# Graphic Packaging Holding Co: Form 10-Q for the period ended Mar 31, 2025

- Company: [Graphic Packaging Holding Co](/companies/gpk.md) (CIK 1408075)
- Form: 10-Q
- Filed: 2025-05-01
- Accepted by EDGAR: May 1, 2025, 16:31 ET
- Period: 2025-03-31
- Accession: 0001408075-25-000013
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1408075/000140807525000013/gpk-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1408075/000140807525000013/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.11bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.68bn | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $196.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $221.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $51.0m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $43.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $127.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.42 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.42 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 303,200,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$174.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $30.0m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-03-31 | $129.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $2.95bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $11.50bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $1.57bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2025-03-31 | $5.67bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $16.0m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2025-03-31 | $19.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-31 | $3.16bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 31,555 characters.

### INTRODUCTION

This management’s discussion and analysis of financial conditions and results of operations is intended to assist you in understanding the Company's past performance, financial condition and prospects. This discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 along with the Condensed Consolidated Financial Statements and related notes included in and referred to within this report.

### OVERVIEW OF BUSINESS

Graphic Packaging is a leading global producer of consumer goods packaging made from renewable or recycled materials. The Company designs and manufactures sustainable packaging solutions including cartons, multipack cartons, trays, carriers, and paperboard canisters, as well as cups and bowls, made primarily from unbleached paperboard, recycled paperboard, and bleached paperboard. Paperboard used in its packaging solutions comes from wood fiber, a renewable resource, and from recovered (reused) fiber. Graphic Packaging’s consumer packaging is designed to be recycled, and the Company works across the value chain to make it easier for people to recycle. With this focus, the Company plays an active role in support of the move to a more circular economy and a sustainable future for generations to come. Graphic Packaging’s commitment to reducing the environmental impact of everyday consumer packaging is fundamental to the Company's strategy, goals, and to business purpose.

The Company serves a wide variety of consumer markets, from food and beverage, to foodservice, household products, beauty and heath care. Graphic Packaging produces packaging solutions at over 100 locations in over 20 countries around the world, serving customers and brands ranging from local to multinational consumer products companies and retailers. The Company offers one of the most comprehensive ranges of packaging design, manufacture, and execution capabilities available. Graphic Packaging manufactures a significant amount of the paperboard that it uses to produce packaging solutions, primarily where it believes that self-manufacture provides it with a competitive advantage and allows the Company to deliver better, more consistent results for customers. The Company currently manufactures most of the paperboard it consumes in the Americas and purchases from third parties the majority of the paperboard it consumes in its International Paperboard Packaging operations.

Graphic Packaging works closely with its customers to understand their needs and goals and to create new and innovative designs customized to their specific needs. The Company’s approach serves to build and strengthen long-term relationships with purchasing, brand management, marketing, and other key customer functions. The Company is organized to bring the full resources of its global and local innovation, design, and manufacturing capabilities to all of its customers with the goal of delivering packaging solutions that are more circular, more functional, and more convenient.

The Company competes with a wide range of packaging companies whose primary raw materials are paperboard, plastic, multi-layer laminates, shrink film, paper, corrugated board, bio-based materials and other packaging materials. While circularity and sustainability are increasingly important to customers' purchase decisions, the Company also competes on the basis of product innovation, price, and execution capabilities. Many of the Company’s multi-year supply contracts include terms which provide for the pass through of certain costs including raw materials, energy, labor and other manufacturing costs with the intention of reducing exposure to the volatility of these costs, many of which are outside of the Company’s control.

The Company is implementing strategies (i) to develop and market innovative packaging products and applications that benefit from consumer-led sustainability trends; (ii) to expand market share in its current markets and to identify and penetrate new markets; (iii) to capitalize on the Company’s customer relationships, business competencies, and manufacturing facilities; and (iv) to continue to reduce costs and drive productivity through operational improvements. The Company’s ability to fully implement its strategies and achieve its objectives may be influenced by a variety of factors, many of which are beyond its control. Graphic Packaging cannot predict with any certainty the impact that rising interest rates, a global or regional recession, or higher inflation may have on its customers or suppliers. Additionally, it is unable to predict the potential effects that any future pandemic or other global health emergency and widespread military and geopolitical conflicts and other social and political unrest or change, including Eastern Europe, Africa and the Middle East, and related sanctions or market disruptions, may have on its business.

### Acquisitions and Dispositions

- On April 1, 2025, the Company announced its intention to permanently close the Middletown, Ohio, recycled paperboard manufacturing facility, on or about June 1, 2025.
- On May 1, 2024, the Company completed the sale of its Augusta, Georgia bleached paperboard manufacturing facility (the “Augusta Divestiture”) to Clearwater Paper Corporation for a total consideration of $711 million.
- During 2024, the Company decided to close multiple packaging facilities by the end of 2024 and early 2025. These are in addition to the multiple packaging facilities that the Company decided to close by the end of 2023 and early 2024. Production from these facilities will be consolidated into other existing packaging facilities. Current Assets on the Condensed Consolidated Balance Sheet include $7 million relating to multiple packaging facilities that met the held for sale criteria as of March 31, 2025.

### RESULTS OF OPERATIONS

*In millions*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net Sales | $2,120 | $2,259 |
| Income from Operations | 221 | 278 |
| Nonoperating Pension and Postretirement Benefit Expense | — | (1) |
| Interest Expense, Net | (51) | (59) |
| Income before Income Taxes | 170 | 218 |
| Income Tax Expense | (43) | (53) |
| Net Income | $127 | $165 |

### FIRST QUARTER 2025 COMPARED WITH FIRST QUARTER 2024

### Net Sales

The components of the change in Net Sales are as follows:

*In millions*

|  | Three Months Ended March 31, 2024 | Variances Price/ Volume/ Mix | M&A | Foreign Exchange | 2025 | Decrease | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Consolidated | $2,259 | $(10) | $(102) | $(27) | $2,120 | $(139) | (6)% |

The Company’s Net Sales for the three months ended March 31, 2025 decreased by $139 million or 6% to $2,120 million from $2,259 million for the three months ended March 31, 2024, due primarily to the Augusta divestiture and reduced open market paperboard volumes and pricing of bleached paperboard ($110 million), and unfavorable foreign currency exchange ($27 million). Modest other price declines were largely offset by modestly higher packaging volumes. Innovation sales growth was $44 million driven by sales of the Company's sustainable consumer packaging solutions. Packaging sales were relatively flat in food, foodservice, household, and health and beauty, while beverage decreased.

### Income from Operations

Income from Operations for the three months ended March 31, 2025 decreased $57 million or 21% to $221 million from $278 million for the three months ended March 31, 2024, due to the Augusta divestiture and bleached paperboard price and volume declines, lower packaging price, mix, and commodity inflation (including byproducts, logistics, energy and purchased materials), as well as an unfavorable foreign currency exchange of $6 million. Other costs including labor and benefits inflation were more than offset by savings from continuous improvements and other programs and productivity improvements. Income from Operations was also favorably impacted by a reduction in accelerated depreciation related to the closures of several packaging and paperboard facilities of $7 million (refer to “*Note 12 - Exit Activities”* in the Notes to Condensed Consolidated Financial Statements for additional information).

### Interest Expense, Net

Interest Expense, Net was $51 million and $59 million for the three months ended March 31, 2025 and 2024, respectively. Interest Expense, Net decreased due to an increase in capitalized interest. As of March 31, 2025, approximately 41% of the Company’s total debt was subject to floating interest rates.

### Income Tax Expense

During the three months ended March 31, 2025, the Company recognized Income Tax Expense of $43 million on Income before Income Taxes of $170 million. The effective tax rate for the three months ended March 31, 2025 is different from the statutory rate primarily due to discrete tax adjustments including a tax benefit of $2 million related to excess tax benefits on restricted stock that vested during the period in addition to the mix of earnings between foreign and domestic jurisdictions, including those with and without valuation allowances.

During the three months ended March 31, 2024, the Company recognized Income Tax Expense of $53 million on Income before Income Taxes of $218 million. The effective tax rate for the three months ended March 31, 2024 is different from the statutory rate primarily due to discrete tax adjustments including a tax benefit of $3 million related to excess tax benefits on restricted stock units that vested during the period in addition to the mix of earnings between foreign and domestic jurisdictions, including those with and without valuation allowances.

### Segment Reporting

During the first quarter of 2025, the Company realigned its financial reporting structure under two reportable segments, Americas Paperboard Packaging and International Paperboard Packaging. This structure aligns with how the Chief Operating Decision Maker (“CODM”) measures segment operating results, allocates resources among the segments and assesses segment performance.

The Company's reportable segments are as follows:

*Americas Paperboard Packaging* includes paperboard packaging sold primarily to consumer packaged goods (“CPG”) companies serving the food, beverage, and consumer product markets and cups, lids and food containers sold primarily to foodservice companies and quick-service restaurants (“QSR”) in the Americas.

*International Paperboard Packaging* includes paperboard packaging sold primarily to CPG companies serving the food, beverage and consumer product markets, including healthcare and beauty, outside of the Americas.

The Company allocates internally sourced paperboard margin and corporate costs to the reportable segments to appropriately represent the economics of these segments. The Corporate and Other caption, which does not meet the criteria of a reportable segment, includes the unallocated corporate costs and the Paperboard Manufacturing operating segment. The effect of intercompany transfers to the paperboard packaging segments has been eliminated from the Corporate and Other caption to reflect the economics of the integration of these segments.

The Company’s CODM evaluates each segment based primarily on Income from Operations. The accounting policies of the reportable segments are the same as those described in “*Note 1 - General Information”* in the Notes to Condensed Consolidated Financial Statements.

*In millions*

| NET SALES: | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Americas Paperboard Packaging | $1,476 | $1,531 |
| International Paperboard Packaging | 523 | 525 |
| Corporate/Other/Eliminations(a) | 121 | 203 |
| Total | $2,120 | $2,259 |
| **INCOME (LOSS) FROM OPERATIONS:** |  |  |
| Americas Paperboard Packaging(b)(c) | $228 | $281 |
| International Paperboard Packaging | 40 | 34 |
| Corporate and Other(b)(c) | (47) | (37) |
| Total | $221 | $278 |

(a) Includes revenue from the sale of paperboard to third parties.

(b) Includes accelerated depreciation related to exit activities in 2025 and 2024. See “*Note 12 - Exit Activities”* in the Notes to Condensed Consolidated Financial Statements for further information.

(c) Includes expenses related to business combinations, exit activities and other special items. See “*Note 1 - General Information”* in the Notes to Condensed Consolidated Financial Statements for further information.

### 2025 COMPARED WITH 2024

### First Quarter 2025 Compared to First Quarter 2024

#### Americas Paperboard Packaging

Net Sales decreased due to lower pricing, packaging volume declines, and unfavorable foreign currency exchange, partially offset by innovation sales growth driven by conversions to our sustainable consumer packaging solutions. Lower packaging sales in beverage and household markets were partially offset by higher packaging sales in the health and beauty market while food and foodservice were relatively flat.

Income from Operations decreased due to lower pricing, mix, packaging volume declines, and higher commodity cost and other inflation (primarily labor and benefits). These decreases were partially offset by net performance, including cost savings from continuous improvement and other programs and productivity improvements. Income from Operations was also favorably impacted by reductions in accelerated depreciation and charges related to the closures of several packaging facilities (refer to “*Note 12 - Exit Activities”* in the Notes to Condensed Consolidated Financial Statements for additional information).

#### International Paperboard Packaging

Net Sales decreased slightly due to lower pricing and unfavorable foreign currency exchange, partially offset by innovation sales growth driven by conversions to our sustainable consumer packaging solutions and higher volumes. Slightly lower packaging sales in food, beverage, and health and beauty markets were mostly offset by higher packaging sales in foodservice and household markets.

Income from Operations increased due to higher packaging volumes and cost savings from continuous improvement and other programs, including benefits from capital projects, and productivity improvements, offset by lower pricing, commodity inflation, other inflation (primarily labor and benefits) and unfavorable foreign currency exchange.

### FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Company broadly defines liquidity as its ability to generate sufficient funds from both internal and external sources to meet its obligations and commitments. In addition, liquidity includes the ability to obtain appropriate debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives. Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service commitments.

### Cash Flows

*In millions*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net Cash (Used in) Provided by Operating Activities | $(174) | $3 |
| Net Cash Used in Investing Activities | (298) | (311) |
| Net Cash Provided by Financing Activities | 439 | 287 |

Net cash used in operating activities for the first three months of 2025 totaled $174 million compared to $3 million of net cash provided by operating activities for the same period in 2024. The decrease was mainly due to lower income from operations and a higher use of cash to fund working capital in 2025 as compared to 2024. Pension contributions for the first three months of 2025 and 2024 were $2 million.

Net cash used in investing activities for the first three months of 2025 totaled $298 million compared to $311 million for the same period in 2024. The Company had capital spending of $313 million ($215 million was capitalized of which $207 million was for adding capacity and improving process capabilities, $4 million for capital spares and $4 million for manufacturing packaging machinery) and $331 million ($278 million was capitalized) in 2025 and 2024, respectively. The elevated levels of capital spending were driven by the construction of the Company's new recycled paperboard manufacturing facility in Waco, Texas. For more information on the construction of the new recycled paperboard manufacturing facility in Waco, Texas, and continued investments made as part of the integration of acquisitions, see “*Note 12 - Exit Activities”* in the Notes to the Condensed Consolidated Financial Statements. Net cash receipts related to the accounts receivable securitization and sale programs were $28 million and $20 million in 2025 and 2024, respectively.

Net cash provided by financing activities for the first three months of 2025 and 2024 totaled $439 million and $287 million respectively. Current year activities include borrowings under revolving credit facilities primarily for capital spending and payments on debt of $3 million. The Company also paid dividends of $30 million and withheld $27 million of restricted stock units to satisfy tax withholding obligations related to the payout of restricted stock units. Prior year financing activities included new incremental term facilities consisting of a $50 million Incremental Term A-5 Facility (the “Incremental A-5 Loan”) and a $200 million Incremental Term A-6 Facility (the “Incremental Term A-6 Loan”). For further discussion of the Company's debt and redemptions, see “*Note 3 - Debt”* in the Notes to the Condensed Consolidated Financial Statements. In the prior year, the Company also made borrowings under revolving credit facilities primarily for capital spending and payments on debt of $10 million. The Company also paid dividends and distributions of $31 million and withheld $22 million of restricted stock units to satisfy tax withholding payments related to the payout of restricted stock units.

### Supplemental Guarantor Financial Information

As discussed in “*Note 3 - Debt”* in the Notes to Consolidated Financial Statements, the Senior Notes issued by Graphic Packaging International, LLC (“GPIL” or the “Issuer”) are guaranteed by Graphic Packaging International Partners, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“GPIP”) and certain domestic subsidiaries (the “Subsidiary Guarantors”), which consist of all material 100% owned subsidiaries of the issuer other than its foreign subsidiaries (collectively “the Guarantors”). GPIL's remaining subsidiaries (the “Nonguarantor Subsidiaries”) include all of GPIL’s foreign subsidiaries and immaterial domestic subsidiaries. The Subsidiary Guarantors are jointly and severally, fully and unconditionally liable under the guarantees.

The results of operations, assets, and liabilities for GPHC and GPIL are substantially the same. Therefore, the summarized financial information below is presented on a combined basis, consisting of the Issuer and Subsidiary Guarantors (collectively, the “Obligor Group”), and is presented after the elimination of: (i) intercompany transactions and balances among the Issuer and Subsidiary Guarantors, and (ii) equity in earnings from and investments in the Nonguarantor Subsidiaries.

*In millions*

| SUMMARIZED STATEMENTS OF OPERATIONS | Three Months Ended March 31, 2025 |
| --- | ---: |
| Net Sales(a) | $1,636 |
| Cost of Sales | 1,282 |
| Income from Operations | 192 |
| Net Income | 106 |

(a) Includes Net Sales to Nonguarantor Subsidiaries of $158 million.

*In millions*

| SUMMARIZED BALANCE SHEET | March 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Current assets (excluding intercompany receivable from Nonguarantor) | $1,654 | $1,610 |
| Noncurrent assets | 6,743 | 6,654 |
| Intercompany receivables from Nonguarantors | 285 | 231 |
| Current liabilities | 1,103 | 1,416 |
| Noncurrent liabilities | 6,400 | 5,928 |

### Liquidity and Capital Resources

The Company expects its material cash requirements for the next nine months will be for: capital expenditures, periodic required income tax payments, periodic interest and debt service payments on associated debt, as discussed in “*Note 5 - Debt”* of the Notes to the Consolidated Financial Statements of the Company's 2024 Annual Report on Form 10-K, lease agreements which have fixed lease payment obligations, as discussed in “*Note 6 - Leases”* of the Notes to the Consolidated Financial Statements of the Company's 2024 Annual Report on Form 10-K, and minimum purchase commitments as discussed in “*Note 13 - Commitments”* of the Notes to the Consolidated Financial Statements of the Company's 2024 Annual Report on Form 10-K along with ongoing operating costs, working capital, share repurchases and dividend payments. The Company expects its primary sources of liquidity to be cash flows from sales and operating activities in the normal course of operations and availability from its revolving credit facilities, as needed. The Company expects that these sources will be sufficient to fund ongoing cash requirements for the foreseeable future, including at least the next twelve months.

Principal and interest payments under the term loan facilities and the revolving credit facilities, together with principal and interest payments on the Company's 1.512% Senior Notes due 2026, 4.75% Senior Notes due 2027, 3.50% Senior Notes due 2028, 3.50% Senior Notes due 2029, 2.625% Senior Notes due 2029, 3.75% Senior Notes due 2030 and 6.375% Notes due 2032 (the “Notes”), represent liquidity requirements for the Company. Based upon current levels of operations, anticipated cost savings and expectations as to future growth, the Company believes that cash generated from operations, together with amounts available under its revolving credit facilities and other available financing sources, will be adequate to permit the Company to meet its debt service obligations, necessary capital expenditure program requirements and ongoing operating costs and working capital needs, although no assurance can be given in this regard. The Company's future financial and operating performance, ability to service or refinance its debt and ability to comply with the covenants and restrictions contained in its debt agreements (see “Covenant Restrictions” below) will be subject to future economic conditions, including conditions in the credit markets, and to financial, business and other factors, many of which are beyond the Company's control, and will be substantially dependent on the selling prices and demand for the Company's products, raw material and energy costs, and the Company's ability to successfully implement its overall business and profitability strategies.

Accounts receivable are stated at the amount owed by the customer, net of an allowance for estimated uncollectible accounts, returns and allowances, and cash discounts. The allowance for doubtful accounts is estimated based on historical experience, current economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible.

The Company engages with third party financial institutions to sell certain trade accounts receivable from customers. Transfers under these agreements meet the requirements to be accounted for as sales of receivables in accordance with the *Transfers and Servicing* topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification”). The receivables sold are reflected as a reduction of accounts receivable on the Condensed Consolidated Balance Sheets at the time of sale. The corresponding proceeds are reflected in Cash Flows from Operating Activities within the Condensed Consolidated Statements of Cash Flows. A portion of the Company’s European receivables program proceeds do not meet the requirements to be accounted for as sales of receivables and are therefore reflected in Cash Flows from Investing Activities within the Condensed Consolidated Statements of Cash Flows as “Beneficial Interest on Sold Receivables” and “Beneficial Interest Obtained in Exchange for Proceeds”. The loss on sale for all programs is included in Other Expense, Net in the Condensed Consolidated Statements of Operations. The following table summarizes the activity under these programs for the three months ended March 31, 2025 and 2024, respectively:

*In millions*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Receivables Sold and Derecognized | $876 | $914 |
| Proceeds Collected on Behalf of Financial Institutions | 872 | 884 |
| Net Proceeds Paid to Financial Institutions | (52) | (15) |
| Deferred Purchase Price at March 31(a) | 17 | 15 |
| Pledged Receivables at March 31 | 157 | 160 |

(a) Included in Other Current Assets on the Condensed Consolidated Balance Sheets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure.

Receivables sold under all programs subject to continuing involvement, which consists principally of collection services, were $784 million and $778 million as of March 31, 2025 and December 31, 2024, respectively.

The Company also participates in supply chain financing arrangements offered by certain customers that qualify for sale accounting in accordance with the *Transfers and Servicing* topic of the FASB Codification. For the three months ended March 31, 2025 and 2024, the Company sold receivables of $262 million and $250 million, respectively, related to these arrangements.

The Company has arranged a supplier finance program (“SFP”) with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice. The transactions are at the sole discretion of both the suppliers and financial institution, and the Company is not a party to the agreements and has no economic interest in the supplier’s decision to sell a receivable. The range of payment terms negotiated by the Company with its suppliers is consistent, irrespective of whether a supplier participates in the program. The agreement with the financial intermediary does not require the Company to provide assets pledged as security or other forms of guarantees for the SFP. Amounts due to the Company’s suppliers that elected to participate in the SFP program are included in Accounts Payable on the Company's Condensed Consolidated Balance Sheets and payments made under the SFP program are reflected in Cash Flows from Operating Activities in the Company's Condensed Consolidated Statements of Cash Flows. Accounts Payable included $30 million to suppliers who elected to participate in the SFP program as of March 31, 2025 and December 31, 2024.

### Covenant Restrictions

Covenants contained in the Current Credit Agreement and the Indentures may, among other things, limit the Company's ability to incur additional indebtedness, dispose of assets, incur guarantee obligations, prepay other indebtedness, repurchase shares, pay dividends and make other restricted payments, create liens, make equity or debt investments, make acquisitions, modify terms of the Indentures under which the Notes are issued, engage in mergers or consolidations, change the business conducted by the Company and its subsidiaries, and engage in certain transactions with affiliates. Such restrictions, as well as disruptions in the credit markets, could limit the Company's ability to respond to changing market conditions, fund its capital spending program, provide for unexpected capital investments or take advantage of business opportunities.

Under the terms of the Current Credit Agreement, the Company must comply with a maximum Consolidated Total Leverage Ratio covenant and a minimum Consolidated Interest Expense Ratio covenant.

The Current Credit Agreement requires that the Company maintain a maximum Consolidated Total Leverage Ratio of less than 4.25 to 1.00. At March 31, 2025, the Company was in compliance with such covenant and the ratio was 3.30 to 1.00.

The Company must also comply with a minimum Consolidated Interest Expense Ratio of 3.00 to 1.00. At March 31, 2025, the Company was in compliance with such covenant and the ratio was 7.20 to 1.00.

As of March 31, 2025, the Company's credit was rated BB+ by Standard & Poor's and Ba1 by Moody's Investor Services. Standard & Poor's and Moody's Investor Services' ratings on the Company included a stable outlook.

### Environmental Matters

Some of the Company’s current and former facilities are the subject of environmental investigations and remediations resulting from historical operations and the release of hazardous substances or other constituents. Some current and former facilities have a history of industrial usage for which investigation and remediation obligations may be imposed in the future or for which indemnification claims may be asserted against the Company. Also, closures or sales of facilities may necessitate further investigation and may result in remediation at those facilities. The Company has established reserves for those facilities or issues where a liability is probable and the costs are reasonably estimable. The Company believes that the amounts accrued for its loss contingencies, and the reasonably possible loss beyond the amounts accrued, are not material to the Company’s consolidated financial position, results of operations or cash flows.

For further discussion of the Company’s environmental matters, see “*Note 8 - Environmental and Legal Matters”* in the Notes to Condensed Consolidated Financial Statements.

### CRITICAL ACCOUNTING POLICIES

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 net sales and expenses during the reporting period. Actual results could differ from these estimates, and changes in these estimates are recorded when known. The critical accounting policies used by management in the preparation of the Company’s Condensed Consolidated Financial Statements are those that are important both to the presentation of the Company’s financial condition and results of operations and require significant judgments by management with regard to estimates used.

The Company’s most critical accounting policies, which require significant judgment or involve complex estimations, are described in the Company's 2024 Annual Report on Form 10-K for the year ended December 31, 2024.

The Company performed its annual goodwill impairment tests as of October 1, 2024. The Company concluded that all reporting units with goodwill have a fair value that exceeds their carrying value, and thus goodwill was not impaired. The Europe reporting unit had a fair value that exceeded its respective carrying value by 24%, whereas all other reporting units exceeded by more than 69%. The Europe reporting unit had goodwill totaling $492 million at March 31, 2025.

### NEW ACCOUNTING STANDARDS

For a discussion of recent accounting pronouncements impacting the Company, see “*Note 1 - General Information”* in the Notes to Condensed Consolidated Financial Statements.

## Market risk

As filed, 607 characters.

For a discussion of certain market risks related to the Company, see Part II, “*Item 7A, Quantitative and Qualitative Disclosure about Market Risk”*, in the Company's 2024 Annual Report on Form 10-K for the year ended December 31, 2024.

The Company is exposed to changes in interest rates, primarily as a result of its short-term and long-term debt, which include both fixed and floating rate debt. The Company has previously used interest rate swap agreements effectively to fix the SOFR rate on certain variable rate borrowings. At March 31, 2025, the Company had no active interest rate swap agreements.

## Controls and procedures

As filed, 815 characters.

#### Evaluation of Disclosure Controls and Procedures

The Company’s management has carried out an evaluation, with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as amended. Based upon such evaluation, management has concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2025.

#### Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 165 characters.

There have been no material changes from the risk factors previously disclosed in the Company's 2024 Annual Report on Form 10-K for the year ended December 31, 2024.

Filed May 1, 2025.
Source: SEC EDGAR, the filing index for accession 0001408075-25-000013. Last ingested by Listed: Nov 4, 2026, 17:04 ET. No prices; not investment advice.