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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 FORM 10-Q
 
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 2023
or 
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File No. 001-11261
Sonoco Products Company
(Exact name of registrant as specified in its charter)
South Carolina
57-0248420
(State or other jurisdiction of incorporation of organization)
(I.R.S. Employer Identification No.)
1 N. Second St., Hartsville, South Carolina
29550
(address of principal executive offices)(Zip Code)
(843) 383-7000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
No par value common stockSONNew York Stock Exchange LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒   No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer
☐
Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
The number of shares outstanding of the registrant's no par value common stock as of April 21, 2023 was 97,955,689.



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

2


Part I. FINANCIAL INFORMATION 
Item 1. Financial Statements.
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars and shares in thousands)
April 2,
2023		December 31, 2022*
Assets
Current Assets
Cash and cash equivalents$209,651 $227,438 
Trade accounts receivable, net of allowances903,424 862,712 
Other receivables89,554 99,492 
Inventories, net:
Finished and in process472,641 453,981 
Materials and supplies610,364 641,577 
Prepaid expenses76,693 76,054 
2,362,327 2,361,254 
Property, Plant and Equipment, Net1,717,615 1,710,399 
Goodwill1,679,547 1,675,311 
Other Intangible Assets, Net717,784 741,598 
Deferred Income Taxes47,867 29,878 
Right of Use Asset-Operating Leases289,017 296,781 
Other Assets247,277 237,719 
Total Assets$7,061,434 $7,052,940 
Liabilities and Equity
Current Liabilities
Payable to suppliers$746,118 $818,885 
Accrued expenses and other382,560 405,671 
Notes payable and current portion of long-term debt447,601 502,440 
Accrued taxes33,211 16,905 
1,609,490 1,743,901 
Long-term Debt, Net of Current Portion2,717,891 2,719,783 
Noncurrent Operating Lease Liabilities243,714 250,994 
Pension and Other Postretirement Benefits118,163 120,084 
Deferred Income Taxes127,674 107,293 
Other Liabilities38,937 38,088 
Commitments and Contingencies
Sonoco Shareholders’ Equity
Common stock, no par value
Authorized 300,000 shares
97,955 and 97,645 shares issued and outstanding
at April 2, 2023 and December 31, 2022, respectively
7,175 7,175 
Capital in excess of stated value138,008 140,539 
Accumulated other comprehensive loss(395,084)(430,083)
Retained earnings2,448,299 2,348,183 
Total Sonoco Shareholders’ Equity2,198,398 2,065,814 
Noncontrolling Interests7,167 6,983 
Total Equity2,205,565 2,072,797 
Total Liabilities and Equity$7,061,434 $7,052,940 
*The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (the “United States” or “U.S.”).
See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
3


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share data)
 
Three Months Ended
April 2, 2023April 3, 2022
Net sales$1,729,783 $1,770,982 
Cost of sales1,355,355 1,399,417 
Gross profit374,428 371,565 
Selling, general and administrative expenses187,976 190,362 
Restructuring/Asset impairment charges28,814 12,142 
Gain on divestiture of business and other assets72,010 — 
Operating profit229,648 169,061 
Non-operating pension costs3,658 1,324 
Interest expense34,232 20,581 
Interest income1,562 1,516 
Income before income taxes193,320 148,672 
Provision for income taxes46,912 35,289 
Income before equity in earnings of affiliates146,408 113,383 
Equity in earnings of affiliates, net of tax1,856 2,224 
Net income148,264 115,607 
Net loss/(income) attributable to noncontrolling interests55 (274)
Net income attributable to Sonoco$148,319 $115,333 
Weighted average common shares outstanding:
Basic98,167 97,924 
Diluted98,615 98,554 
Per common share:
Net income attributable to Sonoco:
Basic$1.51 $1.18 
Diluted$1.50 $1.17 

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


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (unaudited)
(Dollars in thousands)
 
Three Months Ended
April 2, 2023April 3, 2022
Net income$148,264 $115,607 
Other comprehensive income:
     Foreign currency translation adjustments31,808 706 
     Changes in defined benefit plans, net of tax916 191 
Changes in derivative financial instruments, net of tax2,514 2,550 
Other comprehensive income$35,238 $3,447 
Comprehensive income:183,502 119,054 
Less: Net loss/(income) attributable to noncontrolling interests55 (274)
Less: Other comprehensive income attributable to noncontrolling interests(239)(891)
Comprehensive income attributable to Sonoco$183,318 $117,889 

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

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN TOTAL EQUITY (unaudited)
(Dollars and shares in thousands)

Total
Equity		Common SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2021$1,849,541 97,370 $7,175 $119,690 $(359,425)$2,070,005 $12,096 
Net income115,607 115,333 274 
Other comprehensive income/(loss):
Translation gain/(loss)706 (185)891 
Defined benefit plan adjustment, net of tax191 191 
Derivative financial instruments, net of tax2,550 2,550 
Other comprehensive loss$3,447 $2,556 $891 
Dividends(44,124)(44,124)
Issuance of stock awards377 182 377 
Shares repurchased(3,410)(60)(3,410)
Share-based compensation10,689 10,689 
Purchase of noncontrolling interest(13,196)(7,080)(6,116)
April 3, 2022$1,918,931 97,492 $7,175 $120,266 $(356,869)$2,141,214 $7,145 


Total EquityCommon SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2022$2,072,797 97,645 $7,175 $140,539 $(430,083)$2,348,183 $6,983 
Net income/(loss)148,264 148,319 (55)
Other comprehensive income:
Translation gain31,808 31,569 239 
Defined benefit plan adjustment, net of tax916 916 
Derivative financial instruments, net of tax2,514 2,514 
Other comprehensive income$35,238 $34,999 $239 
Dividends(48,203)(48,203)
Issuance of stock awards472 485 472 
Shares repurchased(10,576)(175)(10,576)
Share-based compensation7,573 7,573 
April 2, 2023$2,205,565 97,955 $7,175 $138,008 $(395,084)$2,448,299 $7,167 

See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
6

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
Three Months Ended
April 2, 2023April 3, 2022
Cash Flows from Operating Activities:
Net income$148,264 $115,607 
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments18,616 5,511 
Depreciation, depletion and amortization82,137 73,315 
Share-based compensation expense7,573 10,689 
Equity in earnings of affiliates, net(1,856)(2,224)
Cash dividends from affiliated companies1,875 350 
Net (gain)/loss on disposition of assets(60,615)190 
Net gain on divestiture of business(11,065)— 
Pension and postretirement plan expense4,408 2,232 
Pension and postretirement plan contributions(4,931)(28,095)
Increase in net deferred tax liabilities1,588 4,613 
Change in assets and liabilities, net of effects from acquisitions and foreign currency adjustments:
Trade accounts receivable(33,485)(129,670)
Inventories13,549 (116,169)
Payable to suppliers(71,553)60,356 
Prepaid expenses350 (6,954)
Income taxes payable and other income tax items22,030 13,786 
Accrued expenses and other assets and liabilities(18,883)(2,477)
Net cash provided by operating activities98,002 1,060 
Cash Flows from Investing Activities:
Purchases of property, plant and equipment(83,401)(67,507)
Cost of acquisitions, net of cash acquired— (1,348,589)
Proceeds from the sale of business, net13,839 — 
Proceeds from the sale of assets, net71,405 183 
Other net investing activities(4,810)145 
Net cash used in investing activities(2,967)(1,415,768)
Cash Flows from Financing Activities:
Proceeds from issuance of debt9,621 1,530,145 
Principal repayment of debt(84,162)(33,117)
Net change in commercial paper12,000 (27,000)
Net increase (decrease) in outstanding checks2,670 (15,759)
Cash dividends(47,731)(43,747)
Purchase of noncontrolling interest— (14,474)
Payments for share repurchases(10,576)(3,410)
Net cash (used in)/provided by financing activities(118,178)1,392,638 
Effects of Exchange Rate Changes on Cash5,356 2,629 
Net Decrease in Cash and Cash Equivalents(17,787)(19,441)
Cash and cash equivalents at beginning of period227,438 170,978 
Cash and cash equivalents at end of period$209,651 $151,537 
Certain prior year amounts reported within net cash provided by operating activities have been revised to conform with the current presentation.
See accompanying Notes to Condensed Consolidated Financial Statements (unaudited)
7
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


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

Note 3: Acquisitions and Divestitures
Acquisitions
As previously disclosed, on November 9, 2022, the Company entered into a definitive agreement to purchase the remaining equity interest in RTS Packaging, LLC (“RTS”), from joint venture partner WestRock Company (“WestRock”) and one WestRock paper mill in Chattanooga, Tennessee, for $330,000 in cash, subject to customary pricing adjustments. In January 2023, both the Company and WestRock received a request for additional information and documentary material from the Antitrust Division of the U.S. Department of Justice. The Company anticipates completing the transaction in the second half of 2023, subject to the satisfaction or waiver of the closing conditions contained in the purchase agreement, including the expiration or early termination of waiting periods or extensions thereof under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Upon completion of the transaction, the Company will own 100% of RTS, which is currently operated as a joint venture between Sonoco (35% ownership interest) and WestRock (65% ownership interest). The RTS joint venture was formed in 1997 and combined the former protective packaging operations of WestRock and the Company to market solid fiber partitions from recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals. The transaction will give the Company full ownership of fourteen converting operations, including ten in the United States, two in Mexico, and two in South America and one paper mill in the United States. Upon completion of the transaction, approximately 1,100 individuals will become employees of the Company. The Company expects to fund the acquisition with new borrowings from lenders and cash on hand.
8
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

On November 15, 2022, the Company completed the acquisition of S.P. Holding, Skjern A/S (“Skjern”), a privately owned manufacturer of paper based in Skjern, Denmark for $88,647, net of cash acquired. Skjern produces high-grade paperboard from recycled paper for rigid paper containers, tubes and cores, and other applications. Goodwill for Skjern, none of which is expected to be deductible for income tax purposes, consists of increased access to certain markets and existing customer relationships. Skjern's financial results are included in the Company's Industrial Paper Packaging segment.
The Company's initial fair value estimates of the assets acquired and the liabilities assumed in the Skjern acquisition, as well as updated preliminary fair value allocations reflecting adjustments made during the measurement period, are as follows:
Initial EstimateMeasurement Period AdjustmentsPreliminary Allocation
Trade accounts receivable$8,055 $— $8,055 
Other receivables193 — 193 
Inventories2,595 14 2,609 
Prepaid expenses349 — 349 
Property, plant and equipment24,334 4,921 29,255 
Right of use asset - operating leases28 — 28 
Other intangible assets42,818 (3,488)39,330 
Goodwill29,059 (1,447)27,612 
Payable to suppliers(3,466)— (3,466)
Accrued expenses and other(1,173)— (1,173)
Taxes payable(576)— (576)
Noncurrent operating lease liabilities(20)— (20)
Deferred income taxes(13,549)— (13,549)
Total purchase price, net of cash acquired$88,647 $— $88,647 
The allocation of the purchase price of Skjern to the tangible and intangible assets acquired and liabilities assumed, as reflected under the heading “Preliminary Allocation” in the table above, is based on the Company's preliminary allocations of their fair value, based on information currently available. Management is continuing to finalize its valuation of certain assets and liabilities including, but not limited to: inventory; property, plant and equipment; goodwill; other intangible assets; and deferred income taxes, and expects to complete its valuations within one year of the date of acquisition.
The Company has accounted for this acquisition as a business combination under the acquisition method and has included the results of operations of the acquired business in the Company's Condensed Consolidated Statements of Income from the date of acquisition.
On January 26, 2022, the Company completed the acquisition of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging (“Metal Packaging”), a leading supplier of sustainable metal packaging for food and household products and the largest aerosol can producer in North America, for $1,348,589, net of cash acquired. Prior to the Company's acquisition of Metal Packaging, Ball Metalpack Holding, LLC was a joint venture formed in 2018 and owned by Platinum Equity (51%) and Ball Corporation (49%). Metal Packaging consists of eight manufacturing plants in the United States and a headquarters facility in Broomfield, Colorado.
9
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

During the three-month period ended April 2, 2023, the Company finalized its valuations of the assets and liabilities assumed in the acquisition of Metal Packaging. As a result, the following measurement period adjustments were made to the previously disclosed provisional fair values of assets acquired and liabilities assumed:
Measurement Period AdjustmentsThree Months Ended April 2, 2023
Inventories$(73)
Property, plant and equipment(247)
Goodwill439 
Accrued expenses and other(119)
Additional cash consideration$— 
Factors comprising goodwill include increased access to certain markets as well as the value of the assembled workforce. Approximately 81% of the goodwill is expected to be deductible for income tax purposes. Metal Packaging's financial results are included in the Company's Consumer Packaging segment.
The Company has accounted for this acquisition as a business combination under the acquisition method and has included the results of operations of the acquired business in the Company's Condensed Consolidated Statements of Income from the date of acquisition.
The following table presents the unaudited financial results for Metal Packaging from the prior year date of acquisition through the end of the reporting period ending April 3, 2022:

Supplemental Information (unaudited)January 26 to
Metal PackagingApril 3, 2022
Net sales$171,228 
Net income$14,019 
The following table presents the Company’s estimated unaudited pro forma consolidated results for the three-month period ended April 3, 2022, assuming the acquisition of Metal Packaging had occurred on January 1, 2021. This unaudited pro forma information is presented for informational purposes only and does not purport to represent the results of operations that would have been achieved if the acquisition had been completed at the beginning of 2021, nor is it necessarily indicative of future consolidated results.
Pro Forma Supplemental Information (unaudited)Three Months Ended
ConsolidatedApril 3, 2022
Net sales$1,820,570 
Net income attributable to Sonoco$164,881 
The unaudited pro forma information above does not project the Company’s expected results for any future period and gives no effect to any future synergistic benefits that may result from the combination or the costs of integrating the acquired operations with those of the Company. Unaudited pro forma information for the three-month period ended April 3, 2022 includes adjustments to depreciation, amortization, and income taxes based upon the final fair value allocation of the purchase price to Metal Packaging's tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2021. Interest expense on the additional debt issued by the Company to fund the acquisition and retention bonuses incurred related to the acquisition are also included in the unaudited pro forma information as if the acquisition had occurred on January 1, 2021.
Acquisition-related costs of $22,284 were recognized during the three-month period ended April 3, 2022 and charges related to fair value adjustments to acquisition-date inventory of $25,000 were recognized during the three-month period ended April 3, 2022. These costs are excluded from 2022 unaudited pro forma net income as though the acquisition had occurred on January 1, 2021.
10
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Divestiture of Business
On January 26, 2023, the Company completed the sale of its Sonoco Sustainability Solutions (“S3”) business, a provider of customized waste and recycling management programs and part of the Company's Industrial Paper Packaging segment, to Northstar Recycling Co. (“Northstar”), for total cash proceeds of $13,839. An additional $1,500 of proceeds are being held in escrow and will be released to the Company, pursuant to any indemnification claims, 20 months following the date of the divestiture. These escrow proceeds are included in “Other Assets” in the Company’s Condensed Consolidated Balance Sheets as of April 2, 2023. The Company wrote off net assets totaling $4,274 as part of the divestiture of the business, including $3,042 of allocated goodwill, and recognized a pretax gain of $11,065 during the three-month period ended April 2, 2023, which is included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income. The Company is also entitled to receive additional proceeds of $3,200 in the second quarter of 2024 if certain conditions are met. This contingent consideration will be recognized as additional gain on the sale at the point the contingencies are resolved.
In addition, the Company purchased a 2.7% equity interest in Northstar for $5,000. This investment is being accounted for under the measurement alternative (i.e., cost less impairment, adjusted for any qualifying observable price changes).
The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to be suboptimal or nonstrategic.
Sale of Assets
With the completion of Project Horizon, the Company's project to convert the corrugated medium machine in Hartsville, South Carolina, to produce uncoated recycled paperboard, the Company now produces paper exclusively from recycled fibers and no longer requires natural tree fiber for production. Accordingly, on March 29, 2023, the Company sold its timberland properties, approximately 55,000 acres, to Manulife Investment Management for net cash proceeds of $70,802. The Company disposed of assets with a net book value of $9,857 as part of the sale, and recognized a pretax gain from the sale of these assets of $60,945 during the three months ended April 2, 2023, which is included in “Gain on divestiture of business and other assets” in the Company’s Condensed Consolidated Statements of Income.
Acquisition and Divestiture-Related Costs
Acquisition- and divestiture-related costs totaled $5,188 during the three-month period ended April 2, 2023. These costs include legal and professional fees, investment banking fees, and other transaction costs that are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.
Acquisition-related costs totaled $48,352 during the three months ended April 3, 2022 primarily related to the acquisition of Metal Packaging. These charges included the partial amortization of the fair value step-up of finished goods inventory of $25,000, included in “Cost of sales” in the Company's Condensed Consolidated Statements of Income, and other acquisition-related charges of $23,352. These other charges consisted primarily of investment banking fees, representation and warranty insurance premiums, legal and professional fees, and other transaction costs and are included in “Selling, general and administrative expenses” in the Company’s Condensed Consolidated Statements of Income.

11
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 4: Shareholders' Equity
Earnings per Share
The following table sets forth the computation of basic and diluted earnings per share:
Three Months Ended
April 2, 2023April 3, 2022
Numerator:
Net income attributable to Sonoco$148,319 $115,333 
Denominator:
Weighted average common shares outstanding:
Basic98,167 97,924 
Dilutive effect of share-based compensation448 630 
Diluted98,615 98,554 
Net income attributable to Sonoco per common share:
Basic$1.51 $1.18 
Diluted$1.50 $1.17 
Cash dividends$0.49 $0.45 
No adjustments were made to “Net income attributable to Sonoco” in the computations of net income attributable to Sonoco per common share.
Anti-dilutive Securities
Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes the proceeds from the exercise of all dilutive stock appreciation rights (“SARs”) are used to repurchase the Company’s common stock. Certain SARs are not dilutive because either the exercise price is greater than the average market price of the stock during the reporting period or assumed repurchases from proceeds from the exercise of the SARs were anti-dilutive. These SARs may become dilutive in the future if the market price of the Company's common stock appreciates.
The average numbers of SARs that were anti-dilutive and, therefore, not included in the computation of diluted earnings per share during the three-month periods ended April 2, 2023 and April 3, 2022 were as follows (in thousands):
Three Months Ended
April 2, 2023April 3, 2022
Anti-dilutive stock appreciation rights343401
Stock Repurchases
On April 20, 2021, the Company's Board of Directors (the “Board”) authorized the repurchase of the Company's common stock in an aggregate amount of up to $350,000. Following several repurchase transactions in 2021, a total of $137,972 remained available for share repurchases under this authorization as of December 31, 2021. No shares were repurchased under this authorization during the year ended December 31, 2022 or the three-month period ended April 2, 2023.
The Company regularly repurchases shares of its common stock to satisfy employee tax withholding obligations in association with certain share-based compensation awards. These repurchases, which are not part of a publicly announced plan or program, totaled 175 shares during the three-month period ended April 2, 2023, at a cost of $10,576, and 60 shares during the three-month period ended April 3, 2022, at a cost of $3,410.
Dividend Declarations
On February 8, 2023, the Board of Directors declared a regular quarterly dividend of $0.49 per share. This dividend was paid on March 10, 2023 to all shareholders of record as of February 22, 2023.
On April 19, 2023, the Board of Directors declared a regular quarterly dividend of $0.51 per share. This dividend is payable on June 9, 2023 to all shareholders of record as of May 10, 2023.

12
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Noncontrolling interests
In April 2015, the Company acquired a 67% controlling interest in Graffo Paranaense de Embalagens S/A (“Graffo”). Prior to March 31, 2022, the Company consolidated 100% of Graffo, with the partner's 33% share included in “Noncontrolling Interests” within the equity section of the balance sheet. On March 31, 2022, the Company paid $14,474 in cash to acquire the remaining 33% ownership interest from the three noncontrolling partners, which resulted in a $6,116 reduction in noncontrolling interest, a $7,080 charge to capital in excess of stated value, and a $1,278 reduction to accrued expenses and other on the Company's Condensed Consolidated Balance Sheet as of April 3, 2022.
Note 5: Restructuring and Asset Impairments
Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking the most cost-effective means and structure to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company's operating costs. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope and location of the restructuring activities.
Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:
Three Months Ended
April 2, 2023April 3, 2022
Restructuring and restructuring-related asset impairment charges$28,814 $5,753 
Other asset impairments— 6,389 
Restructuring and asset impairment charges$28,814 $12,142 

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:
Three Months Ended
April 2, 2023April 3, 2022
Severance and termination benefits$5,516 $2,099 
Asset impairments19,193 445 
Other costs4,105 3,209 
Restructuring and restructuring-related asset impairment charges$28,814 $5,753 
The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:
Three Months Ended
April 2, 2023April 3, 2022
Consumer Packaging$1,576 $1,635 
Industrial Paper Packaging24,544 1,348 
All Other1,157 78 
Corporate1,537 2,692 
Restructuring and restructuring-related asset impairment charges$28,814 $5,753 
Restructuring and restructuring-related asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company's Condensed Consolidated Statements of Income.
13
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:
Severance
and
Termination
Benefits		Asset
Impairments/
Disposal
of Assets		Other
Costs		Total
Accrual Activity
Liability at December 31, 2022
$14,677 $— $1,392 $16,069 
2023 charges5,516 19,193 4,105 28,814 
Cash payments(6,380)(166)(2,378)(8,924)
Asset writedowns/disposals— (19,027)— (19,027)
Foreign currency translation14 — 11 25 
Liability at April 2, 2023
$13,827 $— $3,130 $16,957 

“Severance and Termination Benefits” during the first three months of 2023 includes the cost of severance for approximately 159 employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts and severance related to the closure of the Company's paper mill in Hutchinson, Kansas, part of the Industrial Paper Packaging segment.
“Asset Impairments/Disposal of Assets” during the first three months of 2023 consists primarily of asset impairment charges related to the closure of the Company's paper mill in Hutchinson, Kansas.
“Other Costs” during the first three months of 2023 consists primarily of consulting services, costs related to the closure of the Hutchinson, Kansas paper mill, and the cost of earlier plant closures, including equipment removal, utilities, plant security, property taxes and insurance.
The Company expects to pay the majority of the remaining restructuring reserves by the end of 2023 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $5,200 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2023. The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.
Other Asset Impairments
Total other asset impairment charges of $6,389 were incurred during the three months ended April 3, 2022, which includes $5,713 of impairment charges related to the Company's decision to exit its operations in Russia, part of the Industrial Paper Packaging segment, as a result of the ongoing Russia-Ukraine conflict, and $676 of fixed asset impairments in the Company's plastics foods operations, part of the Consumer Packaging segment.
The assets were impaired as the value of their projected undiscounted cash flows was determined to no longer be sufficient to recover their carrying value. These impairment charges are included in “Restructuring/Asset impairment charges” in the Company’s Condensed Consolidated Statements of Income.
14
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 6: Accumulated Other Comprehensive Loss
The following table summarizes the components of accumulated other comprehensive loss and the changes in the balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the three-month periods ended April 2, 2023 and April 3, 2022:
Foreign
Currency
Items		Defined
Benefit
Pension Items		Cash
Flow Hedges		Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2022
$(338,316)$(90,973)$(794)$(430,083)
Other comprehensive income/(loss) before reclassifications31,569 (393)2,645 33,821 
Amounts reclassified from accumulated other comprehensive loss to net income— 1,309 (431)878 
Amounts reclassified from accumulated other comprehensive loss to fixed assets— — 300 300 
Other comprehensive income31,569 916 2,514 34,999 
Balance at April 2, 2023
$(306,747)$(90,057)$1,720 $(395,084)
Balance at December 31, 2021
$(269,076)$(91,397)$1,048 $(359,425)
Other comprehensive (loss)/income before reclassifications(185)(971)5,119 3,963 
Amounts reclassified from accumulated other comprehensive loss to net loss— 1,162 (2,654)(1,492)
Amounts reclassified from accumulated other comprehensive loss to fixed assets— — 85 85 
Other comprehensive (loss)/income(185)191 2,550 2,556 
Balance at April 3, 2022
$(269,261)$(91,206)$3,598 $(356,869)


15
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The following table summarizes the effects on net income of significant amounts reclassified from each component of accumulated other comprehensive loss for the three-month periods ended April 2, 2023 and April 3, 2022:
Amount Reclassified from Accumulated
Other Comprehensive Loss
Three Months Ended
Details about Accumulated Other
Comprehensive
Loss Components		April 2,
2023		April 3,
2022		Affected Line Item in
the Condensed Consolidated
Statements of Income
Gains/(losses) on cash flow hedges
Foreign exchange contracts$1,062 $566 Net sales
Foreign exchange contracts(454)(695)Cost of sales
Commodity contracts(32)3,850 Cost of sales
576 3,721 Income before income taxes
        Income tax impact(145)(1,067)Provision for income taxes
431 2,654 Net income
Defined benefit pension items
Effect of settlement loss(a)
(686)(356)Non-operating pension costs
Amortization of defined
   benefit pension items(a)
(1,071)(1,171)Non-operating pension costs
(1,757)(1,527)Income before income taxes
        Income tax impact448 365