial measures presented herein and uses them for internal planning and forecasting purposes, to evaluate its ongoing operations, and to evaluate the ultimate performance of management and each business unit against plans/forecasts. In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.

Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances that the investor may find material and view differently.

To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in evaluating the Company’s results to review both GAAP information, which includes all of the items impacting financial results, and the related non-GAAP financial measures that exclude certain elements, as described above. Further, Sonoco management does not, nor does it suggest that investors should, consider any non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Whenever reviewing a non-GAAP financial measure, investors are encouraged to review and consider the related reconciliation to understand how it differs from the most directly comparable GAAP measure.

Reconciliations of GAAP to non-GAAP results are presented under “Reconciliations of GAAP to Non-GAAP Financial Measures” below in

conjunction with MD&A of the Company’s results of operations. Reconciliations are not provided for non-GAAP financial measures related to

future years due to the likely occurrence of one or more of the following, the timing and magnitude of which management is unable to reliably

forecast: possible gains or losses on the sale of businesses or other assets; restructuring costs and restructuring-related asset impairment

charges; acquisition, integration and divestiture-related costs; and the tax effect of these items and/or other income tax-related events. These

items could have a significant impact on the Company’s future GAAP financial results.

Reconciliations of GAAP to Non-GAAP Financial Measures

The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures for each of the years presented:

Adjusted Operating Profit, Adjusted Income from Continuing Operations Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Net Income Attributable to Sonoco, and Adjusted Diluted EPS

Dollars in thousands, except per share data

1 Operating profit, income from continuing operations before income taxes, and provision for income taxes exclude results related to discontinued operations of $644,424, $619,612, and $207,264, respectively.

2 Acquisition, integration and divestiture-related costs relate primarily to the Company’s December 2024 acquisition of Eviosys, the April 2025 divestiture of TFP and the November 2025 divestiture of ThermoSafe.

3 Gain on divestiture of business associated with Operating Profit primarily consists of the gain on the sale of ThermoSafe. Net Income Attributable to Sonoco reflects the after-tax impact of the gains on the sales of both ThermoSafe and TFP.

4 Other adjustments to the provision for income taxes include the following: an expense related to the initial integration of the acquired Sonoco Metal Packaging EMEA legal entity structure of $10,479; a deferred tax liability related to the foreign exchange effects on undistributed earnings of Sonoco Metal Packaging EMEA not considered to be indefinitely reinvested of $10,289; provision-to-return and deferred remeasurement adjustments related to the divested TFP business of $5,998; and other net unfavorable tax items totaling $7,723. The impact of other adjustments on net income attributable to Sonoco primarily reflects these same items.

Dollars in thousands, except per share data

1 Operating profit, income from continuing operations before income taxes, and provision for income taxes exclude results related to discontinued operations of $128,037, $116,309, and $19,934, respectively.

2 Acquisition, integration and divestiture-related costs include losses on treasury lock derivative instruments, amortization of financing fees and pre-acquisition net interest expenses totaling $33,569 related to debt instruments associated with the financing of the Eviosys acquisition. These costs are included in “Interest expense” in the Company’s Consolidated Statements of Income.

3 Other expenses, net primarily relates to remeasurement loss on Euro denominated cash held by the Company to close the Eviosys acquisition.

4 Other adjustments include discrete tax items primarily related to a $12,638 adjustment to deferred taxes from a post-acquisition restructuring of the partitions business, a $9,864 reduction in reserves for uncertain tax positions following the expiration of the applicable statute of limitations and a $5,796 tax benefit due to the recording of a deferred tax asset on the outside basis of certain held-for-sale entities, partially offset by an adjustment for hurricane-related insurance deductible losses.

Dollars in thousands, except per share data

1 Operating profit, income from continuing operations before income taxes, and provision for income taxes exclude results related to discontinued operations of $126,741, $125,805, and $29,548, respectively.

Adjusted EBITDA1

Dollars in thousands

1 Adjusted EBITDA is calculated on a total Company basis, including both continuing operations and discontinued operations.

The Company does not calculate net income by segment; therefore, Adjusted EBITDA by segment is reconciled to the closest GAAP measure of segment profitability, Segment Operating Profit, which is another method to achieve the same result. Segment Operating Profit is the measure of segment profit or loss reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance in accordance with Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” as prescribed by the Financial Accounting Standards Board.

Segment results, which are reviewed by the Company’s management to evaluate segment performance, do not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration, and divestiture-related costs; changes in LIFO inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations. Total operating profit is comprised of the sum of segment and All Other operating profit plus certain items that have been allocated to Corporate, including amortization of acquisition intangibles; restructuring/asset impairment charges; changes in LIFO inventory reserves; acquisition, integration and divestiture-related costs; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; and certain other items that were excluded from segment and All Other operating profit.

Segment and All Other Adjusted EBITDA and Segment Adjusted EBITDA Margin Reconciliation

Dollars in thousands

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $160,272, the Industrial Paper Packaging segment of $21,585, and the All Other group of businesses of $574.

2 These expenses relate to charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle primarily within the Consumer Packaging segment.

3 Included in Corporate are net restructuring/asset impairment charges associated with the Consumer Packaging segment of $54,200, the Industrial Paper Packaging segment of $8,307, and the All Other group of businesses of $5.

4 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $1,062 and the Industrial Paper Packaging segment of $(1,004).

5 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $21,992 and the Industrial Paper Packaging segment of $623.

6 Included in Corporate are net gains on divestiture of businesses associated with the All Other group of businesses of $(378,014) from the sale of ThermoSafe and a gain associated with the Industrial Paper Packaging segment of $(1,207) from the sale of a production facility in France. These gains were partially offset by losses of $5,390 related to the sale of the Company’s operations in Venezuela and $2,114 from the sale of a recycling facility in Asheville, North Carolina, both part of the Industrial Paper Packaging segment.

7 Included in Corporate are net losses from derivatives associated with the Consumer Packaging segment of $166, the Industrial Paper Packaging segment of $1,497, and the All Other group of businesses of $67.

Segment and All Other Adjusted EBITDA and Segment Adjusted EBITDA Margin Reconciliation

Dollars in thousands

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $52,144, the Industrial Paper Packaging segment of $25,619, and the All Other group of businesses of $832.

2 Included in Corporate are net restructuring/asset impairment charges associated with the Consumer Packaging segment of $19,259, the Industrial Paper Packaging segment of $33,923, and the All Other group of businesses of $1,434.

3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(5,780) and the Industrial Paper Packaging segment of $(483).

4 Included in Corporate are acquisition, integration, and divestiture-related costs associated with the Consumer Packaging segment of $9,052 and the Industrial Paper Packaging segment of $(3,600).

5 Included in Corporate are net losses from the divestiture of businesses within the Industrial Paper Packaging segment of $24,357, including a loss of $25,607 from the sale of two production facilities in China, partially offset by a gain of $(1,250) from the sale of the S3 business, and a gain on divestiture of businesses associated with the All Other group of businesses of $(905) related to the sale of Protexic.

6 Included in Corporate are net gains from derivatives associated with the Consumer segment of $(1,202), the Industrial Paper Packaging segment of $(5,174), and All Other of $(849).

Segment and All Other Adjusted EBITDA and Segment Adjusted EBITDA Margin Reconciliation

Dollars in thousands

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $44,250, the Industrial Paper Packaging segment of $16,121, and the All Other group of businesses of $6,952.

2 Included in Corporate are net restructuring/asset impairment charges associated with the Consumer Packaging segment of $4,111, the Industrial Paper Packaging segment of $38,754, and the All Other group of businesses of $2,547.

3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(10,915) and the Industrial Paper Packaging segment of $(902).

4 Included in Corporate are acquisition, integration, and divestiture-related costs associated with the Consumer Packaging segment of $1,171 and the Industrial Paper Packaging segment of $5,810.

5 Included in Corporate are gains from the sale of the Company’s timberland properties in the amount of $(60,945), the sale of its S3 business in the amount of $(11,065), and the sales of its BulkSak businesses in the amount of $(6,919), all of which are associated with the Industrial Paper Packaging segment.

6 Included in Corporate are net gains from derivatives associated with the Consumer segment of $(257), the Industrial Paper Packaging segment of $(1,290), and All Other of $(365).

7 Included in Corporate are other non-GAAP adjustments associated with the Industrial segment of $3,762 and the All Other group of businesses of $3,249.

Financial Position, Liquidity, and Capital Resources

Cash Flow

Operating Activities

Cash flows from operations totaled $689.8 million in 2025, compared with $833.8 million in 2024, a year-over-year decrease of $144.1 million. GAAP net income increased by $839.4 million year over year, primarily as a result of the gains recognized on the 2025 divestitures of TFP and ThermoSafe as described in the “Results of Operations” section above. Net income in the current year also reflected a $144.5 million year-over-year increase in non-cash depreciation and amortization expense, primarily related to the Eviosys acquisition on December 4, 2024, a $22.6 million increase in gains on the sale of assets, a $11.6 million decrease in share-based compensation expense, and a $4.5 million decrease in net non-cash asset impairment charges. GAAP net income in the prior year also included a remeasurement loss of $113.7 million related to euro denominated cash balances held in connection with the funding of the Eviosys acquisition. No such remeasurements occurred in 2025. Cash contributions to the Company’s pension and postretirement plans in 2025 were $22.3 million, compared with $19.6 million in 2024, a year-over-year increase of $2.7 million. Accrued expenses and other assets and liabilities provided $51.5 million and $75.1 million of cash in 2025 and 2024, respectively, a $23.6 million lower year-over-year provision of cash. Significant drivers of the change include a $35.2 million lower year-over-year provision of cash related to accrued management incentive compensation as the accrual decreased $4.3 million year over year in 2025 while increasing $30.9 million year over year in 2024. In addition, accrued interest reflected a use of cash of $4.8 million in 2025 compared to a provision of cash of $34.8 million. The use of cash in 2025 reflects the reduction of accrued interest resulting from debt repayments throughout the year. The provision of cash in 2024 reflects greater levels of accrued interest at the end of 2024 compared to 2023 resulting from the financing transactions associated with the Eviosys acquisition. Partially offsetting the year-over-year impact of the changes in management incentive accruals and accrued interest were higher year-over-year restructuring accruals totaling $22.7 million.

Cash paid for taxes increased by $172.5 million year over year, primarily as a result of one-time taxes paid during 2025 on gains from the sale of TFP.

Net working capital used cash of $70.6 million in 2025, while providing cash of $128.1 million in 2024. The higher year-over-year net use of cash of $198.7 million was driven largely by changes in inventory and accounts payable, partially offset by changes in accounts receivable. Inventories used cash of $80.9 million and $13.3 million in 2025 and 2024, respectively and accounts payable used $87.5 million of cash in 2025 while providing $123.6 million of cash in 2024. The year-over-year increase in the use of cash from inventory primarily relates to our Metal Packaging North America business, where inventory levels of steel were low at the end of 2023 and throughout 2024. Steel inventory was increased through the peak packing season in the third quarter of 2025 before moderating over the remainder of the year. The year-over-year increase in the use of cash from accounts payable also primarily relates to our Metal Packaging North America business. As inventory levels increased throughout 2025, accounts payable also increased. However, as inventory levels moderated in the fourth quarter of 2025, more of these payables were settled, resulting in a higher year-over-year use of cash. Accounts receivable provided $80.1 million more cash in 2025 compared to 2024, reflecting the Company’s active management of collections and compliance with payment terms.

Investing Activities

Investing activities provided $2.2 billion of cash in 2025, compared with using $4.1 billion of cash in 2024. Cash proceeds from the sale of TFP in April 2025 and ThermoSafe in November 2025 provided $2.5 billion of cash while cash proceeds from the sale of Protexic in April 2024 and additional proceeds related to the 2023 sale of the S3 business provided $81.0 million of cash in 2024. Acquisition spending totaled $3.8 billion in 2024, primarily related to the December 2024 Eviosys acquisition. There was no acquisition spending in 2025; however, the Company received net cash proceeds of $16.5 million from a final working capital settlement related to Eviosys during 2025. Capital expenditures in 2025 were $344.0 million, $49.2 million lower than the previous year as the Company had fewer large capital projects in 2025 and directed more of its capital to reducing outstanding debt. Proceeds from the sale of assets totaled $47.0 million in 2025, compared with $15.6 million in the prior year. The proceeds in both years were primarily from the sale of assets related to previously closed production facilities. Proceeds from the settlement of a net investment hedge provided $9.1 million of cash in 2024, and the Company paid $34.4 million in 2024 to settle a tranche of foreign currency forward contracts that the Company entered into in connection with the funding of the Eviosys acquisition. No such similar settlements occurred in 2025. Investments in affiliated companies and other net investing proceeds provided $6.5 million of cash in 2025 compared with a $10.0 million provision of cash in 2024. The proceeds in 2025 were largely attributable to dividends from one of the Company’s affiliate investments representing a return on capital. Both 2025 and 2024 reflect additional investments in the Company’s investments in ISI Robotics and 2024 includes an additional investment in a small South Carolina-based designer and manufacturer of sustainable packaging solutions. The 2024 figure also reflects proceeds from the sale of the Company’s 2.7% equity interest in Northstar, which it had acquired on January 26, 2023 as part of the sale of its S3 business to Northstar.

Financing Activities

Financing activities used $3.0 billion of cash in 2025 and provided $3.7 billion of cash in 2024. The large provision of cash in 2024 included net proceeds from the issuance of debt totaling $3.9 billion primarily used to fund the Eviosys acquisition, which closed on December 4, 2024, while the significant use of cash in 2025 included net debt repayments totaling $2.8 billion. These debt repayments included the $0.4 billion principal repayment of the Company’s 1.80% Notes upon their maturity in February 2025 and the repayments of two term loan facilities totaling $2.2 billion, ahead of their scheduled maturities, utilizing proceeds from the divestitures of TFP and ThermoSafe and available cash on hand.

Financing activities in 2024 also included the payment of fees totaling $19.0 million related to an unsecured bridge term loan facility to secure funding for the Eviosys acquisition. The change in outstanding checks used cash of $3.7 million and $8.7 million in 2025 and 2024, respectively. The year-over-year change is the result of the timing and size of the last accounts payable check runs in 2025 and 2024 relative to the Company’s December 31 year end.

Cash used to repurchase the Company’s common stock to satisfy employee tax withholding obligations in association with the exercise of certain share-based compensation awards was $10.9 million in 2025, compared to $9.2 million in 2024.

Cash dividends totaled $208.1 million in 2025 compared to $203.5 million in 2024, reflecting the increase in the quarterly dividend payment from $0.52 per share to $0.53 per share approved by the Board in April 2025.

Capital Resources

The Company’s cash balances are held in numerous locations throughout the world. Of the Company’s total reported cash and cash equivalents balances of $378.4 million and $431.0 million at December 31, 2025 and 2024, respectively, approximately $193.3 million and $190.1 million, respectively, were held outside of the United States by its foreign subsidiaries. Cash held outside of the United States is available to meet local liquidity needs, or for capital expenditures, acquisitions, and other offshore growth opportunities. The Company has generally maintained sufficient domestic liquidity through a combination of operating cash flow generation and access to bank and capital markets borrowings, and therefore generally considered its foreign unremitted earnings to be indefinitely invested outside the United States and did not typically plan to repatriate such earnings, other than excess cash balances that could be repatriated at minimal tax cost. Beginning in 2024, due to the increase in debt in the United States affecting domestic liquidity as a result of the Eviosys acquisition, the Company does not consider certain future earnings of the Sonoco Metal Packaging EMEA business to be indefinitely reinvested outside the United States and is providing for taxes on these amounts for financial reporting purposes. For those foreign unremitted earnings considered to be indefinitely reinvested, computation of the associated potential deferred tax liability is not practicable.

The Company uses a notional pooling arrangement with an international bank to help manage global liquidity requirements. Under this pooling arrangement, the Company and its participating subsidiaries may maintain either a cash deposit or a borrowing position through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit. Because it maintains a security interest in the cash deposits and has the right to offset the cash deposits against the borrowings, the bank provides the Company and its participating subsidiaries favorable interest terms on both the cash deposit and borrowing positions.

The Company, as part of its ongoing efforts to improve cash flow and related liquidity, works with suppliers to improve its terms and conditions, including extending payment terms. Beginning in 2020, the Company also began voluntary supply chain financing programs (the “SCF Programs”) to provide certain suppliers with the opportunity to sell receivables due from the Company to the SCF Programs’ participating financial institution. Such sales are conducted at the sole discretion of both the suppliers and the financial institution on a non-recourse basis at a rate that leverages the credit rating of the Company and thus might be more beneficial to the supplier. No guarantees are provided by the Company or any of its subsidiaries under the SCF Programs. Responsibility is limited to making payment on the terms originally negotiated with suppliers, regardless of whether those suppliers sell the receivables to the financial institution. The Company does not enter into any agreements with suppliers regarding their participation in the SCF Programs. All amounts outstanding at December 31, 2025 under the SCF Programs were recorded within trade accounts payable. The amount owed to the participating financial institution under the SCF Programs and included in accounts payable was $53.1 million and $28.5 million at December 31, 2025 and 2024, respectively. The year-over-year increase is primarily due to a greater level of participation in the SCF Programs Sonoco Metal Packaging EMEA following the acquisition of Eviosys. The Company accounts for all payments made under the SCF Programs as a reduction to cash flows from operations and reports them within “changes in payable to suppliers” in the Consolidated Statements of Cash Flows. A downgrade in the Company’s credit rating or changes in the financial markets could limit financial institutions’ willingness to commit funds to, and participate in, the SCF Programs. However, the Company does not believe a reduction in, or the elimination of, the SCF Programs would have a material impact on its working capital or cash flows.

The Company’s total debt at December 31, 2025, was $4.3 billion, a year-over-year decrease of $2.7 billion. The year-over-year change reflects the following actions taken during 2025:

• On November 5, 2025, the Company repaid the outstanding $700 million principal amount of borrowings under a term loan facility using cash proceeds from the sale of ThermoSafe and the issuance of commercial paper. The Company had entered into a credit agreement on July 12, 2024, with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent providing the Company with the ability to borrow up to $700 million on an unsecured basis to finance a portion of the cash consideration for the Company’s acquisition of Eviosys. The Company drew down the entire term loan facility on December 2, 2024 in connection with the consummation of the Eviosys acquisition on December 4, 2024. Under the terms of the agreement, the borrowings became payable upon completion of the ThermoSafe divestiture.
• On April 3, 2025, the Company repaid the outstanding $1.5 billion principal amount of borrowings under its 364-day term loan facility using a portion of the cash proceeds from the sale of TFP. The Company had entered into a credit agreement on September 16, 2024 with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent providing the Company with the ability to borrow up to $1.5 billion on an unsecured basis to finance a portion of the cash consideration for the Company’s acquisition of Eviosys. The Company drew down the entire 364-day term loan facility on December 2, 2024 in connection with the consummation of the Eviosys acquisition on December 4, 2024. Under the terms of the agreement, the borrowings became payable upon completion of the TFP divestiture.
• On February 3, 2025, the Company repaid the $400 million aggregate principal amount of its 1.80% notes upon their maturity using proceeds from the issuance of commercial paper.

Included in “Other foreign denominated debt” at December 31, 2024 are $73.5 million of transfers of certain trade receivables of Eviosys to third-party financial institutions for which the requirements to be accounted for as a true sale in accordance with the guidance under ASC 860 were not met. Additions to and settlements of these obligations during the year ended December 31, 2025 are reflected as “Proceeds from issuance of debt” and “Principal repayment of debt,” respectively, in “Net cash (used)/provided by financing activities” in the Company’s Consolidated Statements of Cash Flows. All of these obligations had been settled as of December 31, 2025.

At December 31, 2025, the Company had approximately $378.4 million in cash and cash equivalents on hand and $1.25 billion in committed availability under its revolving credit facility, all of which was available for drawdown. The Company has the contractual right to draw funds directly on the underlying revolving credit facility, which could possibly occur if there were a disruption in the commercial paper market.

As of December 31, 2025, the Company had scheduled debt maturities of $538.0 million, $316.4 million, $513.6 million, $600.8 million, and $602.2 million in 2026, 2027, 2028, 2029, and 2030, respectively. See Note 11 to the Consolidated Financial Statements for additional information regarding the Company’s contractual principal debt maturities.

The Company’s contractual obligation maturities for interest payments on outstanding fixed-rate, long-term debt, as well as financing fees on the backstop line of credit, are expected to total approximately $150.2 million in 2026, $129.2 million in 2027, $128.7 million in 2028, $118.0 million in 2029, and $86.4 million in 2030.

Capital spending is expected to total approximately $309 million in 2026, down 10% from 2025. The Company expects to continue to invest in profit generating projects in our Consumer Packaging Americas, Consumer Packaging EMEA/APAC, and global industrial businesses focused on automation, footprint optimization, and sales growth.

The Company believes cash on hand and available credit, combined with expected net cash flows generated from operating and investing activities, will provide sufficient liquidity to cover these and other cash flow needs of the Company over the course of 2026 and beyond.

Acquisitions and internal investments are key elements of the Company’s growth strategy. The Company believes that its cash on hand, coupled with cash generated from operations and available borrowing capacity, will enable it to support this strategy. Although the Company believes that it has excess borrowing capacity beyond its current lines of credit, there can be no assurance that such financing would be available or available on terms that are acceptable to the Company. 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. Should these efforts result in the future sale of any plants or business units, management expects to utilize the proceeds to pay down debt and/or invest in growth projects or strategic acquisitions.

The net unfunded position of the Company’s pension and postretirement plans was $163 million at the end of 2025, compared with $168 million at the end of 2024. The Company contributed approximately $22 million to its benefit plans in 2025. Benefit plan contributions are expected to total approximately $23 million in 2026. Future funding requirements will depend largely on actual investment returns, future actuarial assumptions, legislative actions, and changes to the Company’s benefit offerings.

Current assets decreased year over year by $532 million to $2.65 billion at December 31, 2025, and current liabilities decreased by $1.51 billion to $2.53 billion, resulting in an increase in the Company’s ratio of current assets to current liabilities to 1.0 at December 31, 2025 from 0.8 at December 31, 2024. The decrease in both current assets and current liabilities primarily relates to the divestitures of TFP and ThermoSafe in 2025. The reduction in current liabilities also reflects the repayment of debt in 2025, primarily the 1.80% Notes and the 364-day syndicated term loan.

Total equity increased $1.35 billion during 2025 as net income of $1.0 billion, other comprehensive income of $542 million and stock-based compensation of $18 million were partially offset by dividends of $209 million and share repurchases of $11 million for tax share withholding on vested stock compensation granted to employees. The primary driver of other comprehensive income was a $537 million translation gain from the impact of a weaker U.S. dollar on the Company’s foreign investments, primarily the Company’s euro-denominated Sonoco Metal Packaging EMEA businesses.

On April 20, 2021, the Board authorized the repurchase of the Company’s common stock up to an aggregate amount of $350 million. The Company purchased a total of 3.29 million shares under this authorization during 2021 at a cost of $212 million. No additional shares have been repurchased under this authorization since 2021; accordingly, a total of $138 million remains available for share repurchases at December 31, 2025.

Although the ultimate determination of whether to pay dividends is within the sole discretion of the Board and is based on a variety of factors, the Company plans to continue paying dividends consistent with historical practice as earnings and the Company’s liquidity permit. Dividends per common share were $2.11 in 2025, $2.07 in 2024 and $2.02 in 2023. On February 11, 2026, the Company declared a regular quarterly dividend of $0.53 per common share payable on March 10, 2026, to shareholders of record on February 25, 2026.

The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). Lease contracts with a term of 12 months or less are not recorded in the consolidated balance sheet. Leased assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation arising from the lease. Leased assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years. For additional information regarding the Company’s contractual lease obligations, see Note 8 to the Consolidated Financial Statements.

As of December 31, 2025, the Company had long-term obligations to purchase electricity and steam, which it uses in its production processes, as well as long-term purchase commitments for certain raw materials, principally old corrugated containers. In addition, as of December 31, 2025 the Company had purchase commitments of approximately $93.9 million to be paid in 2026 for the acquisition of tax credits that are expected to offset a portion of taxes payable recorded within “Accrued taxes” on the Company’s Consolidated Balance Sheets at December 31, 2025. For additional information regarding the Company’s purchase commitment obligations, see Note 18 to the Consolidated Financial Statements.

Risk Management

As a result of operating globally, the Company is exposed to changes in foreign exchange rates. The exposure is well diversified, as the Company’s facilities are located throughout the world, and the Company generally sells in the same countries where it produces with both revenue and costs transacted in the local currency. The Company monitors these exposures and uses foreign currency forward contracts and other risk management instruments to manage exposure to changes in foreign currency cash flows and the translation of monetary assets and liabilities on the Company’s consolidated financial statements by hedging a portion of forecasted transactions that are denominated in foreign currencies, foreign currency assets and liabilities, or its net investment in foreign subsidiaries. The Company’s foreign operations are exposed to political, geopolitical, and cultural risks, but these risks are mitigated by diversification and the relative stability of the countries in which the Company has significant operations.

The economy in Venezuela has been considered highly inflationary under U.S. GAAP since 2010. Accordingly, the Company had considered the U.S. dollar to be the functional currency of its Venezuelan operations and had used the official exchange rate when remeasuring the financial results of those operations since January 1, 2010. Economic conditions in Venezuela worsened considerably over the past several years with no indications that conditions were likely to improve in the foreseeable future. As a result, the Company sold its operations in Venezuela during the first quarter of 2025, recognizing a loss in the amount of $5.4 million, including $3.8 million of cumulative translation losses that were reclassified from accumulated other comprehensive income/(loss).

Turkey has been deemed to be a highly inflationary economy under U.S. GAAP since the first quarter of 2022. Accordingly, the Company considers the U.S. dollar to be the functional currency of its operations in Turkey and has remeasured monetary assets and liabilities denominated in Turkish lira to U.S. dollars with changes recorded through earnings. The cumulative impact of applying highly inflationary accounting to Turkey has been a pretax charge to earnings of $9.2 million ($7.1 million after tax), including $1.3 million ($1.0 million after tax) during 2025. The magnitude of future earnings impacts, however, is uncertain as such impacts are dependent upon unpredictable movements in the Turkish lira relative to the U.S. dollar. In addition to remeasurement-related charges, significant deterioration in the Turkish economy could result in the recognition of future impairment charges. However, the Company believes its exposure is limited to its net investment in Turkey, which was approximately $54.7 million as of December 31, 2025.

The Company is a purchaser of various raw material inputs such as recovered paper, energy, steel, aluminum, and plastic resin. The Company generally does not engage in significant hedging activities for these purchases other than for energy and, from time to time, aluminum, because there is usually a high correlation between the primary input costs and the ultimate selling price of its products. Inputs are generally purchased at market or at fixed prices that are established with individual suppliers as part of the purchase process for quantities expected to be consumed in the ordinary course of business. On occasion, where the correlation between selling price and input price is less direct, the Company may enter into derivative contracts such as futures or swaps to manage the effect of price fluctuations. In addition, the Company may occasionally use traditional, unleveraged interest-rate swaps to manage its mix of fixed and variable rate debt and control its exposure to interest rate movements within select ranges.

At December 31, 2025, the Company had derivative contracts outstanding to hedge the prices on a portion of anticipated aluminum purchases. These contracts, some of which qualify as cash flow hedges, include aluminum swaps totaling 6,133 metric tons. The total fair market value of these instruments resulted in a net gain position of $1.7 million and $1 million at December 31, 2025 and December 31, 2024, respectively. The amount of the gain included in accumulated other comprehensive income/(loss) at December 31, 2025 expected to be reclassified to the income statement during the next twelve months is $1.5 million. The Company also has certain natural gas hedges that are not designated as cash flow hedges.

The Company has entered into forward contracts to hedge certain anticipated foreign currency denominated sales and purchases expected to occur in 2026. The total market value of these instruments resulted in a net gain position of $49 thousand at December 31, 2025 and a net loss position of $1.8 million at December 31, 2024. At December 31, 2025, the total notional amount of these contracts, in U.S. dollar terms, was $157 million, of which $(23) million related to the Canadian dollar, $22 million to the Euro, $52 million to the British pound, $(13) million to the Polish zloty, $39 million to the US Dollar, and $2 million to all other currencies for USD contracts and $42 million related to the Euro, $73 million to the British pound, $(56) million to the Polish zloty, $21 million to the US Dollar, and $(2) million to all other currencies for Euro contracts. In addition, the Company had various currency contracts outstanding to hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables. Although placed as economic hedges, the Company does not apply hedge accounting to these instruments. As such, changes in fair value are recorded directly to income and expense in the periods that they occur.

In 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S. dollar denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The swap agreements, which had a maturity of December 18, 2026, provided for the Company to receive semi-annual interest payments in U.S. dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate. The risk management objective of entering into the swap agreements was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros. The agreements were designated as net investment hedges for accounting purposes.

The gain or loss on the net investment hedge derivative instruments is included in the “Foreign currency translation” component of “Accumulated other comprehensive income/(loss)” until the net investment is sold, diluted, or liquidated. Interest payments received for the cross- currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Consolidated Statements of Income. The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S. dollar exchange rate market.

On April 15, 2024, as a result of the strengthening of the U.S. dollar against the euro, as well as a reduction in the differential between U.S. and European interest rates, the Company terminated its swap agreements and received a net cash settlement of $9.1 million. The foreign currency translation gain of approximately $3.1 million, net of tax, is included as a component of “Accumulated other comprehensive income/(loss).”

Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The new swap agreements, which have a maturity of May 1, 2027, share the same risk management objective as the terminated cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

In December 2024, the Company entered into additional cross-currency swap agreements with a total notional amount of $1.5 billion, including $500 million maturing on September 1, 2026, $500 million maturing on September 1, 2029, and $500 million maturing on May 1, 2030. The swaps effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt at the prevailing market rate at execution. The new swap agreements share the same risk management objective as the Company’s previously existing cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

On June 30, 2025, the Company entered into additional cross-currency swap agreements with a total notional amount of $285 million, maturing on February 1, 2027. The swaps effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt at the prevailing market rate at execution.

The fair value of the Company’s net investment hedges was a loss position of $207.2 million and a gain position of $11.9 million at December 31, 2025 and December 31, 2024, respectively. Foreign currency translation loss of $154.4 million (net of income taxes of $52.8 million) and gain of $8.9 million (net of income taxes of $3.0 million) were reported as components of “Accumulated other comprehensive income/(loss)” within “Foreign currency items” at December 31, 2025 and December 31, 2024, respectively.

In anticipation of the offering of the Notes, the Company entered into treasury lock derivative instruments with eleven banks, with a total notional principal amount of $900 million, on August 29, 2024. These instruments had the risk management objective of reducing the Company’s exposure to increases in the underlying Treasury index up to the date of pricing of the Notes. The derivatives were settled when the Notes priced on September 17, 2024, with the Company recognizing a loss on the settlement of $11.1 million. The loss is included in “Interest expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2024.

The total fair market value of the Company’s derivatives was a net unfavorable position of $206.6 million and a net favorable position of $8.0 million at December 31, 2025 and December 31, 2024, respectively. Derivatives are marked to fair value using published market prices, if available, or using estimated values based on current price quotes and a discounted cash flow model. See Note 12 to the Consolidated Financial Statements for more information on financial instruments.

The Company has an investment in preferred stock of a nonaffiliated private company that is accounted for under the measurement alternative of cost less impairment, adjusted for any qualifying observable price changes. Observable price changes would consist of Level 2 inputs based on privately negotiated transactions with the nonaffiliated company. The preferred stock balance of $21.2 million is included in “Other Assets” in the Company’s Consolidated Balance Sheet as of December 31, 2025.

The Company is subject to various federal, state and local environmental laws and regulations in the United States and in each of the countries where we conduct business, concerning, among other matters, solid waste disposal, wastewater effluent and air emissions. Although the costs of compliance have not been significant due to the nature of the materials and processes used in manufacturing operations, such laws also make generators of hazardous wastes and their legal successors financially responsible for the cleanup of sites contaminated by those wastes. The Company has been named a potentially responsible party at several environmentally contaminated sites. These regulatory actions and a small number of private party lawsuits are believed to represent the Company’s largest potential environmental liabilities. The Company had accrued $1.8 million at December 31, 2025 with respect to these sites. See “Environmental Charges” in Item 3 – Legal Proceedings and Note 18 to the Consolidated Financial Statements for more information on environmental matters.

Critical Accounting Estimates

The MD&A is based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and assumptions on an ongoing basis, including but not limited to those related to inventories, bad debts, derivatives, income taxes, share-based compensation, goodwill, intangible assets, restructuring, pension and other postretirement benefits, environmental liabilities, and contingencies and litigation. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The results of these estimates may form the basis of the carrying value of certain assets and liabilities and may not be readily apparent from other sources. Actual results could differ from those estimates. The impact of, and any associated risks related to, estimates, assumptions and accounting policies are discussed in the MD&A, as well as in the Notes to the Consolidated Financial Statements, if applicable, where such estimates, assumptions and accounting policies affect the Company’s reported and expected financial results.

The Company believes the accounting policies discussed in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K are critical to understanding the results of its operations. The following discussion represents those policies that involve the more significant judgments and estimates used in the preparation of the Company’s Consolidated Financial Statements.

Business Combinations

The Company’s acquisitions of businesses are accounted for in accordance with ASC 805, “Business Combinations.” The Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquired business at their fair values as of the date of acquisition. Goodwill is measured as the excess of the consideration transferred, also measured at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method of accounting requires us to make significant estimates and assumptions regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, property, plant, and equipment, deferred tax asset valuation allowances, liabilities including those related to debt, pensions and other postretirement plans, uncertain tax positions, contingent consideration, and contingencies. This method also requires us to refine these estimates over a measurement period not to exceed one year to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on our financial condition and results of operations.

Significant estimates and assumptions in estimating the fair value of acquired patents, customer relationships, trade names, proprietary technology, and other identifiable intangible assets include future cash flows that the Company expects to generate from the acquired assets, discount rate, customer attrition rate, and long-term revenue growth projections. Projecting discounted future cash flows requires the Company to make significant estimates regarding projected revenues, projected earnings before interest, taxes, depreciation, and amortization margins, discount rates and customer attrition rates. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could record impairment charges.

In addition, the Company has estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation on property, plant, and equipment and amortization expense on definite-lived intangible assets. If the estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could become impaired.

For leases acquired in a business combination, the Company measures the lease liability at the present value of the remaining lease payments, as if the acquired lease were a new lease of the Company at the acquisition date. When the implicit rate in the acquired lease is not readily determinable, the Company calculates the lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate for the region in which the acquisition was completed. An assessment of the certainty associated with the exercise of any lease renewal, termination, and purchase options included in the acquired lease contracts is also performed. The Company measures the right-of-use asset at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms.

Impairment of Long-Lived, Intangible, and Other Assets

Assumptions and estimates used in the evaluation of potential impairment can result in adjustments affecting the carrying values of long-lived, intangible and other assets and the recognition of impairment expense in the Company’s Consolidated Financial Statements. The Company evaluates its long-lived assets (property, plant and equipment), definite-lived intangible assets and other assets (including right of use lease assets, notes receivable and equity and other investments) for impairment whenever indicators of impairment exist, or when it commits to sell the asset. If the sum of the undiscounted expected future cash flows from a long-lived asset or definite-lived intangible asset group is less than the carrying value of that asset group, an asset impairment charge is recognized. Key assumptions and estimates used in the projection of expected future cash flows generally include price levels, sales growth, profit margins and asset life. The amount of an impairment charge, if any, is calculated as the excess of the asset’s carrying value over its fair value, generally represented by the discounted future cash flows from that asset or, in the case of assets the Company evaluates for sale, estimated sale proceeds less costs to sell. The Company takes into consideration historical data and experience together with all other relevant information available when estimating the fair values of its assets. However, fair values that could be realized in actual transactions may differ from the estimates used to evaluate impairment. In addition, changes in the assumptions and estimates may result in a different conclusion regarding impairment.

Impairment of Goodwill

The Company assesses its goodwill for impairment annually and from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. If the fair value of a reporting unit exceeds the carrying value of that reporting unit, there is no impairment. If the carrying value of a reporting unit exceeds the fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess. The Company’s reporting units, as determined in accordance with ASC 350, “Intangibles-Goodwill and Other,” are the same as, or one level below, its operating segments, as determined in accordance with ASC 280, “Segment Reporting.”

The Company completed its most recent annual goodwill impairment testing during the third quarter of 2025. For testing purposes, the Company performed an assessment of each reporting unit using either a qualitative evaluation or a quantitative test. The qualitative evaluations considered factors such as the macroeconomic environment, the industry, the Company’s overall financial performance, the current and projected financial performance of specific reporting units, and business strategy changes. The quantitative tests, described further below, relied on the current outlook of reporting unit management for future operating results and took into consideration, among other things, specific business unit risk, the countries in which the reporting units operate, and implied fair values based on comparable trading multiples.

When performing a quantitative analysis, the Company estimates the fair value of its reporting units using a weighted average of the income and market approaches. Under the income approach, the Company uses a discounted cash flow model based on projections of future years’ operating results and associated cash flows. The Company’s assessments reflect significant management assumptions and estimates related to the Company’s forecast of sales growth during the discrete period, EBITDA, and discount rates, which are validated by observed comparable trading and transaction multiples based on guideline public companies under the market approach. The Company’s model discounts projected future cash flows, forecasted over a five-year period, with an estimated residual growth rate. The Company’s projections incorporate management’s estimates of the most-likely expected future results. Projected future cash flows are discounted to present value using a discount rate that management believes is appropriate for the reporting unit.

The Company’s assessments, whether qualitative or quantitative, incorporate management’s expectations for the future, including forecasted growth rates and/or margin improvements. Therefore, should there be changes in the relevant facts and circumstances and/or expectations, management’s conclusions regarding goodwill impairment may change as well.

In considering the level of uncertainty regarding the potential for goodwill impairment, management has concluded that any such impairment would, in most cases, likely be the result of adverse changes in more than one assumption. Management considers the assumptions used to be its best estimates across a range of possible outcomes based on available evidence at the time of the assessment. Other than in the Metal Packaging EMEA and Global Paper Products APAC reporting units, which are discussed below, there is no specific singular event or single change in circumstances management has identified that it believes could reasonably result in a change to the expected future results in any of its reporting units significant enough to result in goodwill impairment. In the case of Metal Packaging EMEA, the lower differential between the fair value and carrying value of the reporting unit is due to the acquisition of Eviosys in December 2024, at which time the majority of assets and liabilities acquired were recorded at fair value. In management’s opinion, a change of such magnitude would more likely be the result of changes to some combination of the factors identified above, a general deterioration in competitive position, introduction of a superior technology, significant unexpected changes in customer preferences, an inability to pass through significant raw material cost increases, and other such items as identified in “Item 1A. Risk Factors” in this Annual Report on Form 10-K.

Although no reporting units failed the annual impairment test, in management’s opinion, the goodwill balances of the Metal Packaging EMEA and Global Paper Products APAC reporting units are individually at risk of impairment in the near term if each reporting unit’s operation does not perform in line with management’s expectations, or if there is a negative change in the long-term financial outlook for each reporting unit or in other factors such as the particular discount rates used. Total goodwill associated with the Metal Packaging EMEA and Global Paper Products APAC reporting units was $1,397.0 million and $26.9 million, respectively at December 31, 2025.

Sensitivity Analysis

In the annual goodwill impairment analysis completed during the third quarter of 2025, projected future cash flows for the Metal Packaging EMEA and Global Paper Products APAC reporting units were discounted at 12.0% and 13.0%, respectively, and their estimated fair values were determined to exceed their carrying values by approximately 3.1% and 9.0%, respectively. Based on an equal weighting of the income and market approaches, and holding other valuation assumptions constant, the discount rates for the Metal Packaging EMEA and Global Paper Products APAC reporting units would have to increase to 12.7% and 15.4%, respectively, or projected EBITDA across all future periods would have to be reduced by approximately 3.0% and 8.4%, respectively, in order for the estimated fair values of the reporting units to fall below their individual carrying values.

Income Taxes

The Company follows ASC 740, Accounting for Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not such assets will not be realized. Deferred tax assets generally represent expenses that have been recognized for financial reporting purposes, but for which the corresponding tax deductions will occur in future periods. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns and future profitability. Our accounting for deferred tax consequences represents our best estimate of those future events. Changes in our current estimates, due to unanticipated events or otherwise, could have a material impact on our financial condition and results of operations.

For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those positions not meeting the more-likely-than-not standard, no tax benefit has been recognized in the financial statements. Associated interest has also been recognized, where applicable.

The estimate for the potential outcome of any uncertain tax issue is highly judgmental. The Company believes it has adequately provided for any reasonably foreseeable outcome related to these matters. However, future results may include favorable or unfavorable adjustments to estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitations on potential assessments expire. Additionally, the jurisdictions in which earnings or deductions are realized may differ from current estimates. As a result, the eventual resolution of these matters could have a different impact on the effective rate than currently reflected or expected.

Share-Based Compensation Plans

The Company utilizes share-based compensation in the form of restricted stock units (“RSUs”), performance contingent restricted stock units (“PCSUs”), and other share-based awards. The fair value of the Company’s RSUs is equal to the closing price of the Company’s stock on the date of grant discounted for any projected dividends that are not eligible to be received during the vesting period. The amount of share-based compensation expense associated with PCSUs is based on estimates of future performance using measures defined in the stock plan descriptions for each award granted. As of December 31, 2025, these performance measures include the following:

• Adjusted earnings per share — three-year sum of forecasted future and historical annual adjusted earnings per share for the three-year measurement period associated with each award; and
• Return on invested capital — three-year simple average of annual returns calculated by dividing 1) adjusted operating profit after tax (derived from historical or projected adjusted earnings) by 2) the average of total historical or projected debt plus equity for the respective annual periods.

Changes in estimates regarding the future achievement of these performance measures may result in significant fluctuations from period to period in the amount of share-based compensation expense recognized in the Company’s Consolidated Financial Statements. Performance payouts for PCSU awards are also subject to adjustment by a total stock return modifier as determined by the Company’s relative performance within its targeted peer group for each grant. See Note 14 to the Consolidated Financial Statements for additional information on the Company’s share-based compensation plans.

Pension and Postretirement Benefit Plans

The Company has significant pension and postretirement benefit liabilities and costs that are measured using actuarial valuations. The largest of the Company’s pension and postretirement plans include the U.S.-based Sonoco Pension Plan, the U.S. nonqualified retirement plans, the U.S. Retirement and Retiree Health and Life Insurance Plan, the Sonoco U.K. Retirement Benefits Plan, and several defined benefit plans assumed by the Company upon its acquisition of Eviosys on December 4, 2024 (the “Eviosys Plans”). As of December 31, 2025, the total benefit obligation of the Company’s pension and postretirement benefit plans was $483.3 million and the total assets of these plans were $320.5 million, resulting in a net unfunded pension and postretirement plan obligation of $162.9 million.

The actuarial valuations used to evaluate the plans employ key assumptions that can have a significant effect on the calculated amounts. The key assumptions used at December 31, 2025 in determining the PBO for retirement plans and the accumulated benefit obligation for retiree health and life insurance plans include discount rates and rates of compensation increase. The key assumptions used to determine the 2025 net periodic benefit cost for retirement and retiree health and life insurance plans include discount rates, expected long-term rate of return on plan assets, and rates of compensation increase.

The Company adjusts its discount rates at the end of each fiscal year based on yield curves of high-quality debt instruments over durations that match the expected benefit payouts of each plan. The expected rate of return assumption is derived by taking into consideration the targeted plan asset allocation, projected future returns by asset class and active investment management. A third-party asset return model is used to develop an expected range of returns on plan investments over a 12- to 30-year period, with the expected rate of return selected from a best estimate range within the total range of projected results. The Company periodically rebalances its plan asset portfolio in order to maintain the targeted allocation levels. The rate of compensation increase assumption is generally based on salary and incentive compensation increases.

The sensitivity to changes in the critical assumptions for the Company’s U.S. and U.K. based plans and Eviosys Plans as of December 31, 2025, is as follows:

Another key assumption for the U.S. retiree health and life insurance plan is a medical cost trend rate beginning at 7.0% for post-age 65 participants and trending down to an ultimate rate of 4.5% in 2035. The ultimate trend rate of 4.5% represents the Company’s best estimate of the long-term average annual medical cost increase over the duration of the plan’s liabilities. It provides for real growth in medical costs in excess of the overall inflation level.

Other assumptions and estimates impacting the projected liabilities of these plans include inflation, participant withdrawal and mortality rates, and retirement ages. The Company evaluates the assumptions used in projecting the pension and postretirement liabilities and associated expenses annually. These judgments, assumptions and estimates may affect the carrying value of pension and postretirement plan net assets and liabilities and pension and postretirement plan expenses in the Company’s Consolidated Financial Statements. See Note 15 to the Consolidated Financial Statements for additional information on the Company’s pension and postretirement plans.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is provided in Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Information regarding market risk is provided in this Annual Report on Form 10-K under the following items and captions: “Our international operations subject us to various risks that could adversely affect our business operations and financial results” and “Currency exchange rate fluctuations may adversely affect our results of operations and shareholders’ equity” in Item 1A - Risk Factors; “Risk Management” in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations; and in Note 12 to the Consolidated Financial Statements in Item 8 – Financial Statements and Supplementary Data.

Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our CEO and CFO, conducted an evaluation of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that information disclosed in the reports that we file or submit is recorded, processed, summarized and reported within the relevant time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information that is required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Based on this evaluation, our CEO and CFO concluded that such controls and procedures, as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K, were effective at a reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed by, or under the supervision of, our CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, the end of the period covered by this report based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework in Internal Control - Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2025.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2025 as stated in their report, which appears at the beginning of Item 8 of this Annual Report on Form 10-K.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that the Company’s disclosure controls and procedures or internal control over financial reporting will prevent all error and all fraud. Internal control over financial reporting, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives will be met. Because of the inherent limitations in internal control over financial reporting, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected timely.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting occurring during the three-month period ended December 31, 2025, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.