UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 20192022
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.Number: 001-11261
SONOCO PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)

Incorporated under the laws
of South Carolina
(State or other jurisdiction of incorporation or organization)		 
I.R.S.57-0248420 (I.R.S. Employer Identification
No. 57-0248420
)
1 N. Second St. Hartsville, South Carolina (Address of principal executive offices)29550 (Zip Code)
1 N. Second St.
Hartsville, South Carolina 29550
Telephone: 843/(843) 383-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbolSymbol(s)Name of each exchange on which registered
No par value common stockSONNew York Stock Exchange LLC
Securities registered pursuant to Section 12(g) of the Act:    None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒
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, 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
The aggregate market value of voting common stock held by nonaffiliates of the registrant (based on the New York Stock Exchange closing price) on June 28, 2019,July 1, 2022, which was the last business day of the registrant’s most recently completed second fiscal quarter, was $6,455,701,379. Registrant does not (and did not at June 30, 2019) have any non-voting common stock outstanding.$5,708,937,090.
As of February 14, 2020,17, 2023, there were 100,255,00897,776,921 shares of no par value common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the annual meeting of shareholders to be held on April 15, 2020,19, 2023, which statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates, are incorporated by reference in Part III.


TABLE OF CONTENTS
  
  
Page
Part I
Item 1.
4
Item 1A.
79
Item 1B.
1519
Item 2.
1519
Item 3.
1519
Item 4.
1519
Part II
Item 5.
1620
Item 6.
1721
Item 7.
1821
Item 7A.
3134
Item 8.
3134
Item 9.
3235
Item 9A.
3235
Item 9B.
3235
Item 9C.
35
Part III
Item 10.
3336
Item 11.
3336
Item 12.
3336
Item 13.
3336
Item 14.
3436
Part IV
Item 15.
3437
Item 16.
3437



SONOCO PRODUCTS COMPANY
Forward-looking statementsForward-Looking Statements
Statements included in this Annual Report on Form 10-K that are not historical in nature, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those settlements are based, are intended to be, and are hereby identified as “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. In addition, the Company and its representatives may from time to time make other oral or written statements that are also “forward-looking statements.” Words such as "anticipate," "aspires," "assume," "believe," "can," "committed," "commitment," "consider," "could," "envision," “estimate,” “project,”"expect," "forecast," "future," "goal," "guidance," “intend,” “expect,” “believe,” “consider,”"may," "might," "objective," "opportunity," "outlook," “plan,” "potential," "project," "re-envision," “strategy,” “opportunity,” “commitment,” “target,” “anticipate,” “objective,” “goal,” “guidance,” “outlook,” “forecast,” “future,” “re-envision,” “assume,” “will,” “would,” “can,” “could,” “may,” “might,” “aspires,” “potential,” or the negative thereof, and similar expressions identify forward-looking statements. Forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements regarding:

•availability and supply of raw materials and energy, and offsetting high raw material and energy costs, including the potential impact of potential changes in tariffs;
•the effects of economic downturns, inflation, volatility and other macroeconomic factors on the Company and its industry;
•the resiliency of the Company's operating model;
•reduced supply chain and labor disruptions and benefits to the Company therefrom;
•potential impacts of the COVID-19 pandemic on the Company's business, operations and financial condition;
•consumer and customer actions in connection with the COVID-19 pandemic and the Russia-Ukraine military conflict;
•improved productivity and cost containment;containment, including cost savings from the Company's investments;
•improving margins and leveraging strong cash flow and financial position;
•effects and timing of, and anticipated synergies and gains resulting from, pending and completed acquisitions and dispositions;
•realizationdivestitures, including the Company's acquisitions of synergies resulting from acquisitions;Ball Metalpack Holding, LLC ("Ball Metalpack"), renamed Sonoco Metal Packaging ("Metal Packaging"), S.P. Holding, Skjern A/S ("Skjern"), and RTS Packaging, LLC ("RTS") and the Company's sale of its Sonoco Sustainability Solutions ("S3") business;
•costs, timing and effects of restructuring and portfolio simplification activities;
•adequacy and anticipated amounts and uses of cash flows;
•capital allocation, including expected amounts of capital spending;spending and expected annualized cost savings and other benefits therefrom;
•the Company's capital structure, including the incurrence of debt and the refinancing and repayment of debt;
•financial and business strategies and the results expected of them;them, including with respect to pricing, capital deployment and commercial, operational and supply chain excellence;
•financial results and profitability for future periods;
•producing improvements in earnings;
•profitable sales growth and rates of growth;
•market leadership;opportunities and anticipated growth thereof;
•research and development spending;market leadership;
•expected impact and costs of resolution of legal proceedings;
•extent of, and adequacy of provisions for, environmental liabilities;liabilities and sustainability commitments;
•sustainability commitments;commitments to reduce greenhouse gas emissions;
•the Company's human capital management strategy
•adequacy of income tax provisions, realization of deferred tax assets, outcomes of uncertain tax issues and tax rates;
•goodwill impairment charges and fair values of reporting units;
•future asset impairment charges and fair values of assets;
•anticipated contributions to pension and postretirement benefit plans, fair values of plan assets, long-term rates of return on plan assets, and projected benefit obligations and payments;
•expected impact of implementation of new accounting pronouncements;
•creation of long-term value and returns for shareholders;
•continued payment of dividends; and
•planned stock repurchases.

Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements. TheSuch risks, uncertainties and assumptions include, without limitation:

•availability and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs or sanctions and escalating trade wars and the impact of war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine and economic sanctions related thereto), and the Company's ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;
•impacts arising as a result of the COVID-19 pandemic on our results of operations, financial condition, value of assets, liquidity, prospects, growth, and on the industries in which we operate and that we serve, resulting from, without limitation, recent and ongoing financial market volatility, potential governmental actions, changes in consumer behaviors and demand, changes in customer requirements, disruptions to the Company's suppliers and supply chain, availability of labor and personnel, necessary modifications to operations and business, and uncertainties about the extent and duration of the pandemic;
•costs of labor;
•work stoppages due to labor disputes;
•success of new product development, introduction and sales;
•success of implementation of new manufacturing technologies and installation of manufacturing equipment, including the startup of new facilities and lines;
•consumer demand for products and changing consumer preferences;
•ability to be the low-cost global leader in customer-preferred packaging solutions within targeted segments;
•competitive pressures, including new product development, industry overcapacity, customer and supplier consolidation, and changes in competitors' pricing for products;
2 FORM 10-K SONOCO 2022 ANNUAL REPORT

•financial conditions of customers and suppliers;
•ability to maintain or increase productivity levels, contain or reduce costs, and maintain positive price/cost relationships;
•ability to negotiate or retain contracts with customers, including in segments with concentration of sales volume;
•inventory management strategies of customers;
•timing of introduction of new products or product innovations by customers;
•collection of receivables from customers;
•ability to improve margins and leverage cash flows and financial position;
•ability to manage the mix of business and execute on the Company's portfolio simplification strategy to take advantage of growing markets while reducing cyclical effects of some of the Company's existing businesses on operating results;
•ability to maintain innovative technological market leadership and a reputation for quality;
•ability to attract and retain talented and qualified employees, managers and executives;
•ability to profitably maintain and grow existing domestic and international business and market share;
•ability to expand geographically and win profitable new business;
•ability to identify and successfully close suitable acquisitions at the levels needed to meet growth targets, andtargets;
•ability to successfully integrate newly acquired businesses into the Company's operations;operations and realize synergies and other anticipated benefits within the expected time period, or at all;
2 FORM 10-K SONOCO 2019 ANNUAL REPORT

•the costs, timing and results of restructuring activities;
•availability of credit to us, our customers and suppliers in needed amounts and on reasonable terms;
•effects of our indebtedness on our cash flow and business activities;
•fluctuations in interest rates and our borrowing costs;
•fluctuations in obligations and earnings of pension and postretirement benefit plans;
•accuracy of assumptions underlying projections of benefit plan obligations and payments, valuation of plan assets, and projections of long-term rates of return;
•timing of funding pension and postretirement benefit plan obligations;
•cost of employee and retiree medical, health and life insurance benefits;
•resolution of income tax contingencies;
•foreign currency exchange rate fluctuations, interest rate and commodity price risk and the effectiveness of related hedges;
•changes in U.S. and foreign tariffs, tax rates, and tax laws, regulations interpretations and implementationinterpretations thereof;
•the adoption of new, or changes in, accounting standards or interpretations;
•challenges and assessments from tax authorities resulting from differences in interpretation of tax laws, including income, sales and use, property, value added, employment, and other taxes;
•accuracy in valuation of deferred tax assets;
•accuracy of assumptions underlying projections related to goodwill impairment testing, and accuracy of management's assessment of goodwill impairment;
•accuracy of assumptions underlying fair value measurements, accuracy of management's assessments of fair value and fluctuations in fair value;
•ability to maintain effective internal controls over financial reporting;
•failure to maintain effective disclosure controls and internal control procedures to prevent or detect errors or acts of fraud;
•liability for and anticipated costs of resolution of litigation, regulatory actions, or other legal proceedings;
•liability for and anticipated costs of environmental remediation actions;
•effects of environmental laws and regulations;
•operational disruptions at our major facilities;
•failure or disruptions in our information technologies;
•failuresfailure of third party transportation providers to deliver our products to our customers or to deliver raw materials to us;
•substantially lower than normal crop yields;
•loss of consumer or investor confidence;
•ability to protect our intellectual property rights;
•changes in laws and regulations relating to packaging for food products and foods packaged therein, other actions and public concerns about products packaged in our containers, or chemicals or substances used in raw materials or in the manufacturing process;
•changing consumer attitudes toward plastic packaging;
•ability to meet sustainability targets and challenges in implementation;
•changing climate, climate change regulations and greenhouse gas effects;
•ability to meet commitments to reduce greenhouse gas emissions and to meet environmental, social, and governance ("ESG") goals and other sustainability commitments;
•actions of domestic or foreign government agencies and other changes in laws and regulations affecting the Company and increased costs of compliance;
•international, national and local economic and market conditions and levels of unemployment;
•economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine), terrorist activities and natural disasters; and
•accelerating inflation.

More information about the risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or forecasted in forward-looking statements is provided in this Annual Report on Form 10-K under Item 1A - "Risk Factors" and throughout other sections of this report and in other reports filed with the Securities and Exchange Commission. In light of these various risks, uncertainties and assumptions, the forward-looking events discussed in this Annual Report on Form 10-K might not occur.

The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise.otherwise, except as may be required by law. You are, however, advised to review any further disclosures we make on related subjects, and about new or additional risks, uncertainties and assumptions, in our future filings with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K.
References to our website address
References to our website address and domain names throughout this Annual Report on Form 10-K are for informational purposes only, or to fulfill specific disclosure requirements of the Securities and Exchange Commission’s rules or the New York Stock Exchange Listing Standards. These references are not intended to, and do not, incorporate the contents of our websites by reference into this Annual Report on Form 10-K.
3 FORM 10-K SONOCO 20192022 ANNUAL REPORT

PART I
 
Item 1. Business
(a) General developmentDevelopment of businessBusiness –
Sonoco Products Company ("Sonoco," "the Company," "we," "us," or "our") is a South Carolina corporation originally founded in Hartsville, South Carolina, in 1899 as the Southern Novelty Company. 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 industriala variety of highly-engineered and consumersustainable packaging products and a providerserving multiple end markets. As of packaging services, withDecember 31, 2022, the Company had approximately 320310 locations in32 36 coucountries.ntries, serving some of the world’s best-known brands in some 85 nations. Sonoco is committed to creating sustainable products, services and programs for 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 customer’s goals and objectives.
(c) Narrative descriptionDescription of businessBusiness –
Segment Reporting
The Company currently reports its financial results in fourtwo reportable segments – Consumer Packaging Paper and Industrial Converted Products, Display andPaper Packaging, and Protective Solutions. Informationwith all remaining businesses reported as All Other. Further information about the Company’s reportable segments is provided in Note 18 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Consumer Packaging
The Consumer Packaging segment accounted for approximately 44%52%, 44%42% and 42%43% of the Company’s consolidated net sales in the years ended December 31, 2019, 20182022, 2021 and 2017,2020, respectively. The operations in this segment consistconsisted of 8687 plants throughout the world. The products, services and marketsworld as of December 31, 2022. Products within the Consumer Packaging segment consist of rigid packaging (paper, metal, and plastic) and flexible packaging, primarily serving the consumer staples market focused on food, beverage, household, and personal products.
Our rigid paper containers are as follows:
Products and ServicesMarkets
Round composite cans, shaped rigid paperboard containers; fiber and plastic caulk/adhesive tubes; aluminum, steel and peelable membrane easy-open closures for composite and metal cans; thermoformed rigid plastic trays, cups and bowls; injection molded containers, spools and parts; high-barrier flexible and forming plastic packaging films, modified atmosphere packaging, lidding films, printed flexible packaging; rotogravure cylinder engraving, global brand management

Stacked chips, snacks, nuts, cookies, crackers, other hard-baked goods, candy, gum, frozen concentrate, powdered and liquid beverages, powdered infant formula, coffee, refrigerated dough, frozen foods and entrees, processed foods, fresh fruits, vegetables, fresh-cut produce, salads, fresh-baked goods, eggs, seafood, poultry, soup, pasta, dairy, sauces, dips, condiments, pet food, meats, cheeses, labels
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 Ball Metalpack acquisition in 2022, we expanded our manufacturing capability in steel and aluminum metal fabrication beyond our existing metal ends and closures products to include metal packaging products for food and household products including vegetables, tomatoes, fruit, spray cleaners, paint, and other products. Our rigid plastic products are comprised of thermoformed plastic trays and enclosures for fresh produce, condiments, and pre-packaged foods. Our flexible packaging is comprised primarily of plastic packaging serving a variety of food and personal product applications where high-barrier properties are critical for freshness and shelf-life.
Within the Consumer Packaging segment, Sonoco’s rigid packaging – paper-based products – ispaper containers are the Company’s largest revenue-producing group of products and services, representing approximately 22%21% of consolidated net sales in the year ended December 31, 2019.2022. This group comprised 21%24% and 22%25% of consolidated net sales in 20182021 and 2017,2020, respectively.
Display andIndustrial Paper Packaging
The Display andIndustrial Paper Packaging segment accounted for approximately 10%37%, 11%44% and 10%38% of the Company’s consolidated net sales in the years ended December 31, 2019, 20182022, 2021 and 2017, respectively. The operations in this segment consist of 22 plants around the world including the United States, Poland, Mexico and Brazil. The products, services and markets of the Display and Packaging segment are as follows:
Products and ServicesMarkets
Point-of-purchase displays; custom packaging; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; fulfillment; primary package filling; supply chain management; paperboard specialtiesMiscellaneous foods and beverages, candy, electronics, personal care, baby care, cosmetics, fragrances, hosiery, office supplies, toys, home and garden, medical, over-the-counter drugs, sporting goods, hospitality industry, advertising
Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment accounted for approximately 37%, 35% and 37% of the Company’s consolidated net sales in the years ended December 31, 2019, 2018 and 2017,2020, respectively. This segment servesserved its markets through 183182 plants on five continents.continents as of December 31, 2022. Sonoco’s paper operations provide the primary raw material for the Company’s fiber-based packaging. Sonoco uses approximately 52%49% of the paper it manufactures, and the remainder is sold to third parties. This vertical integration strategy iswas supported by 2523 paper mills with 3429 paper machines and 24throughout the world as of December 31, 2022.The Company also operates 23 recycling facilities throughoutin the world.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 2019,2022, Sonoco had the capacity to manufacture approximately 2.42.2 million tons of recycled paperboard. Thepaperboard per year. Products within the Industrial Paper Packaging segment consist primarily of goods produced from recycled fiber including paperboard tubes, cores, and cones, 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 industrials (construction and building products, services and markets of the Paperindustrial distribution), consumer staples (food and Industrial Converted Products segment arebeverage, food distribution, household and personal products), and consumer discretionary (home building, appliances, apparel, and home furnishings), as follows:well as various other end markets.
Products and ServicesMarkets
Recycled paperboard, chipboard, tubeboard, lightweight corestock, boxboard, linerboard, corrugating medium, edgeboard, specialty paper grades, adhesives; paperboard tubes and cores, molded plugs, reels; collection, processing and recycling of old corrugated containers, paper, plastics, metal, glass and other recyclable materials; flexible intermediate bulk containers and bulk bagsConverted paperboard products, spiral winders, construction, plastic films, flowable products, metal, paper mills, shipping and storage, tape and labels, textiles, wire and cable, adhesives, municipal, residential, customers’ manufacturing and distribution facilities
In 2019,2022, Sonoco’s tubes and cores products were the Company’s second largest revenue-producing group of products, representing approximately 20%18% of consolidated net sales in the year ended December 31, 2019.2022. This group comprised 20%21% and 22%19% of consolidatedconsolidated net sales in 20182021 and 2017,2020, respectively.

4 FORM 10-K SONOCO 2019 ANNUAL REPORT

All Other
Protective Solutions
The Protective Solutions segmentbusinesses grouped as All Other accounted for approximately 10%11%, 10%14%, and 11%19% of the Company’s consolidated net sales in the years ended December 31, 2019, 20182022, 2021 and 2017,2020, respectively. The operations in this segment consistconsisted of 2939 plants throughout the world. The products, servicesworld as of December 31, 2022. Products within the All Other businesses consist of a variety of packaging materials including plastic, paper, foam, and various other specialty materials. All Other businesses serve a wide variety of end markets including consumer staples, consumer discretionary, industrial, and pharmaceuticals. Prior to their divestitures in 2020 and 2021, the Company's global display and packaging businesses, which included point-of-purchase displays, fulfillment operations, and contract packaging, were reported in All Other.

4 FORM 10-K SONOCO 2022 ANNUAL REPORT

Other Aspects of the Protective Solutions segment are as follows:Company's Business
Products and ServicesMarkets
Custom-engineered, paperboard-based and expanded foam protective packaging and components; temperature-assured packagingConsumer electronics, automotive, appliances, medical devices, temperature-sensitive pharmaceuticals and food, heating and air conditioning, office furnishings, fitness equipment, promotional and palletized distribution
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 and Industrial Converted ProductsPackaging 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, aluminum, and plastic resins. Raw materials are purchased from a number of outside sources. TheAfter 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 staffs,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 many other countries. Patents, trademarks and trade secretsproprietary technology are also acquired through acquisitions. During 2022, proprietary technology was acquired as part of the Ball Metalpack (renamed Sonoco Metal Packaging) acquisition and both proprietary technology and trademarks were acquired as part of several acquisitions over the past two years, including the acquisitions of Thermoform Engineered Quality, LLC, and Plastique Holdings, LTD, (together "TEQ"), Corenso Holdings America, Inc. ("Corenso"), the remaining 70 percent interest in Conitex Sonoco (BVI), Ltd., and Highland Packaging Solutions. These patentsSkjern acquisition. Patents are managed globally by a Sonoco intellectual capital management team through the Company’s subsidiary Sonoco Development, Inc. (SDI)("SDI"). SDI globally manages patents, trade secrets, confidentiality agreements and license agreements. Some patents have been licensed to other manufacturers.manufacturers, and Sonoco also licenses a few patents from outside companies and universities. U.S. patents expire after about 20 years, 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®, SmartSeal®, Sonotube®, Sealclick®, Sonopost® and UltraSeal®. Sonoco’s registered web domain names such as www.sonoco.com and www.sonotube.com provide information about Sonoco, its people and its products. Trademarks and domain names are licensed to outside companies where appropriate.
Seasonality – The Company’s operations are Although demand for the majority of the Company's products is not seasonal to any significant degree, although the Display andCompany's Metal Packaging segment normally reports slightlyoperations (acquired in January 2022) generally experience higher sales and operating profits induring the second halfand third quarters of the year when compared withas demand for certain of its products increases during the first half.
Working Capital Practices – The Company is not required to carry any significant amountspeak of inventory to meet customer requirements or to assure itself continuous allotment of goods.the food packaging season.
Dependence on Customers – On an aggregate basis during 2019,2022, the five largest customers in the PaperConsumer Packaging and Industrial Converted Products segment, the ConsumerPaper Packaging segment and the Protective Solutions segmentsegments accounted for approximately 6%, 27%26% and 16%12%, respectively, of each segment’s net sales. The dependence on a few customers in the Display and Packaging segment is more significant, as the five largest customers in this segmentthe All Other group of businesses accounted for approximately 58%14% of that segment’sthe group’s net sales.
Sales toNone of the Company’s largest customercustomers represented 4.6%10% or more of consolidated revenues in 2019. This concentration of sales volume resulted in a corresponding concentration of credit, representing approximately 8% of the Company’s2022 or consolidated trade accounts receivable atas of December 31, 2019. The Company’s next largest customer comprised 3.7% of consolidated revenues2022.
Additional information regarding Sonoco's customers is provided in 2019.Item 1A - Risk Factors under the caption "Risks Related to Competition, Customers and Suppliers."
Backlog – Most customer orders are manufactured with a lead time of three weeks or less. Therefore, the amount of backlog orders at December 31, 2019, was not material.- The Company expects allprovides 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 orders at December 31, 2019, to be shipped during 2020.and, in general, aligns its customer deliveries on a build-to-order basis.
Competition – The Company sells its products in highly competitive markets, which include paper, textile, film, food, chemical, packaging, 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 and/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 constantly 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 EnvironmentalGovernment 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 16 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Number of EmployeesCulture – At Sonoco, had approximately 23,000 employees worldwide asour 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 December 31, 2019.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. However, we believe the importance of packaging extends beyond its functionality to also include its impact on the planet. During 2020, we established a new corporate team, led by a vice president directly reporting to our CEO, to champion our global sustainability efforts. This team has expanded and leads the Company’s global sustainability programs for all our Consumer- and Industrial-related packaging businesses, including driving efforts to meet our climate change related goals.

In partnership with our employees, we are committed to protecting the natural environment and our communities through sustainable practices. 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. Additionally, we continue to convene our Corporate Sustainability Council to provide oversight, guidance, and direction on social, community, and environmental issues that impact the reputation and economic performance of the Company and to help address the concerns of our stakeholders. The Council meets quarterly and reports to and is sponsored by Sonoco’s President and CEO. The Council reports on Sonoco’s sustainability activities, quarterly, to the Board of Directors. We have committed to reporting in line with the Global Reporting Initiative standards.




Our sustainability goals include the following key elements:
5 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Greenhouse Gas Emissions - While we estimate that we have reduced our Scope 1 and Scope 2 greenhouse gas ("GHG") emissions intensity by approximately 25% since 2009, we are committed to further improving our environmental impact by setting ambitious new targets to reduce our global greenhouse gas emissions in line with the Paris Agreement, which is aimed at limiting the warming of global temperatures to well below 2°C above pre-industrial levels. Specifically, Sonoco aims to reduce absolute scope 1 and 2 GHG emissions by 25% by 2030 from a 2020 base year. We have also set a goal to reduce absolute scope 3 GHG emissions by 13.5% by 2030 from a 2019 base year by working with our customers and suppliers to develop innovative packaging solutions that reduce packaging waste and improve recyclability. These goals were validated by the Science-Based Target initiative in June 2021. In addition, we are actively studying necessary operational changes, technology developments and market changes that would be required to achieve net-zero GHG emissions by 2050.
Energy Usage- We strive to manage, mitigate and reduce our GHG emissions where possible. In support of our GHG emission reductions, Sonoco aims to continue energy efficiency improvements in our manufacturing plants targeted to reduce total energy use by at least 8% by 2030 from a 2020 baseline in addition to investing in energy efficiency, renewable energy and alternative power projects.
Water Usage - Reducing our water consumption is part of being responsible stewards of our planet’s resources. Many of our actions to reduce water usage involve our global paper mills, which account for the majority of our global water usage. We have conducted initial water risk studies at these manufacturing facilities using the WRI Aqueduct water risk tool.
Single Use Plastics - We are committed to reducing the use and impact of virgin plastics on the environment. As such, we are working to ensure we can make relevant on-pack recyclability claims for at least 75% of our global rigid plastic product portfolio, while also ensuring we are closing the loop through continued use of post-consumer recycled content. We are also committed to responsibly managing resins use at our facilities and are implementing "Operation Clean Sweep", a program focused on preventing discharge of plastic pellets and nurdles into the environment.
Recycling- 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.
People Management -Sonoco’s core belief in “People and Packaging with a Purpose” underlies our efforts to attract, acquire 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; diversity, equity and inclusion; and talent development. Integrity is a hallmark of the Sonoco culture.
We seek to engage, develop and reward our employee base 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 is critical to maintaining our competitiveness. This focus on human capital is reinforced by our Policies on Business Conduct and through increasing employee awareness and education, communication and training.
As of December 31, 2022, we had approximately 22,000 full-time equivalent employees, with the majority concentrated in the United States. We consider our employee relations to be strong.
People Objectives
We rely on the personal relationships and service provided by employees. As such, we believe attracting, recruiting, developing and retaining diverse 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, and the Executive Compensation and Employee & Public Responsibility Committees of the Board, provide oversight of our human capital management strategy.
Health and Safety
We take the health and safety of our employees seriously. Protecting the health and safety of our employees is a top priority, and we are committed to providing a safe working environment for all our associates. We expect each employee to follow our safety standards and protocols.
We use global and local incident data along with identifying leading indicators to create program and safety improvement action plans to reduce conditions and behaviors that lead to at-risk situations. Sonoco tracks safety performance and training indicators with a goal of reducing safety incidents and improving upon the previous year’s performance. Overall injuries in 2022 were slightly up from 2021, but remained lower than 2020 and 2019, despite the effects of acquisitions. To promote the prevention of more significant injuries or incidents that cause or have the potential to cause permanent disabilities or the loss of life, we continue to engage with outside experts to conduct assessments of high-risk activities and to leverage learnings from such engagement globally. In addition, we evaluated our safety systems to improve focus and resources. Globally, we achieved completion of 99% of all safety improvement action plans, which are site level improvement plans designed to reduce risk, in 2022. Finally, our operations leadership implemented a new safety playbook globally in 2022 to further train our employees. We believe tracking and reporting of Sonoco’s health and safety data increases accountability and provides important insights into processes that need improvement or enhancement.
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.
Diversity, Equity, and Inclusion
Our commitment to diversity, equity and inclusion ("DEI") starts with our goal of developing a workforce that is diverse in background, knowledge, skill and experience. Sonoco engages in efforts aimed at hiring diverse talent, including initiatives focused on gender, underrepresented ethnic groups, LGBT+ individuals, people with disabilities, veterans and others. We have implemented policies and training focused on non-discrimination and harassment prevention. We embrace DEI, which we believe fosters leadership through new ideas and perspectives. In 2022, we continued the evolution of our DEI strategy and objectives, an ongoing business imperative. In connection with its diversity initiatives, Sonoco periodically requests that its employees and Board members self-identify based on specified diversity categories. As of December 31, 2022, approximately 25.5% of our total work force and 17.0% of our senior leaders identified as female, while approximately 33.2% of our U.S. workforce and 13.6% of our senior leaders identified as a member of an underrepresented ethnic group. From our global workforce, our employees were located in the following geographic regions: 57% in North America; 18% in Europe, Middle East and Africa; 15% in Latin America; and 10% in Asia Pacific.
We have labor unions in all regions of our operations, and in North America, approximately 12.5% of our employees are represented by unions. We rely on the unique qualities and talents of our employees to help us meet our strategic priorities. Our DEI goals are focused on increasing the representation of women and racial minorities into more salaried and senior leadership positions. We are working toward this goal by increasing hiring, focusing on development and promotions, as well as focusing on retention efforts. We made significant progress in talent acquisition during 2022, despite a challenging labor market. In the U.S., 29% of new employee hires were female and 42% a member of a minority group in 2022.
6 FORM 10-K SONOCO 2022 ANNUAL REPORT

For the past 11 years, Sonoco’s employees have expanded and improved our Global Diversity, Equity and Inclusion Council (the "DEI Council"), which is chaired by our President and CEO. In 2022, the Company changed the name of the DEI Council, which was formerly known as the Global Diversity and Inclusion Council, to reflect the Company's increasing emphasis on driving equity as part of an inclusive employee environment. An important part of our DEI efforts includes Sonoco’s Business Resource Groups, which are groups of employees who support our diversity, equity, and inclusion strategies by leveraging the unique perspectives of their members. In 2022, we continued to focus DEI Council activities on workforce representation (diversity and equity) and work environment (equity and inclusion) by addressing unconscious bias to promote an environment where diverse backgrounds are appreciated, and diverse ideas are heard. In 2022, the DEI Council hosted a global Diversity & Inclusion Leadership Summit at headquarters in Hartsville, South Carolina, with a primary focus of equipping global DEI leaders with tools and information to increase impact in their regions.
We have continued to build our Supplier Diversity Program since 2004, integrating diversity and inclusion into our procurement process by laying a strong foundation with key internal and external stakeholders. We developed policies, practices and procedures to ensure equal opportunity and enable access. As part of Sonoco’s Supplier Diversity Program, supplier diversity progress is reported to the CEO, who in turn reports the progress to the Employee & Public Responsibility Committee of the Board of Directors.
Talent Development
Attracting, developing 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 Organization Development team to provide a more holistic approach to managing and enriching the employee lifecycle through continuous training and comprehensive succession planning. In 2021 and 2022, we significantly expanded Sonoco University, our internal learning resource that offers on-demand webinars, e-learning and in-person learning programs. Sonoco also provides employees access to self-directed e-learning courses taught by industry experts with curated learning paths designed for specific professional interests. In addition, we conduct regular talent succession assessments along with individual performance reviews 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 are also committed to pay equity and regularly review our compensation model to promote more fair and inclusive pay practices across our business. We offer competitive benefits packages that 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 informationInformation –
The Company electronically files with the Securities and Exchange Commission (SEC)(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 Securities Exchange Act of 1934, as amended (the “1934“Exchange Act”), and proxy materials pursuant to Section 14 of the 1934Exchange Act. The SEC maintains a site on the Internet, 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.sonoco.comwww.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.



7 FORM 10-K SONOCO 2022 ANNUAL REPORT

Information aboutAbout our Executive Officers –
NameAgePosition and Business Experience for the Past Five Years
Executive CommitteeOfficers
R. Howard Coker57 60 Board member, President and Chief Executive Officer since February 2020. Previously, Senior Vice President, Global Paper and Industrial Converted Products, 2019-2020; Senior Vice President, Rigid Paper Containers and Paper/Engineered Carriers International, 2017-2018; Group Vice President, Global Rigid Paper &and Closures, and Paper &and Industrial Converted Products, EMEA, Asia, Australia and/ New Zealand, 2015-2017; Vice President, Global Rigid Paper & Closures 2015; Group Vice President, Global Rigid Paper & Plastics 2013-2015; Vice President, Global Rigid Paper & Closures 2011-2013.2015-2017. Joined Sonoco in 1985. Mr. Coker is the brother-in-law of John R.J.R. Haley, Chairman of Sonoco'sSonoco’s Board of Directors.
Robert C. TiedeR. Dillard61 48 
(Resigned as President and Chief Executive Officer effective February 1, 2020.) President and Chief Executive Officer April 2018-February 2020; Previously Vice President and Chief Operating Officer 2017-2018; Senior Vice President, Global Consumer Packaging & Services, Protective Solutions & Reels 2015-2017; Senior Vice President, Global Consumer Packaging and Services 2013-2015; Vice President, Global Flexible & Packaging Services 2009-2013. Joined Sonoco in 2004.

Julie C. Albrecht

52 Vice President and Chief Financial Officer since April 2019.June 2022. Previously, Corporate Vice President, Treasurer/Assistant Chief FinancialStrategy Officer, 2017-2018; Vice President, Finance and Investor Relations & Treasurer for Esterline Technologies Corporation, 2015-2017; Finance Director, Customer Service Aircraft Systems for United Technologies, 2012-2015. Joined Sonoco in 2017.
Robert Dillard45 CorporateApril-June 2022; Vice President, Corporate Development, since November 2019. Previously Staff Vice President, Corporate Development 2018-2019;2018 - March 2022; President of Personal Care Europe 2018,and Vice President of Strategy and Innovation at Domtar Personal Care, a division of Domtar Corporation, 2016-2018; President, Stanley Hydraulics at Stanley Black & Decker, Inc. 2013-2016.2016-2018. Joined Sonoco in 2018.
John M. Florence

41 Vice President, Human Resources, General Counsel, and Secretary since February 2019. Previously Corporate Vice President, General Counsel and Secretary 2016-2019; Corporate Attorney 2015-2016. Previously an attorney at Haynsworth Sinkler Boyd, P.A. 2005-2015. Joined Sonoco in 2015.
Rodger D. Fuller58 61 Chief Operating Officer since April 2022. Previously, Executive Vice President, Global Industrial and Consumer, since February 2020. Previously2020-2022; Senior Vice President, Global Consumer Packaging, Display and Packaging and Protective Solutions, 2019-2020; Senior Vice President, Paper/Engineered Carriers U.S./Canada and Display &and Packaging, 2017-2018; Group Vice President, Paper & Industrial Converted Products, Americas 2015-2017; Vice President, Global Primary Materials Group 2015; Group Vice President, Paper & Industrial Converting N.A. 2013-2015; Vice President, Global Rigid Plastics & Corporate Customers 2011-2013.2017-2018. Joined Sonoco in 1985.
John M. Florence, Jr.
Richard K. Johnson
51 44 
General Counsel, Secretary, Vice President and General Manager Converted Products North America since June 2022. Previously, Vice President, General Counsel, Human Resources and Secretary, 2019-2022. Corporate Vice President, General Counsel and Chief Information Officer since joiningSecretary, 2016-2019; Joined Sonoco in March 2019.2015.

Sean Cairns52 President, Global Rigid Paper Packaging since April 2022. Previously, Vice President and Chief Information Officer of HNI Corporation 2011-2019.General Manager Rigid Paper Products Europe, 2008-2022. Joined Sonoco in 2008.
Roger P. SchrumRussell K. Grissett64 Vice President, Investor Relations & Corporate Affairs since February 2009. Previously Staff Vice President, Investor Relations & Corporate Affairs 2005-2009. Joined Sonoco in 2005.
Marcy J. Thompson58 Vice President, Marketing and Innovation since July 2013. Previously Vice President, Rigid Paper N.A. 2011-2013; Division Vice President & General Manager, Sonoco Recycling 2009-2011. Joined Sonoco in 2006.
Other Corporate Officers53 President, Global Flexibles Division since April 2022. Previously, Vice President and General Manager Global Flexibles, 2019-2022; Vice President and General Manager Global Protective Solutions, 2017-2019. Joined Sonoco in 1993.
James A. Harrell III58 61 President, Global Industrial Paper Packaging since April 2022. Previously, Vice President, Industrial Americas, Industrial effective March 1, 2020. PreviouslyAsia and Conitex, 2020-2022; Vice President Tubes & Cores, U.S.US and Canada, 2015-2020; Vice President, Global Tubes & Cores Operations February 2015-December 2015; Vice President, Tubes & Cores N.A. 2012-2015; and Vice President, Industrial Converting Division N.A. 2010-2012.2016-2020. Joined Sonoco in 1985.
Ernest D. Haynes III50 President, Metal Packaging since March 2022. Previously, Vice President, Rigid Paper Containers, North America, 2021-2022; Division Vice President and General Manager of Rigid Paper Containers, North America, 2018-2021. Division Vice President and General Manager of Tubes and Cores, U.S. and Canada, 2015-2018. Joined Sonoco in 1997.
Jeffrey S. Tomaszewski51 54 President, Diversified Businesses since April 2022. Previously, Vice President, North America Consumer and Global RPC effective March 1, 2020. PreviouslyRigid Paper and Closures, 2020-2022; Division Vice President and General Manager – Global Rigid Paper and Closures, and Display and Packaging and Paperboard Specialties, 2019-2020; Division Vice President and General Manager of Rigid Paper Containers, NANorth America and Display and Packaging, 2018-2019; Division Vice President, Rigid Paper Containers, NA 2015-2018; and General Manager of Global Display and Packaging and Packaging Services 2013-2015.North America, 2015-2018. Joined Sonoco in 2002.
Lisa K. Weeks55 Vice President, Investor Relations and Corporate Affairs, since April 2022. Previously Senior Vice President, Head of Investor Relations and Chief Strategy Officer at Benchmark Electronics, Inc. 2020-2022. Vice President, Strategy and Investor Relations at Benchmark Electronics, Inc., 2012-2020. Joined Sonoco in 2022.
Adam Wood

51 54 
Vice President Global Paper Products-Europe since April 2022. Previously Vice President, Paper &and Industrial Converted Products, Europe, Middle East,EMEA, Australia and New Zealand, since 2019. Previously Vice President, Paper & Industrial Converted Products, EMEA, Asia, Australia and New Zealand 2015-2019; Vice President, Global Tubes & Cores February 2015-December 2015; Vice President, Industrial Europe 2014-2015; Division Vice President and General Manager, Industrial Europe 2011-2014.2015-2022. Joined Sonoco in 2003.



68 FORM 10-K SONOCO 20192022 ANNUAL REPORT


Item 1A. Risk factorsFactors
We are subject to risks and uncertainties that could adversely affect our business, 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 Securities and Exchange Commission, 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 Securities and Exchange Commission, 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.
Changes in domestic and global economic conditions may have a negative impact on our business operations and financial results.
Although our business is diversified across various markets and customers, 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 the difficulties of the United States and other countries in dealing with their rising debt levels, and currency fluctuations are likely to continue to put pressure on the economy, and on us. In responseRisks Related to the last global economic recession, extraordinary monetary policy actions of the U.S. Federal ReserveDomestic and other central banking institutions, including the utilization of quantitative easing, were takenGlobal Economies and to create and maintain a low interest rate environment. The Federal Reserve began slowly raising its benchmark interest rates over the past few years in response to an improving economy and reduced unemployment, and indications in 2018 were that further increases might be expected in 2019. However, in 2019, the Federal Reserve lowered the rate three times, as concerns grew about a potential global slowdown in the face of unresolved trade negotiations between the United States and China, which dampened business investment and slowed the manufacturing sector. If the U.S. economy remains strong and international trade negotiations are successfully resolved, the Federal Reserve may begin to raise its benchmark rate again. Such an increase may, among other things, reduce the availability and/or increase the costs of obtaining new variable rate debt and refinancing existing indebtedness, and negatively impact our financial condition and results of operations. Additionally, such an increase in rates would put additional pressure on consumers and the economy in general. As evidenced in recent years, tightening of credit availability and/or financial difficulties, leading to declines in consumer and business confidence and spending, affect us, 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 adverse effect on us.
The ongoing coronavirus outbreak emanating from China at the beginning of 2020 has impacted various Chinese and multi-national businesses, including travel restrictions and the extended shutdown of certain businesses in the region. Annual sales of our China operations totaled approximately $130 million in 2019. To date, our eight manufacturing locations in China have been somewhat negatively impacted by lower customer demand and certain supply chain disruptions. If the coronavirus outbreak situation should worsen, we may experience greater disruptions to both customer demand and supply chains in China and on a worldwide basis. We continue to evaluate the potential operational impacts and closely monitor developments as they are reported and will respond accordingly.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 320approximately 310 facilities in 36 countries.32 countries as of December 31, 2022. In 2019,2022, approximately 37%28% of consolidated sales came from operations and sales outside of the United States, and we expect to continue tomay expand our international operations in the future. 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 maycan 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 or government royalties, including the imposition or increase of withholding and other taxes on remittances and other payments by non-U.S. subsidiaries;
•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, and/or other liabilities related to non-compliance, damage to our reputation, unanticipated operational restrictions and/or other consequences as a result of the Company's 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 work councils, and costs associated with restructuring activities;
•national and regional labor strikes;
•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, and customs, import/export and other trade compliance regulations;
•compliance with and changes in applicable foreign laws;
•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 U.S.;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;
7 FORM 10-K SONOCO 2019 ANNUAL REPORT

•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 and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine), catastrophic events, acts of terrorism, and widespread outbreaks of infectious diseases.diseases, such as COVID-19.

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/orand disruptions in the credit markets could adversely affect our business, financial condition or results of operations.
The Company hasWe have extensive international operations and isare dependent on customers and suppliers that operate in local economies around the world. In addition, the Company accesseswe access global credit markets as part of itsour capital allocation strategy. Adverse global macroeconomic conditions could negatively 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 could have a significant impact on the financial stability of our suppliers and customers, and could negatively impact demand for our products. For example, as a result of the impacts of the COVID-19 pandemic, we previously 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.

The United Kingdom's exit from the European Union could adversely affect us.
In 2016, the U.K. voted to leave the European Union (E.U.) (referred to as Brexit), and formally exited the E.U. at the end of January 2020. Brexit could cause disruptions to and create uncertainty surrounding our U.K. businesses, including affecting relationships with existing and future customers, suppliers and employees. The effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period or more permanently. The measures could potentially disrupt the markets we serve and the tax jurisdictions in which we operate and adversely change tax benefits or liabilities in these or other jurisdictions. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace or replicate. Our annual revenue in 2019 for our U.K. businesses alone totaled $120 million. Although Brexit could have broad-reaching effects beyond just in the U.K. itself, we believe our exposure to this uncertainty is limited.

We are subject to governmental export and import control laws, economic sanctions 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 of our 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
9 FORM 10-K SONOCO 2022 ANNUAL REPORT

could be subject to substantial civil or criminal penalties, including economic sanctions against us, incarceration for responsible employees and managers, and the possible loss of export or import privileges.privileges, 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, licenseand 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 prohibit the shipment of certain products to embargoed or otherwise sanctioned countries, governments and persons. WeDespite our efforts taken 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 could have negative consequences, including government investigations, penalties, fines, civil and criminal sanctions and reputational harm. Any change in export or import regulations, economic sanctions regulations or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons 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 materially 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 exited our operations in Russia, which consisted of two small manufacturing operations, and incurred asset impairment charges as a result of our exit. We have also ceased sourcing certain inputs from Russian suppliers. 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, and any future additional export controls or sanctions imposed by the United States, the United Kingdom, the European Union, or other countries could further exacerbate these effects.
Changes in U.S.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 U.S.United States and many of its trading partners. In March 2018, the U.S.United States announced new tariffs on imported steel and aluminum products. Other international trade actions and initiatives have also werebeen announced in 2018 and 2019,over the past few years, notably the imposition by the U.S.United States of additional tariffs on products of Chinese origin, and China’s imposition of additional tariffs on products of U.S. origin. These tariffs have had, and we expect that they will continue to have, an adverse effect on our costs of products sold and margins in our North America segment. Additional measures targeting U.S. trade with China, including the expansion of U.S. export controls targeting China and Chinese companies, could potentially have an adverse effect on our consolidated financial condition and results of operations.
In December 2019,July 2020, the United States-Mexico-Canada Agreement, (USMCA), which is intended to replacereplaced the North American Free Trade Agreement, (NAFTA), was signed but has only been ratified by the legislative bodies of the United States and Mexico. There remains uncertainty regarding when the USMCA would be adopted as well as the specific impacts of the final agreement. Further changes in U.S. trade policies may be put into place, including additional import tariffs and tariffs on raw materials imported from Canada and Mexico, if the replacement trade agreement reached by the three countries is not ratified by Canada. Additional tariffs and changes to the U.S. trade policies would likely adversely impact our business.became effective. In response to these changes,this agreement, 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 U.S.United States.
In order to mitigate the impact of these trade-related increases on our costs of products sold, we have increased and may in the future increase prices in certain markets and, over the longer term, make changes in our supply chain and, potentially, our U.S. manufacturing strategy. Implementing price increases may cause our customers to find alternative sources for their products. We may be unable to successfully to 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. Further, the uncertainty surrounding U.S. trade policy makes it difficult to make long-term strategic decisions regarding the best way to respond to these pressures and could also increase the volatility of currency exchange rates. Our inability to effectively manage the negative 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 income and balances as reported in U.S. dollars. 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, this does not insulate us completely from foreign currency fluctuations and also exposes us to counterparty risk of nonperformance.
Changes in domestic and global economic conditions may have a negative 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, currency fluctuations, geopolitical uncertainty and increased interest rates, as well as the difficulties of the United States and other countries in dealing with the effects of the COVID-19 pandemic and their rising debt levels, are likely to continue to put pressure on the economy, and on us. For example, the Federal Reserve began raising its benchmark rate in March 2022, increasing the rate by a total of 4.50% since the start of 2022. Such increases and any future increases may, among other things, reduce the availability and increase the costs of obtaining new variable rate debt and refinancing existing indebtedness, and negatively impact our financial condition and results of operations. Additionally, such increases in rates put additional pressure on consumers and the economy in general. As evidenced in recent years, 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. We have experienced most of these conditions to some extent as a result of the global economic impact of the pandemic. All of these factors may have a material and adverse effect on our business, results of operations, financial condition and prospects.
10 FORM 10-K SONOCO 2022 ANNUAL REPORT

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, steel, aluminum and resin. 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 military conflict between Russia and Ukraine, 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/orand 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
8 FORM 10-K SONOCO 2019 ANNUAL REPORT

prevent a materiallymaterial 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.
SomeIn 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. The ongoing conflict between Russia and Ukraine has increased the volatility of energy and commodity prices and contributed to supply chain disruptions, which have had, and may in the future have, an adverse effect on the cost and availability of energy supplies and other inputs in our European operations. Any current and future government sanctions or an escalation or widening of the conflict could further contribute to these effects. 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, we cannot guarantee successthese efforts may be insufficient to protect us against fluctuations in these efforts,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/orand 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, negatively 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 impacteffect on our financial condition and operating results.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 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 or 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.
WeMaterial disruptions in our business operations could negatively 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 negatively impact production and our financial results. Such a disruption could occur as a result of any number of events including but not limited to a 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 such as the COVID-19 pandemic. These types of disruptions could materially and adversely affect our earnings to varying degrees depending upon the facility, the duration of the disruption, 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 able to identify suitable acquisition candidates, which could limitcovered by our potential for growth.
We have made numerous acquisitions in recent years, and expect to actively seek new acquisitions that management believes will provide meaningful opportunities for growth. However, we may not be able to identify suitable acquisition candidatesexisting insurance policies or complete acquisitions on acceptable 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.subject to certain deductibles.
11 FORM 10-K SONOCO 2022 ANNUAL REPORT

Risks Related to Acquisitions, Divestitures and Joint Ventures
We may encounter difficulties in integrating acquisitions, which could have an adverse impacteffect on our financial condition and operating results.results of operations.
As noted in the risk factors above, weWe have invested a substantial amount of capital in acquisitions, joint ventures and strategic investments, including our acquisition of Ball Metalpack (now Sonoco Metal Packaging) in January 2022, and we expect that we will continue to do so in the foreseeable future. We are continually evaluating acquisitions and strategic investments that are significant to our business both in the United States and internationally. Acquisitions, joint ventures and strategic investments involve numerous risks. AcquiredAs 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 operating results.results of operations. Acquisitions also involve special risks, including, without limitation, 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 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;
•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;
•difficulties in maintaining uniform standards, controls, procedures and policies;
•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.

While management believes that acquisitions will improve our competitiveness and profitability, no assurance can be given that acquisitions will be successful or accretive to earnings.earnings or that the expected benefits from such transactions will be realized within the anticipated time frame, or at all. If actual performance in an acquisition falls significantly 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, which could limit our potential for growth.
9 FORM 10-K SONOCO 2019 ANNUAL REPORT

We have made numerous acquisitions in recent years and expect to actively seek new acquisitions that provide meaningful opportunities for growth. However, we may not be able to identify suitable acquisition candidates or complete acquisitions, including our currently pending acquisition of RTS, 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, and any acquisitions we complete may not provide the benefits that we anticipate. 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. We may also be unable to complete acquisitions that we believe would be beneficial to the Company on the timing we anticipate, or at all, if we are unable to satisfy related closing conditions or obtain necessary government consents or the expiration or termination of applicable regulatory waiting periods. 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 divestitures,other strategic transactions, we may become subject to liabilities and legal claims.
In connection with any acquisitions, joint ventures, divestitures or divestitures,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; 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.facilities, assets or businesses.
We are continuously seeking the most cost-effective means and structure to serve our customers and to respond to changes in our markets. Accordingly, fromFrom time to time, we have closed higher-cost facilities, sold non-core assets and businesses, and otherwise restructured operations, and are likely to do so again, close higher-cost facilities, sell non-core assets and otherwise restructure operations in an effort to improve cost competitiveness and profitability. For example, in 2020 and 2021, we divested our global display and packaging operations in two separate transactions. 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 also 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.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
12 FORM 10-K SONOCO 2022 ANNUAL REPORT

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 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 face intense competition, and failure to compete effectively may have an adverse effect on our operating results.
We sell our productsinvestments 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 effective competition. The loss of business from our larger customers, customer changes to alternative forms of packaging, or renewal of business with less favorable terms may have a significant adverse effect on our operating results.

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 and reduce our net sales and operating results.

The loss of a key customer, or a reduction in its production requirements, could have a significant adverse impact on our sales and profitability.
Each of our segments has large customers, and the loss of any of these could have a significant 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, although no single customer accounted for more than 10% of our net sales in 2019 or 2018, 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), "Dependence on Customers."
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, 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 may hinder our growth potential and affect our competitive position, and adversely affect our business and results of operations.
We are subject to costs and liabilities related to environmental, health and safety, and corporate social responsibility laws and regulations that could adversely affect our operating results.
We must comply with extensive laws, rules and regulations in the United States and in each of the 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 (CERCLA), 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.
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, 2019, approximately $8.7 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 that would have a material adverse effect on our operating results and financial position.
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 negatively impact customers’ demand for our
10 FORM 10-K SONOCO 2019 ANNUAL REPORT

products as they comply with such changes and/or 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 negatively impact demand for our products, including changes in consumer preferences driven by various health-related concerns and perceptions.
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 reputation risk with our customers and other stakeholders if we are unable sufficiently to 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 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 operating results of one or more of our operating units. However, any such changes are uncertain, and we cannot predict the amount of additional capital expenditures or operating expenses that could be necessary for compliance.

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. While we have built extensive operational processes intended to ensure that the design and manufacture of our products meet rigorous quality standards, 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 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, it could have a material adverse impact on our business, financial condition and results of operations.
We and the industries in which we operate are at times being 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. Simply 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 believe that we have adopted appropriate risk management and compliance programs, the global and diverse nature of our operations means that legal and compliance risks will continue to exist and legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, will arise from time to time that could adversely affect our business, results of operations and financial condition.
Changes in pension plan assets or liabilities may reduce our operating results and shareholders’ equity.
We sponsor various defined benefit plans worldwide, and have an aggregate projected benefit obligation for these plans of approximately $2.0 billion as of December 31, 2019. 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 a negative impact on our results of operations and cash flows. As of December 31, 2019, these plans hold a total of approximately $1.7 billion in assets consisting primarily of common collective trusts, mutual funds, fixed income securities and alternative investments such as interests in hedge funds, funding a portion of the projected benefit obligations of the plans. If the performance of these assets does not meet our assumptions, or discount rates decline, the 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 operating results and shareholders’ equity. Beginning in 2019, the Company initiated de-risking measures in its U.S. defined benefit pension plans which at December 31, 2019 comprised approximately 74% and 78% of the aggregate projected benefit obligation and plan asset value, respectively, of the Company's worldwide defined benefit plans, These measures included a voluntary $200 million plan contribution, reallocation of plan assets to primarily fixed income investments, and initiating the process of terminating and annuitizing the Sonoco Pension Plan for Inactive Participants, the larger of the Company's U.S. defined benefit pension plans.
We, or our customers, may not be able to obtain necessary credit or, if so, on reasonable terms.
We have $1.0 billion of fixed-rate debt outstanding. We also operate a $500 million commercial paper program, supported by a $500 million credit facility committed by a syndicate of eight banks until July 2022. If we were prevented from issuing commercial paper, we have the contractual right to draw funds directly on the underlying bank credit facility. We believe that the lenders have the ability to meet their obligations under the facility. 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 a negative 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.
Our credit ratings are important to our ability to issue commercial paper at favorable rates of interest. A downgrade in our credit rating could increase our cost of borrowing.

Our indebtedness could adversely affect our cash flow, increase our vulnerability to economic conditions, and limit or restrict our business activities.
In addition to interest payments, from time to time 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. 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; and
•limiting our ability to borrow additional funds.
11 FORM 10-K SONOCO 2019 ANNUAL REPORT

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. Although we were substantially above these minimum levels at December 31, 2019, 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.
In 2019, our average variable-rate borrowings were approximately $0.7 billion. Increases in short-term interest rates would directly impact the amount of interest we pay. Fluctuations in interest rates can increase borrowing costs and have a material adverse effect on our business.

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 may 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.

Currency exchange rate fluctuations may reduce operating results and shareholders' equity.
Fluctuations in currency exchange rates can cause translation, transaction and other losses that can unpredictably and adversely affect our consolidated operating results. 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 operating results and balances as reported in U.S. dollars. Although we monitor our exposures and, from time to time, may use forward currency contracts to hedge certain forecasted currency transactions or foreign currency denominated assets and liabilities, this does not insulate us completely from foreign currency fluctuations and exposes us to counterparty risk of nonperformance.

Adverse weather and climate changes may result in lower sales.
We manufacture packaging products for foods as well as products used in construction and industrial manufacturing. Varying weather conditions can impact crop growing seasons and related farming conditions that can then impact the timing or amount of demand for food packaged in our containers. In addition, poor or extreme weather conditions can temporarily impact the level of construction and industrial activity and also impact the efficiency of our manufacturing operations. Such disruptions could have a material adverse effect on our results of operations.

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 information technology systems may be susceptible to damage, disruption or shutdown due to natural disaster, hardware of software failure, obsolescence, cyberattack, support infrastructure failure, user errors or malfeasance resulting in malicious or accidental destruction of information or functionality, or other catastrophic event..
From time to time, we have been, and we will likely continue to be, subject to cybersecurity-related incidents. However, to date we have not experienced any material impact on our business or operations from these attacks or events.
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 adverse effect on our business, financial position and results of operations. Although we attempt to mitigate these risks by employing a number of 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 information technology 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 information technology 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.

A security breach of customer, employee, supplier or company information may have a material 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 data and information is subject to the risk of intrusion, tampering and theft. Although we develop and maintain systems 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 or 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 and/or user errors that could lead to the compromising 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 information to third parties when it is necessary to pursue business objectives. While we obtain assurances that these third parties will protect this information and, where appropriate, assess the protections employed by these third parties, there is a risk the confidentiality of data held by third parties may be compromised.
We continue to see increased regulation of data privacy and security and the adoption of more stringent subject matter specific state laws and national laws regulating the collection and use of data, as well as security and data breach obligations – including, for example, the General Data Protection Regulation in the EU, the Cyber Security Law in China, the General Data Protection Law in Brazil and the state of California's Consumer Privacy Act of 2018. It is likely that new laws and regulations will continue to be adopted in the United States and internationally, and
12 FORM 10-K SONOCO 2019 ANNUAL REPORT

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 and expect to continue to incur ongoing operating 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. 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 the new 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 national data protection regulators and result in significant penalties, and increase our cost of doing business, all of which could have a materially adverse impact on our business, financial condition and results of operations.

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

Changes in U.S. generally accepted accounting principles (U.S. 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, pension benefit plans, 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 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 negatively impact our operating results and shareholders' equity.
At December 31, 2019, the carrying value of our goodwill and intangible assets was approximately $1.8 billion. We are required to evaluate our goodwill amounts 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 one reporting unit that currently is at risk of a significant future impairment charge if actual results fall short of expectations. 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 adverse effect on our operating results and shareholders' equity.

Full realization of our deferred tax assets may be affected by a number of factors.
We have deferred tax assets, including U.S. 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 U.S. 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 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. Changes in these 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.
For example, the U.S. Tax Cuts and Jobs Act (“Jobs Act”), enacted in 2017, significantly changes how the U.S. taxes corporations. The Jobs Act requires complex computations to be performed that were not previously required under U.S. tax law, significant judgments to be made in interpretation of the provisions of the Jobs Act, and significant estimates in calculations, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on application or administration of provisions of the Jobs Act and regulations under the act that is different from our interpretations. It is
13 FORM 10-K SONOCO 2019 ANNUAL REPORT

also reasonable to expect that global taxing authorities will be reviewing current legislation for potential modifications in reaction to the implementation of the Jobs Act. Any such additional guidance, along with the potential for additional global tax legislation changes, could have a material adverse impact on our net income and cash flow by impacting significant deductions or income inclusions. 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.
Recently, international tax norms governing each country’s jurisdiction to tax cross-border international trade have evolved, and are expected to continue to evolve, due in part to the Base Erosion and Profit Shifting project led by the Organization for Economic Cooperation and Development (“OECD”), an international association of 36 countries including the United States, and supported by the G20. Changes in these laws and regulations, or any change in the position of tax authorities regarding their application, administration or interpretation could adversely affect our financial results. In addition, a number of countries are actively pursuing changes to their tax laws applicable to multinational corporations.
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 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 and/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.
As further discussed in Note 14 to our December 31, 2019 financial statements included in Item 8 of this Form 10-K, the IRS has previously notified us that it disagrees with our characterization of a distribution, and subsequent repayment, of an intercompany note in 2012 and 2013. If the IRS were to prevail, we could be required to make an adjustment to income for the affected years and pay a significant amount of additional taxes, which could have a material adverse effect on our results of operations and financial condition.

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 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 we have over 190 subsidiaries and joint ventures in 36 countries around the world. As described in Item 9A of this Form 10-K, management has concluded that our internal controls over financial reporting were effective as of December 31, 2019. 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 adverse effect on our operations, investor confidence in our business and the trading prices of our securities.

Challenges to, or the loss of, our intellectual property rights could have an adverse impact 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/or 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 U.S. 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 U.S. The use of our intellectual property by someone else without our authorization could reduce or eliminate certain of our 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 cost 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 adverse effect on our business, consolidated financial condition or results of operations.

14 FORM 10-K SONOCO 2019 ANNUAL REPORT

Several of our operations are conducted by joint ventures that we cannot operateare 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 negatively 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 effective competition. The loss of business from our larger customers, customer changes to alternative forms of packaging, or renewal of business with less favorable terms may 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), "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 of our 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.
13 FORM 10-K SONOCO 2022 ANNUAL REPORT

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, 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 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, 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.
Climate Change Related Risk
Adverse weather and climate changes 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 can 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 can temporarily impact the level of construction and industrial activity and impact the efficiency of our manufacturing operations. Weather-related events, such as hurricanes and floods, which may increase in frequency and severity due to climate change, could 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.

Material disruptionsThere has been an increased focus from investors, customers, the general public and U.S. and foreign governmental and nongovernmental authorities on climate change and GHG emissions. Regulatory responses to climate change may result in new laws and regulations 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. In the United States, the Environmental Protection Agency has issued a number of regulations under the Clean Air Act with the goal of reducing 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 related to 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 and which the United States formally rejoined in February 2021. Many of the other countries where we conduct business are expected to develop similar climate change related regulations. To the extent our facilities become subject to additional 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, 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 have also voluntarily established and publicly disclosed our GHG reduction targets and other 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 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,
14 FORM 10-K SONOCO 2022 ANNUAL REPORT

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.
Risks Related to Environmental, Health and Safety, and Corporate Social Responsibility Laws and Regulations
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 laws, rules and regulations in the United States and in each of the 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.
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, 2022, approximately $7.3 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 negatively 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 negatively 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, 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 or mandate the use of recycled content. 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.
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, 2022, we had $2.4 billion of fixed-rate debt outstanding. We also operate a $500 million commercial paper program, supported by a $750 million revolving credit facility committed by a syndicate of eight banks until June 2026. 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 on our plans. In addition, our customers may experience liquidity problems as a result of a negative 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 January 2022, in connection with our acquisition of Ball Metalpack, we issued $1.2 billion aggregate principal amount of unsecured senior notes and entered into a $300 million term loan facility, and in December 2022, we entered into an additional $400 million term loan facility. 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
15 FORM 10-K SONOCO 2022 ANNUAL REPORT

business. 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 our two term loan facilities totaling $700 million. 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. Variable-rate borrowings at December 31, 2022 were approximately $796 million.
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, 2022, scheduled debt maturities in 2023 totaled $502 million.
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 information technology systems may be susceptible to damage, disruption or shutdown due to natural disaster, hardware of 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.
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 results of operations. Although we attempt to mitigate these risks by employing a number of 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 information technology 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 information technology 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.
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 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 or 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 to third parties when it is necessary to pursue business objectives and there is a risk that the confidentiality of data held by third parties may be compromised.
We continue to see increased regulation of data privacy and security and the adoption of more stringent subject matter specific state laws and national laws regulating the collection and use of data, as well as security and data breach obligations – including, for example, the General Data Protection Regulation in the EU, the Cyber Security Law in China, the General Data Protection Law in Brazil, the state of California's California Consumer Privacy Act of 2018 and California Privacy Rights Act of 2020, and additional state privacy and data protection laws in Virginia, Connecticut, Utah and Colorado, each of which will come into full effect in 2023. Significant changes also include the expansion of the scope of California privacy law to include employee and business-to-business personal data. 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
16 FORM 10-K SONOCO 2022 ANNUAL REPORT

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 and expect to continue to incur ongoing operating 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. 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 the new 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 national 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 projected benefit obligation for these plans of approximately $364 million as of December 31, 2022. 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 a negative impact on our results of operations and cash flows. As of December 31, 2022, these plans held a total of approximately $266 million in assets consisting primarily of fixed income securities and mutual funds, funding a portion of the projected benefit obligations 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 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.
Changes in U.S. generally accepted accounting principles (U.S. 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, pension benefit plans, 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 negatively impact our results of operations and shareholders' equity.
At December 31, 2022, the carrying value of our goodwill and intangible assets was approximately $2.4 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 that are currently at risk of a future impairment charge if actual results fall short of expectations. 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.
17 FORM 10-K SONOCO 2022 ANNUAL REPORT

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. Changes in these 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. For example, 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.
Recently, international tax norms governing each country’s jurisdiction to tax cross-border international trade have evolved, and are expected to continue to evolve, due in part to the Base Erosion and Profit Shifting project led by the Organization for Economic Cooperation and Development (the “OECD”), an international association of 38 countries including the United States, and supported by the G20. The OECD reached an agreement to align countries on a minimum corporate tax rate and an expansion of the taxing rights of market countries. Some individual countries, including those in the European Union, have proposed legislation to implement the global minimum tax agreement. However, in other countries, such as the United States, the implementation of the OECD agreement remains highly uncertain. If enacted, either by all OECD participants or unilaterally by individual countries, the agreement could result in tax increases or double taxation that could affect our tax liability. Changes in these or any other laws and regulations, or any change in the position of tax authorities regarding their application, administration or interpretation, could adversely affect our financial results.
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 measuresregarding the tax treatment or characterization of any of our transactions. If any tax authorities were to minimizesuccessfully challenge the riskstax treatment or characterization of disruptionany 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 facilities,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, 2022, we had approximately 180 subsidiaries and joint ventures in 32 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, encounter an unforeseenwe 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 operational disruptionand adverse effect on our operations, investor confidence in oneour business and the trading prices of our major facilities, which could negatively impact productionsecurities.
18 FORM 10-K SONOCO 2022 ANNUAL REPORT

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.
Risks Related to COVID-19
The direct and indirect results of the COVID-19 pandemic may adversely affect our operations, results of our operations and our financial results. Such a disruption could occur as a resultcondition.
Globally, the impact of any numberthe COVID-19 pandemic continues to evolve. The operations and financial performance in some of events includingour businesses continued to be negatively impacted during the first half of 2022, but not limited to a major equipment failure, labor stoppages, transportation failures affectinglesser extent than in 2021. For example, in some instances, the supply chain constraints and shipmentlabor shortages that were seen throughout the economy in 2021 continued to impact certain of our businesses, contributing to a negative price/cost relationship in the first half of the year; however, these issues continued to improve as the year progressed.
We expect that the future impact of COVID-19 on our operational and financial performance will depend on the behavior of the virus and the world's reaction to it, which are highly uncertain and cannot be predicted. New variants have caused and may have the potential to cause further outbreak and economic disruption. Additionally, the effectiveness of vaccines and containment measures to mitigate the impacts of the virus on people's health and the economy could diminish, resulting in decreased demand for our products or disruption to our operations.
We previously experienced, and may experience in the future, lower overall demand for certain of our products due to economic uncertainty and changing consumer behaviors driven by COVID-19 or reduced demand due to our customers’ supply chain issues. We have previously experienced, and may in the future experience, strong headwinds related to higher supply chain costs and tight labor market due to the continued impacts of COVID-19. Inflation continues, and may continue in the future, to contribute to higher commodity and other input costs. Our production capabilities may be disrupted if we are unable to secure sufficient supplies of raw materials, disruptions atif significant portions of our suppliers, fire, severe weather conditions, natural disasters and disruptions in utility services. These typesworkforce are unable to work effectively, including because of illness, government actions or other restrictions, or if we have periods of disruptions due to deep cleaning and sanitizing our facilities. An extended period of disruption to our served markets or global supply chains could materially and adversely affect our earningsresults of operations, access to varying degrees depending upon the facility, the duration of the disruption, 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 coveredliquidity and overall financial condition. In addition, an extended global recession caused by the pandemic could have an adverse effect on our existing insurance policies or may be subject to certain deductibles.business, results of our operations, financial condition and prospects.
Item 1B. Unresolved staff commentsStaff Comments
There are no unresolved written comments from the SEC staff regarding the Company’s periodic or current 1934Exchange Act reports.
Item 2. Properties
The Company’s corporate offices are owned and operated in Hartsville, South Carolina. There are approximately 320 As of December 31, 2022, there were approximately 310 owned and leased facilities used by the Company in36 32 countries around the world. The majority of these facilities are located in North America. The most significant foreign geographic region in which the Company operates is Europe, followed by Asia.
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.
Item 3. Legal proceedingsProceedings
The Company has been named as a potentially responsible party (PRP)("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, 2019,2022, cannot be determined.
As of December 31, 20192022 and 2018,2021, the Company had accrueued d $8.7$7.3 million and $20.17.4 million, respectively, related to environmental contingencies. 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 16 to the Company's Consolidated Financial Statements under Item 8 of this Annual Report on Form 10-K.
Other legal mattersLegal Matters
Additional information regarding legal proceedingsproceedings is provided in Note 16 to thethe Consolidated Financial Statements of this Annual Report on Form 10-K.
Item 4. Mine safety disclosuresSafety Disclosures
Not applicable.

1519 FORM 10-K SONOCO 20192022 ANNUAL REPORT


PART II
 
Item 5. Market for registrant’s common equity, related stockholder mattersRegistrant’s Common Equity, Related Stockholder Matters and issuer purchasesIssuer Purchases of equity securitiesEquity Securities
The Company’s common stock is traded on the New York Stock Exchange under the stock symbol “SON.” As of December 31, 2019,2022, there were approximately 95,000106,000 shareholder accounts. Information required by Item 201(d) of Regulation S-K can be found in Part III, Item 12 of this Annual Report on Form 10-K.
Although the ultimate determination of whether to pay dividends is within the sole discretion of the Board of Directors and is based on a variety of factors, the Company currently plans to continue paying dividends consistent with historical practice as earnings and the Company's liquidity permit. Dividends per common share were $1.92 in 2022, $1.80 in 2021 and $1.72 in 2020. On February 8, 2023, the Company declared a regular quarterly dividend of $0.49 per common share payable on March 10, 2023, to shareholders of record on February 22, 2023.
son-20221231_g1.jpg



December 31,201720182019202020212022
Sonoco Products Company$100.00$103.07$123.19$122.25$122.89$133.11
S&P 500$100.00$95.62$125.72$148.85$191.58$156.89
Dow Jones US Containers & Packaging$100.00$81.55$104.86$127.03$140.95$115.86









20 FORM 10-K SONOCO 2022 ANNUAL REPORT

The Company made the following purchases of its securities during the fourth quarter of 2019:2022:
Issuer purchases of equity securities
Period
(a) Total Number of  
Shares Purchased1
(b) Average Price  
Paid per Share
(c) Total Number of  
Shares Purchased
as Part of Publicly
Announced Plans or
Programs2
(d) Maximum
Number of Shares
that May Yet be
Purchased under the
Plans or Programs2
09/30/19 - 11/03/1912,589  $58.12  —  2,969,611  
11/04/19 - 12/01/19887  $59.27  —  2,969,611  
12/02/19 - 12/31/192,067  $61.40  —  2,969,611  
Total15,543  $58.62  —  2,969,611  

Period
(a) Total Number of  
Shares Purchased1
(b) Average Price  
Paid per Share
(c) Total Number of  
Shares Purchased
as Part of Publicly
Announced Plans or
Programs
(d) Maximum
Number or Approximate Dollar Value of Shares
that May Yet be
Purchased under the
Plans or Programs1
10/03/22 - 11/06/22—$——$137,971,853 
11/07/22 - 12/04/22—$——$137,971,853 
12/05/22 - 12/31/22—$——$137,971,853 
Total—$——$137,971,853 
1
A total of 15,543 common shares were repurchased inOn April 20, 2021, the fourth quarter of 2019 related to shares withheld to satisfy employee tax withholding obligations in association with the exercise of certain share-based compensation awards. These shares were not repurchased as part of a publicly announced plan or program.
2
On February 10, 2016, theCompany's Board of Directors authorized the repurchase of up to 5,000,000 shares of the Company's common stock.stock in an aggregate amount of up to $350.0 million. Following several repurchase transactions in 2021, a total of approximately $138.0 million remained available for share repurchases at December 31, 2021 and December 31, 2022. No shares were repurchased under this authorization during 2019, 2018 or 2017. During 2016, a total of 2,030,389 shares were repurchased at a cost of $100 million. Accordingly, at December 31, 2019, a total of 2,969,611 shares remain available for repurchase under this authorization.2022.
The Company did not make any unregistered sales of its securities during 2019.2022.
16 FORM 10-K SONOCO 2019 ANNUAL REPORT

Item 6. Selected financial data[Reserved]
The following table sets forth the Company’s selected consolidated financial information for the past five years. The information presented below should be read together with

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this Annual Report on Form 10-K and the Company’s historical Consolidated Financial Statements and the Notes thereto included in Item 8 of this Annual Report on Form 10-K. The selected statement of income data and balance sheet data are derived from the Company’s Consolidated Financial Statements.
  
Years ended December 31
(Dollars and shares in thousands except per share data)20192018201720162015
Operating Results
Net sales$5,374,207  $5,390,938  $5,036,650  $4,782,877  $4,964,369  
Cost of sales and operating expenses4,847,245  4,913,238  4,585,822  4,339,643  4,512,927  
Restructuring/Asset impairment charges59,880  40,071  38,419  42,883  50,637  
Gain on disposition of business—  —  —  (104,292) —  
Non-operating pension costs24,713  941  45,110  11,809  18,261  
Interest expense66,845  63,147  57,220  54,170  56,973  
Interest income(5,242) (4,990) (4,475) (2,613) (2,375) 
Income before income taxes380,766  378,531  314,554  441,277  327,946  
Provision for income taxes93,269  75,008  146,589  164,631  87,738  
Equity in earnings of affiliates, net of tax(5,171) (11,216) (9,482) (11,235) (10,416) 
Net income292,668  314,739  177,447  287,881  250,624  
Net (income) attributable to noncontrolling interests(883) (1,179) (2,102) (1,447) (488) 
Net income attributable to Sonoco$291,785  $313,560  $175,345  $286,434  $250,136  
Per common share
Net income attributable to Sonoco:
Basic$2.90  $3.12  $1.75  $2.83  $2.46  
Diluted2.88  3.10  1.74  2.81  2.44  
Cash dividends1.70  1.62  1.54  1.46  1.37  
Weighted average common shares outstanding:
Basic100,742  100,539  100,237  101,093  101,482  
Diluted101,176  101,016  100,852  101,782  102,392  
Actual common shares outstanding at December 31100,198  99,829  99,414  99,193  100,944  
Financial Position
Net working capital1
$116,704  $436,342  $563,666  $546,152  $384,862  
Property, plant and equipment, net1,286,842  1,233,821  1,169,377  1,060,017  1,112,036  
Total assets5,126,289  4,583,465  4,557,721  3,923,203  4,013,685  
Long-term debt1,193,135  1,189,717  1,288,002  1,020,698  1,015,270  
Total debt1,681,369  1,385,162  1,447,329  1,052,743  1,128,367  
Total equity1,815,705  1,772,278  1,730,060  1,554,705  1,532,873  
Current ratio1.1  1.4  1.6  1.7  1.4  
Total debt to total capital2
48.1 %43.9 %45.6 %40.4 %42.4 %

1
Calculated as total current assets minus total current liabilities.
2`
Calculated as total debt divided by the sum of total debt and total equity.

17 FORM 10-K SONOCO 2019 ANNUAL REPORT

Item 7. Management’s discussion and analysis of financial condition and results of operations
The following discussion and analysis 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 Form 10-K.

This section of this Form 10-K generally discusses 20192022 and 20182021 items and year-to-year comparisons between 20192022 and 2018.2021. Discussions of 20172021 items and year-to-year comparisons between 20182021 and 20172020 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, 2018.

2021.
General overviewOverview
Sonoco is a leading manufacturerprovider of consumer packaging, industrial products and protective packaging products and provider of packaging services with approximately 320 310 locations in 36 countries.32 countries as of December 31, 2022. The Company’s operations are reported in fourCompany's operating and reporting structure consists of two reportable segments, Consumer Packaging Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions.
Generally, the Company serves two broad end-use markets, consumer and industrial, which, period to period, can exhibit different economic characteristics from each other.Paper Packaging, with all remaining businesses reported as All Other. Geographically, in 20192022, approximately 63%72% of sales were generated in the United States, 20%13% in Europe, 7% in Asia, 4% in Canada and 6% in other regions.regions, 5% in Asia, and 3% in Canada.
Sonoco’s strategy is to increase its long-term profitability and return capital to shareholders. Over the past several years, we have simplified our business portfolio around fewer, bigger businesses which has reduced operating complexity and improved agility. We are 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. In parallel, we have worked on commercial, operational, and supply chain excellence programs to shift the mix of our business towards higher-valued products, improve our contracting process to better capture input costs and the value of the services we provide, and increase overall productivity.
Base operating profit is a non-GAAP financial measure reflecting adjustments to the reported GAAP operating profit for certain items. For an explanation of how and why the Company uses such non-GAAP financial measures, and the types of adjustments made, see "Use of Non-GAAP Financial Measures" below.
The Company's primary focus areas in 2022 were to continue to manage supply chain challenges presented by the COVID-19 pandemic, generate profitable growth, further seek capital investments and acquisitions that augment the Company's core portfolio, improve operating cash flow and profit margins, and enhance the Company's sustainability. 2022 was a pivotal year for the Company as we made significant progress in our growth as a world-class packaging company with a portfolio of highly engineered and sustainable products to support our customers.
On January 26, 2022, the Company completed the acquisition of Ball Metalpack, renamed Sonoco Metal Packaging, a leading supplier of metal packaging for food and household products and the largest aerosol can producer in North America. This acquisition expanded our sustainable packaging portfolio with metal packaging, a highly recyclable packaging substrate. On November 15, 2022, the Company completed the acquisition of Skjern, a privately owned paper manufacturer in Denmark. Skjern produces high-grade paperboard from recycled paper for rigid paper containers, tubes and cores, and other applications. Skjern has programs to reduce its carbon emissions, while its operations are powered by a biomass boiler, making them less reliant on natural gas. The acquisition is expected to expand production capacity for the Company’s converting operations and customers throughout Europe while capitalizing on the growing market for sustainable paper and packaging products. Both acquisitions build on the Company's strategy of investing in our core businesses. See additional information under “—Acquisitions and Divestitures—Acquisitions” below.
During the third quarter of 2022, the Company completed Project Horizon, a $125 million project to transform the corrugated medium machine in Hartsville, South Carolina to produce uncoated recycled paperboard ("URB"). The Company anticipates the upgraded paper machine to be fully operational early in 2023 and expects it to drive significant annualized savings as production ramps through 2023 and beyond. The new URB machine, with a targeted annual production capacity of 180,000 tons, was designed with the goal of being the largest and lowest-cost producer of URB in the world, capable of producing a wide range of high-value paper grades to service the Company's Industrial Paper Packaging businesses and external trade customers. Project Horizon, which commenced in 2020, also included the completion of a new finished goods warehouse on the Hartsville campus as well as other infrastructure improvements to the Hartsville paper manufacturing complex.
21 FORM 10-K SONOCO 2022 ANNUAL REPORT

The Company is a market-share leaderalso continued efforts in manycommercial excellence to reposition pricing of its product lines, particularly in tubes, cores and composite containers. Competition in mostcertain items to less volatile indices while improving the timing of recovery for higher manufacturing. The results of these efforts, along with the successful integration of the Company’sMetal Packaging acquisition, reflected positively in the Company's 2022 financial results which were a record in the 124-year history of the Company.
As the Company looks to 2023, capital allocation remains a key factor of our strategy. We are focused on driving productivity as we expect to see the benefits of fewer supply chain and labor disruptions. Actions taken over the past several years have built resiliency into our operating model and are expected to help offset inflation. At the same time, we have invested capital in our core consumer and industrial businesses is intense. Demandto position us well for the Company’s productslonger term growth and services is primarily driven by the overall level of consumer consumption of non-durable goods; however, certain productprofitability. We remain focused on improving returns on invested capital through organic investments in our core, accretive acquisitions, and service groups are tied more directly to durable goods, such as appliances, automobiles and construction. The businesses that supply and/or service consumer product companies have tended to be,potential portfolio rationalization while focusing on a relative basis, more recession resistant than those that service industrial markets.
Financially, the Company’s objective is to deliver average annual double-digit totalfurther improving returns to shareholders over time. To meet that target, the Company focuses on three major areas: driving profitable sales growth, improving margins and leveraging the Company’s strong cash flow and financial position. Operationally, the Company’s goal is to be the acknowledged leader in high-quality, innovative, value-creating packaging solutions within targeted customer market segments.shareholders.
Use of Non-GAAP financial measuresFinancial Measures
To assess and communicate the financial performance of the Company, Sonoco management uses, both internally and externally, certain financial performance measures that are not in conformity with generally accepted accounting principles (“non-GAAP” financial measures).principles. These non-GAAP“non-GAAP” financial measures (referred to as "Base") reflect adjustments to the Company’sCompany's GAAP operating results adjusted to removeexclude amounts, including the associated tax effects, relating to to:
•restructuring initiatives, initiatives;
•asset impairment charges, environmental charges, acquisition-related costs, charges;
•acquisition/divestiture-related costs;
•gains or losses from the dispositiondivestiture of businesses, excess property insurance recoveries, businesses;
•losses from the early extinguishment of debt;
•non-operating pension costs, costs;
•amortization expense on acquisition intangibles;
•changes in last-in, first-out (“LIFO”) inventory reserves;
•certain income tax events and adjustments; and
•other items, if any, including other income tax-related adjustments and/or events,any.
The Company's management believes the exclusion of which management believesthe above items improves the period-to-period comparability and analysis of the underlying financial performance of the business. The adjusted non-GAAP results are identified using the term “base,” for example, “base earnings.” As previously disclosed, effective January 1, 2022, the Company modified its definition of base results to include adjustments for amortization-related expense on acquisition intangibles. Accordingly, base results for 2021 have been revised to conform with the current presentation. This change was made to better align the Company's definitions of base results with those of its peers, to better reflect the Company's operating performance, and to increase the usefulness of such measures to the investing community.
The Company’s basenon-GAAP financial performance measures are not in accordance with, nor an alternative for, measures conforming to generally accepted accounting principles and 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. Sonoco continues to provide all information required by GAAP, but it believes that evaluating its ongoing operating results may not be as useful if an investor or other user is limited to reviewing only GAAP financial measures. The Company uses theconsistently applies its non-GAAP “base” performance 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 plan/forecast all the way up through the evaluation of the Chief Executive Officer’s performance by the Board of Directors. 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.
Sonoco management does not, nor does it suggest that investors should, consider these non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Sonoco presents these non-GAAP financial measures to provide users information to evaluate Sonoco’s operating results in a manner similar to how management evaluates business performance. Material limitations associated with the use of such measures are that they do not reflect all period costs included in operating expenses and may not reflectbe comparable with similarly named financial results that are comparable to financial resultsmeasures of other companies that present similar costs differently.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 these limitations, management believes that it is useful in understanding and analyzing the results of the business to review both GAAP information which includes all of the items impacting financial results and the non-GAAP financial measures that exclude certain elements, as described above.
Restructuring and restructuring-related asset impairment charges are a recurring item as Sonoco’sthe Company's restructuring programs usuallyoften 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 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 restructuring actions occur. Similarly, non-operating pension expense is a recurring item. However, this expense is subject to significant fluctuations from period to period due to changes in actuarial assumptions, global financial markets (including stock market returns and interest rate changes), plan changes, settlements, curtailments, and other changes in facts and circumstances.
Reconciliations of GAAP to base results are presented on pages 21 and 22under "—Reconciliations of GAAP to Non-GAAP Financial Measures" below in conjunction with management’s discussion and analysis of the Company’s results of operations. Whenever reviewing a non-GAAP financial measure, readers are encouraged to review the related reconciliation to fully understand how it differs from the related GAAP measure. 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-relatedacquisition/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.
Acquisitions and Divestitures
Acquisitions
The Company completed three acquisitions during 2022 at a net cash cost of approximately $1.4 billion.
On November 15, 2022, the Company completed the acquisition of Skjern, a privately owned manufacturer of paper based in Denmark, for $88.6 million, net of cash acquired. Skjern produces high-grade paperboard from recycled paper for rigid paper containers, tubes and cores, and other applications. The acquisition is expected to expand production capacity for the Company’s converting operations and customers throughout Europe.
18
22 FORM 10-K SONOCO 20192022 ANNUAL REPORT

2019 overview and 2020 outlook
Management's focus in 2019 was on generating profitable growth, improving margins, driving free cash flow, and portfolio optimization, including both potential acquisitions and divestitures. Management targeted an overall 2019 organic volume increase of approximately 1.0% and a positive price/cost relationship, albeit lower than what was achieved in 2018. As a result, management was expecting a notable increase in net sales, including the full-year impact of 2018 acquisitions, and modest improvements in overall margins for gross profit, base operating profit and base operating profit before depreciation and amortization. However, as the year unfolded, price/cost was flat and global weakness in manufacturing, exacerbated by tariffs and overall trade uncertainty, drove volume down in our Paper and Industrial Converted Products segment, while continued secular declines in certain end markets of our rigid paper container business and a combination of operational performance issues, competitive pressure and spotty demand in our plastics business resulted in lower overall volume in Consumer Packaging. Despite company-wide volume being down 2.5% and flat price/cost, consolidated operating profit and operating margin improved considerably, due to acquisitions, net productivity gains and the effective control of other fixed costs.
Consolidated operating profit increased in 2019 by $29.4 million, or 6.7% despite a small 0.3% decline in total revenue year over year. The benefit to sales from acquisitions and higher selling prices implemented to recover rising costs were offset by negative volume/mix in most of the Company's businesses, the negative impact of foreign exchange on sales and lost sales from the 2018 exit of a single-customer contract for retail packaging fulfillment. Each of the Company's segments contributed to the year-over-year growth in consolidated operating profit with the greatest gain reported by Display and Packaging, followed by Paper and Industrial Converted Products and Protective Solutions. On a company-wide basis, productivity improvements and the added operating profit from acquisitions were partially offset by negative volume / mix. Volume declines, together with production inefficiencies in certain businesses, were the primary drivers of a significant decline in manufacturing productivity, which was more than offset by purchasing and fixed cost productivity.
Despite the increased consolidated operating profit, Net Income Attributable to Sonoco (GAAP earnings) for 2019 decreased $21.8 million, or 6.9%, year over year. This decrease was primarily due to higher current-year non-operating pension and restructuring costs and a prior-year income tax valuation allowance release triggered by certain provisions of the Tax Cuts and Jobs Act ("Tax Act"). Base earnings, which exclude the previously mentioned non-operating pension costs, restructuring costs and income tax valuation allowance release, as well as certain other items of income and expense, improved $16.6 million, or 4.9%, year over year. Base earnings are more fully described within this Item under "Use of Non-GAAP financial measures" and are reconciled within this Item under "Reconciliations of GAAP to Non-GAAP financial measures." Base operating profit as a percent of sales increased to 9.8% from 9.1% in 2018, and base operating profit before depreciation and amortization as a percent of sales improved to 14.2% from 13.5% in 2018.
2019 gross profit was $1,057.8 million, compared with $1,041.0 million in 2018. Gross profit as a percentage of sales improved to 19.7% compared to 19.3% in 2018. GAAP selling, general and administrative expenses declined $32.4 million driven by a gain related to the reversal of an environmental reserve and significant focus across the Company on lowering controllable costs, the benefits of which were partially offset by the addition of expenses from acquisitions.
On DecemberAugust 31, 2019,2022, the Company completed the acquisition of Thermoform Engineered Quality, LLC,Nordeste Tubetes and Plastique Holdings, LTD, (together "TEQ"NE Tubetes (collectively “Nordeste”) with, two small tube and core operations in Brazil. Total consideration for the United States,two businesses was $6.5 million, including cash paid at closing of $3.9 million, additional payments in October and November 2022 totaling $0.7 million, and deferred payments totaling $1.9 million that are expected to be paid over the United Kingdom and Poland. The acquisition of TEQ provides a strong platform to further expand Sonoco's growing healthcare packaging business. next six years.
On August 9, 2019,January 26, 2022, the Company completed the acquisition of Corenso Holdings America, Inc. ("Corenso"),Ball Metalpack, renamed Sonoco Metal Packaging, a leading manufacturersupplier of uncoated recycled paperboard (URB)sustainable metal packaging for food and high-performance cores usedhousehold products and the largest aerosol can producer in North America, for $1.3 billion, net of cash acquired. As previously disclosed, final consideration was subject to customary post-closing adjustments for working capital, cash and indebtedness and was finalized in the paper, packaging films, tape, and specialty industries. Corenso's operations expand the Company's ability to produce a wide varietysecond quarter of sustainable coreboard grades. These transactions are described in greater detail below.
On July 17, 2019, the Company's Board of Directors approved a resolution to terminate the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan") effective September 30, 2019. Upon approval2022. The Company received cash from the Pension Benefit Guaranty Corporation, and following completionsellers totaling $14.8 million, of a limited lump-sum offering, the Company is expected to settle all remaining liabilities under the Inactive Plan through the purchases of annuities in late 2020 or early 2021. In anticipation of settling these liabilities, the Company also took measures to de-risk the Inactive Plan's assets moving them to a more conservative mix of primarily fixed income investments. During 2019, the Company recorded total pension and postretirement benefit expenses of approximately $52.7which $6.9 million compared with $34.9 million during 2018. The increased expense was primarily due to lower expected returns on plan assetshad been reflected as a result of the de-risking of the Inactive Plan portfolio. The aggregate net unfunded position of the Company’s various defined benefit plans decreased from $369 million at the end of 2018, to $294 million at the end of 2019. This decrease was driven primarily by contributions to its various pension and postretirement plans, including voluntary contributions to the U.S. plans totaling $200 million, partially offset by the effect of lower discount rates.
The effective tax rate on GAAP earnings was 24.5%, compared with 19.8% in 2018, and the effective tax rate on base earnings was 23.9%, compared with 23.7% in 2018. The year-over-year increase in the GAAP tax rate was driven primarily by the 2018 benefit from the release of a valuation allowance on foreign tax credits of $16.1 million. The modest increase in the base effective tax rate was due to a discrete foreign benefit in the 2018 base effective rate, partially offset by additional US tax credits available in 2019.
The Company generated $425.9 million in cash from operations during 2019, compared with $589.9 million in 2018. The primary driver of the lower operating cash flow was the previously mentioned voluntary U.S. pension contribution which had an after-tax cash flow impact of approximately $165 million. Free cash flow for 2019 was $74.3 million, compared with $260.2 million in the prior year, reflecting the decrease in cash flow from operations discussed above as well as an increase in net capital expenditures and cash dividends in the current year. Free cash flow is a non-GAAP financial measure which may not represent the amount of cash flow available for general discretionary use because it excludes non-discretionary expenditures, such as mandatory debt repayments and required settlements of recorded and/or contingent liabilities not reflected in cash flow from operations. (Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures are defined as capital expenditures minus proceeds from, and/or plus costs incurred in, the disposition of capital assets.) Cash flow from operations is expected to be approximately $635 million in 2020 and free cash flow is expected to be approximately $260 million.
Outlook
Profitable growth, margin expansion, improving free cash flow and sustainability will continue to be primary focus areas for the Company in 2020. Key to achieving management's objectives for the year will be further development of the Company's previously implemented commercial and operational excellence initiatives aimed at improving margins by more fully realizing the value of our products and services, reducing our unit costs and better leveraging our fixed support costs. Management is targeting an overall organic volume increase in 2020 of approximately 1.0% driven by new chilled and prepared food volume, improved perimeter of the store performance, new sustainable products, and stabilization of demand in our industrial products markets. In addition, the Company will continue to look for strategic and opportunistic acquisition candidates as well as opportunities to optimize our overall business portfolio.
The Company has projected that company-wide price/cost will be negative in 2020 as continued weakness in key raw material prices are likely to make full recovery of any overall cost increases more challenging. Manufacturing and other productivity gains are expected to offset a significant portion of projected increases in labor and other costs; however, not realizing the targeted organic volume gains would make fully
19 FORM 10-K SONOCO 2019 ANNUAL REPORT

achieving management's productivity objectives more difficult. Operating results in 2020 will include a full year of revenue and operating profit from the Corenso and TEQ acquisitions.
The Company projects the operating component of pension and post-retirement benefits expense will be approximately $1 million higher year over year, while the non-operating component, excluding settlement charges, is projected to be $3 million lower. The net anticipated decrease of $2 million is primarily due to lower interest expense due to a decline in discount rates, partially offset by lower expected returns on plan assets due to de-risking actions taken to move the Inactive Plan's assets to a more conservative mix of primarily fixed income investments. Non-cash settlement charges totaling approximately $600 million are expected to be recognized beginning in 2020 as the liabilities of the Inactive Plan, terminated in 2019, are settled through lump-sum payouts and annuity purchases. The Company anticipates making additional contributions to the Inactive Plan of approximately $150 million in late 2020 or early 2021 in order to be fully funded on a termination basisreceivable at the time of the annuity purchase. Contributions to all other defined benefit plans in 2020 are expected to total approximately $25 million.
Absent additional borrowings for acquisitions or significant changes in interest rates, net interest expense is expected to be relatively flat year over year. The consolidated effective tax rate on base earnings is expected to be between 25.0% and 26.0% in 2020 compared with 23.9% in 2019. The anticipated year-over-year increase is due to discrete items that benefited the 2019 rate that are not expected to reoccur in 2020.
In consideration of the above factors, management is projecting that reported 2020 net sales will increase approximately 3% and overall margins for gross profit and base operating profit will improve approximately 0.3% and 0.1%, respectively, over 2019 levels.
The Company does not provide projected GAAP earnings results dueinitial purchase price allocation. Prior to the likely occurrenceCompany's acquisition of one or moreMetal Packaging, Ball Metalpack was a joint venture formed in 2018 and owned by Platinum Equity (51%) and Ball Corporation (49%). As of the following, the timing and magnitude of which we are unable to reliably forecast: possible gains or losses on the sale of businesses or other assets, restructuring costs and restructuring-related impairment charges, acquisition-related costs, and the income tax effects 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.
Acquisitions
The Company completed two acquisitions during 2019 at a cost of $297.9 million, net of cash acquired. On December 31, 2019, the Company completed the acquisition2022, Metal Packaging consisted of Thermoform Engineered Quality, LLC, and Plastique Holdings, LTD, (together "TEQ") for $187.3 million, net of cash acquired. Final consideration is subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment is expected to be made by the end of the first quarter of 2020.The operations acquired consist of three thermoforming and extrusion facilitieseight manufacturing plants in the United States along withand a thermoforming operation in the United Kingdom and thermoforming and molded-fiber manufacturing in Poland, which together employ approximately 500 associates. The acquisition of TEQ provides a strong platform to further expand Sonoco's growing healthcare packaging business. The operations of TEQ will be reported in the Company's Consumer Packaging segment. On August 9, 2019, the Company completed the acquisition of Corenso Holdings America, Inc. ("Corenso") for $110.6 million, net of cash acquired. Final consideration was subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment was settled in November 2019 and required an additional cash payment of approximately $0.1 million. Corenso is a leading manufacturer of uncoated recycled paperboard (URB) and high-performance cores used in the paper, packaging films, tape, and specialty industries. Corenso operates a 108,000-ton per year URB mill and core convertingheadquarters facility in Wisconsin Rapids, Wisconsin,Broomfield, Colorado. Factors comprising goodwill at Metal Packaging include increased access to certain markets as well as a core converting facility in Richmond, Virginia, expanding the Company's ability to produce a wide varietyvalue of sustainable coreboard grades. To finance the acquisitions,assembled workforce.
Also, on November 9, 2022, the Company used short-term credit facilities,entered into a definitive agreement to purchase the remaining equity interest in RTS from joint venture partner WestRock Company ("WestRock") and available cash. The operationsone WestRock paper mill in Chattanooga, Tennessee, for $330 million in cash, subject to customary closing adjustments. In January 2023, both the Company and WestRock received a request for additional information and documentary material (a "Second Request") from the Antitrust Division of Corenso are reportedthe U.S. Department of Justice (the "DOJ"). Issuance of the Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), until 30 days after we and WestRock have each substantially complied with the Second Request, unless the period for review is extended voluntarily by the parties and the DOJ or is terminated earlier by the DOJ. We anticipate completing the transaction in the Company's Paper and Industrial Converted Products segment.
The Company completed three acquisitions during 2018 at a costsecond half of $278.8 million, net2023, subject to the satisfaction or waiver of cash acquired. On October 1, 2018,the closing conditions contained in the purchase agreement, including the expiration or early termination of waiting periods or extensions thereof under the HSR Act. Upon completion of the transaction, the Company completed the acquisitionwill own 100% of the remaining 70 percent interest in ConitexRTS, which is currently operated as a joint venture between Sonoco (BVI), Ltd. ("Conitex Sonoco") from Texpack Investments, Inc. ("Texpack") for total consideration of $134.8 million, including net cash payments of $127.8 million(35% ownership interest) and debt assumed of $7.1 million. Final consideration was subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment was settled in February 2019 and required an additional cash payment of approximately $0.1 million.WestRock (65% ownership interest). The operations of Conitex Sonoco are reported in the Company's Paper and Industrial Converted Products segment. The Conitex SonocoRTS joint venture was formed in 1998 with Texpack, a Spanish-based global provider1997 and combined the former protective packaging operations of paperboardWestRock and paper-based packaging products. Conitex Sonoco produces uncoatedthe Company to market solid fiber partitions from recycled paperboard to glass container manufacturers and tubesproducers of wine, liquor, food, and cones for the global spun yarn industry, as well as adhesives, flexible intermediate bulk containers and corrugated pallets. Conitex Sonoco has approximately 1,250 employees across 13 manufacturing locations in 10 countries, including four paper mills and seven cone and tube converting operations and two other production facilities. Also on October 1, 2018, the Company acquired from Texpack Group Holdings B.V. a rigid paper facility in Spain ("Compositub") for $10.0 million in cash. Final consideration was subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment was settled in February 2019 for an additional cash payment to the seller of $0.4 million. The operations of Compositub are reported in the Company's Consumer Packaging segment. Both the Conitex Sonoco and Compositub acquisitions were funded with existing cash on hand. pharmaceuticals.
Divestitures
On April 12, 2018,January 26, 2023, the Company completed the acquisitionsale of Highlandits S3 business, a provider of customized waste and recycling management programs and part of the Company's Industrial Paper Packaging Solutionssegment, to Northstar Recycling Company, LLC ("Highland"Northstar"). Total consideration for this acquisition was $148.5a total sales price of $15.3 million, including net cash paida 2.7% equity interest in Northstar valued at closing of $141.0, along with a contingent purchase liability of $7.5$5.0 million. The contingent purchase liability is based uponCompany expects to recognize a sales metric whichgain from the divestiture of this business of approximately $11.0 million, before tax, in the first quarter of 2023.
As previously disclosed, the Company expected to meetcompleted the divestiture of its global display and packaging business in full attwo separate transactions, the timeEuropean contract packaging business on November 30, 2020 and the U.S. display and packaging business on April 4, 2021. These businesses, which included point-of-purchase displays, fulfillment operations, and contract packaging, were reported in All Other. Although no divestitures were completed in 2022, the Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the acquisition. The first year's metric was met and $5.0 million was paid in the second quarterdivestiture of 2019. The second installment of $2.5 million is expectedplants and/or business units it considers to be paid during the second quarter of 2020. The liability for the remaining installment is included in "Accrued expenses and other" on the Company's Consolidated Balance Sheets at December 31, 2019. Highland manufactures thermoformed plastic packaging for fresh produce and dairy products from a single production facility in Plant City, Florida, providing total packaging solutions for customers that include sophisticated engineered containers, flexographic printed labels, and inventory management through distribution warehouses in the Southeast and West Coast of the United States. The Company financed the acquisition with proceeds from a $100.0 million term loan, along with proceeds from existing credit facilities, which was repaid in full before the end of 2018. The operations of Highland are reported in the Company's Consumer Packaging segment.
suboptimal or nonstrategic. See Note 3 to the Consolidated Financial Statements for further information about acquisition activities.acquisitions and divestitures.








20 FORM 10-K SONOCO 2019 ANNUAL REPORT

Restructuring and asset impairment chargesAsset Impairment Charges
Due to its geographic footprint (approximately 320310 locations in 36 countries)32 countries as of December 31, 2022) and the cost-competitive nature of its businesses, the Company is constantly seeking the mostfrequently seeks more cost-effective means and structurestructures to serve its customers, to improve profitability, 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 year to year depending upon the scope and location of the restructuring activities.
23 FORM 10-K SONOCO 2022 ANNUAL REPORT

The following table recapssummarizes the impact of restructuring and asset impairment charges onfor each of the Company’s net income for the periods presented (dollars in thousands):
 Year Ended December 31,
  
201920182017
Restructuring and restructuring-related asset impairment charges$44,819  $40,071  $19,834  
Other asset impairments15,061  —  18,585  
Restructuring/Asset impairment charges$59,880  $40,071  $38,419  
years presented:
 Year Ended December 31,
Dollars in thousands20222021
Restructuring and restructuring-related asset impairment charges$46,815 $9,176 
Other asset impairments10,095 5,034 
Restructuring/Asset impairment charges$56,910 $14,210 
During 2019,2022, the Company announcedrecognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the elimination of a forming film production lineCompany's ongoing organizational effectiveness efforts. Restructuring charges were also incurred during the year for consulting services and costs related to plant closures, including equipment removal, utilities, plant security, property taxes, and insurance at a flexible packaging facility in Illinois and initiated the closure of a composite can and injection molding facility in Germany, a composite can plant in Malaysia, a molded plastics plantclosed facilities. Asset impairment charges were recognized in the United States (allIndustrial Paper Packaging and Consumer Packaging segments as the result of plant closures and were partially offset by gains from the sales of previously impaired assets and closed facilities during the year. The Company recognized other asset impairment charges in 2022 totaling $10.1 million, primarily as a result of completing the exit of its operations in Russia during the second quarter of 2022. These operations consisted of two small tube and core plants and were part of the Industrial Paper Packaging segment.
During 2021, the Company recognized severance charges for employees terminated as a result of various plant closures, employees impacted by Project Horizon, and employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts. In addition, the Company recognized gains from the sale of real estate in the Industrial Paper Packaging segment and gains from the sale of other assets impaired in the prior year as a result of consolidations in the Company's Plastics - Food thermoforming operations. The Company recognized other asset impairment charges totaling $5.0 million in the year ended December 31, 2021. These charges consisted of fixed asset impairments in the Company's Plastics - Food thermoforming operations, part of the Consumer Packaging segment),segment, and three tube and core plants - one in the United Kingdom, one in Norway, and one in Estonia (alltemperature-assured packaging business, part of the Paper and Industrial Converted Products segment). Restructuring actions in the Protective Solutions segment included charges associated with the exitAll Other group of a protective packaging facility in Texas. In addition the Company continued to realign its cost structure, resulting in the elimination of approximately 223 positions.
During 2018, the Company initiated the closures of a flexible packaging plant in North Carolina, a global brand management facility in Canada, a thermoformed packaging plant in California (all part of the Consumer Packaging segment), five tube and core plants - one in Alabama, one in Canada, one in Indonesia, one in Russia, and one in Norway (all part of the Paper and Industrial Converted Products segment), and a protective packaging plant in North Carolina (part of the Protective Solutions segment). Restructuring actions in the Display and Packaging segment included charges associated with exiting a single-customer contract at a packaging center in Atlanta, Georgia. In addition, the Company continued to realign its cost structure, resulting in the elimination of approximately 120 positions.businesses.
The Company expects to recognize future additional costs totaling approximately $2.8$8.4 million in connection with previously announced restructuring actions. The Company believes that the majority of these charges will be incurred and paid by the end of 2020.2023. 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 4 to the Consolidated Financial Statements for further information about restructuring activities and asset impairment charges.
Reconciliations of GAAP to non-GAAP financial measuresNon-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:
 For the year ended December 31, 2022
Dollars and shares in thousands, except per share dataGAAP
Restructuring/
Asset
Impairment(1)
Amortization of Acquisition Intangibles(2)
Acquisition/Divestiture
Related
Costs(3)
Other Adjustments(4)
Base
Operating profit$675,396 $56,910 $80,427 $70,210 $36,922 $919,865 
Non-operating pension costs7,073 — — — (7,073)— 
Interest expense, net97,041 — — — 136 97,177 
Income before income taxes571,282 56,910 80,427 70,210 43,859 822,688 
Provision for income taxes118,509 11,269 19,554 17,640 29,788 196,760 
Income before equity in earnings of affiliates452,773 45,641 60,873 52,570 14,071 625,928 
Equity in earnings of affiliates, net of tax14,207 — — — — 14,207 
Net income466,980 45,641 60,873 52,570 14,071 640,135 
Less: Net (income) attributable to noncontrolling interests, net of tax(543)(99)— — — (642)
Net income attributable to Sonoco$466,437 $45,542 $60,873 $52,570 $14,071 $639,493 
Diluted weighted average common shares outstanding:98,732 98,732 
Per diluted common share$4.72 $0.46 $0.62 $0.53 $0.14 $6.48 
 For the year ended December 31, 2019
Dollars and shares in thousands, except per share dataGAAP
Restructuring/
Asset
Impairment
Acquisition
Related
Costs
Other Adjustments(1)
Base
Operating profit$467,082  $59,880  $8,429  $(9,999) $525,392  
Non-operating pension costs24,713  —  —  (24,713) —  
Interest expense, net61,603  —  —  —  61,603  
Income before income taxes$380,766  $59,880  $8,429  $14,714  $463,789  
Provision for income taxes93,269  15,520  1,147  994  110,930  
Income before equity in earnings of affiliates$287,497  $44,360  $7,282  $13,720  $352,859  
Equity in earnings of affiliates, net of tax5,171  —  —  —  5,171  
Net income$292,668  $44,360  $7,282  $13,720  $358,030  
Less: Net (income) attributable to noncontrolling interests, net of tax(883) 51  —  —  (832) 
Net income attributable to Sonoco$291,785  $44,411  $7,282  $13,720  $357,198  
Per diluted common share$2.88  $0.44  $0.07  $0.14  $3.53  
(1) Consists of a favorable change in estimate of an environmental reserve totaling $10,000, non-operating pension costs, and other non-base tax adjustments totaling a net benefit of approximately $3,059.

2124 FORM 10-K SONOCO 20192022 ANNUAL REPORT

For the year ended December 31, 2018 For the year ended December 31, 2021
Dollars and shares in thousands, except per share dataDollars and shares in thousands, except per share dataGAAP
Restructuring/
Asset
Impairment
Acquisition
Related
Costs
Other Adjustments(2)
BaseDollars and shares in thousands, except per share dataGAAP
Restructuring/
Asset
Impairment(1)
Amortization of Acquisition Intangibles(2)
Acquisition/Divestiture
Related
Costs(3)
Other Adjustments(5)
Base
Operating profitOperating profit$437,629  $40,071  $14,446  $(326) $491,820  Operating profit$486,853 $14,210 $49,419 $17,722 $(3,420)$564,784 
Non-operating pension costsNon-operating pension costs941  —  —  (941) —  Non-operating pension costs568,416 — — — (568,416)— 
Interest expense, netInterest expense, net58,157  —  —  —  58,157  Interest expense, net59,235 — — — 2,165 61,400 
Income before income taxes$378,531  $40,071  $14,446  $615  $433,663  
Provision for income taxes75,008  10,038  115  17,723  102,884  
Income before equity in earnings of affiliates$303,523  $30,033  $14,331  $(17,108) $330,779  
Loss from the early extinguishment of debtLoss from the early extinguishment of debt20,184 — — — (20,184)— 
(Loss)/Income before income taxes(Loss)/Income before income taxes(160,982)14,210 49,419 17,722 583,015 503,384 
(Benefit from)/Provision for income taxes(Benefit from)/Provision for income taxes(67,430)5,363 12,241 3,535 165,531 119,240 
(Loss)/Income before equity in earnings of affiliates(Loss)/Income before equity in earnings of affiliates(93,552)8,847 37,178 14,187 417,484 384,144 
Equity in earnings of affiliates, net of taxEquity in earnings of affiliates, net of tax11,216  —  —  —  11,216  Equity in earnings of affiliates, net of tax10,841 — — — (1,394)9,447 
Net income$314,739  $30,033  $14,331  $(17,108) $341,995  
Net (loss)/incomeNet (loss)/income(82,711)8,847 37,178 14,187 416,090 393,591 
Less: Net (income) attributable to noncontrolling interests, net of taxLess: Net (income) attributable to noncontrolling interests, net of tax(1,179) (191) —  —  (1,370) Less: Net (income) attributable to noncontrolling interests, net of tax(2,766)— — — 2,052 (714)
Net income attributable to Sonoco$313,560  $29,842  $14,331  $(17,108) $340,625  
Net (loss)/income attributable to SonocoNet (loss)/income attributable to Sonoco$(85,477)$8,847 $37,178 $14,187 $418,142 $392,877 
Diluted weighted average common shares outstanding(6):
Diluted weighted average common shares outstanding(6):
99,608 469 100,077 
Per diluted common sharePer diluted common share$3.10  $0.30  $0.14  $(0.17) $3.37  Per diluted common share$(0.86)$0.09 $0.37 $0.14 $4.18 $3.93 
(1) Restructuring/Asset impairment charges are a recurring item as Sonoco’s restructuring actions 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 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 restructuring actions occur.
(2) PrimarilyBeginning in 2022, the Company redefined base results to exclude amortization of intangible assets related to acquisitions. Prior year results have been revised to conform with the new presentation.
(3)    Includes legal and professional fees related to acquisition and divestiture transactions, whether proposed or consummated. 2022 also includes approximately $33,000 of fair value adjustments to acquisition-date inventory related to Metal Packaging.
(4)     Includes non-operating pension costs, unrealized losses related to commodity hedges of approximately $8,000, change in LIFO inventory reserves of approximately $28,000, and the release of a valuation allowance and other non-baseon foreign tax adjustments totaling a net benefitcredits of approximately $17,434.$13,200.

(5)     N
 For the year ended December 31, 2017
Dollars and shares in thousands, except per share dataGAAP
Restructuring/
Asset
Impairment
Acquisition
Related
Costs
Other Adjustments(3)
Base
Operating profit$412,409  $38,419  $13,790  $(2,279) $462,339  
Non-operating pension costs45,110  —  —  (45,110) —  
Interest expense, net52,745  —  —  —  52,745  
Income before income taxes$314,554  $38,419  $13,790  $42,831  $409,594  
Provision for income taxes146,589  13,064  3,841  (40,123) 123,371  
Income before equity in earnings of affiliates$167,965  $25,355  $9,949  $82,954  $286,223  
Equity in earnings of affiliates, net of tax9,482  —  —  581  10,063  
Net income$177,447  $25,355  $9,949  $83,535  $296,286  
Less: Net (income)/loss attributable to noncontrolling interests, net of tax(2,102) (71) —  —  (2,173) 
Net income attributable to Sonoco$175,345  $25,284  $9,949  $83,535  $294,113  
Per diluted common share$1.74  $0.25  $0.10  $0.83  $2.92  
(3) Consists of the following:on-operating pension costs include settlement charges of $32,761 ($20,241 after tax), partially offset by insuranceapproximately $551,000 related primarily to the settlement gains; tax charges of approximately $76,933 related to a one-time transition tax on certain accumulated foreign earnings offset by approximately $25,668 related to an increase in net deferred tax assets, both of which are related to implementation of the U.S. Tax CutsSonoco Pension Plan for Inactive Participants (the "Inactive Plan") in the second quarter.
(6) Due to the magnitude of certain expenses considered by management to be non-base, the Company reported a 2021 GAAP net loss attributable to Sonoco. In instances where a company incurs a net loss, including potential common shares in the denominator of a diluted earnings per-share computation will have an antidilutive effect on the per-share loss. GAAP therefore requires the exclusion of any unexercised share awards or other like instruments for purposes of calculating weighted average shares outstanding. Accordingly, the Company did not include any unexercised share awards or other like instruments in calculating weighted average shares outstanding for GAAP purposes in the table above, which resulted in basic weighted average common shares outstanding and Jobs Act; and otherdiluted weighted average common shares outstanding being the same. However, the Company also presents base net tax charges totaling $492.

Results of operations – 2019 versus 2018
Net income attributable to Sonoco, (GAAP earnings)which excludes the net non-base items. In order to maintain consistency and comparability of base diluted earnings per share, dilutive unexercised share awards were included in the calculation to the same extent they would have been had GAAP net income attributable to Sonoco been equal to base net income attributable to Sonoco.


25 FORM 10-K SONOCO 2022 ANNUAL REPORT

Results of Operations – 2022 Versus 2021
Net income/(loss) attributable to Sonoco ("GAAP results") was $291.8net income of $466.4 million ($2.884.72 per diluted share) in 2019,2022, compared with $313.6a net loss of $(85.5) million ($3.10(0.86) per diluted share) in 2018.2021.
Net income in 2019 reflectsThe GAAP results reflect net after-tax, non-base charges totaling $65.4$173.1 million related to restructuring and asset impairment charges, acquisition costs and non-operating pension costs, partially offset by the favorable change in estimate of an environmental reserve. Net income in 2018 was negatively impacted by net after-tax charges totaling $27.1 million, consisting of restructuring/asset impairment charges and acquisition-related expenses, partially offset by beneficial tax adjustments related to$478.4 million in 2022 and 2021, respectively. These non-base items consisted of the Tax Act.following:
Base earnings
For the year ended
Amounts in MillionsDecember 31, 2022December 31, 2021
Restructuring and asset impairment charges$45.5 $8.8 
Amortization of acquisition intangibles60.9 37.2 
Acquisition and divestiture-related costs27.6 14.2 
Fair value adjustments to acquisition-date inventory24.9 — 
Changes in LIFO inventory reserve21.4 — 
Non-operating pension costs5.1 423.5 
Derivative losses/(gains)6.6 (3.4)
Insurance settlement gains(2.7)(4.9)
Non-base income tax gains, net(17.8)(14.5)
Refund of foreign VAT and applicable interest— (3.1)
Loss from the early extinguishment of debt— 15.0 
Loss on divestiture of businesses— 1.2 
All other non-base charges, net1.6 4.4 
Total non-base charges, after tax$173.1 $478.4 

Adjusted for these items, base net income ("base earnings") in 2019 were $357.22022 was $639.5 million ($3.536.48 per diluted share), compared with $340.6$392.9 million ($3.373.93 per diluted share) in 2018.2021.
Both GAAP and base earnings in 2019 benefited from operating profit from current and prior-year acquired businesses, as well as total productivity2022 reflect the impact of a positive price/cost relationship which was especially impactful to our Industrial Paper Packaging segment. Additionally, the Metal Packaging acquisition contributed to the year-over-year increase in earnings. These gains and lower management incentives. These year-over-year favorable factors were partially offset by volume/mix declines in volume, particularly in the Industrial Paper Packaging segment, as well as a higher current-year effective tax rate. The effective tax rate change had morethe negative impact on GAAP earnings. Additionally,of foreign currency exchange rates. GAAP earnings in 2022 were unfavorablyfavorably impacted by a $19.8$561.3 million decrease in non-operating pension costs which was driven by the settlement of the Inactive Plan in the second quarter of 2021. This was partially offset by a $42.7 million increase in restructuring activity in 2019 as well asand asset write-offs, which included a $23.8$9.2 million increase in non-operating pension costs. Changes in foreign currency translation had little effect on earnings year over year.impairment charge from the Company's exit of its Russia operations.
The effective tax raterates on GAAP and base earnings was 24.5% in 2019,for the full year 2022 were 20.7% and 23.9%, respectively, compared with 19.8%41.9% and 23.7%, respectively in 2018, and2021. The decrease in the GAAP effective tax rate for 2022 was due primarily to the prior year regular tax benefit recognized on base earnings was 23.9%, comparedthe Company's reported pretax loss together with 23.7% in 2018.a prior year discrete tax benefit from the realization of additional foreign tax credits. The year-over-year increase in theCompany's 2022 GAAP tax rate was driven primarily by the 2018 benefitalso benefited from the release of a valuation allowance on foreign tax credits of $16.1 million. The modest increase in the base effective tax rate was due to a discrete foreign benefit in the 2018 base effective rate, partially offset by additional US tax credits available in 2019.credits.

22 FORM 10-K SONOCO 2019 ANNUAL REPORT

Consolidated net sales for 20192022 were $5.4$7.3 billion, a $17 million,$1.7 billion, or 0.3%29.7%, decreaseincrease from 2018.2021. The components of the sales change were:
($ in millions)
  
Volume/mix$(133)(161)
Selling price15989 
Acquisitions and divestitures, net2511,004 
Foreign currency translation and other, net(149)(172)
Total sales decreaseincrease$(17)1,660 
In September 2018, the Company exited a single-customer contract for retail packaging fulfillment ("Atlanta Packaging Contract") at a packaging center in Atlanta, Georgia ("Atlanta Packaging Center"). The negative impact on comparable year-over-year net sales was approximately $67 million. Due to the relatively low margins in this business, the impact of the lost revenue is included above in "Foreign currency translation and other, net."
Sales volume/mix was downdeclined approximately 2.5%2.9% driven by decreases in eachthe Industrial Paper Packaging segment except for Display and Packaging. Higher selling prices year-over-year were implemented to recover rising material prices, mostly resins. This led to year-over-yearpartially offset by increases in the Consumer Packaging segment. Volume/mix growth in the Consumer Packaging segment was driven by food product packaging. Selling prices were higher year over year in all segments due to strong strategic pricing performance. Additionally, sales increased by $1,035.0 million from the acquisition of the Company's segments, except for the Paper and Industrial Converted Products segment where market prices for the segment's primary raw material, old corrugated containers ("OCC"), continued to declineMetal Packaging in 2019 from 2018. The Company's 2019 acquisitions added $251 million to comparable year-over-year sales. Finally, foreign exchange rate changes decreased year-over-year sales approximately $90 million as almost all of the foreign currencies in which the Company conducts business weakened slightly in relation to the U.S. Dollar.January 2022.
Total domestic sales were $3.4were $5.2 billion, down 2.3%up 43.3% from 2018 levels. The main driver2021, as higher selling prices in all businesses located in the United States and sales from the Metal Packaging acquisition more than offset demand declines, primarily in the Industrial Paper Packaging segment, and the domestic divestiture of the domestic decrease was the exit from the Atlanta Packaging Contract.U.S. display and packaging business. International sales were $2.0 billion, up 3.4%4.0% from 2018 with the2021. The year-over-year increase in international sales was driven by growth in the Company's international rigid paper containers and industrial businesses.by increased sales prices.
Costs and expenses/marginsExpenses/Margins
Despite the impact of acquisitions, costCost of sales decreased $33.6increased $1,282.4 million in 2019,2022, or 0.8%28.3%, from the prior year. This decreaseincrease was largely driven by lower volumes as well as foreign exchange rate changesinflation, which had the impact of increasing the Company's LIFO inventory reserves, and procurement productivity.costs added by the January 2022 acquisition of Metal Packaging, including expensing the acquisition-date fair value adjustments to finished goods inventory. Gross profit margins increased to 19.7%19.9% in 20192022 from 19.3%19.0% in the prior year driven by the previously mentioned procurement productivity and the timing and direction of material due to a positive price/cost movements.relationship.
Selling, general and administrative ("SG&A") expenses decreased $32.4increased $149.2 million, or 5.8%26.7%, and were 9.9%9.8% of sales compared to 10.4%10.0% of sales in 2018.2021. The current year decreaseincrease in selling, general and administrativeSG&A expenses is largely attributable to management's concerted efforts to control costs throughout the year as well as lower management incentives. Additionally, acquisition-related costs decreased $6.0 million from last year to $8.4 million. These decreases in selling, general, and administrative expenses were partially offset by the added expenses of acquired businesses.
GAAP operating profit was 8.7% of sales in 2019 compared to 8.1% in 2018. Base operating profit increased to 9.8% of sales in 2019 compared to 9.1% in 2018. GAAP and base operating profit increased $29.5 million and $33.6 million, respectively. The increased GAAP and base operating margins were driven by the previously mentioned factors positively affecting gross profit as well asJanuary 2022 acquisition of Metal Packaging, increased amortization of acquisition intangibles, higher acquisition and divestiture transaction costs, losses on certain derivative transactions, increased compensation and benefits, increased information technology costs, and the reductionabsence of selling generalnon-recurring insurance gains and administrative costs.VAT refunds in the prior year.
26 FORM 10-K SONOCO 2022 ANNUAL REPORT

Restructuring and restructuring-related asset impairment charges totaled $59.9$56.9 million and $40.1$14.2 million in 20192022 and 2018,2021, respectively. The year-over-year increase was driven by higher year-over-year restructuring activity in the current year, including a $9.2 million impairment charge resulting from the Company’s exit from its Russian operations. Prior year restructuring costs were offset by gains recorded in 2021 for the sale of buildings at previously closed facilities. Additional information regarding restructuring actions and asset impairments is provided in Note 4 to the Company’s Consolidated Financial Statements.
Non-operating pension costs increased $23.8were $7.1 million in 2019 to a total of $24.7 million,2022, compared with $0.9$568.4 million in 2018.2021. The higher year-over-year expense isdecrease of $561.3 million was primarily due to lower expected returns on plan assets as a resultthe settlement of de-risking actions taken in 2019 on the U.S. pension plans in which assets were reallocated to a more conservative mix of primarily fixed income investments. Service cost, a component of net periodic benefit plan expense, is reflectedInactive Plan in the Company's Consolidated Statementssecond quarter of Income with approximately 75%2021, resulting in cost of sales and 25% in selling, general and administrative expenses.a $538.7 million settlement charge. See Note 13 to the Consolidated Financial Statements for further information on employee benefit plans.
In 2021, the Company recognized a loss on the early extinguishment of debt totaling $20.2 million pursuant to a tender offer through which the Company retired a portion of its 5.750% notes due November 2040. See Note 9 to the Consolidated Financial Statements for further information.
Net interest expense totaled $61.6$97.0 million for the year ended December 31, 2019,2022, compared with $58.2$59.2 million in 2018.2021. The increase was primarily due to the impacthigher year-over-year debt balances related to the financing of higher borrowings, partially offset by lower interest rates.the January 2022 acquisition of Metal Packaging.
Reportable segmentsSegments
The Company reports its financial results in fourCompany's operating and reporting structure consists of two reportable segments, – Consumer Packaging Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions.Paper Packaging, with all remaining businesses reported as All Other.
Consolidated operating profits, reported as “Operating Profit” onin the Company's Consolidated Statements of Income, are comprised of the following:
($ in millions)20192018% Change
Segment operating profit
Consumer Packaging$228.4  $224.5  1.7 %
Display and Packaging27.7  13.3  108.3 %
Paper and Industrial Converted Products219.1  211.1  3.8 %
Protective Solutions50.2  42.9  17.0 %
Restructuring/Asset impairment charges(59.9) (40.1) 49.4 %
Acquisition-related costs(8.4) (14.5) (42.1)%
Other non-operational (charges)/income, net10.0  0.4  2,400.0 %
Consolidated operating profit*$467.1  $437.6  6.7 %
*Due to rounding, amounts above may not sum to the totals presented
($ in millions)20222021% Change
Segment operating profit:
Consumer Packaging$526.0 $274.9 91.3 %
Industrial Paper Packaging327.9 226.8 44.6 %
All Other66.0 63.1 4.6 %
             Total segment operating profit919.9 564.8 62.9 %
Restructuring/Asset impairment charges(56.9)(14.2)
Amortization of acquisition intangibles(80.4)(49.4)62.8 %
Other non-base income/(charges), net(107.1)(14.3)
Consolidated operating profit*$675.5 $486.9 38.7 %
*Due to rounding, amounts above may not sum to the totals presented
Segment results viewed by Company management to evaluate segment performance do not include restructuring charges, restructuring/asset impairment charges, acquisition-relatedacquisition/divestiture-related charges, gains or losses from the saledivestiture of businesses, pension settlement charges, specifically identified tax adjustments,amortization of acquired intangibles, changes in LIFO inventory reserves, and certain other items,non-operational income and expenses, if any, the exclusion of which the Company believes improves comparability and analysis. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “Operating profit” excluding those items. GeneralAll other general corporate expenses with the exception of restructuring charges, asset impairment charges, acquisition-related charges, net interest expense and income taxes, have been allocated as operating costs to each of the Company’s reportable segments.
23 FORM 10-K SONOCO 2019 ANNUAL REPORT

segments and All Other.
See Note 18 to the Company’s Consolidated Financial Statements for more information on reportable segments.
Consumer Packaging
($ in millions)20222021% Change
Trade sales$3,768.0 $2,368.3 59.1 %
Segment operating profits526.0 274.9 91.3 %
Depreciation, depletion and amortization111.6 78.8 41.6 %
Capital spending127.5 60.5 110.7 %
($ in millions)20192018% Change
Trade sales$2,333.4  $2,360.0  (1.1)%
Segment operating profits228.4  224.5  1.7 %
Depreciation, depletion and amortization111.9  116.8  (4.2)%
Capital spending64.6  66.7  (3.1)%
Sales decreasedConsumer Packaging segment trade sales increased year over year primarily due to volume declines in Rigid Paper Containers North America, Global Plastics, and Flexibles. These declines were mostly offsetsales added by sales from the full-year impact of the April 12, 2018 acquisition of HighlandMetal Packaging in January 2022 and strong strategic pricing performance throughout the October 1, 2018 acquisition of Compositub. Higher selling prices in most ofconsumer businesses. Positive volume/mix growth for the segment's businesses,full year was driven largely by raw material price increases, also served to offset the volume declines.food products. Foreign currency translation decreased sales by approximately $32$63 million year over year due to a stronger U.S. dollar. Domestic sales were approximately $1,659$2,960 million down 1.0%, up 84.1%, or $17$1,352 million, from 2018,2021, while international sales were approximately $674$808 million, down 1.4%up 6.2%, or $10$47 million, from 2018.2021.
Segment operating profits increased by $3.9$251.1 million year over year and operating profit margins of 9.8% were up 28 basis pointsincreased from 2018.11.6% to 14.0%. The increases in segment operating profits and operating profit margins were largely driven by totalthe Metal Packaging acquisition, favorable price/cost relationship, including the benefits of strategic pricing initiatives, and productivity and a positive price cost relationship. Additionally, operating profits from the full-year impact of businesses acquired in 2018 also increased operating profit from last year. These positive factors were partially offset by volume declines and isolated manufacturing inefficiencies in Global Plastics. In response, the Company is investing in new machinery and tooling to improve performance from operations serving the perimeter of the store and is optimistic that it will improve manufacturing performance and better leverage the fixed cost profile of these operations in 2020.gains.
Capital spending in the segment included numerous productivity projects and expansion of manufacturing capabilities in North America (primarily flexiblerigid paper containers, metal packaging, and plastics)flexible packaging), Europe and in EuropeAsia (primarily rigid paper containers).
27 FORM 10-K SONOCO 2022 ANNUAL REPORT
Display and

Industrial Paper Packaging
($ in millions)20192018% Change
Trade sales$554.1  $592.3  (6.4)%
Segment operating profits27.7  13.3  108.3 %
Depreciation, depletion and amortization14.9  18.0  (17.2)%
Capital spending5.1  19.8  (74.2)%
($ in millions)20222021% Change
Trade sales$2,684.6 $2,464.3 8.9 %
Segment operating profits327.9 226.8 44.6 %
Depreciation, depletion and amortization91.9 91.1 .9 %
Capital spending145.0 150.2 (3.5)%
Domestic trade sales in the segment decreased $44increased $190 million, or 15.0%13.3%, to $247$1,611 million, while international trade sales increased $5$31 million, or 1.8%2.9%, to $307$1,073 million. The decreaseincrease in both domestic and international trade sales resulted primarily from last year'sstrong strategic pricing performance, with selling prices increased to cover increased raw material and other operating costs. Those gains were partially offset by the negative impact of foreign currency translation of approximately $112 million and lower volume/mix globally in both converted products and paper, which also includes the impact of the exit of the Atlanta Packaging Contract, offset by higher volume in retail security packaging. The increase in international sales reflects increases in activity atcorrugated medium market from the Company's packaging center in Poland, partially offset by a negative impact of approximately $19 million from foreign currency translation as a result of a weaker Polish zloty relative to the U.S. dollar year over year. The increase in segment operating profit was largely due to increased volumes both domestically and internationally. Additionally, 2018 operating profits were depressed due to losses related to exiting the Atlanta Packaging Contract in the third quarter of 2019 as a resultconversion of the Company's determination that it could not achieve acceptable margins under the contract.
Capital spending in the segment declined year over year as last year's spending related to the Atlanta Packaging Center and Contract did not repeat in 2019. Capital spending in 2019 was mostly related to customer development and productivity related projects.
Paper and Industrial Converted Products
($ in millions)20192018% Change
Trade sales$1,974.7  $1,911.0  3.3 %
Segment operating profits219.1  211.1  3.8 %
Depreciation, depletion and amortization85.6  74.4  15.1 %
Capital spending112.3  91.4  22.9 %
The main driver of the year-over-year increase in sales was the full-year impact of the October 1, 2018 acquisition of the remaining 70 percent interest in the Conitex Sonoco joint venture. Conitex Sonoco's sales for the first nine months of 2019 were approximately $180 million. Additionally, the acquisition of Corenso in August 2019 added approximately $30 million to trade sales. These increases were offset by volume declines in many of our tubes and cores businesses as well as an overall decline in sales prices as market prices for OCC on the whole were down from the previous year. Total domestic sales in the segment decreased $13 million, or 1.2%, to $1,095 million while international sales increased $77 million, or 9.6%, to $880 million.
#10 paper machine. Segment operating profit increased year over year, driven by the previously mentioned acquisitions and total productivity gains, which werea positive price/cost relationship, partially offset by decreased volume/mix, productivity losses, and the negative impact from foreign currency translation due to a stronger dollar.
During the third quarter of 2022, as part of Project Horizon, the #10 paper machine on the Company's Hartsville campus was shut down to allow for its conversion from a corrugated medium machine to an URB machine. This planned shutdown resulted in an expected loss of volume declines and lower absorption of fixed costs. Late in the third quarter, the #10 machine began production of URB. As discussed above, the new URB machine was designed with the goal of being one of the largest and lowest-cost producers of URB in the world, with a negative price/targeted annual production capacity of 180,000 tons and capable of producing a wide range of high-value paper grades to service the Company's Industrial Paper Packaging businesses and external trade customers. Project Horizon is expected to drive significant annualized cost relationship.savings as production ramps through 2023 and beyond.
Conditions deteriorated for the corrugating medium operation in 2019. While the business remained profitable, a negative price/cost relationship and volume declines eroded the business's profits year over year. The Company continuesIn addition to evaluate strategic alternatives for this operation.
SignificantProject Horizon, capital spending in the segment included the modificationmodifications of several paper machines in North America, numerous productivity projects, and IT investments.
All Other
($ in millions)20222021% Change
Trade sales$798.0 $757.8 5.3 %
Segment operating profits66.0 63.1 4.6 %
Depreciation, depletion and amortization24.9 25.8 (3.5)%
Capital spending21.2 22.8 (7.0)%
The year-over-year increase in sales was due to increased selling prices implemented to recover increased costs. The gains due to pricing were partially offset by the $34 million impact of the 2021 divestiture of the Company's U.S. display and packaging business and the negative impact of foreign currency translation.
All Other operating profit increased year over year, driven by a positive price/cost relationship. Operating profit increases were partially offset by foreign currency translation and the impact of the divested display and packaging business.
Capital spending in the All Other group of businesses was mostly related to customer development and productivity related projects in North America, primarily in our molded foam protective packaging and temperature assured businesses.
Financial Position, Liquidity and Capital Resources
Cash Flow
Operating Activities
Cash flows from operations totaled $509.0 million in 2022 compared with $298.7 million in 2021, a year-over-year increase of $210.4 million. Although GAAP net income increased $549.7 million year over year, the increase was largely due to a decline in non-cash pension costs, and their related tax effects, attributable to the pension settlement charges incurred in 2021. Net income in the current year also reflected the earnings impact of the Metal Packaging acquisition and higher non-cash expenses for depreciation and amortization, up $63.6 million, and net asset impairment charges, up $25.5 million. Cash pension contributions in 2022 were $37.4 million, a year-over-year decrease of $126.3 million from 2021 as additional contributions were required in the prior year to fully fund the Inactive Plan prior to settling the plan's obligations in the second quarter of 2021. Cash paid for taxes decreased $10.7 million year over year; 2022 tax payments benefited from additional accelerated tax depreciation in the United States resulting from the Metal Packaging acquisition.
Accrued expenses and other assets and liabilities provided $17.9 million of cash in 2022 and used $13.4 million of cash in 2021. The year-over-year change was largely the result of higher management incentive accruals and higher accrued interest stemming from debt incurred to finance acquisition activity in 2022, partially offset by the second and final payment of certain 2020 payroll taxes that were deferred under the CARES Act.
These provisions of cash were partially offset by changes in net working capital, which consumed $328.7 million of cash in 2022 and $107.4 million of cash in 2021. The additional consumption of $221.3 million was primarily driven by higher inventory levels resulting from pre-buys of steel in the Metal Packaging business, coupled with the impact of inflation and inventory build in the Company's food businesses. Accounts payable used $145.2 million more cash in 2022 than in 2021 as business levels over the last few weeks of 2022 were lower than the comparable period in 2021 and the higher levels of accounts payable at the end of 2021 were paid during 2022. Accounts receivable provided $147.3 million more cash in 2022 than in 2021 as the Company continued to actively manage collections and drive strong customer payment terms compliance.
Investing Activities
Cash used by investing activities was $1,741.4 million in 2022, compared with $165.9 million in 2021. Spending on acquisitions used $1,427.0 million of cash in 2022 compared with $22.2 million in 2021. The increase in acquisition spending was driven by the January 2022 acquisition of Metal Packaging. Capital spending was $328.8 million in 2022, compared with $256.0 million in 2021, an increase of $72.8 million primarily due to increased spending in the Consumer Packaging segment related to numerous productivity projects and expansion of manufacturing capabilities in North America, Europe and Asia. Capital spending on Project Horizon, a $125 million project to convert our corrugated medium machine to a state-of-the-art uncoated recycled paperboard machine, declined year over year as spending was substantially completed in 2022.
24
28 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Protective Solutions
($ in millions)20192018% Change
Trade sales$512.0  $527.7  (3.0)%
Segment operating profits50.2  42.9  17.0 %
Depreciation, depletion and amortization26.7  27.0  (1.1)%
Capital spending6.9  5.9  16.9 %
Sales declined slightly year over year, impacted mostly by volume declines in automotive components, consumer electronics and appliances, partially offset by volume gains in temperature-assured packaging.
Segment operating profit increased year over year due to total productivity slightly offset by a negative price/cost relationship.
Domestic salesThere were $407 million in 2019 down $8 million, or 1.9%, from 2018, while international sales were approximately $105 million, down $8 million, or 6.9% from 2018.
Capital spending in the segment included numerous productivity initiatives as well as customer-related projects in our expanded foam protective packaging and temperature-assured packaging businesses.
Financial position, liquidity and capital resources
Cash flow
Operating activities
Cash flow from operations totaled $425.9 million in 2019 and $589.9 million in 2018. This $164.0 million decrease was mostly driven by the $165 million after-tax cash impact of the voluntary U.S. pension contributions made in 2019. These voluntary pension contributions totaled $200 million. The cash flow impact from lower GAAP net income was essentially offset by higher non-cash operating expenses and improved working capital management. Working capital provided $36.9 million in 2019 compared to providing $27.7 million in 2018; this $9.2 million additional cash provision was largely driven by changes in accounts receivable. Accounts receivable, net of acquisitions, declined in 2019 due to a concerted effort by management regarding collection efficiencies as well as other process improvements. While accounts receivable and inventory both provided more cash in 2019 than in 2018, this was partially offset by accounts payable's increased consumption of cash which was partially the result of lower raw material prices at the end of 2019 which amplified the decline in the year-end balance of accounts payable outstanding.
Non-cash asset impairment charges were $19.2 million higher year over year, due largely to the fourth quarter 2019 impairment of assets related to certain plastics, flexibles, and temperature-assured packaging operations. The net benefit from changes in deferred income tax and income tax payable balances was $39.2 million higher in 2019 compared with the previous year. The year-over-year increase is largely attributable to the $35 million cash tax benefit that resulted from the $200 million pre-tax pension contribution mentioned above. Non-cash share-based compensation expenses were $3.6 million higher year over year as expenses recognized in association with our performance-based awards increased, reflecting assumptions about actual performance against targeted performance metrics over the vesting period of the awards. Net losses on disposition of assets totaled $0.7 million in 2019 compared with $8.6 million in 2018, a year-over-year change of $7.9 million, driven by the loss on exiting and disposing of the Atlanta Packaging Center. The Company's 2018 acquisition of Conitex resulted in the recognition of a loss of $4.8 million as the implied fair value of the previously held minority interest was less than its book value. Changes in accrued expenses reflect a $7.5 million provision of cash in 2019 compared with a $19.2 million provision of cash in 2018. The lower provision in 2019 is primarily due to lower year-over-year management incentives and other accrued expenses. Changes in other assets and liabilities used $7.3 million more cash in 2019 compared to 2018. This year-over-year increased consumption is largely attributable to the collection of various other receivables in 2018 that were outstanding at the end of 2017. Similar levels of miscellaneous receivable items were not outstanding at the end of 2018. Cash paid for income taxes was $20.9 million lower year over year, which was due primarily to the tax benefit of the $138 million pension plan contribution recognized in 2019.
Investing activities
Cash used by investing activities was $479.1 million in 2019, compared with $444.1 million in 2018. The higher use of cash in 2019 is due in part to increased year-over-year acquisition spending. The Company's acquisitions consumed $298.4 million of cash in 2019 compared with $277.2 million in 2018. In addition,no proceeds from the sale of assets were lower year over year.businesses in 2022, compared to $91.6 million in 2021, primarily from the sale of the Company's U.S display and packaging business. The Company received proceeds from the sale of assets totaling $14.6$9.6 million in 20192022 compared with $24.3$13.2 million in the prior year. The 2018 proceeds included $17.2 million from the September 2018 sale of equipment relating to the Atlanta Packaging Center, less a contract termination fee on the Atlanta Packaging Contract. Capital spending was slightly higher year over year, totaling $195.9 million in 2019, compared with $192.6 million in 2018, an increase of $3.4 million. Capital spending is expected to total approximately $195.0 million in 2020.
Financing activitiesActivities
Net cash provided by financing activities increased $350.9totaled $1,294.2 million year over year as financingin 2022, compared with a net use of cash of $513.5 million in 2021. Financing activities provided $77.2in 2022 included net proceeds of $1,189.9 million from the issuance of green bonds and proceeds from a $300 million three-year term loan facility. These proceeds were used primarily to fund the January 2022 acquisition of Metal Packaging. The Company received an additional $400.0 million of proceeds from a 364-day term loan facility on December 2, 2022. These proceeds were used for general corporate purposes, including the repayment of certain short-term debt. The use of cash in 2021 reflects $212.0 million of share repurchases pursuant to a repurchase authorization approved by the Company's Board of Directors in April 2021. No repurchases were made under this authorization in 2022. Cash of $14.5 million was used to purchase the remaining shares of a noncontrolling interest in 2022 and excess cash costs related to the early extinguishment of debt used $20.1 million of cash in 2019, compared with a use of cash totaling $273.72021.
Cash dividends totaled $187.1 million in 2018. The year-over-year change was driven primarily by higher net borrowings in 20192022 compared to 2018, including proceeds from a new $200 million term loan used to fund voluntary contributions to the U.S. defined benefit pension plans and borrowings to fund acquisitions. Although the cost of acquisitions was up only slightly year over year, a greater portion of 2019 activity was funded by debt. Outstanding debt was $1,681.4 million at December 31, 2019, compared with $1,385.2 million at December 31, 2018. Cash dividends increased 5.5% to $170.3$178.6 million in 2019 compared to $161.4 million in 2018,2021, reflecting a $0.02 per sharethe increase in the quarterly dividend payment from $0.45 per share to $0.49 per share approved by the Board of Directors in April 2019.
25 FORM 10-K SONOCO 2019 ANNUAL REPORT

Contractual obligationsFebruary 2022, partially offset by the impact of the share repurchases completed in 2021.
The following table summarizes contractual obligations atchange in outstanding checks used cash of $18.5 million in 2022 while providing cash of $7.0 million in the prior year. The year-over-year change is the result of the timing and size of the last accounts payable check runs in 2022 and 2021 relative to the Company's December 31 2019:
 Payments Due In
($ in millions)Total20202021-20222023-2024Beyond 2024Uncertain
Debt obligations$1,681.4  $488.2  $575.5  $10.3  $607.3  $—  
Interest payments1
775.4  46.4  79.2  69.0  580.8  —  
Operating leases389.3  55.7  92.9  73.3  167.5  —  
Transition tax under Tax Act2
46.3  —  —  26.2  20.1  —  
Income tax contingencies3
13.0  —  —  —  —  13.0  
Purchase obligations4
99.4  39.7  44.1  12.6  3.0  —  
Total contractual obligations5
$3,004.8  $630.0  $791.7  $191.4  $1,378.7  $13.0  

1
Includes interest payments on outstanding fixed-rate, long-term debt obligations, as well as financing fees on the backstop line of credit.
2
The Company recognized a transition tax of $80.6 million on certain accumulated foreign earnings in order to comply with the Tax Act. The liability for this tax is payable in installments through 2025.
3
Due to the nature of this obligation, the Company is unable to estimate the timing of the cash outflows. Includes gross unrecognized tax benefits of $12.2 million, plus accrued interest associated with the unrecognized tax benefit of $2.0 million, adjusted for the deferred tax benefit associated with the future deduction of unrecognized tax benefits and the accrued interest of $0.8 million and $0.4 million, respectively.
4
Includes only long-term contractual commitments. Does not include short-term obligations for the purchase of goods and services used in the ordinary course of business.
5
Excludes potential cash funding requirements of the Company’s retirement plans and retiree health and life insurance plans.

year end.
Capital resourcesResources
Current assets increased year over year by $1.9$703 million to $1,521.2$2,361 million at December 31, 2019,2022, and current liabilities increased by $321.6$218 million to $1,404.5$1,744 million, resulting in a decreasean increase in the Company’s ratio of current ratioassets to current liabilities to 1.4 at December 31, 2022 from 1.1 at December 31, 2019 from 1.4 at December 31, 2018.2021. Current liabilitiesassets were higher year over yearas a result of the acquisition of Metal Packaging in January 2022 and higher inventory levels resulting from pre-buys of steel in the Metal Packaging business, coupled with the impact of inflation and inventory build in the Company's food businesses. The year-over-year increase in current liabilities was primarily due to an increase in outstanding commercial papertrade accounts payable stemming from the buildup of inventory, an increase in the short-term borrowings, and higher accrued interest related to the new term loan referredgreen bonds used to above.fund the Metal Packaging acquisition.
The Company’s cash balances are held in numerous locations throughout the world. At December 31, 20192022 and 2018,2021, approximately $115.0$170.1 million and $107.7$154.4 million, respectively, of the Company’s reported cash and cash equivalents balances of $145.3$227.4 million and $120.4$171.0 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 to fundfor capital expenditures, acquisitions, and other offshore growth opportunities. As the Company enjoys amplehas maintained sufficient domestic liquidity through a combination of operating cash flow generation and access to bank and capital markets borrowings, we have generally considered our foreign unremitted earnings to be indefinitely invested outside the United States and currently have no plans to repatriate such earnings, other than excess cash balances that can be repatriated at minimal tax cost. Accordingly, as of December 31, 2019,2022, the Company is not providing for taxes on these amounts for financial reporting purposes. Computation of the potential deferred tax liability associated with unremitted earnings deemedconsidered to be indefinitely reinvested is not practicable at this time.
The Company’s total debt at December 31, 2019, was $1,681 million, a year-over-year increase of $296 million. This year-over-year increase includes a $200million term loan, the proceeds from which were used to fund voluntary contributions to the U.S. defined benefit pension plans, and includes additional short-term borrowings to fund the acquisitions of Corenso and TEQ, partially offset by repayments of short-term debt using free cash flow generated during the year. The Company had $250 million of commercial paper outstanding at December 31, 2019 and $120 million at December 31, 2018.
The Company operates a $500 million commercial paper program, supported by a $500 million five-year revolving credit facility. In July 2017, the Company entered into a new credit agreement with a syndicate of eight banks for that revolving facility, together with a $250 million five-year term loan. The revolving bank credit facility is committed through July 2022. If circumstances were to prevent the Company from issuing commercial paper, it has the contractual right to draw funds directly on the underlying revolving bank credit facility. Borrowings under the credit agreement may be prepaid at any time at the discretion of the Company. The outstanding balance of the five-year term loan was $147 million at December 31, 2019, reflecting a $75 million prepayment made by the Company during 2018 and required amortization payments totaling $12.5 million per year.
At December 31, 2019, the Company's short-term debt and current portion of long-term debt totaled $488 million, primarily consisting of $250 million of commercial paper and the $200 million 2019 term loan which matures in May 2020. The Company expects to exercise its one-time right to extend the term loan for an additional 364-day period.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 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 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 a voluntary supply chain financing program (the "program") to provide certain suppliers with the opportunity to sell receivables due from the Company to the program's 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 program. 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 program. All amounts outstanding at December 31, 2022 under the program were recorded within trade accounts payable. The amount owed to the participating financial institution under the program and included in accounts payable for continuing operations was $52.4 million at December 31, 2022 and $46.8 million at December 31, 2021. The Company accounts for all payments made under the program as a reduction to cash flows from operations and reports them within "changes in payable to suppliers" in the Consolidated Statements of Cash Flows. The total amount settled through the program and paid by the Company to the participating financial institution was $270 million during 2022 and $178 million during 2021. 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 program. However, the Company does not believe a reduction in, or the elimination of, the program would have a material impact on its working capital or cash flows.
The Company’s total debt at December 31, 2022, was $3.2 billion, a year-over-year increase of $1.6 billion. The year-over-year change reflects the following actions taken during 2022:
•On January 21, 2022, the Company completed its inaugural offering of green bonds to support the Company's sustainability strategy and to fund the acquisition of Metal Packaging. The aggregate principal amount of the unsecured notes totaled $1.2 billion, consisting of the following:
◦$400 million aggregate principal amount of 1.800% Notes due 2025,
◦$300 million aggregate principal amount of 2.250% Notes due 2027, and
◦$500 million aggregate principal amount of 2.850% Notes due 2032.
•On January 21, 2022, the Company entered into a $300 million term loan facility, maturing on January 27, 2025, with a syndicate of eight banks. The funds from this facility were drawn on January 26, 2022 and used, along with a portion of the net proceeds from the bonds and commercial paper borrowings, to fund the acquisition of Metal Packaging.
29 FORM 10-K SONOCO 2022 ANNUAL REPORT

•On December 2, 2022, the Company entered into a $400 million term loan facility, maturing on December 1, 2023, with a syndicate of banks. The full amount was drawn on December 2, 2022, and the proceeds used for general corporate purposes, including repayment of certain short-term debt.
As previously disclosed, the Company also maintains a $750 million, unsecured revolving credit facility, maturing in June 2026, that supports the Company's $500 million commercial paper program.
At December 31, 2022, the Company had approximately $227 million in cash and cash equivalents on hand and $750 million 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, 2022, the Company had scheduled debt maturities of $502.4 million, $15.0 million, $715.3 million, $14.6 million, and $302.0 million in 2023, 2024, 2025, 2026, and 2027, respectively. See Note 9 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 $78.8 million in both 2023 and 2024, $72.2 million in 2025, $71.6 million in 2026, and $64.9 million in 2027.
Capital spending is expected to total approximately $350 million in 2023, slightly higher than 2022, due to anticipated capital investments in our Consumer Packaging segment, including Metal Packaging, which will more than offset the impact of the completion of spending on Project Horizon in 2022. Consistent with its past practice, the Company expects to continue investing in its capital assets in subsequent periods but does not currently have significant contractual commitments.
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 2023 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 if so, atavailable 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 underfunded position of the Company’s various U.S and international defined benefit pension and postretirement plans was $294$98 million at the end of 2019.2022, compared with $97 million at the end of 2021. The Company contributed approximately $231$37 million to its benefit plans in 2019,2022, including $200a $22 million contribution to its U.S. pension plans. On July 17, 2019, the Company's Board of Directors approved a resolution to terminate the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan"Retirement Contribution ("SRC"), a tax-qualified defined benefit. Benefit plan effective September 30, 2019. Upon approval from the Pension Benefit Guaranty Corporation, and following completion of a limited lump-sum offering, the Company is expected to settle all remaining liabilities under the Inactive Plan through the purchase of annuities. The Company anticipates making additional contributions to the Inactive Plan of approximately $150 million in late 2020 or early 2021 in order to be fully funded on a termination basis at the time of the annuity purchase.
26 FORM 10-K SONOCO 2019 ANNUAL REPORT

Contributions to all other defined benefit plans in 20202023 are expected to total approximately $25$15 million. Future funding requirements will depend largely on the nature and timing of participant settlements, actual investment returns, future actuarial assumptions, legislative actions, and legislative actions.changes to the Company's benefit offerings.
As previously disclosed, the Sonoco Retirement and Savings Plan was amended in the prior year to eliminate the SRC and to increase the Company's 401(k) matching contribution to 100% of the first 6% of eligible contributions effective as of December 31, 2021. The amendment was neutral to total expense in 2022; however, operating cash flow was negatively affected in 2022 as it reflected both the annual funding of the SRC earned in 2021 and the higher 401(k) matching contributions.
Total equity increased $43$223 million during 20192022 as net income of $293$467 million and stock-based compensation of $14$31 million were partially offset by an other comprehensive loss of $77$70 million, dividends of $172$188 million, the purchase of a noncontrolling interest of $13 million, and share repurchases of $10$5 million and the impactfor tax share withholdings on vested stock compensation granted to retained earnings of adopting the new leasing standard of $7 million.employees. The primary componentsdriver of other comprehensive loss were an $8was a $69 million translation gainloss from the impact of a weakerstronger U.S. dollar on the Company’s foreign investments and additional actuarial losses totaling $87 million, net of tax, in the Company’s various defined benefit plans resulting primarily from lower interest rates.investments.
On February 10, 2016,April 20, 2021, the Company’s Board of Directors authorized the repurchase of the Company's common stock up to 5 million sharesan aggregate amount of the Company’s common stock. During 2016,$350 million. The Company purchased a total of 2.033.29 million shares were repurchased under this authorization during 2021 at a cost of $100$212 million. No shares were repurchased under this authorization during 2017, 2018, or 2019. Accordingly,2022; accordingly, a total of $138 million remains available for share repurchases at December 31, 2019 a total of 2.97 million shares remain available for repurchase under this authorization.2022.
Although the ultimate determination of whether to pay dividends is within the sole discretion of the Board of Directors and is based on a variety of factors, the Company plans to increasecontinue paying dividends consistent with historical practice as earnings grow.and the Company's liquidity permit. Dividends per common share were $1.92 in 2022, $1.80 in 2021 and $1.70 in 2019, $1.62 in 2018 and $1.54 in 2017.2020. On February 12, 2020,8, 2023, the Company declared a regular quarterly dividend of $0.43$0.49 per common share payable on March 10, 2020,2023, to shareholders of record on February 26, 2020.
Off-balance sheet arrangements22, 2023.
The Company had no material off-balance sheetroutinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, warehouses, and packaging centers), 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 on 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 7 to the Consolidated Financial Statements.
As of December 31, 2019.2022, 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. For additional information regarding the Company's purchase commitment obligations, see Note 16 to the Consolidated Financial Statements.
Risk managementManagement
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 spreadlocated throughout the world, and the Company generally sells in the same countries where it produces.produces with both revenue and costs transacted in the local currency. The Company monitors these exposures and may use traditionalforeign currency swapsforward contracts and forward exchange contractsother risk management instruments to hedgemanage 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 net investment in foreign subsidiaries. The Company’s foreign operations are exposed to political, geopolitical, and cultural risks, but the risks are mitigated by diversification and the relative stability of the countries in which the Company has significant operations.
30 FORM 10-K SONOCO 2022 ANNUAL REPORT

Due to the highly inflationary economy in Venezuela, the Company considers the U.S. dollar to be the functional currency of its Venezuelan operations and uses the official exchange rate when remeasuring the financial results of those operations. Economic conditions in Venezuela have worsened considerably over the past several years and there is no indication that conditions are due to improve in the foreseeable future. Further deterioration could result in the recognition of an impairment charge or a deconsolidation of the subsidiary. At December 31, 2019,2022, the carrying value of the Company's net investment in its Venezuelan operations was approximately $2.0$2.1 million. In addition, at December 31, 2019,2022, the Company's Accumulated Other Comprehensive Lossaccumulated other comprehensive loss included a cumulative translation loss of approximately $3.8 million related to its Venezuela operations which would need to be reclassified to net income in the event of a complete exit of the business or a deconsolidation of these operations.
The Company has operationsDuring the first quarter of 2022, the three-year cumulative rate of inflation in Turkey rose above 100 percent, the United Kingdom and elsewhere in Europe that could be impacted by the exit of the U.K. from the European Union (Brexit)threshold at the end of January 2020. Our U.K. operations have been making contingency plans regarding potential customs clearance issues, tariffs and other uncertainties resulting from Brexit. Althoughwhich it is difficultdeemed to predict allbe a highly inflationary economy under U.S. GAAP. Accordingly, effective as of the possible impacts to our supply chain or in our customers' downstream markets, the Company has evaluated the potential operational impacts and uncertainties of Brexit and at this time believes that the likelihood of a material impact on our future results of operations is low. Although there are some cross-border sales made out of and into the U.K., most of what we produce in the U.K. is also sold in the U.K. and the same is true for continental Europe. In some cases, companies that have been importing from Europe into the U.K. are now seeking local sources, which has actually been positive for our U.K. operations. Annual sales of the Company's U.K. operations totaled approximately $120 million in 2019.
The ongoing coronavirus outbreak emanating from China at the beginning of 2020the second quarter of 2022, the Company considers the U.S. dollar to be the functional currency of its operations in Turkey and has impacted various Chineseremeasured monetary assets and multi-national businesses, including travel restrictions and the extended shutdownliabilities denominated in Turkish lira to U.S. dollars with changes recorded through earnings. The impact of certain businessesapplying highly inflationary accounting to Turkey was a pretax charge to earnings of approximately $2.7 million (approximately $2.1 million after tax) in 2022. The magnitude of future earnings impacts is uncertain as such impacts are dependent upon unpredictable movements in the region. Annual salesTurkish 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 the Company's China operations totaled approximately $130 million in 2019. To date, the Company's eight manufacturing locations in China have been somewhat negatively impacted by lower customer demand and certain supply chain disruptions. If the coronavirus outbreak situation should worsen,future impairment charges. However, the Company may experience greater disruptionsbelieves its exposure is limited to both customer demand and supply chainsits net investment in China and on a worldwide basis. The Company continues to evaluate the potential operational impacts and closely monitor developmentsTurkey which, as they are reported and will respond accordingly.of December 31, 2022, was approximately $18.5 million.
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 from time to time,occasionally use traditional, unleveraged interest-rate swaps to manage its mix of fixed and variable rate debt and to control its exposure to interest rate movements within select ranges.
At December 31, 2019,2022, the Company had derivative contracts outstanding to hedge the priceprices on a portion of anticipated commoditynatural gas and energy purchases as well as to hedge certain foreign exchange risks for various periods through December 2019.aluminum purchases. These contracts, which qualify as cash flow hedges, included swaps to hedge the purchase price of approximately 4.4 million MMBTUs of natural gas inswaps covering approximately 0.2 million metric million British thermal units ("MMBTUs") and aluminum swaps covering 983 metric tons. In addition, at December 31, 2022, the U.S. and Canada representing approximately 61%Company had certain other commodity contracts outstanding to manage the cost of anticipated natural gas usagepurchases for 2020. Additionally,which the Company had swapdoes not apply hedge accounting. These contracts consist of natural gas swaps covering 1,225 metric tons of aluminum representing approximately 23%7.3 million MMBTUs. The Company's combined designated and non-designated derivative contracts totaled approximately 70% and 13% of anticipated natural gas and aluminum usage, respectively, in North America for 2020. 2023.
The aluminum hedges relateCompany routinely enters into forward contracts to fixed-price customer contracts. At December 31, 2018, the Company had a number of foreign currency contracts in place for both designated and undesignated hedges of eitherhedge certain anticipated foreign currency denominated transactionssales, purchases, and capital spending. For such contracts that are designated and qualify as a cash flow hedge under Accounting Standards Codification ("ASC") 815, the gain or existing financial assetsloss on the derivative instrument is reported as a component of other comprehensive income and liabilities.reclassified into earnings in the periods during which the hedged transaction affects earnings. At December 31, 2019,2022, the total notional amount of these contracts, in U.S. dollar terms, was $109$110 million, of which $24$28 million related to the Canadian dollar, $34 million to the Mexican peso, $24$27 million to the Polish Zlotyzloty, $25M to the Canadian dollar, $11 million to the Euro, $7 million to the British pound, $6 million to the Colombian peso, and $27$6 million to all other currencies. The Company also routinely enters into forward contracts to economically hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables. The Company does not apply hedge accounting treatment under ASC 815 for these instruments. As such, changes in fair value are recorded directly to income and expense in the periods that they occur.
The total fair market value of the Company's derivatives was a net unfavorable position of $(9.3) million at December 31, 2022, and a net favorable position of $0.5$1.5 million and $3.3 million at December 31, 2019, and December 31, 2018, respectively.2021. 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 10 to the Consolidated Financial Statements for more information on financial instruments.
Beginning in January 2020, the Company is party to a cross-currency swap agreement with a notional amount of $250 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 agreement matures November 1, 2024. Under the terms of the swap agreement, the Company will receive semi-
27 FORM 10-K SONOCO 2019 ANNUAL REPORT

annual interest payments in U.S. dollars at a rate of 5.75% and pay interest in euros at a rate of 3.856%. The risk management objective is to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in foreign currencies.
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 has accrued $8.7accrued $7.3 million at December 31, 2019,2022, compared with $20.1$7.4 million at December 31, 2018,2021, with respect to these sites. See “Environmental Charges,”Charges” in Item 3 – Legal Proceedings and Note 16 to the Consolidated Financial Statements for more information on environmental matters.
Critical accounting policiesAccounting Policies and estimatesEstimates
Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States (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 Management’s Discussion and Analysis of Financial Condition and Results of Operations, 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.
31 FORM 10-K SONOCO 2022 ANNUAL REPORT

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, 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 customer relationships, technology, and other identifiable intangible assets include future cash flows that we expectthe Company expects to generate from the acquired assets.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, wethe Company could record impairment charges. In addition, we havethe Company has estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense.expense on definite lived intangible assets. If ourthe estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could bebecome impaired.
For leases in which the acquired business is a lessee, 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. 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, intangibleLong-Lived, Intangible and other assetsOther 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 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 flow modelflows 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, as 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 goodwillGoodwill
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 the reporting unit's assets, including goodwill, 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 are the same as, or one level below, its operating segments, as determined in accordance with ASC 350.Accounting Standards Codification 350 - "Intangibles-Goodwill and Other."
The Company completed its most recent annual goodwill impairment testing during the third quarter of 2019.2022. 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, Company stock pricethe industry, the Company's overall financial performance, the current and market capitalization movement,projected financial performance of specific reporting units, and business strategy changes, and significant customer wins and losses.changes. The quantitative tests, described further below, considered factors such asrelied on the current yearoutlook of reporting unit management for future operating performance as compared to prior projectionsresults and took into consideration, among other things, specific business unit risk, the countries in which the reporting units operate, and implied fair values frombased on comparable trading and transactiontrading multiples.
When performing a quantitative analysis, the Company estimates the fair value of its reporting units using a discounted cash flow model based on projections of future years’ operating results and associated cash flows. The Company's assessments reflected a number ofreflect significant
28 FORM 10-K SONOCO 2019 ANNUAL REPORT

management assumptions and estimates includingrelated to the Company's forecast of sales growth, gross profit margins and discount rates, which are validated by observed comparable trading and transaction multiples.multiples based on guideline public companies. The Company’s model discounts projected future cash flows, forecasted over a ten-yearseven-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 an assumeda 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 conclusionconclusions regarding goodwill impairment may change as well. Management’s projections related to revenue growth and/or margin improvements are based on a combination of factors, including expectations for volume growth with existing customers and customer retention, product expansion, changes in price/cost relationships, productivity gains, fixed cost leverage, and stability or improvement in general
economic conditions.
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 DisplayPlastics - Healthcare and Packaging,Protexic reporting units, which isare 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 expected future results in any of its reporting units sufficient to result in goodwill impairment. 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" on pages 7-15 of the Company's 2019in this Annual Report on Form 10-K.
32 FORM 10-K SONOCO 2022 ANNUAL REPORT

Although no reporting units failed the annual impairment test, noted above, in management’s opinion, the goodwill of the DisplayPlastics - Healthcare and Packagingthe Protexic reporting unit isunits are at risk of impairment in the near term if theeach reporting unit's operating performance doesoperations do not continue to improveperform in line with management's expectations, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate. The Display and Packaging reporting unit designs, manufactures, assembles, packs and distributes temporary, semi-permanent and permanent point-of-purchase displays; provides supply chain management services, including contract packing, fulfillment and scalable service centers; and manufactures retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment. The current goodwill impairment analysis incorporates management's expectations for slight sales growth and mild improvements to profit margin percentages which reflects the estimated benefits of future productivity initiatives. A large portion of projected sales in this reporting unit is concentrated in several major customers, the loss of any of which could impact the Company's conclusion regarding the likelihood of goodwill impairment for the unit. Total goodwill associated with this reporting unit was approximately $203 million at December 31, 2019. Based on the latest annual impairment test, the estimated fair value of the Display and Packaging reporting unit exceeded its carrying value
by approximately 35%.Sensitivity Analysis
In its 20192022 annual goodwill impairment analysis, projected future cash flows for Displaythe Plastics - Healthcare and PackagingProtexic reporting units were discounted at 8.9%.9.8% and 9.5%, respectively, and their estimated fair values were determined to exceed their carrying values by approximately 18.0% and 18.3%, respectively. Based on the discounted cash flow model and holding other valuation assumptions constant, Displaythe discount rates for the Plastics - Healthcare and Packaging projected operating profits across all future periodsProtexic reporting units would have to be reduced approximately 27%, or the discount rate increased to 12.5%11.0% and 11.5%, respectively, in order for the estimated fair valuevalues of the reporting units to fall below their carrying values. Total goodwill associated with the Plastics - Healthcare and Protexic reporting unit’s carrying value.
As discussed in the "Report of Independent Registered Public Accounting Firm" with respect to our 2019 Consolidated Financial Statements, PricewaterhouseCoopers LLP has identified this as a "critical audit matter."
During the time subsequent to the annual evaluation,units was $62.6 million and $29.1 million, respectively, at December 31, 2019, the Company considered whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its reporting units may have been impaired. It is management’s opinion that no such events have occurred.2022.
Income taxesTaxes
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.
As previously disclosed, the Company received a draft Notice of Proposed Adjustment (“NOPA”) from the Internal Revenue Service (IRS) in February 2017 proposing an adjustment to income for the 2013 tax year based on the IRS's recharacterization of a distribution of an intercompany note made in 2012, and the subsequent repayment of the note over the course of 2013, as if it were a cash distribution made in 2013. In March 2017, the Company received a draft NOPA proposing penalties of $18 million associated with the IRS’s recharacterization, as well as an Information Document Request (“IDR”) requesting the Company’s analysis of why such penalties should not apply. The Company responded to this IDR in April 2017. On October 5, 2017, the Company received two revised draft NOPAs proposing the same adjustments and penalties as in the prior NOPAs. On November 14, 2017, the Company received two final NOPAs proposing the same adjustments and penalties as in the prior draft NOPAs. On November 20, 2017, the Company received a Revenue Agent's Report (“RAR”) that included the same adjustments and penalties as in the prior NOPAs. At the time of the distribution in 2012, it was characterized as a dividend to the extent of earnings and profits, with the remainder as a tax-free return of basis and taxable capital gain. As the IRS proposes to recharacterize the distribution, the entire distribution would be characterized as a dividend. The incremental tax liability associated with the income adjustment proposed in the RAR would be approximately $89 million, excluding interest and the previously referenced penalties. On January 22, 2018, the Company filed a protest to the proposed deficiency with the IRS. The Company received a rebuttal of its protest from the IRS on July 10, 2018, and the matter has now been referred to the Appeals Division of the IRS. The Company had a pre-conference hearing with IRS Appeals during the second quarter of 2019, and has had continued discussions with IRS Appeals throughout the year. If the matter is not resolved in IRS Appeals, the next step would be to file a petition in Tax Court. The Company strongly believes the position of the IRS with regard to this matter is inconsistent with the applicable tax laws and existing Treasury regulations, and that the Company's previously reported income tax provision for the year in question is appropriate. However, there can be no assurance that this matter will be resolved in the Company's favor. Regardless of whether the matter is resolved in the Company's favor, the final resolution of this matter could be expensive and time consuming to defend and/or
29 FORM 10-K SONOCO 2019 ANNUAL REPORT

settle. While the Company believes that the amount of tax originally paid with respect to this distribution is correct, and accordingly has not provided additional reserve for tax uncertainty, there is still a possibility that an adverse outcome of the matter could have a material effect on its future results of operations and financial condition.
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.
Stock-based compensation plansStock-Based Compensation Plans
The Company utilizes share-based compensation in the form of restricted stock appreciation rights,units, performance contingent restricted stock units, and other share-based awards. Certain awards are in the form of contingent stock units where the ultimate number of units are performance based. The amount of share-based compensation expense associated with these performance-based awardsperformance contingent restricted stock units is based on estimates regardingof future performance using measures defined in the plans. In 2019, thestock plan descriptions for each award granted. As of December 31, 2022, these performance measures consistedinclude the following:
•Base earnings per share — three-year sum of Base Earningsforecasted future and historical annual base earnings per Shareshare for the three-year measurement period associated with each award; and
•Return on Net Assets Employed. invested capital — three-year simple average calculated using the annual returns calculated by dividing 1) net base operating profit after tax (derived from historical or projected base 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 reflectedrecognized in the Company’s Consolidated Financial Statements.
The Company uses an option-pricing model to determine the grant date fair value of its stock appreciation rights. Inputs to the model include a number of subjective assumptions. Management routinely assesses the assumptions and methodologies used to calculate the estimated fair value of share-based compensation per share. Circumstances may change and additional data may become available over time that results in changes to these assumptions and methodologies, which could materially impact fair value determinations.
Pension and postretirement benefit plansPostretirement 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 plans are the U.S. basedU.S.-based Sonoco Pension Plan (the "Active Plan") and the Sonoco PensionU.K. Retirement Benefits Plan for Inactive Participants (the "Inactive"U.K. Plan"). Benefits under theseOther significant benefit plans were frozen effective December 31, 2018 for all active, non-union participants. As of January 1, 2019, these participants became eligible for annual contributions under a noncontributory defined contribution plan. On July 17, 2019,include the Company's Board of Directors approved a resolution to terminate the InactiveU.S. Retirement and Retiree Health and Life Insurance Plan effective September 30, 2019. Upon approval from the Pension Benefit Guaranty Corporation, and following completion of a limited lump-sum offering, the Company is expected to settle all remaining liabilities under the Inactive Plan through the purchase of annuities in late 2020 or early 2021.
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, 2019 in determining the projected benefit obligation and the accumulated benefit obligation for U.S. nonqualified retirement and retiree health and life insurance plans include: discount rates of 3.37% and 2.84% for the Active Plan and Inactive Plan, respectively, 3.05% for the non-qualified retirement plans, and 2.89% for the retiree health and life insurance plan. The discount rate for the Inactive Plan was determined on a plan termination basis. The rate of compensation increase for the retiree health and life insurance plan was 3.04%. The key assumptions used to determine the 2019 net periodic benefit cost for U.S. retirement and retiree health and life insurance plans include: discount rates of 4.34% and 4.14% for the Active Plan and Inactive Plan, respectively, 4.16% for the non-qualified retirement plans, and 4.02% for the retiree health and life insurance plan; an expected long-term rate of return on plan assets of 6.75% and 6.50% for the Active Plan and Inactive Plan, respectively; and a rate of compensation increase for the retiree health and life insurance plan of 3.06%.plans.
During 2019,2022, the Company recorded total pension and postretirement benefit expenses of approximately $52.7$10.7 million, compared with $34.9$595.6 million during 2018.2021, a reduction of $584.9 million. The 2019 amount reflects $65.9year-over-year decrease was due primarily to the previously disclosed settlement of the Company's Inactive Plan liabilities in the second quarter of 2021. Charges in 2022 reflect $10.7 million of expected returns on plan assets at an average assumed rate of 6.13%3.03% and interest cost of $57.8$10.8 million at a weighted-average discount rate of 3.96%2.55%. The 2018 amountPension and postretirement benefit expense in 2021 reflects $92.2$23.3 million of expected returns on plan assets at an average assumed rate of 6.38%3.61% and interest cost of $55.4$24.4 million at a weighted-average discount rate of 3.43%2.43%. During 2019, the Company made contributions to its pension and postretirement plans of $231.2Settlement charges totaling $550.7 million including voluntary contributionswere recognized in 2021, primarily related to the Active Plan andsettlement of all remaining liabilities under the Inactive Plan totaling $200 million. Inin June 2021 through the prior year, thepurchase of annuities. The Company made contributionsprojects that total benefit plan expenses will be approximately $15 million in 2023, approximately $5 million higher than in 2022, due primarily to its pension and postretirement plans totaling $25.4 million. Contributions varyan increase in interest costs stemming from year to year depending on various factors, the most significant being the market value of assets and interesthigher discount rates.
Cumulative net actuarial losses were approximately $753decreased slightly from $105 million at December 31, 2019,2021 to $103 million at December 31, 2022, as the favorable impact of higher year-over-year discount rates and are primarilyongoing amortization of actuarial losses was partially offset by additional actuarial losses stemming from lower-than-expected asset returns on the result of low discount rates. ActuarialU.K. Plan. Remaining actuarial losses/gains outside of the 10% corridor defined by U.S. GAAP are amortized over the average remaining service life of the plan’s active participants or the average remaining life expectancy of the plan’s inactive participants if all, or almost all, of the plan’s participants are inactive.
In October 2021, the Sonoco Retirement and Savings Plan was amended to eliminate the SRC and to increase the Company's 401(k) matching contribution to 100% of the first 6% of eligible contributions effective as of December 31, 2021. The majorityamendment was neutral to total expense in 2022. However, the Company's operating cash flow was negatively affected in 2022 as it reflected both the annual funding of these actuarial losses are relatedthe SRC earned in 2021 and the higher 401(k) matching contributions.
Contributions to its pension and postretirement plans in 2022 totaled $37.4 million, including an SRC contribution of $21.9 million. Contributions in 2021 totaled $163.7 million, including contributions of $124.4 million to the Inactive Plan and will result in non-cash settlement charges of approximately $600 million beginning in 2020 as lump-sum payouts and annuity purchases are made.
Excludingorder to be fully funded on a termination basis at the $600 million of expected settlement charges relatedtime the plan was annuitized. Contributions to the Inactive Plan,Company's benefit plans in 2023 are expected to total approximately $15 million. Future funding requirements will depend largely on actual investment returns, future actuarial assumptions, legislative actions, and changes to the Company projects totalCompany's benefit plan expenseofferings.
33 FORM 10-K SONOCO 2022 ANNUAL REPORT

The actuarial valuations used to be approximately $4 million lowerevaluate the plans employ key assumptions that can have a significant effect on the calculated amounts. The key assumptions used at December 31, 2022 in 2020 than in 2019. This decrease is primarily due to lower interest expense due to a decline indetermining the projected benefit obligation and the accumulated benefit obligation for U.S. retirement and retiree health and life insurance plans include: discount rates partially offset by lowerof 5.10% for the Active Plan, 4.97% for the Company's non-qualified retirement plans, 4.92% for the Company's retiree health and life insurance plan, and 4.80% for the U.K. Plan. The rate of compensation increase was 2.99% for the retiree health and life insurance plan and 3.75% for the U.K. Plan.
The key assumptions used to determine the 2022 net periodic benefit cost for U.S. retirement and retiree health and life insurance plans include: discount rates of 3.05% for the Active Plan, 2.66% for the non-qualified retirement plans, 2.48% for the retiree health and life insurance plan, and 1.95% for the U.K. Plan; an expected returnslong-term rate of return on plan assets due to de-risking actions taken withof 3.27% for the Inactive Plan's assets moving them toActive Plan and 2.90% for the U.K. Plan; and a more conservative mixrate of primarily fixed income investments.compensation increase of 3.01% and 3.65% for the retiree health and life insurance plan and U.K. Plan, respectively.
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 was used to develop an expected range of returns on plan investments over a 12- to 15-year period, with the expected rate of return selected from a best estimate range within the total range of projected results. The Company periodically re-balances 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. A key assumption for the U.S. retiree health and life insurance plan is a medical cost trend rate beginning at 6.25%6.50% for post-age 65 participants and trending down to an ultimate rate of 4.5% in 2026.2030. 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.
The sensitivity to changes in the critical assumptions for the Company’s U.S. plans as of December 31, 2022, is as follows:
Assumption
($ in millions)
Percentage
Point
Change
Projected Benefit
Obligation
Higher/(Lower)
Annual Expense
Higher/(Lower)
Discount rate0.25% decrease$3.8$0.2
Expected return on assets0.25% decreaseN/A$0.1
Other assumptions and estimates impacting the projected liabilities of these plans include inflation, participant withdrawal and mortality rates and retirement ages. The Company annually reevaluatesevaluates the assumptions used in projecting the pension and postretirement liabilities and associated expense.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.

30 FORM 10-K SONOCO 2019 ANNUAL REPORT

The sensitivity to changes in the critical assumptions for the Company’s U.S. plans as of December 31, 2019, is as follows:
Assumption
($ in millions)
Percentage
Point
Change
Projected Benefit
Obligation
Higher/(Lower)
Annual
Expense
Higher/
(Lower)
Discount rate-.25 pts$53.4  $2.4  
Expected return on assets-.25 ptsN/A$2.4  
See Note 13 to the Consolidated Financial Statements for additional information on the Company’s pension and postretirement plans.
Recent accounting pronouncementsAccounting Pronouncements
Information regarding recent accounting pronouncements is provided in Note 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Item 7A. Quantitative and qualitative disclosures about market riskQualitative Disclosures About Market Risk
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 reduce operating results and shareholders' equity” in Item 1A-Risk1A - Risk Factors; “Risk Management” in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations; and in Note 10 to the Consolidated Financial Statements in Item 8 – Financial Statements and Supplementary Data.
Item 8. Financial statementsStatements and supplementary dataSupplementary Data
The Consolidated Financial Statements and Notes to the Consolidated Financial Statements are provided on pages F-1 through F-40 of this report. Selected quarterly financial data is provided in Note 20 to the Consolidated Financial Statements included in this Annual Report on Form 10-K.


3134 FORM 10-K SONOCO 20192022 ANNUAL REPORT

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Shareholders of Sonoco Products Company
Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Sonoco Products Company and its subsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, and the related consolidated statements of income, comprehensive income, changes in total equity and cash flows for each of the three years in the period ended December 31, 2019,2022, including the related notes and financial statement schedule listed in the accompanying index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework (2013) (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20192022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework (2013) (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Overover Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Corenso Holdings America, Inc.Sonoco Metal Packaging, LLC (“Corenso”Metal Packaging”), and Thermoform Engineered Quality, LLC and Plastique Holdings, LTD, (together “TEQ”S.P. Holding, Skjern A/S (“Skjern”), from its assessment of internal control over financial reporting as of December 31, 20192022, because they were acquired by the Company in purchase business combinations during 2019.2022. We have also excluded CorensoMetal Packaging and TEQSkjern from our audit of internal control over financial reporting. CorensoMetal Packaging and TEQSkjern are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent 2.9%14.7% and 0.7%14.3%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2019.2022.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit mattermatters communicated below is a matterare matters arising from the current period audit of the consolidated financial statements that waswere communicated or required to be communicated to the audit committee and that (i) relatesrelate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattermatters below, providing a separate opinionopinions on the critical audit mattermatters or on the accounts or disclosures to which it relates.they relate.

F-1 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Goodwill Impairment Assessment - Display and PackagingPlastics - Healthcare Reporting Unit

As described in Notes 1 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $1.4$1.68 billion as of December 31, 2019,2022, and the goodwill associated with the Display and PackagingPlastics - Healthcare reporting unit was $203$62.6 million. Management assesses goodwill for impairment annually during the third quarter, or 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 the reporting unit’s assets, including goodwill, there is no impairment. If the carrying value of a reporting unit exceeds the fair value of that reporting unit, an impairment charge is recognized for the excess. Fair value is estimated using a discounted cash flow model based on projections of future years’ operating results and associated cash flows corroborated bycombined with comparable trading and transaction multiples.multiples based on guideline public companies. The calculated reporting unit estimated fair value of the reporting unit reflects a number of significant management assumptions and estimates including the forecast of sales growth, gross profit margins, and discount rate.rates.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Display and PackagingPlastics - Healthcare reporting unitis a critical audit matter are there was(i) the significant judgment by management when developingdetermining the fair value measurementestimate of the Display and Packaging reporting unit, which in turn led to significantunit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence obtainedmanagement’s significant assumptions related to management’s discounted cash flow model and the significant assumptions, including the forecast of sales growth, gross profit margins, and discount rate. In addition,rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the determinationvaluation of the fair value of the Display and PackagingPlastics - Healthcare reporting unit. These procedures also included, among others (i) testing management’s process for developingdetermining the fair value estimate;of the Plastics - Healthcare reporting unit; (ii) evaluating the appropriateness of the discounted cash flow model; (iii) testing the completeness accuracy, and relevanceaccuracy of underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions used by management includingrelated to the forecast of sales growth, gross profit margins, and discount rate. Evaluating management’s significant assumptions related to the forecast of sales growth and gross profit margins involved evaluating whether the significant assumptions used by management were reasonable considering (i) the current and past performance of the Plastics - Healthcare reporting unit,unit; (ii) the consistency with external market data,data; and (iii) whether these significant assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow model and (ii) the reasonableness of the discount rate.rate significant assumption.

[Valuation of Customer Lists Intangible Asset - Acquisition of Ball Metalpack

As described in Notes 3 and 8 to the consolidated financial statements, on January 26, 2022, the Company completed the acquisition of Ball Metalpack Holding, LLC for $1.35 billion, net of cash acquired. Identifiable intangible assets acquired as part of the acquisition were $498.0 million, primarily related to customer lists. The fair value of intangible assets associated with the acquisition was determined using an income valuation approach. Projecting discounted future cash flows requires management to make significant estimates regarding projected revenues, projected earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, discount rates and customer attrition rates.

The principal considerations for our determination that performing procedures relating to the valuation of the customer lists intangible asset acquired in the Ball Metalpack Holding, LLC acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer lists intangible asset acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected revenues, EBITDA margins, discount rate and customer attrition rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to acquisition accounting, including controls over management’s valuation of the customer lists intangible asset. These procedures also included, among others (i) reading
the purchase agreement; (ii) testing management’s process for developing the fair value estimate of the customer lists intangible asset acquired; (iii) evaluating the appropriateness of the income valuation approach; (iv) testing the completeness and accuracy of underlying data used in the income valuation approach; and (v) evaluating the reasonableness of the significant assumptions used by management related to projected revenues, EBITDA margins, discount rate and customer attrition rate. Evaluating management’s significant assumptions related to projected revenues and EBITDA margins involved evaluating whether the significant assumptions used by management were reasonable considering (i) the current and past performance of Ball Metalpack Holding, LLC; (ii) the consistency with external market and industry data; and (iii) whether these significant assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s income valuation approach and (ii) the reasonableness of the discount rate and customer attrition rate significant assumptions.


/s/ PricewaterhouseCoopers LLP (signed)]
Charlotte, North Carolina
February 28, 20202023

We have served as the Company’s auditor since 1967.







F-2 FORM 10-K SONOCO 20192022 ANNUAL REPORT

CONSOLIDATED BALANCE SHEETS
Sonoco Products Company
(Dollars and shares in thousands)
At December 31
(Dollars and shares in thousands)
At December 31
20192018
(Dollars and shares in thousands)
At December 31
20222021
AssetsAssetsAssets
Current AssetsCurrent AssetsCurrent Assets
Cash and cash equivalentsCash and cash equivalents$145,283  $120,389  Cash and cash equivalents$227,438 $170,978 
Trade accounts receivable, net of allowances of $14,382 in 2019 and $11,692 in 2018698,149  737,420  
Trade accounts receivable, net of allowances of $16,879 in 2022 and $19,651 in 2021Trade accounts receivable, net of allowances of $16,879 in 2022 and $19,651 in 2021862,712 755,609 
Other receivablesOther receivables113,754  111,915  Other receivables99,492 95,943 
InventoriesInventoriesInventories
Finished and in processFinished and in process172,223  174,115  Finished and in process453,981 199,823 
Materials and suppliesMaterials and supplies331,585  319,649  Materials and supplies641,577 362,290 
Prepaid expensesPrepaid expenses60,202  55,784  Prepaid expenses76,054 74,034 
1,521,196  1,519,272  
Total Current AssetsTotal Current Assets2,361,254 1,658,677 
Property, Plant and Equipment, NetProperty, Plant and Equipment, Net1,286,842  1,233,821  Property, Plant and Equipment, Net1,710,399 1,297,500 
GoodwillGoodwill1,429,346  1,309,167  Goodwill1,675,311 1,324,501 
Other Intangible Assets, NetOther Intangible Assets, Net388,292  352,037  Other Intangible Assets, Net741,598 278,143 
Long-term Deferred Income TaxesLong-term Deferred Income Taxes46,502  47,297  Long-term Deferred Income Taxes29,878 25,818 
Right of Use Asset-Operating LeasesRight of Use Asset-Operating Leases298,393  —  Right of Use Asset-Operating Leases296,781 268,390 
Other AssetsOther Assets155,718  121,871  Other Assets237,719 220,206 
Total AssetsTotal Assets$5,126,289  $4,583,465  Total Assets$7,052,940 $5,073,235 
Liabilities and EquityLiabilities and EquityLiabilities and Equity
Current LiabilitiesCurrent LiabilitiesCurrent Liabilities
Payable to suppliersPayable to suppliers$537,764  $556,011  Payable to suppliers$818,885 $721,312 
Accrued expenses and otherAccrued expenses and other289,067  237,197  Accrued expenses and other295,841 290,874 
Accrued wages and other compensationAccrued wages and other compensation78,047  85,761  Accrued wages and other compensation109,830 90,476 
Notes payable and current portion of long-term debtNotes payable and current portion of long-term debt488,234  195,445  Notes payable and current portion of long-term debt502,440 411,557 
Accrued taxesAccrued taxes11,380  8,516  Accrued taxes16,905 11,544 
1,404,492  1,082,930  
Total Current LiabilitiesTotal Current Liabilities1,743,901 1,525,763 
Long-term DebtLong-term Debt1,193,135  1,189,717  Long-term Debt2,719,783 1,199,106 
Noncurrent Operating Lease LiabilitiesNoncurrent Operating Lease Liabilities253,992  —  Noncurrent Operating Lease Liabilities250,994 234,167 
Pension and Other Postretirement BenefitsPension and Other Postretirement Benefits304,798  374,419  Pension and Other Postretirement Benefits120,084 158,265 
Deferred Income TaxesDeferred Income Taxes76,206  64,273  Deferred Income Taxes107,293 70,482 
Other LiabilitiesOther Liabilities77,961  99,848  Other Liabilities38,088 35,911 
Commitments and Contingencies
Commitments and Contingencies (Note 16)Commitments and Contingencies (Note 16)
Sonoco Shareholders’ EquitySonoco Shareholders’ EquitySonoco Shareholders’ Equity
Serial preferred stock, no par valueSerial preferred stock, no par valueSerial preferred stock, no par value
Authorized 30,000 sharesAuthorized 30,000 sharesAuthorized 30,000 shares
0 shares issued and outstanding as of December 31, 2019 and 2018
0 shares issued and outstanding as of December 31, 2022 and 20210 shares issued and outstanding as of December 31, 2022 and 2021
Common shares, no par valueCommon shares, no par valueCommon shares, no par value
Authorized 300,000 sharesAuthorized 300,000 sharesAuthorized 300,000 shares
100,198 and 99,829 shares issued and outstanding as of December 31, 2019 and 2018, respectively7,175  7,175  
97,645 and 97,370 shares issued and outstanding as of December 31, 2022 and 2021, respectively97,645 and 97,370 shares issued and outstanding as of December 31, 2022 and 2021, respectively7,175 7,175 
Capital in excess of stated valueCapital in excess of stated value310,778  304,709  Capital in excess of stated value140,539 119,690 
Accumulated other comprehensive lossAccumulated other comprehensive loss(816,803) (740,913) Accumulated other comprehensive loss(430,083)(359,425)
Retained earningsRetained earnings2,301,532  2,188,115  Retained earnings2,348,183 2,070,005 
Total Sonoco Shareholders’ EquityTotal Sonoco Shareholders’ Equity1,802,682  1,759,086  Total Sonoco Shareholders’ Equity2,065,814 1,837,445 
Noncontrolling InterestsNoncontrolling Interests13,023  13,192  Noncontrolling Interests6,983 12,096 
Total EquityTotal Equity1,815,705  1,772,278  Total Equity2,072,797 1,849,541 
Total Liabilities and EquityTotal Liabilities and Equity$5,126,289  $4,583,465  Total Liabilities and Equity$7,052,940 $5,073,235 
The Notes beginning on page F-7 are an integral part of these consolidated financial statements.

F-3 FORM 10-K SONOCO 20192022 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF INCOME
Sonoco Products Company
  
(Dollars and shares in thousands except per share data)
Years ended December 31
(Dollars and shares in thousands except per share data)
Years ended December 31
201920182017
(Dollars and shares in thousands except per share data)
Years ended December 31
202220212020
Net salesNet sales$5,374,207  $5,390,938  $5,036,650  Net sales$7,250,552 $5,590,438 $5,237,443 
Cost of salesCost of sales4,316,378  4,349,932  4,077,998  Cost of sales5,810,903 4,528,528 4,191,104 
Gross profitGross profit1,057,829  1,041,006  958,652  Gross profit1,439,649 1,061,910 1,046,339 
Selling, general and administrative expensesSelling, general and administrative expenses530,867  563,306  507,824  Selling, general and administrative expenses707,343 558,180 528,439 
Restructuring/Asset impairment chargesRestructuring/Asset impairment charges59,880  40,071  38,419  Restructuring/Asset impairment charges56,910 14,210 145,580 
Loss on divestiture of business, net

Loss on divestiture of business, net

— 2,667 14,516 
Operating profitOperating profit467,082  437,629  412,409  Operating profit675,396 486,853 357,804 
Non-operating pension costsNon-operating pension costs24,713  941  45,110  Non-operating pension costs7,073 568,416 30,142 
Interest expenseInterest expense66,845  63,147  57,220  Interest expense101,662 63,991 75,046 
Interest incomeInterest income5,242  4,990  4,475  Interest income4,621 4,756 2,976 
Income before income taxes380,766  378,531  314,554  
Provision for income taxes93,269  75,008  146,589  
Income before equity in earnings of affiliates287,497  303,523  167,965  
Loss from the early extinguishment of debtLoss from the early extinguishment of debt— 20,184 — 
Income/(Loss) before income taxesIncome/(Loss) before income taxes571,282 (160,982)255,592 
Provision for/(Benefit from) income taxesProvision for/(Benefit from) income taxes118,509 (67,430)53,030 
Income/(Loss) before equity in earnings of affiliatesIncome/(Loss) before equity in earnings of affiliates452,773 (93,552)202,562 
Equity in earnings of affiliates, net of taxEquity in earnings of affiliates, net of tax5,171  11,216  9,482  Equity in earnings of affiliates, net of tax14,207 10,841 4,679 
Net income292,668  314,739  177,447  
Net (income) attributable to noncontrolling interests(883) (1,179) (2,102) 
Net income attributable to Sonoco$291,785  $313,560  $175,345  
Net income/(loss)Net income/(loss)466,980 (82,711)207,241 
Net (income)/loss attributable to noncontrolling interestsNet (income)/loss attributable to noncontrolling interests(543)(2,766)222 
Net income/(loss) attributable to SonocoNet income/(loss) attributable to Sonoco$466,437 $(85,477)$207,463 
Weighted average common shares outstanding:Weighted average common shares outstanding:Weighted average common shares outstanding:
BasicBasic100,742  100,539  100,237  Basic97,991 99,608 100,939 
Assuming exercise of awardsAssuming exercise of awards434  477  615  Assuming exercise of awards741 — 270 
DilutedDiluted101,176  101,016  100,852  Diluted98,732 99,608 101,209 
Per common sharePer common sharePer common share
Net income attributable to Sonoco:
Net income/(loss) attributable to Sonoco:Net income/(loss) attributable to Sonoco:
BasicBasic$2.90  $3.12  $1.75  Basic$4.76 $(0.86)$2.06 
DilutedDiluted$2.88  $3.10  $1.74  Diluted$4.72 $(0.86)$2.05 
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Sonoco Products Company
(Dollars in thousands)
Years ended December 31
201920182017
Net income$292,668  $314,739  $177,447  
Other comprehensive income/(loss):
Foreign currency translation adjustments8,270  (54,763) 89,108  
Changes in defined benefit plans, net of tax(87,033) (20,244) 59,924  
Change in derivative financial instruments, net of tax2,035  (1,614) (2,580) 
Other comprehensive income/(loss)(76,728) (76,621) 146,452  
Comprehensive income/(loss)215,940  238,118  323,899  
Net (income) attributable to noncontrolling interests(883) (1,179) (2,102) 
Other comprehensive loss/(income) attributable to noncontrolling interests838  2,156  (1,105) 
Comprehensive income attributable to Sonoco$215,895  $239,095  $320,692  
(Dollars in thousands)
Years ended December 31
202220212020
Net income/(loss)$466,980 (82,711)$207,241 
Other comprehensive (loss)/income:
Foreign currency translation adjustments(68,780)(75,636)46,092 
Changes in defined benefit plans, net of tax424 471,350 11,666 
Change in derivative financial instruments, net of tax(1,842)1,119 325 
Other comprehensive (loss)/income(70,198)396,833 58,083 
Comprehensive income396,782 314,122 265,324 
Net (income)/loss attributable to noncontrolling interests(543)(2,766)222 
Other comprehensive (income)/loss attributable to noncontrolling interests(460)584 1,878 
Comprehensive income attributable to Sonoco$395,779 $311,940 $267,424 
The Notes beginning on page F-7 are an integral part of these consolidated financial statements.
 
F-4 FORM 10-K SONOCO 20192022 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY
Sonoco Products Company
(Dollars and shares in thousands)
Total
Equity
Common Shares
Capital in
Excess of
Stated
Value
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Non-
controlling
Interests
OutstandingAmount
January 1, 2017$1,554,705  99,193  $7,175  $321,050  $(738,380) $1,942,513  $22,347  
Net income177,447  175,345  2,102  
Other comprehensive income/(loss):
Translation gain89,108  88,003  1,105  
Defined benefit plan adjustment1
59,924  59,924  
Derivative financial instruments1
(2,580) (2,580) 
Other comprehensive loss146,452  145,347  1,105  
Dividends(154,773) (154,773) 
Issuance of stock awards1,636  341  1,636  
Shares repurchased(6,335) (120) (6,335) 
Stock-based compensation13,488    13,488     
Impact of new accounting pronouncements—  318  (73,239) 72,921  
Noncontrolling interest from acquisition(2,560) (2,560) 
December 31, 2017$1,730,060  99,414  $7,175  $330,157  $(666,272) $2,036,006  $22,994  
Net income314,739  313,560  1,179  
Other comprehensive income/(loss):
Translation loss(54,763) (52,607) (2,156) 
Defined benefit plan adjustment1
(20,244) (20,244) 
Derivative financial instruments1
(1,614) (1,614) 
Other comprehensive income(76,621) (74,465) (2,156) 
Dividends(163,348) (163,348) 
Issuance of stock awards1,688  682  1,688  
Shares repurchased(14,561) (267) (14,561) 
Stock-based compensation10,730  10,730  
Impact of new accounting pronouncements1,721  —  (176) 1,897  
Purchase of Sonoco Asia noncontrolling interest(35,000) (23,305) (11,695) 
Noncontrolling interest from acquisition2,870  2,870  
December 31, 2018$1,772,278  99,829  $7,175  $304,709  $(740,913) $2,188,115  $13,192  
Net income292,668  291,785  883  
Other comprehensive income/(loss):
Translation gain8,270  9,108  (838) 
Defined benefit plan adjustment1
(87,033) (87,033) 
Derivative financial instruments1
2,035  2,035  
Other comprehensive loss(76,728) (75,890) (838) 
Dividends paid to noncontrolling interests(214) (214) 
Dividends(171,597) (171,597) 
Issuance of stock awards1,343  538  1,343  
Shares repurchased(9,608) (169) (9,608) 
Stock-based compensation14,334  14,334  
Impact of new accounting pronouncements(6,771) —  (6,771) 
December 31, 2019$1,815,705  100,198  $7,175  $310,778  $(816,803) $2,301,532  $13,023  

(Dollars and shares in thousands)
Total
Equity
Common Shares
Capital in
Excess of
Stated
Value
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Non-
controlling
Interests
OutstandingAmount
January 1, 2020$1,815,705 100,198 $7,175 $310,778 $(816,803)$2,301,532 $13,023 
Net income/(loss)207,241 207,463 (222)
Other comprehensive income/(loss):
Translation gain/(loss)46,092 47,970 (1,878)
Defined benefit plan adjustment1
11,666 11,666 
Derivative financial instruments1
325 325 
Other comprehensive income/(loss)58,083 59,961 (1,878)
Dividends paid to noncontrolling interests— 
Dividends(173,570)(173,570)
Issuance of stock awards1,154 398 1,154 
Shares repurchased(8,483)(149)(8,483)
Stock-based compensation10,607   10,607    
Impact of new accounting pronouncements(209)— (209)
December 31, 2020$1,910,528 100,447 $7,175 $314,056 $(756,842)$2,335,216 $10,923 
Net (loss)/income(82,711)(85,477)2,766 
Other comprehensive income/(loss):
Translation loss(75,636)(75,052)(584)
Defined benefit plan adjustment1
471,350 471,350 
Derivative financial instruments1
1,119 1,119 
Other comprehensive income/(loss)396,833 397,417 (584)
Dividends(179,734)(179,734)
Issuance of stock awards1,111 309 1,111 
Shares repurchased(218,085)(3,386)(218,085)
Stock-based compensation22,608 22,608 
Dividends paid to noncontrolling interest(1,009)(1,009)
December 31, 2021$1,849,541 97,370 $7,175 $119,690 $(359,425)$2,070,005 $12,096 
Net income466,980 466,437 543 
Other comprehensive (loss)/income:
Translation (loss)/ income(68,780)(69,240)460 
Defined benefit plan adjustment1
424 424 
Derivative financial instruments1
(1,842)(1,842)
Other comprehensive (loss)/income(70,198)(70,658)460 
Purchase of noncontrolling interest(13,196)(7,080)(6,116)
Dividends(188,259)(188,259)
Issuance of stock awards1,167 354 1,167 
Shares repurchased(4,547)(79)(4,547)
Stock-based compensation31,309 31,309 
December 31, 2022$2,072,797 97,645 $7,175 $140,539 $(430,083)$2,348,183 $6,983 
1
net of tax
The Notes beginning on page F-7 are an integral part of these consolidated financial statements.
F-5 FORM 10-K SONOCO 20192022 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF CASH FLOWS
Sonoco Products Company
(Dollars in thousands)
Years ended December 31
202220212020
Cash Flows from Operating Activities
Net income/(loss)$466,980 $(82,711)$207,241 
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment/(gain)21,444 (4,082)100,242 
Depreciation, depletion and amortization308,824 245,184 261,290 
Loss on early extinguishment of debt— 20,184 — 
Share-based compensation expense31,309 22,608 10,607 
Equity in earnings of affiliates, net of tax(14,207)(10,841)(4,679)
Cash dividends from affiliated companies8,902 8,660 6,777 
Net (gain)/loss on disposition of assets(5,979)15 (2,752)
Net loss on divestiture of business— 2,667 14,516 
Pension and postretirement plan expense10,697 595,620 57,973 
Pension and postretirement plan contributions(37,409)(163,659)(40,411)
Net (decrease)/increase in deferred taxes(9,876)(158,836)573 
Change in assets and liabilities, net of effects from acquisitions, divestitures and foreign currency adjustments
Trade accounts receivable(2,466)(149,755)17,853 
Inventories(353,478)(130,119)12,125 
Payable to suppliers27,225 172,430 21,487 
Prepaid expenses33,702 (13,077)4,754 
Income taxes payable and other income tax items5,504 (42,204)(12,545)
Accrued expenses and other assets and liabilities17,877 (13,412)50,570 
Net cash provided by operating activities509,049 298,672 705,621 
Cash Flows from Investing Activities
Purchase of property, plant and equipment(328,769)(256,019)(194,127)
Cost of acquisitions, net of cash acquired(1,427,020)(22,209)(49,261)
Proceeds from the sale of business, net— 91,569 103,411 
Proceeds from the sale of assets9,621 13,166 12,966 
Other net investing activities4,732 7,591 684 
Net cash used by investing activities(1,741,436)(165,902)(126,327)
Cash Flows from Financing Activities
Proceeds from issuance of debt2,153,355 172,042 1,121,860 
Principal repayment of debt(285,511)(628,119)(886,055)
Net (decrease)/increase in commercial paper borrowings(349,000)349,000 (250,000)
Net (decrease)/increase in outstanding checks(18,529)6,974 20,950 
Proceeds from interest rate swap— 4,387 14,480 
Payment of contingent consideration— — (3,000)
Cash dividends – common(187,093)(178,622)(172,626)
Purchase of noncontrolling interest(14,474)— — 
Dividends paid to noncontrolling interests— (1,009)— 
Excess cash costs of early extinguishment of debt— (20,111)— 
Payments for share repurchases(4,547)(218,085)(8,483)
Net cash provided/(used) by financing activities1,294,201 (513,543)(162,874)
Effects of Exchange Rate Changes on Cash(5,354)(13,097)3,145 
Increase/(Decrease) in Cash and Cash Equivalents56,460 (393,870)419,565 
Cash and cash equivalents at beginning of year170,978 564,848 145,283 
Cash and cash equivalents at end of year$227,438 $170,978 $564,848 
Supplemental Schedule of Non-Cash Investing Activities:
Non-cash additions to property, plant and equipment$20,250 $27,343 $3,139 
Supplemental Disclosures:
Interest paid, net of amounts capitalized$88,208 $68,189 $71,707 
Income taxes paid, net of refunds$122,881 $133,610 $65,002 
(Dollars in thousands)
Years ended December 31
201920182017
Cash Flows from Operating Activities
Net income$292,668  $314,739  $177,447  
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment25,026  5,794  20,017  
Depreciation, depletion and amortization239,140  236,245  217,625  
Gain on adjustment of environmental reserves(10,675) —  —  
Share-based compensation expense14,334  10,730  13,488  
Equity in earnings of affiliates(5,171) (11,216) (9,482) 
Cash dividends from affiliated companies6,620  7,570  6,967  
Loss on remeasurement of previously held interest in Conitex Sonoco—  4,784  —  
Net loss on disposition of assets746  8,635  2,039  
Pension and postretirement plan expense52,741  34,885  78,506  
Pension and postretirement plan contributions(231,234) (25,373) (108,579) 
Net (decrease)/increase in deferred taxes16,958  (9,420) (20,553) 
Change in assets and liabilities, net of effects from acquisitions, dispositions and foreign currency adjustments
Trade accounts receivable59,615  38,193  (43,773) 
Inventories2,631  (6,150) (16,067) 
Payable to suppliers(25,383) (4,380) 4,226  
Prepaid expenses4,030  (5,093) (110) 
Accrued expenses7,471  19,153  (14,606) 
Income taxes payable and other income tax items(6,201) (19,014) 70,180  
Other assets and liabilities(17,466) (10,184) (29,071) 
Net cash provided by operating activities425,850  589,898  348,254  
Cash Flows from Investing Activities
Purchase of property, plant and equipment(195,934) (192,574) (188,913) 
Cost of acquisitions, net of cash acquired(298,380) (277,177) (383,725) 
Proceeds from the sale of assets14,614  24,288  5,271  
Other603  1,335  2,791  
Net cash used by investing activities(479,097) (444,128) (564,576) 
Cash Flows from Financing Activities
Proceeds from issuance of debt276,843  226,885  448,511  
Principal repayment of debt(139,582) (281,262) (217,320) 
Net increase/(decrease) in commercial paper borrowings130,000  (4,000) 124,000  
Net increase/(decrease) in outstanding checks(4,486) (4,282) 7,518  
Payment of contingent consideration(5,500) —  —  
Cash dividends – common(170,253) (161,434) (153,137) 
Dividends paid to noncontrolling interests(214) —  —  
Purchase of Sonoco Asia noncontrolling interest—  (35,000) —  
Shares acquired(9,608) (14,561) (6,335) 
Net cash provided/(used) by financing activities77,200  (273,654) 203,237  
Effects of Exchange Rate Changes on Cash941  (6,639) 10,771  
Increase/(Decrease) in Cash and Cash Equivalents24,894  (134,523) (2,314) 
Cash and cash equivalents at beginning of year120,389  254,912  257,226  
Cash and cash equivalents at end of year$145,283  $120,389  $254,912  
Supplemental Cash Flow Disclosures
Interest paid, net of amounts capitalized$66,768  $63,147  $57,170  
Income taxes paid, net of refunds$82,512  $103,442  $96,962  
Certain prior year amounts reported within net cash provided by operating activities have been revised to conform with the current presentation.
The Notes beginning on page F-7 are an integral part of these consolidated financial statements.
F-6 FORM 10-K SONOCO 20192022 ANNUAL REPORT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company (dollars in thousands except per share data)
 
1. Summary of significant accounting policies
Basis of presentation
The Consolidated Financial Statements include the accounts of Sonoco Products Company and its majority-owned subsidiaries (the “Company” or “Sonoco”) after elimination of intercompany accounts and transactions.
Investments in affiliated companies in which the Company sharesdoes not control over the financial and operating decisions, butinvestee or in which the Company is not the primary beneficiary but has the ability to exercise significant influence over the investee’s financial and operating decisions, are accounted for by the equity method of accounting. Income applicable to these equity investments is reflectedreported in “Equity in earnings of affiliates, net of tax” in the Consolidated Statements of Income. The aggregate carrying value of equity investments is reported in “Other Assets” in the Company’s Consolidated Balance SheetsSheets and totaled $54,339 and $55,516$59,171 and $54,356 at December 31, 20192022 and 2018,2021, respectively. These totals include the Company’s 19.5% ownership investment in a small tubes and cores business in Chile and an 18.0% ownership investment in a small South Carolina based designer and manufacturer of sustainable protective packaging solutions acquired in June 2022. The Company is not able to exercise significant influence over either of these two equity investments. Accordingly, the investments, which are not material, are accounted for under the measurement alternative (i.e., cost less impairment, adjusted for any qualifying observable price changes).
On October 13, 2022, the Company completed the sale of its 12.2% ownership investment in a small paper recycling business in Finland for cash proceeds of $3,830 and recognized a gain on the sale of $1,242. Prior to the sale, this equity investment was accounted for under the measurement alternative.
On January 26, 2023, the Company completed the sale of its Sonoco Sustainability Solutions ("S3") business to Northstar Recycling Company, LLC ("Northstar"). Within the terms of the sale, the Company gains a 2.7% equity interest in Northstar valued at $5,000. This investment will be accounted for under the measurement alternative. See Note 3 for more information.
Affiliated companies over which the Company exercised a significant influence at December 31, 2019,2022, included:
Entity
Ownership Interest
Percentage at
December 31, 20192022
RTS Packaging, JVCOLLC35.0 %
Cascades Conversion, Inc.50.0 %
Cascades Sonoco, Inc.50.0 %
Showa Products Company Ltd.22.2 %
Crown Fibre Tube. Inc.20.0 %
Papertech Energía, S.L.25.0 %
Weidenhammer New Packaging, LLC40.0 %
Also includedOn November 9, 2022, the Company entered into a definitive agreement to purchase the remaining 65% equity interest in RTS Packaging, LLC. The transaction is expected to close in the investment totals above is the Company’s 19.5% ownership in a small tubes and cores business in Chile and its 12.19% ownership in a small paper recycling business in Finland. These investments are accountedsecond half of 2023. See Note 3 for under the cost method as the Company does not have the ability to exercise significant influence over them.more information.
Estimates and assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue recognition
Beginning in 2018, theThe Company records revenue generally at a point in time when control is transferredtransfers to the customer which is either upon shipment or delivery, depending on the terms of sale. Additionally, in certain cases, control transfers over time in casesconjunction with production where the Company is entitled to payment with margin for products produced that are customer specific and without alternative use. TheFor products that meet these two criteria, the Company recognizes over time revenue under the input method as goods are produced. Revenue that is recognized at a point in time is recognized when the customer obtains control of the goods. Customers obtain control either when goods are delivered to the customer facility, if the Company is responsible for arranging transportation, or when picked up by the customer's designated carrier. The Company commonly enters into Master Supply Arrangements (MSA) with customers to provide goods and/or services over specific time periods. Customers submit purchase orders with quantities and prices to create a contract for accounting purposes. Shipping and handling expenses are considered a fulfillment cost, and included in "Cost of Sales," and freight charged to customers is included in "Net Sales" in the Company's Consolidated Statements of Income.
Prior to 2018, the Company recorded revenue when title and risk of ownership passed to the customer, and when persuasive evidence of an arrangement existed, delivery had occurred or services had been rendered, the sales price to the customer was fixed or determinable and when collectibility was reasonably assured. Certain judgments, such as provisions for estimates of sales returns and allowances, were required in the application of the Company’s revenue policy and, therefore, were included in the results of operations in its Consolidated Financial Statements. Shipping and handling expenses were included in “Cost of sales,” and freight charged to customers was included in “Net sales” in the Company’s Consolidated Statements of Income for the year ended December 31, 2017.
The Company has rebate agreements with certain customers. These rebates are recorded as reductions of sales and are accrued using sales data and rebate percentages specific to each customer agreement. Accrued customer rebates are included in "Accrued expenses and other" in the Company's Consolidated Balance Sheets.
Payment terms under the Company's arrangements are typically short term in nature, generally no longer than 120 days.nature. The Company does provideprovides prompt payment discounts to certain customers if invoices are paid within a predetermined period. Prompt payment discounts are treated as a reduction of revenue and are determinable within a short period after the originating sale.sale and like sales returns, are treated as a reduction of revenue.
Accounts receivable and allowance for doubtful accounts
The Company’s trade accounts receivable are non-interest bearing and are recorded at the invoiced amounts. The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. Provisions are made toThe Company performs an evaluation of lifetime expected credit losses inherent in its accounts receivable at each balance sheet date. Such an evaluation includes consideration of historical loss experience, trends in customer payment frequency, present economic conditions, and judgment about the allowance for doubtful accounts at such time that collectionfuture financial health of all or part of a trade account receivable is in question.its customers and industry sector. The allowance for doubtful accounts is monitored on a regular basis and adjustments are made as needed to ensure that the account properly reflects the Company’s best estimate of uncollectible trade accounts receivable. Account balances are charged off against the allowance for doubtful accounts when the Company determines that the receivable will not be recovered.
F-7 FORM 10-K SONOCO 2019 ANNUAL REPORT

Sales to the Company’s largest customer accounted for approximately 5%No single customer comprised 10% or more of the Company’s consolidated net sales in 2019, 4% in 2018 and 4% in 2017, primarily in2022, 2021 or 2020, nor did the Display and Packaging and Consumer Packaging segments. Receivablesreceivables balance from thisany single customer accounted for approximately 8%comprise 10% or more of the Company’s total trade accounts receivable at December 31, 2019 and 4% at2022 or December 31, 2018. The Company’s next largest customer comprised approximately 4% of the Co2021.
F-7 FORM 10-K SONOCO 2022 ANNUAL REPORT

mpany’s net sales in 2019, 4% in 2018 and 3% in 2017.
Certain ofThe Company engages with third-party financial institutions to sell certain trade accounts receivable from customers in order to accelerate its cash collection cycle. In addition, the Company’s customers sponsor and actively promote multi-vendorCompany also participates in supply chain finance arrangements promoted by certain of its customers. Receivables transferred under both these arrangements generally meet the requirements to be accounted for as a true sale in accordance with guidance under Accounting Standards Codification (“ASC”) 860, Transfers and Servicing, resulting in a limited numberderecognition of cases,such receivables from the Company has agreedCompany's consolidated balance sheets. The sales under these arrangements are made without recourse and the Company's only continuing involvement with the sold receivables is providing collection services related to participate. Accordingly, approximthe transferred assets. The servicing fees for these arrangements are immaterial to the financial statements given the short-term nature of our arrangements. In total, approximately 13% aately 9%nd 10% of the Company's consolidated annualnet sales were settled under these arrangements in 2022 and 2021, respectively.
Accounts payable and supply chain financing
The Company facilitates a voluntary supply chain financing program (the "SCF Program") to provide certain of its suppliers with the opportunity to sell receivables due from the Company to the participating financial institution in the program. Such sales are conducted at the sole discretion of both 2019the suppliers and 2018.the financial institution on a non-recourse basis at a rate that leverages the Company's credit rating and thus might be more beneficial to the supplier. No guarantees are provided by the Company or any of our subsidiaries under the SCF Program. The Company's responsibility is limited to making payment on the terms originally negotiated with its suppliers, regardless of whether the suppliers sell their receivables to the financial institution. The Company does not enter into any agreements with suppliers regarding their participation in the SCF Program. The amount owed to the participating financial institution under the SCF Program and included in "Accounts payable" was $52,415 at December 31, 2022 and $46,832 at December 31, 2021.
Research and development
Research and development costs are charged to expense as incurred and include salaries and other directly related expenses. Research and development costs totaling approximately $28,700 in $23,3002022, $24,100 in 2019, $23,2002021 and $22,000 in 2018 and $21,000 in 20172020 are included in “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Income.
Restructuring and asset impairment
Costs associated with exit or disposal activities are recognized when the liability is incurred. If assets become impaired as a result of a restructuring action, the assets are written down to fair value, less estimated costs to sell, if applicable. A number of significant estimates and assumptions are involved in the determination of fair value. The Company considers historical experience and all available information at the time the estimates are made; however, the amounts that are ultimately realized upon the sale of divested assets may differ from the estimated fair values reflected in the Company’s Consolidated Financial Statements.
Cash and cash equivalents
Cash equivalents are composed of highly liquid investments with an original maturity to the Company of generally three months or less when purchased. Cash equivalents are recorded at cost, which approximates market.fair market value. The Company’s cash and cash equivalents are primarily placed with large sophisticated credit-worthy financial institutions thereby limiting the Company’s credit exposure.
Inventories
InventoriesThe majority of the Company's inventories are accounted for using the first-in, first-out (FIFO) method and are stated at the lower of cost or net realizable value.
The last-in, first-out (LIFO) method is used for the valuation of certain of the Company’s domestic inventories, primarily metal, internally manufactured paper and paper purchased from third parties.
The LIFO method of accounting was used to determine the carrying costs ofparties, and approximately 13%pproximated 11% and 14% of15% of total inventories at December 31, 20192022 and 2018,2021, respectively. The remaining inventoriesInventories accounted for using the LIFO method are determined onstated at the first-in, first-out (FIFO) method.
lower of cost or market. If the FIFO method of accounting had been used for all inventories, total inventory would have been higherhigher by $20,203$51,342 and $18,854 $22,900 at December 31, 20192022 and 2018,2021, respectively.
Property, plant and equipment
PlantProperty, plant and equipment assets represent the original cost of land, buildings and equipment, less depreciation, computed under the straight-line method over the estimated useful lives of the assets, and are reviewed for impairment whenever events indicate the carrying value may not be recoverable. Equipment lives generally range from 3 to 11 years, and buildings range from 15 to 40 years.
Expenditures for repairs and maintenance are charged to expense as incurred. When properties are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the asset and related allowance accounts, respectively. Gains or losses upon disposal are credited or charged to income as incurred.
Timber resources are stated at cost. Depletion is charged to operations based on the estimated number of units of timber cut during the year.
GoodwillLeases
At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The assessment is based on (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and other intangible(3) whether the Company has the right to direct the use of the asset. When the Company determines a lease exists, a leased asset and corresponding lease liability are recorded on its consolidated balance sheet. Lease contracts with a term of 12 months or less are not recorded on the consolidated balance sheet in conjunction with the Company's practical expedient election under ASC 842 Leases. Leased assets represent the Company’s right to use an underlying asset during the lease term and are reviewed for impairment whenever events indicate the carrying value may not be recoverable. Lease liabilities represent the Company’s obligation arising from the lease. The Company’s leased assets and liabilities may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company has lease agreements with non-lease components that relate to lease components (e.g., common area maintenance such as cleaning or landscaping, etc.). The Company accounts for each lease and any non-lease components associated with that lease as a single lease component for all underlying asset classes in accordance with the scope of the lease accounting standard.
Leased assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the implicit rate in the Company's leases is not readily determinable, the Company calculates its lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years. Lease payments may be fixed or variable,
F-8 FORM 10-K SONOCO 2022 ANNUAL REPORT

however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the expense is paid during the lease term.
The Company recognizes fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, the Company recognizes interest expense on the lease liability using the effective interest method over the lease term and the finance lease asset balance is amortized on a straight-line basis.
Goodwill
The Company assesses its goodwill for impairment annually during the third quarter, or from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. In performing the impairment test, the Company compares the fair value of the reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This quantitative test considers factors such as the amount by which estimated fair value exceeds current carrying value, current year operating performance as compared to prior projections, and implied fair values from comparable trading and transaction multiples.
The calculated reporting unit estimated fair values reflect a number of significant management assumptions and estimates including the Company's forecast of sales, profit margins, and discount rate. Changes in these assumptions could materially impact the estimated fair values.
When the Company estimatesIn determining the fair value of athe reporting unit, it does sounits, management considered both the income approach and the market approach. Fair value was estimated using a discounted cash flow model based on projections of future years'years’ operating results and associated cash flows corroborated bycombined with comparable trading and transaction multiples. multiples based on guideline public companies. The calculated estimated fair value of the reporting unit reflects a number of significant management assumptions and estimates including the forecast of sales growth, gross profit margins, and discount rates. Changes in these assumptions could materially impact the estimated fair value.
The Company's projections incorporate management's best estimates of the expected future results, which include expectations related to new and retained business and future operating margins. Projected future cash flows are then discounted to present value using a discount rate management believes is commensurate with the risks inherent in the cash flows.
If the fair value of a reporting unit exceeds the carrying value of the reporting unit’s assets, including goodwill, there is no impairment. If the carrying value of the reporting unit exceeds the fair value of that reporting unit, an impairment charge is recognized for the excess. Goodwill is not amortized.
Impairment of long-lived, intangible and other assets
Intangible assets are amortized, usually on a straight-line basis, over their respective useful lives, which generally range from 3 to 40 years. The Company has no intangibles with indefinite lives. The Company evaluates its intangible assets for impairment whenever indicators of impairment exist.
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 has no intangiblesevaluates 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 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, definite-lived intangible, or other 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 indefinite lives.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.
Income taxes
The Company provides for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting requirements and tax laws. Assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
The Company recognizes liabilities for uncertain income tax positions based on ourits estimate of whether it is more likely than not that additional taxes will be required and we reportthe Company reports related interest and penalties aswithin provision for income taxes.taxes on the consolidated statement of income.
Derivatives
The Company elected to early adopt Accounting Standards Update (ASU) 2017-12, "Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities," as of January 1, 2018. The Company uses derivatives to mitigate the effect of fluctuations in some of its raw material and energy costs, foreign currencies, and, from time to time, interest rates. The Company purchases commodities such as recovered paper, metal resins and energy, generally at market or at fixed prices that are established with the vendor as part of the purchase process for quantities expected to be consumed in the ordinary course of business. The Company may enter into commodity futures or swaps to manage the
F-8 FORM 10-K SONOCO 2019 ANNUAL REPORT

effect of price fluctuations. The Company may use 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. The Company is exposed to interest-rate fluctuations as a result of using debt as a source of financing for its operations. The Company may from time to time use traditional, unleveraged interest rate swaps to adjust its mix of fixed and variable rate debt to manage its exposure to interest rate movements. Additionally, the Company elected the normal purchase, normal sale scope exception for physical commodity contracts that meet the definition of a derivative. Derivative instruments, to the extent in an asset position, expose the Company to credit loss in the event of nonperformance by the counterparties to the derivative agreements. The Company manages its exposure to counterparty credit risk through minimum credit standards, diversification of counterparties and procedures to monitor concentrations of credit risk. The Company may enter into financial derivative contracts that may contain credit-risk-related contingent features, which could result in a counterparty requesting immediate payment or demanding immediate and ongoing full overnight collateralization on derivative instruments in net liability positions.
The Company records its derivatives as assets or liabilities on the balance sheet at fair value using published market prices or estimated values based on current price and/or rate quotes and discounted estimated cash flows. Changes in the fair value of derivatives are recognized either in net income or in other comprehensive income, depending on whether the derivative is designated purpose of the derivative.in a cash flow or net investment hedging relationship or not. Amounts in accumulated other comprehensive income are reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. It is the Company’s policy not to speculate in derivative instruments.
F-9 FORM 10-K SONOCO 2022 ANNUAL REPORT

Stock-Based Compensation Plans
The Company utilizes share-based compensation in the form of restricted stock units, performance contingent restricted stock units, and other share-based awards. The amount of share-based compensation expense associated with performance contingent restricted stock units is based on estimates of future performance using measures defined in the stock plan descriptions for each award granted. As of December 31, 2022, these performance measures include the following:
•Base earnings per share — three-year sum of forecasted future and historical annual base earnings per share for the three-year measurement period associated with each award; and
•Return on invested capital — three-year simple average calculated using the annual returns calculated by dividing 1) net base operating profit after tax (derived from historical or projected base 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.
Pension and Postretirement Benefit Plans
The Company provides non-contributory defined benefit pension plans for certain of its employees in the United States, Mexico, Belgium, Germany, Greece, France, and Turkey. The actuarial valuations used to evaluate the plans employ key assumptions that can have a significant effect on the calculated amounts.
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 15-year period, with the expected rate of return selected from a best estimate range within the total range of projected results. The Company periodically re-balances 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.
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.
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 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 usthe Company 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, 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 usthe Company 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 arethe Company is required to adjust provisional amounts that we havewere recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on ourits financial condition and results of operations.
Significant estimates and assumptions in estimating the fair value of acquired customer relationships, technology, and other identifiable intangible assets include future cash flows that we expectthe Company expects to generate from the acquired assets.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, wethe Company could record impairment charges. In addition, we havethe Company has estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. If ourthe estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could be impaired.
For leases in which the acquired business is a lessee, 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. 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.
Reportable segments
The Company identifies its reportable segments by evaluating the level of detail reviewed by the chief operating decision maker and the similarities among operating segments related to gross profit margins, nature of products sold, nature of the production processes, type and class of customer, methods used to distribute products, and nature of the regulatory environment. Of these factors, the Company believes that the most significant in determining the aggregation of operating segments are the nature of the products and the type of customers served. 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.
Contingencies
Pursuant to U.S. GAAP for accounting for contingencies, accruals for estimated losses are recorded at the time information becomes available indicating that losses are probable and that the amounts are reasonably estimable. Amounts so accrued are not discounted. Changes in estimates and assumptions could impact the carrying value of the accruals from one period to another as additional information becomes known.

F-10 FORM 10-K SONOCO 2022 ANNUAL REPORT

2. New accounting pronouncements
In December 2019,September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2019-12 "Income Taxes," which provides for certain updates to reduce complexity in the accounting for income taxes, including the utilization2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of the incremental approach for intraperiod tax allocation, among others.Supplier Finance Program Obligations.” The amendments in ASU 2019-12this update 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, and a rollforward of the outstanding obligation as of the end of the annual period. 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 does not plan to elect early adoption of this update and does not expect this pronouncement to materially affect its consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The amendments in this update eliminate the accounting guidance for troubled debt restructurings while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendments also require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases. The Company does not expect this pronouncement to materially affect its consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08, “Business Combinations: Accounting for Contract Assets and Contract Liabilities." The amendments in this Update primarily require that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination as if the acquirer had originated the related revenue contracts rather than at fair value as of the acquisition date. Generally, this would result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree's financial statements in accordance with generally accepted accounting principles. The amendments in this ASU are effective on a prospective basis for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.2022. The Company is currently evaluating the impact that ASU 2021-08's adoption will have on its consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provided temporary optional expedients and exceptions to applying U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR"). In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform,” to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform.The sunset accounting standard provision associated with ASU 2020-04 was originally set for December 31, 2022; however, in December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform: Deferral of the Sunset Date of Topic 848." The expected cessation date of all currencies and tenors of LIBOR is now expected to occur on June 30, 2023. The objective of the guidance in ASU 2022-06 is to provide temporary relief during the transition period by deferring the sunset date of Topic 848 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.This pronouncement, which was effective as of its December 31, 2022 issuance date, did not have a material impact on the Company's consolidated financial statements. The Company does not expect that the implementationmarket transition of ASU 2019-12LIBOR to SOFR will have a material effectimpact on its consolidated financial statements.
In December 2018,2019, the FASB issued ASU 2018-16 “Derivatives2019-12 "Income Taxes, (Topic 740): Simplifying the Accounting for Income Taxes". This ASU removes certain exceptions from recognizing deferred taxes for investments, performing intraperiod allocation and Hedging: Inclusioncalculating income taxes in interim periods. It also reduces complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The amendments in ASU 2019-12 were effective for the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) RateCompany as a Benchmark Interest Rate for Hedge Accounting Purposes,” which allows the use of the SOFR and OIS rate as benchmark rates after the Federal Reserve started publishing such daily rates on April 3, 2018. The Company adopted the standard effective January 1, 2019 using the prospective basis. The2021, and their adoption did not have a material effect on the consolidated financial statements.
In August 2018, the FASB issued ASU 2018-14 "Compensation-Retirement Benefits-Defined Benefit Plans-General," which modifies certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in ASU 2018-14 are effective for fiscal years beginning after December 15, 2020. The Company does not expect the implementation of ASU 2019-12 to have a material effect on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which requires measurement and recognition of expected versus incurred credit losses for financial assets held. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods. The Company will adoptadopted this standard on January 1, 2020 using a modified retrospective approach by recordingand recorded a cumulative-effect adjustment to retained earnings of approximately $200$209, an increase to the allowance for doubtful accounts of $279, and a decrease to deferred income tax liabilities of $70 as of January 1, 2020. The Company does not expect the implementation of ASU 2016-13 to have a material effect on its consolidated financial statements.
In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2016-02, "Leases" (“ASU 2016-02”) requiring lessees to recognize on the balance sheet a right-of-use asset and lease liability for all long-term leases and requiring disclosure of key information about leasing arrangements in order to increase transparency and comparability among organizations. The accounting for lessors does not fundamentally change except for changes to conform and align guidance to the lessee guidance and the revenue recognition standard adopted in 2018. The Company established a cross-functional team to implement certain software solutions as part of its newly integrated enterprise-wide lease management system. The implementation plan included developing business processes, accounting systems, and internal controls to ensure the Company's compliance with reporting and disclosure requirements of the new standard. The Company elected the package of practical expedients permitted under the transition guidance and, as also provided for under the standard, has made an accounting policy election to exclude from the balance sheet leases with a term of 12 months or less. The Company also elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases and has elected to combine lease and non-lease components as a single lease component for all classes of assets.
F-9 FORM 10-K SONOCO 2019 ANNUAL REPORT

The Company adopted ASU 2016-02 as of January 1, 2019, using the modified retrospective transition method and elected to apply the optional transition approach prescribed by ASU 2018-11 which allows entities to initially apply the new leases standard at the adoption date, without adjusting comparative periods. Upon the adoption of ASU 2016-02, the Company recorded on its consolidated balance sheet right of use assets totaling $336,083 and lease liabilities totaling $344,362, as well as a cumulative effect adjustment to retained earnings of $6,771 and a $1,508 reduction to deferred tax liabilities.
Other than the pronouncements discussed above, there have been no other newly issued nor newly applicable accounting pronouncements that have had, or are expected to have, a material impact on the Company’s financial statements. Further, at December 31, 2019,2022, there were no other pronouncements pending adoption that are expected to have a material impact on the Company’s consolidated financial statements.
3. Acquisitions and dispositionsdivestitures
Acquisitions
The Company completed 2 acquisitions during 2019 at a net cash cost of $297,926. On December 31, 2019,November 15, 2022, the Company completed the acquisition of Thermoform Engineered Quality, LLC, and Plastique Holdings, LTD, (together "TEQ"S.P. Holding, Skjern A/S ("Skjern"), a privately owned manufacturer of paper based in Skjern, Denmark for $187,292,$88,647, net of cash acquired. The operations acquired consist of three thermoformingSkjern produces high-grade paperboard from recycled paper for rigid paper containers, tubes and extrusion facilities in the United States along with a thermoforming operation in the United Kingdomcores, and thermoforming and molded-fiber manufacturing in Poland, which together employ approximately 500 associates.other applications. The acquisition of TEQ provides a strong platformis expected to further expand Sonoco's growing healthcare packaging business. Final consideration is subject to a post-closing adjustmentproduction capacity for the change in working capital to the dateCompany’s converting operations and customers throughout Europe. Goodwill for Skjern, none of closing, which is expected to be completed by the enddeductible for income tax purposes, consists of the first quarter of 2020. The acquisition was financed using short-term credit facilities.increased access to certain markets and existing customer relationships.
On August 9, 2019,31, 2022, the Company completed the acquisition of Corenso HoldingsNordeste Tubetes and NE Tubetes (collectively “Nordeste”), two small tube and core operations in Brazil. Total consideration for the two businesses was $6,518, including cash paid at closing of $3,933, additional payments in October and November 2022 totaling $671, and deferred payments totaling $1,914 expected to be paid over the next six years. Goodwill for Nordeste, all of which is expected to be deductible for income tax purposes, consists of increased access to certain markets and existing customer relationships.
On January 26, 2022, the Company completed the acquisition of Ball Metalpack Holding, LLC ("Ball Metalpack"), 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, Inc. ("Corenso") for $110,634,$1,348,589, net of cash acquired. Corenso is a leading manufacturer of uncoated recycled paperboard (URB)As previously disclosed, final consideration was subject to customary post-closing adjustments for working capital, cash and high-performance cores usedindebtedness and was finalized in the paper, packaging films, tape,second quarter of 2022. The Company received cash from the sellers totaling $14,820, of which $6,924 had been reflected as a receivable at the time of the initial allocation. Prior to the Company's acquisition, Ball Metalpack was a joint venture formed in 2018 and specialty industries. Corenso operatesowned by Platinum Equity (51%) and Ball Corporation (49%). Metal Packaging consists of eight manufacturing plants in the United States and a 108,000-ton per year URB mill and core convertingheadquarters facility in Wisconsin Rapids, Wisconsin,Broomfield, Colorado. Factors comprising goodwill at Metal Packaging include increased access to certain markets as well as a core converting facility in Richmond, Virginia, expandingthe value of the assembled workforce. Approximately 81% of goodwill is expected to be deductible for income tax purposes. This acquisition fits the Company's abilitystrategy of investing in its core businesses as it complements the Company's largest Consumer Packaging franchise, global rigid paper containers, and further expands the Company's sustainable packaging portfolio to produce a wide variety of sustainable coreboard grades. The acquisition was financed using available cash and short-term borrowings.include metal packaging.
F-11 FORM 10-K SONOCO 2022 ANNUAL REPORT

The Company's initial preliminary fair values of the assets acquired and the liabilities assumed in connection with the TEQMetal Packaging and CorensoSkjern acquisitions, as well as revised preliminary fair values reflecting adjustments made during the measurement period for the year ended December 31, 2019Metal Packaging, are as follows:
TEQCorenso
Trade Accounts Receivable$11,781  $8,673  
Inventories4,262  8,707  
Property, Plant and Equipment42,005  36,928  
Goodwill75,595  43,427  
Other intangible assets56,170  29,170  
Payable to suppliers(4,965) (5,963) 
Other net tangible assets/(liabilities)3,243  405  
Deferred income taxes, net(799) (10,713) 
Net assets$187,292  $110,634  
Metal PackagingSkjern
Initial Allocation(a)
Measurement Period AdjustmentsRevised Allocation
Initial Allocation(a)
Trade accounts receivable$113,850 $— $113,850 $8,055 
Other receivables14,569 (43)14,526 193 
Inventories190,070 381 190,451 2,595 
Prepaid expenses44,530 — 44,530 349 
Property, plant and equipment333,496 (2,462)331,034 24,334 
Right of use asset - operating leases38,000 — 38,000 28 
Other intangible assets498,000 — 498,000 42,818 
Goodwill366,098 (28,987)337,111 29,059 
Other net tangible assets48,069 (196)47,873 — 
Payable to suppliers(105,580)— (105,580)(3,466)
Accrued expenses and other(30,671)691 (29,980)(1,173)
Taxes payable— — — (576)
Notes payable and current portion of long-term debt(46,463)— (46,463)— 
Noncurrent operating lease liabilities(30,448)— (30,448)(20)
Long-term debt(39,543)— (39,543)— 
Deferred income taxes(52,312)22,720 (29,592)(13,549)
Total purchase price, net of cash acquired$1,341,665 $(7,896)$1,333,769 $88,647 
(a) The initial allocation represents the Company's preliminary estimates of the fair values for the assets and liabilities assumed during the reporting period the acquisition occurred and is based on information then available.
The measurement period adjustments for Metal Packaging reflect changes to the initially recognized amounts resulting from new information about facts and circumstances that existed as of the acquisition date. As of December 31, 2022, the Company is continuing to finalize its valuation of certain assets acquired and liabilities assumed in both the Metal Packaging and Skjern acquisitions and expects to complete its measurement period adjustments within one year from their respective dates of acquisition.
The Company has accounted for these acquisitions as business combinations under the acquisition method and has included the results of operations of the acquired businesses in the Company's Consolidated Statements of Income from the respective dates of acquisition. Financial results for Metal Packaging are included in the Company's Consumer Packaging segment, and financial results for Nordeste and Skjern are included in the Industrial Paper Packaging segment.
The following table presents the financial results for Metal Packaging from the date of acquisition through December 31, 2022:
Supplemental InformationJanuary 26 to
Metal PackagingDecember 31, 2022
Net sales$1,035,020 
Net income$62,777 
The following table presents the Company’s pro forma consolidated results for the years ended December 31, 2022 and December 31, 2021, assuming the acquisition of Metal Packaging had occurred on January 1, 2021. This 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.
F-12 FORM 10-K SONOCO 2022 ANNUAL REPORT

Pro Forma Supplemental InformationYears Ended
ConsolidatedDecember 31, 2022December 31, 2021
Net sales$7,300,140 $6,425,771 
Net income/(loss) attributable to Sonoco$528,818 $(145,570)
The amountpro 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 goodwillintegrating the acquired operations with those of the Company. Pro forma information for the years ended December 31, 2022 and December 31, 2021 includes adjustments to depreciation, amortization, and income taxes based upon the preliminary 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 pro forma information as if the acquisition had occurred on January 1, 2021. Acquisition-related costs of $28,171 and charges related to fair value adjustments to acquisition-date inventory of $33,155 were recognized during 2022. These costs are excluded from 2022 pro forma net income and are instead reflected in 2021 pro forma net income as though the acquisition had occurred on January 1, 2021.
The Company completed four acquisitions during 2021 at a net cash cost of $20,697. On December 30, 2021, the Company completed the acquisition of a recycling facility from American Recycling of Western North Carolina, LLC ("American Recycling"), a privately held company, for total cash consideration of $6,267. The facility, located in Asheville, North Carolina, primarily services western North Carolina and upstate South Carolina for the processing of recycled materials. On November 8, 2021, the Company completed the acquisition of D&W Paper Tube Inc. ("D&W"), a privately owned manufacturer of paper tubes and cardboard cores, serving the carpet and textile industries and consisting of two manufacturing facilities in Chatsworth, Georgia, for total cash consideration of $12,787. The Company also completed two smaller acquisitions earlier in 2021. These included Allied Packaging on August 3, 2021, a manufacturer of paper packaging and related manufacturing equipment, consisting of a single manufacturing facility in Sydney, Australia, for total cash consideration of $802, and TuboTec on March 8, 2021, a small tube and core operation in Brazil, for total cash consideration of $841. The financial results for each of these acquisitions are included in the Company's Industrial Paper Packaging segment from the respective date acquired.
The Company completed two acquisitions during 2020 at a net cash cost of $49,446. On August 3, 2020, the Company completed the acquisition of Can Packaging, a privately owned designer and manufacturer of sustainable paper packaging and related manufacturing equipment, based in Habsheim, France, for $45,473, net of cash acquired. Can Packaging operates two paper can manufacturing facilities in France, along with a research and development center where it designs and builds patented packaging machines and sealing equipment. The acquisition of Can Packaging expands Sonoco's ability to provide innovative recyclable packaging in various shapes and sizes. Goodwill for Can Packaging, none of which is expected to be deductible for income tax purposes, is $58,544 for TEQ and $0 for Corenso. Goodwill for TEQ and Corenso is comprisedconsists of the assembled workforce and increased access to certain markets. AsCan Packaging's financial results from the acquisition of TEQ was completed on December 31, 2019, none of its resultsdate acquired are reflected in the Company's Consolidated Statement of income for the year ended December 31, 2019. Beginning in the first quarter of 2020, TEQ's results will be reflectedincluded in the Company's Consumer Packaging segment. Corenso's financial results from August 9, 2019 to December 31, 2019 are included in the Company's Paper and Industrial Converted Products segment.
The allocation of the purchase price of Corenso and TEQ to the tangible and intangible assets acquired and liabilities assumed was based on the Company's preliminary estimates of their fair value, relying on information currently available. Management is continuing to finalize its valuations of certain assets and liabilities listed in the table above, and expects to complete its valuations within one year of the date of the respective acquisitions.
The Company does not believe that the results of the business acquired in 2019 were material to the years presented, individually or in the aggregate, and are therefore not subject to the supplemental pro-forma information required by ASC 805. Accordingly, this information is not presented herein.
The Company completed 3 acquisitions during 2018 at a net cash cost of $278,777. On October 1, 2018, the Company completed the acquisition of the remaining 70 percent interest in Conitex Sonoco (BVI), Ltd. ("Conitex Sonoco") from Texpack Investments, Inc. ("Texpack") for total consideration of $134,847, including net cash payments of $127,782 and debt assumed of $7,065. Final consideration was subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment was settledsettlement occurred in February 2019 forJanuary 2021 and resulted in the Company making an additional cash payment to the seller of $84. The Conitex Sonoco joint venture was formed in 1998 with Texpack, a Spanish-based global provider of paperboard and paper-based packaging products. Conitex Sonoco produces uncoated recycled paperboard and tubes and cones for the global spun yarn industry, as well as adhesives, flexible intermediate bulk containers and corrugated pallets. Conitex Sonoco has approximately 1,250 employees across 13 manufacturing locations in 10 countries (principally in Asia), including 4 paper mills and 7 cone and tube converting operations and 2 other production facilities. Also on October 1, 2018, the Company acquired a rigid paper facility in Spain ("Compositub") from Texpack Group Holdings B.V. for a cash payment of $9,956. Final consideration was subject to a post-closing adjustment for the change in working capital to the date of closing. This adjustment was settled in February 2019 for an additional cash payment to the seller of $371.
Immediately prior to the acquisition, the fair value of the Company's 30 percent interest in Conitex Sonoco was determined to be $52,543 with a carrying value of $57,327. As the carrying value of the investment exceeded its acquisition-date fair value, the investment was written down to
F-10 FORM 10-K SONOCO 2019 ANNUAL REPORT

fair value resulting in a charge of $4,784 in "Selling, general and administrative expenses" on the Company's Consolidated Statements of Income for the year ended December 31, 2018. Additionally, foreign currency translation losses related to the Company's investment in Conitex Sonoco were reclassified out of accumulated other comprehensive loss resulting in a charge of $897 in "Selling, general and administrative expenses" on the Company's Consolidated Statements of Income for the year ended December 31, 2018.$1,512.
On April 12, 2018,January 10, 2020, the Company completed the acquisition of Highland Packaging Solutionsa small tube and core operation in Jacksonville, Florida, from Design Containers, Inc. ("Highland"Jacksonville"). Total, for total cash consideration of $3,973. Goodwill for this acquisition was $148,539, including net cash paid of $141,039, along with a contingent purchase liability of $7,500 payable in 2 annual installments if certain sales metrics are achieved. The first year's metric was met and the Company paid the first installment of $5,000 in 2019. The second installment of $2,500 is expected to be paid in the second quarter of 2020. The liability for the remaining installment is included in "Accrued expenses and other" on the Company's Consolidated Balance Sheet at December 31, 2019. Highland manufactures thermoformed plastic packaging for fresh produce and dairy products from a single production facility in Plant City, Florida, providing total packaging solutions for customers that include sophisticated engineered containers, flexographic printed labels, and inventory management through distribution warehouses in the Southeast and West Coast of the United States.
During the year ended December 31, 2019, the Company finalized its valuations of the assets acquired and liabilities assumed in acquisitions completed during 2018. As a result, the following measurement period adjustments were made to the previously disclosed provisional fair values of assets and liabilities acquired and are as follows:
Conitex SonocoCompositubHighland
Trade accounts receivable$(77) $203  $—  
Inventories—  50  —  
Property, plant and equipment(199) (1,026) 1,895  
Goodwill2,246  (566) (1,895) 
Other intangible assets300  1,888  —  
Accrued expenses and other(1,782) (138) —  
Other net tangible assets/(liabilities)(404) (40) —  
Additional cash consideration$84  $371  $—  

Factors comprising the goodwill for Conitex Sonoco and Compositub,Jacksonville, all of which $2,000 and $1,965, respectively, is expected to be deductible for income tax purposes, includeconsists of increased access to certain markets as well as the value of the assembled workforce. Themarkets. Jacksonville's financial results of Conitex Sonoco and Compositubfrom the date acquired are included in the Company's Industrial Paper and Industrial Converted Products segment and Consumer Packaging segment, respectively.
All of the goodwill for Highland is expected to be deductible for income tax purposes, and is comprised of increased access to certain markets as well as the value of the assembled workforce. Highland's financial results are included in the Company's Consumer Packaging segment and the business operates within the Company's global plastics division.segment.
The Company does not believe that the results of the businesses acquired in 20182021 and 2020 were material to the years presented, individually or in the aggregate, and are therefore not subject to the requirements to provide supplemental pro-forma information required by ASC 805.information. Accordingly, this information is not presented herein.
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 (a "Second Request") from the Antitrust Division of the U.S. Department of Justice (the "DOJ"). Issuance of the Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), until 30 days after the Company and WestRock have each substantially complied with the Second Request, unless the period for review is extended voluntarily by the parties and the DOJ or is terminated earlier by the DOJ. The Company completed 2 acquisitions during 2017 atanticipates 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 HSR Act. Upon completion of the transaction, the Company will own 100% of RTS, which is currently operated as a netjoint 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 cost of $383,725. on hand.
Divestitures
On July 24, 2017,January 26, 2023, the Company completed the acquisitionsale of Clear Lamits S3 business, a provider of customized waste and recycling management programs and part of the Company's Industrial Paper Packaging Inc. ("Clear Lam")segment, to Northstar for $164,951, neta total sales price of cash acquired. Final consideration was subject$15,338, including a 2.7% equity interest in Northstar valued at $5,000. The Company expects to an adjustment for working capital, which resulted in cashrecognize a gain from the divestiture of $1,600 being returned to the Company in 2018. Clear Lam manufactures high barrier flexible and forming films used to package a varietythis business of products for consumer packaged goods companies, retailers and other industrial manufacturers, with a focus on structures used for perishable foods. It has production facilities in Elk Grove Village, Illinois, and Nanjing, China. Clear Lam's financial results are includedapproximately $11,000, before tax, in the Company's Consumer Packaging segment.first quarter of 2023.
On March 14, 2017,April 4, 2021, the Company completed the acquisitionsale of Packaging Holdings, Inc.its U.S. display and subsidiaries, including Peninsula Packaging LLC ("Packaging Holdings"),packaging business, part of the All Other group of businesses, to Hood Container Corporation for $218,774, net$80,000 in cash. This business provided design, manufacturing and fulfillment of cash acquired. Packaging Holdings manufactures thermoformed packaging for a wide range of whole fresh fruits, pre-cut fruits and produce, prepared salad mixes,point-of-purchase displays, as well as baked goods in retail supermarkets fromcontract packaging services, for consumer product customers and had approximately 450 employees. Its operations included eight manufacturing and fulfillment facilities and four sales and design centers.
The selling price was adjusted at closing for certain transaction expenses and for anticipated differences between targeted levels of working capital and the projected levels at the time of closing. Net cash proceeds of $79,704 were received on April 5, manufacturing facilities, including 42021 and the Company recognized a loss on the divestiture of this business of $5,516, before tax, in the United States and 1 in Mexico. Packaging Holding's financial results are included infirst quarter of 2021. During the Company's Consumer Packaging segment andquarter ended October 3, 2021, the business operates as the Peninsula brand of thermoformed packaging products within the Company's global plastics division. 
Although neither of the acquisitions completed during 2017 were considered individually material, they were considered material on a combined basis. The following table presents the Company's estimated pro forma consolidated results for 2017, assuming both acquisitions had occurred January 1, 2016. This pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had been completed as of the beginning of 2016, nor are they necessarily indicative of future consolidated results.
Consolidated Pro Forma Supplemental InformationYear Ended
December 31, 2017
Packaging Holdings and Clear Lam(unaudited)
Net sales$5,143,066 
Net income attributable to Sonoco$178,205 
Earnings per share:
  Pro forma basic$1.78 
  Pro forma diluted$1.77 
F-11F-13 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Company finalized the working capital settlement related to this sale. The pro forma information above does not projectsettlement resulted in additional cash proceeds of $1,971 and the Company’sbuyer's assumption of certain liabilities totaling $786. As a result, the Company recognized a reduction in the previously reported loss on the sale of this business of $2,757, before tax, in the third quarter of 2021, bringing the total loss on the sale of business to $2,759, before tax.
On September 30, 2021, the Company completed the sale of its Plastics - Food thermoforming operation in Wilson, North Carolina ("Wilson Thermoforming") to Placon for net cash proceeds of $3,528, resulting in the recognition of a pre-tax gain on the sale of $92.
Assets and liabilities disposed of in the sales of U.S. Display and Packaging and Wilson Thermoforming included the following:
U.S. Display and PackagingWilson Thermoforming
Trade accounts receivable$26,342 $— 
Inventories8,434 1,805 
Property, plant and equipment, net9,551 550 
Right of use asset - operating leases11,627 147 
Goodwill53,039 1,058 
Trade accounts payable(10,735)— 
Accrued expenses(2,197)(54)
Operating lease liabilities(12,343)(70)
Other net tangible assets716 — 
Net asset disposal$84,434 $3,436 
Net proceeds81,675 3,528 
Loss/(Gain) on divestiture of business$2,759 $(92)
As previously disclosed, the Company completed the divestiture of its European contract packaging business, Sonoco Poland Packaging Services Sp. z.o.o., on November 30, 2020. The selling price of $120,000 was adjusted at closing for certain indebtedness assumed by the buyer and for anticipated differences between targeted levels of working capital and the projected levels at the time of closing. The Company received net cash proceeds at closing of $105,913, with the buyer funding an escrow account with an additional $4,600. In the second quarter of 2021, the Company received $6,366 in additional proceeds from the sale, which included the release of $4,000 from escrow plus a post-closing adjustment of $2,366 for the working capital settlement. The remaining $600 in escrow is expected results ofto be released in 2023, pending any future period and gives no effect for any future synergistic benefits that may result from consolidating these subsidiaries or costs from integrating their operations with thoseindemnity claims. The receipt of the Company. Pro forma informationadditional cash proceeds is reflected in "Proceeds from the sale of businesses, net" in the Consolidated Statements of Cash Flows.
The decision to sell its global display and packaging businesses was part of the Company's efforts to simplify its operating structure to focus on growing its core Consumer and Industrial packaging businesses around the world. These sales were not expected to notably affect consolidated operating margin percentages, nor did they represent a strategic shift for 2017 includes adjustmentsthe Company that would have a major effect on the entity’s operations and financial results. Consequently, the sales did not meet the criteria for reporting as discontinued operations. The net proceeds from the sales were used for general corporate purposes.
The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to depreciation, amortization, interest expense,be suboptimal or nonstrategic.
Acquisition and income taxes. Acquisition-relatedDivestiture-Related Costs
Acquisition- and divestiture-related costs of $4,345$70,210, $17,722, and non-recurring expenses related to$4,671 were incurred in 2022, 2021 and 2020, respectively. These costs include legal and professional fees, investment banking fees, representation and warranty insurance premiums, and other transaction costs that are included in "Selling, general, and administrative expenses" in the Company's Consolidated Statements of Income. The costs incurred in 2022 also include fair value adjustments to acquisition-date inventory of $5,750 were recognized in 2017 in connection with the acquisitions of Packaging Holdings and Clear Lam. These costs are excluded from 2017 pro forma net income.
The following table presents the aggregate, unaudited financial results for Packaging Holdings and Clear Lam from their respective dates of acquisition:
Packaging Holdings and Clear Lam
Post-Acquisition		Year Ended
December 31, 2017
Actual net sales$215,227 
Actual net income$3,886 
Acquisition-related costs of $8,842, $14,446 and $13,790 were incurred in 2019, 2018 and 2017, respectively. These costs, consisting primarily of legal and professional fees,totaling $33,155, that are included in “Selling, general and administrative expenses”"Cost of sales" in the Company’sCompany's Consolidated Statements of Income. Acquisition-related costs incurred in 2018 also include the previously discussed charge related to the acquisition-date fair value remeasurement of the Company's 30 percent investment in Conitex Sonoco and the foreign currency translation losses related to this investment.
The Company has accounted for these acquisitions as business combinations under the acquisition method of accounting, in accordance with the business combinations subtopic of the Accounting Standards Codification and, accordingly, has included their results of operations in the Company’s consolidated statements of net income from the respective dates of acquisition.
Dispositions
There were no dispositions during the years ended 2019, 2018 or 2017.

4. Restructuring and asset impairment
Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is constantly seeking the mostmore cost-effective means and structurestructures to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to continue to be, a recurring component of the Company's operating costs. The amount of these costs can vary significantly from year to year depending upon the scope, nature, and location of the restructuring activities.
Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:
 Year Ended December 31,
  
202220212020
Restructuring and restructuring-related asset impairment charges$46,815 $9,176 $67,729 
Other asset impairments10,095 5,034 77,851 
Restructuring/Asset impairment charges$56,910 $14,210 $145,580 
The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:
F-14 FORM 10-K SONOCO 2022 ANNUAL REPORT

 Year Ended December 31,
  
201920182017
Restructuring and restructuring-related asset impairment charges$44,819  $40,071  $19,834  
Other asset impairments15,061  —  18,585  
Restructuring/Asset impairment charges$59,880  $40,071  $38,419  
 Year Ended December 31,
202220212020
Severance and Termination Benefits$17,983 $13,097 $36,997 
Asset Impairment/Disposal of Assets9,442 (9,116)22,394 
Other Costs19,390 5,195 8,338 
Total restructuring and restructuring-related asset impairment charges$46,815 $9,176 $67,729 
The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:
 Year Ended December 31,
202220212020
Consumer Packaging12,433 3,427 $25,548 
Industrial Paper Packaging16,019 (1,642)32,691 
All Other(166)2,969 7,266 
Corporate18,529 4,422 2,224 
Total restructuring and restructuring-related asset impairment charges$46,815 $9,176 $67,729 
"Restructuring and restructuring-related asset impairment charges" and "Other asset impairments" are included in “Restructuring/Asset impairment charges” in the Consolidated Statements of Income.
The Company expects to recognize future additional costs totaling approximately $2,800 in connection with previously announced restructuring actions. The Company believes that the majority of these charges will be incurred and paid by the end of 2020.
The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:

 Year Ended December 31,
201920182017
Severance and Termination Benefits$24,864  $15,224  $12,684  
Asset Impairment/Disposal of Assets9,674  6,193  120  
Other Costs10,281  18,654  7,030  
Total restructuring and restructuring-related asset impairment charges$44,819  $40,071  $19,834  

The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:

F-12 FORM 10-K SONOCO 2019 ANNUAL REPORT

 Year Ended December 31,
201920182017
Consumer Packaging$34,850  $15,205  $6,751  
Display and Packaging2,459  18,800  2,048  
Paper and Industrial Converted Products4,927  4,301  7,410  
Protective Solutions519  1,532  3,162  
Corporate2,064  233  463  
Total restructuring and restructuring-related asset impairment charges$44,819  $40,071  $19,834  

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Consolidated Balance Sheets:

Accrual Activity
Severance
and
Termination
Benefits
Asset
Impairment/
Disposal
of Assets
Other
Costs
Total
Liability, December 31, 2020$15,955 $— $511 $16,466 
2021 charges13,097 (9,116)5,195 9,176 
Cash (payments)/receipts(17,828)15,308 (6,313)(8,833)
Asset write downs/disposals— (6,192)2,479 (3,713)
Foreign currency translation(307)— 1 (306)
Liability, December 31, 2021$10,917 $— $1,873 $12,790 
2022 charges17,983 9,442 19,390 46,815 
Cash (payments)/receipts(14,024)7,138 (19,836)(26,722)
Asset write downs/disposals— (16,580)— (16,580)
Foreign currency translation(199)— (35)(234)
Liability, December 31, 2022$14,677 $— $1,392 $16,069 

Accrual Activity
Severance
and
Termination
Benefits
Asset
Impairment/
Disposal
of Assets
Other
Costs
Total
Liability, December 31, 2017$5,982  $—  $1,164  $7,146  
2018 charges15,224  6,193  18,654  40,071  
Cash (payments)/receipts(15,844) 26,566  (17,541) (6,819) 
Asset write downs/disposals—  (32,759) —  (32,759) 
Foreign currency translation(69) —  2  (67) 
Liability, December 31, 2018$5,293  $—  $2,279  $7,572  
2019 charges24,864  9,674  10,281  44,819  
Cash (payments)/receipts(19,386) 5,225  (11,983) (26,144) 
Asset write downs/disposals—  (14,899) —  (14,899) 
Foreign currency translation(6) —  15  9  
Liability, December 31, 2019$10,765  $—  $592  $11,357  

The Company expects"Severance and Termination Benefits" in 2022 include the cost of severance provided to payemployees terminated as the majorityresult of various plant closures, and for approximately 180 employees whose positions were eliminated in conjunction with the Company's ongoing organizational effectiveness efforts.
"Severance and Termination Benefits" in 2021 include the cost of severance provided to employees terminated as the result of various plant closures, as well as certain employees impacted by Project Horizon, a project to transform the corrugated medium machine in Hartsville, South Carolina to produce uncoated recycled paperboard. Severance costs were also incurred for certain employees as a result of the remaining restructuring reserves bysale of the end of 2020 using cash generated from operations.
During 2019, the Company announced the elimination of a forming film production line at a flexible packaging facility in Illinois, and initiated the closure of a composite can and injection molding facility in Germany, a composite can plant in Malaysia, a molded plastics plantCompany's Plastics - Food thermoforming operations in the United States (all part(part of the Consumer Packaging segment), and 3 tube and core plants - 1 in the United Kingdom, 1 in Norway, and 1 in Estonia (all part of the Paper and Industrial Converted Products segment). Restructuring actions in the Protective Solutions segment included charges associated with the exit of a protective packaging facility in Texas. In addition, the Company continued to realign itscharges include the cost structure, resultingof severance for approximately 315 employees whose positions were eliminated in conjunction with the elimination of approximately 223 positions.Company's ongoing organizational effectiveness efforts.
"Asset Impairment/Disposal of Assets" recognized in 20192022 consist primarily of the following asset impairment charges: $4,124 fromcharges related to plant closures in the eliminationIndustrial Paper Packaging and Consumer Packaging segments, including asset impairment charges of a forming film line at a flexible packaging facility in Illinois; $3,663 from the closure of a composite can and injection molding facility in Germany; $909 from the closure of a thermoformed packaging plant in California; $325 from the closure of a composite can plant in Malaysia; and $1,827 from various other restructuring actions during 2019. Partially offsetting these losses was a $1,173 gain$3,620 related to Project Horizon. These charges were partially offset by gains from the sale of previously impaired assets and closed facilities in the Consumer Packaging segment and the "All Other" group of businesses. Cash proceeds in 2022 relate to the sales of these assets and facilities, including the partial sale of a vacant Protective Solutions facilitypreviously closed paper mill in Connecticut for whichCanada, part of the Company received cash proceedsIndustrial Paper Packaging segment.
"Asset Impairment/Disposal of $929, released an environmental reserveAssets" in 2021 consist primarily of $675,gains from the liability for which was assumed bysale of real estate in the buyer,Industrial Paper Packaging segment, and wrote offgains from the sale of other assets withimpaired in the prior year as a book valueresult of $431.consolidations in the Company's Plastics - Food thermoforming operations.
"Other costs"Costs" in 20192022 consist primarily of consulting services and costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance. In 2021, "Other Costs" consist primarily of costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance.
During 2018,The Company expects to pay the Company initiated the closures of a flexible packaging plant in North Carolina, a global brand management facility in Canada, and a thermoformed packaging plant in California (all partmajority of the Consumer Packaging segment),remaining restructuring reserves by the end of 2023 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $8,400 in connection with ongoing consulting services and 5 tubepreviously announced restructuring actions and core plants - 1 in Alabama, 1 in Canada, 1 in Indonesia, 1 in Russia,believes that the majority of these charges will be incurred and 1 in Norway (all partpaid by the end of the Paper and Industrial Converted Products segment), and a protective packaging plant in North Carolina (part of the Protective Solutions segment). Restructuring actions in the Display and Packaging segment included charges associated with exiting a single-customer contract at a packaging center in Atlanta, Georgia. In addition, the2023. The Company continued to realigncontinually evaluates its cost structure, resulting in the elimination of approximately 120 positions.
Included in "Asset Impairment/Disposal of Assets" above in 2018 are losses totaling $4,516 from the disposition of certain assets as a result of exiting a single-customer contract associated with a packaging center in Atlanta, Georgia. The Company received proceeds of $22,163 in conjunction with the sale of fixed assets with a net book value of $24,869,including its manufacturing capacity, and wrote off inventory with a book value of $1,810. Also included in "Asset Impairment/Disposal of Assets" are net losses totaling $1,677 from various otheradditional restructuring actions during 2018.are likely to be undertaken.
"Other Costs" in 2018 include a contract termination fee of $9,600 relating to exiting the single-customer contract, a one-time building lease contract termination fee of $1,931 relating to the closure of a packaging services center in Mexico, as well as costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance.
F-15 FORM 10-K SONOCO 2022 ANNUAL REPORT

Other Asset Impairments
DuringThe Company recognized other asset impairment charges totaling $10,095 for the year ended December 31, 2022.
As a result of exiting our operations in Russia, consisting of two small tube and core plants in the Industrial Paper Packaging segment, other asset impairment charges of $9,165 were recognized for the year ended December 31, 2022. These charges include $3,747 of cumulative translation adjustment losses that were reclassified from accumulated other comprehensive income upon completion of the Company's 2019 long-livedexit from Russia on July 1, 2022.
Total other asset impairment testing, management concluded that certain assets withincharges for the temperature-controlled shipping solution business associated withyear ended December 31, 2022 also include $930 of fixed asset impairments in the ThermoSafe division,Company's plastics foods operations, part of the ProtectiveConsumer Packaging segment. These assets were determined to be impaired as the value of their projected undiscounted cash flows was no longer sufficient to recover their carrying value.
The Company recognized other asset impairment charges totaling $5,034 in the year ended December 31,2021. These charges consisted of fixed asset impairments totaling $2,635 in the Company's plastics foods operations, part of the Consumer Packaging segment, and $2,399 in the temperature-assured packaging business, part of the All Other group of businesses. The assets were impaired as the value of the projected undiscounted cash flows from these assets was determined to no longer be sufficient to recover their carrying values. As a result, the Company recognized a pretax asset impairment charge of $10,099. Also during this testing, the Company impaired the assets and inventory associated with a plastic can business line in the United States (part of the Consumer Packaging segment) due to the inability to generate sufficient revenues associated with this product offering. As a result, the Company recognized an asset impairment charge of $4,054. In addition, the single customer served using certain proprietary technology in our flexible packaging business ended its relationship with Sonoco in 2019, resulting in the recognition of a pretax asset impairment charge for the remaining net book value of fixed assets and intangible assets totaling $908.
During the fourth quarter of 2017, the Company recognized the impairment of a power generating facility at its Hartsville manufacturing complex. The facility, which is part of the Paper and Industrial Converted Products segment, was determined to have been rendered obsolete by
F-13 FORM 10-K SONOCO 2019 ANNUAL REPORT

the Company's new biomass facility and was closed during the first quarter of 2018. As a result, the Company recognized a pretax asset impairment charge of $17,822 in December 2017.
Also in 2017, as a result of the continued devaluation of the Venezuelan Bolivar, the Company recognized impairment charges against inventories and certain long-term nonmonetary assets totaling $338. The assets were deemed to be impaired as the U.S. dollar value of the projected cash flows from these assets was no longer sufficient to recover their U.S. dollar carrying values. In addition, the Company has recognized foreign exchange remeasurement losses on net monetary assets of $425.value.
These asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company’s Condensed Consolidated Statements of Income.
5. Book overdrafts and cash pooling
As part of its cash management system, the Company uses “zero balance” accounts to fund disbursements. Under this system, the bank balance is zero at the end of each day, while the book balance is usually a negative amount due to reconciling items such as outstanding checks. At December 31, 20192022 and 2018,2021, outstanding checks totaling $8,796$17,986 and $13,205,$36,759, respectively, were included in “Payable to suppliers” on the Company’s Consolidated Balance Sheets. In addition, outstanding payroll checks of $38$244 and $114$0 as of December 31, 20192022 and 2018,2021, respectively, were included in “Accrued wages and other compensation” on the Company’s Consolidated Balance Sheets. Changes in these book cash overdrafts are reported as cash flows from financing activities.
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 cash deposit or borrowing positions 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 Company’s Consolidated Balance Sheets reflect a net cash deposit under this pooling arrangement of $4,409$2,375 and $2,562$19,502 as of December 31, 20192022 and 2018,2021, respectively.
6. Property, plant and equipment
Details of the Company's property, plant and equipment at December 31 are as follows:
20222021
Land$131,362 $112,714 
Timber resources42,202 42,355 
Buildings664,012 550,497 
Machinery and equipment3,528,545 3,179,781 
Construction in progress226,701 237,055 
4,592,822 4,122,402 
Accumulated depreciation and depletion(2,882,423)(2,824,902)
Property, plant and equipment, net$1,710,399 $1,297,500 
20192018
Land$114,443  $110,698  
Timber resources42,338  41,862  
Buildings560,334  535,433  
Machinery and equipment3,077,500  2,977,156  
Construction in progress143,021  159,661  
3,937,636  3,824,810  
Accumulated depreciation and depletion(2,650,794) (2,590,989) 
Property, plant and equipment, net$1,286,842  $1,233,821  
Estimated costs for completion of capital additions under construction totaled approximately $102,836 at December 31, 2019.
Depreciation and depletion expense amounted to $186,540$216,138 in 2019, $188,5332022, $189,667 in 20182021 and $178,049$201,004 in 2017.2020.
7. Leases
The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, warehouses, and packaging centers)warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company's lease contracts is atperformed after contemplating all the Company's sole discretion.relevant facts and circumstances in accordance with guidance under ASC 842. Most real estate leases, in particular, include 1one or more options to renew, with renewal terms that cantypically extend the lease term in increments from one to 50five years. The Company's leases do not have any significant residual value guarantees or restrictive covenants.
AsThe Company completed the implicit rate in the Company's leases is not readily determinable, the Company calculates its rightacquisition of useMetal Packaging on January 26, 2022. The acquisition included both operating and finance lease assets and liabilities. The acquired operating lease liabilities usingof $33,910 had a weighted average remaining lease maturity term and discount rates based uponrate of 11.0 years and 2.8%, respectively, and the Company’s incremental secured borrowingacquired finance lease liabilities of $46,687 had a weighted average remaining lease maturity term and discount rate which contemplatesof 3.8 years and reflects a particular geographical region’s interest rate for the leases active within that region7.5%, respectively, as of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease termsdate of 10 years or less and a “long” rate for contracts greater than 10 years. See Note 2 for further information regarding the Company's adoption of ASU 2016-02, "Leases."acquisition.
F-14F-16 FORM 10-K SONOCO 20192022 ANNUAL REPORT

The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at December 31, 2019:
ClassificationBalance Sheet LocationDecember 31, 2019
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$298,393 
Finance lease assetsOther Assets34,858 
Total lease assets$333,251 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses2022 and other$54,048 
Current finance lease liabilitiesNotes payable and current portion of debt10,803 
Total current lease liabilities$64,851 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$253,992 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion22,274 
Total noncurrent lease liabilities$276,266 
Total lease liabilities$341,117 

As of December 31, 2019, the Company has entered into additional leases that have not yet commenced. The associated contracts include payments over the respective lease terms totaling $6,200, which are not reflected in the Company's liabilities recorded as of December 31, 2019. These leases should commence during fiscal year 2020 with lease terms of approximately 12 years.2021:
ClassificationBalance Sheet LocationDecember 31, 2022December 31, 2021
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$296,781 $268,390 
Finance lease assetsOther Assets103,467 55,826 
Total lease assets$400,248 $324,216 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$52,306 $45,305 
Current finance lease liabilitiesNotes payable and current portion of long-term debt19,015 6,952 
Total current lease liabilities$71,321 $52,257 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$250,994 $234,167 
Noncurrent finance lease liabilitiesLong-term Debt, net of current portion83,905 53,330 
Total noncurrent lease liabilities$334,899 $287,497 
Total lease liabilities$406,220 $339,754 
Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.
The following table sets forth the components of the Company's total lease cost for the yearyears ended December 31, 2019:
Lease CostTwelve months ended December 31, 2019
Operating lease cost(a)$61,845 
Finance lease cost:
Amortization of lease asset(a) (b)6,965 
Interest on lease liabilities(c)763 
Variable lease cost(a) (d)51,616 
Total lease cost$121,189 

2022, 2021, and 2020:
Lease Cost202220212020
Operating lease cost(a)$51,890 $48,158 $58,678 
Finance lease cost:
     Amortization of lease asset(a) (b)12,241 5,747 7,387 
     Interest on lease liabilities(c)4,751 1,384 1,050 
Variable lease cost(a) (d)30,269 26,198 36,758 
Impairment charges(e)293 148 11,340 
Total lease cost$99,444 $81,635 $115,213 
(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively.
(b) Included in depreciation and amortization.
(c) Included in interest expense.
(d) Also includes short term lease costs, which are deemed immaterial.

In compliance with ASC 842,(e) Impairment charges are included in "Restructuring/asset impairment charges" in the Company must provide the prior year disclosures required under the previous lease guidance (ASC 840)Company's Consolidated Statements of Income. See Note 4 for comparative periods presented herein. Rental expense under operating leases for the year ended December 31, 2018 was $80,300 and $68,900 for the year ended December 31, 2017.more information.










F-15 FORM 10-K SONOCO 2019 ANNUAL REPORT

The following table sets forth the five-year maturity schedule of the Company's lease liabilities as of December 31, 2019:2022:
Maturity of Lease LiabilitiesOperating LeasesFinance LeasesTotal
2023$53,074 $19,473 $72,547 
202445,570 17,821 63,391 
202537,873 20,140 58,013 
202630,407 16,611 47,018 
202726,833 5,183 32,016 
Beyond 2027185,515 44,779 230,294 
Total lease payments$379,272 $124,007 $503,279 
     Less: Interest75,972 21,087 97,059 
Lease Liabilities$303,300 $102,920 $406,220 
Maturity of Lease LiabilitiesOperating LeasesFinance LeasesTotal
2020$55,681  $11,124  $66,805  
202149,474  9,258  58,732  
202243,418  7,322  50,740  
202339,831  4,569  44,400  
202433,424  2,355  35,779  
Beyond 2024167,463  227  167,690  
Total lease payments$389,291  $34,855  $424,146  
     Less: Interest81,251  1,778  83,029  
Lease Liabilities$308,040  $33,077  $341,117  




F-17 FORM 10-K SONOCO 2022 ANNUAL REPORT

The following tables set forth the Company's weighted average remaining lease term and discount rates used in the calculation of its outstanding lease liabilities at December 31, 2019,2022, 2021, and 2020, along with other lease-related information for the yearyears ended December 31, 2019:2022, 2021, and 2020:
Lease Term and Discount RateAs of December 31, 2019
Weighted-average remaining lease term (years):
     Operating leases10.2
     Finance leases3.8
Weighted-average discount rate:
     Operating leases4.74% 
     Finance leases2.97% 
Other InformationTwelve Months Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases$61,532 
     Operating cash flows used by finance leases763 
     Financing cash flows used by finance leases7,989 
Leased assets obtained in exchange for new operating lease liabilities28,762 
Leased assets obtained in exchange for new finance lease liabilities24,106 
Lease Term and Discount Rate202220212020
Weighted-average remaining lease term (years):
     Operating leases11.211.811.8
     Finance leases9.213.512.9
Weighted-average discount rate:
     Operating leases4.27%4.09%4.28%
     Finance leases4.79%2.86%2.94%
Other Information202220212020
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases$52,198 $50,479 $58,305 
     Operating cash flows used by finance leases$4,751 $1,384 $1,050 
     Financing cash flows used by finance leases$12,687 $4,699 $7,437 
Leased assets obtained in exchange for new operating lease liabilities$36,158 $20,505 $90,361 
Leased assets obtained in exchange for new finance lease liabilities$10,091 $14,643 $23,117 
Modification to leased assets for increase/(decrease) in operating lease liabilities$2,807 $15,936 (9,947)
Modification to leased assets for (decrease)/increase in finance lease liabilities$(642)$9,586 14,005 
Termination reclasses to decrease operating lease assets$(4,285)$(5,267)(27,508)
Termination reclasses to decrease operating lease liabilities$(4,537)$(5,602)(27,985)
Termination reclasses to decrease finance lease assets$(1,351)$(125)(25,079)
Termination reclasses to decrease finance lease liabilities$(87)$(130)(25,199)

8. Goodwill and other intangible assets
Goodwill
The changes
Changes in the carrying amount of goodwill by segment for the year ended December 31, 2019,2022, are as follows:
Consumer
Packaging
Display
and
Packaging
Paper and
Industrial
Converted
Products
Protective
Solutions
Total
Balance as of January 1, 2019$617,332  $203,414  $256,947  $231,474  $1,309,167  
Acquisitions75,595  —  43,427  —  119,022  
    Measurement period adjustments  (2,461) —  2,246  (215) 
Foreign currency translation777  —  421  174  1,372  
Balance as of December 31, 2019$691,243  $203,414  $303,041  $231,648  $1,429,346  
Consumer
Packaging
Industrial Paper
Packaging
All OtherTotal
Balance as of January 1, 2022$572,416 $367,780 $384,305 $1,324,501 
Acquisitions366,098 34,473 — 400,571 
    Measurement period adjustments(28,987)— — (28,987)
    Foreign currency translation(10,902)(7,427)(2,445)(20,774)
Balance as of December 31, 2022$898,625 $394,826 $381,860 $1,675,311 

Acquisitions in 2019 resulted inGoodwill activity reflected under the additioncaption “Acquisitions” relates to the January 26, 2022 acquisition of $119,022 of goodwill, including $43,427 in connection withMetal Packaging, the August 201931, 2022 acquisition of CorensoNordeste, and $75,595 in connection with the December 2019November 15, 2022 acquisition of TEQ. Additionally, measurementSkjern. Activity reflected under the caption “Measurement period adjustments were made in 2019adjustments” relates to the fair values of the assets acquired and the liabilities assumed in the 2018 acquisitions of Compositub, Highland, and Conitex Sonoco resulting in increases/(decreases) in goodwill of $(566), $(1,895) and $2,246, respectively. These adjustments are reflected above in "Measurement period adjustments."Metal Packaging acquisition. See Note 3 for additional information.
The Company assesses goodwill for impairment annually during the third quarter, or from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. The Company completed its most recent annual goodwill impairment testing during the third quarter of 2019. As part of this testing, the Company2022, and analyzed certain qualitative and quantitative factors in determining whether a goodwill impairment.impairment existed. The Company's assessments reflected a number of significant management assumptions and estimates, including the Company's forecast of sales growth, gross profit margins, and discount rates. Changes in these assumptions could materially impact the
F-16 FORM 10-K SONOCO 2019 ANNUAL REPORT

Company's conclusions. Based on its assessments, the Company concluded that there was no impairment of goodwill for any of its reporting units.
Although no reporting units failed the assessments noted above,annual impairment test, in management’s opinion, the goodwill of the DisplayPlastics - Healthcare and PackagingProtexic reporting unit isunits are at risk of impairment in the near term if the reporting units' operations do not perform in line with management's expectations, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate. A large portion of projected sales in this reporting unit is concentrated in several major customers,
F-18 FORM 10-K SONOCO 2022 ANNUAL REPORT

In the loss of any of which could impact the Company's conclusion regarding the likelihood of goodwill impairment for the unit. Total goodwill associated with this reporting unit was $203,414 at December 31, 2019. Based on the latest annual impairment test, the estimated fair value of the Display and Packaging reporting unit exceeded its carrying value by approximately 35%. In its 2019 annual goodwill impairment analysis completed during the third quarter of 2022, projected future cash flows for Displaythe Plastics - Healthcare and PackagingProtexic reporting units were discounted at 8.9%.9.8% and 9.5%, respectively, and their estimated fair values were determined to exceed their carrying values by approximately 18.0% and 18.3%, respectively. Based on the discounted cash flow model and holding other valuation assumptions constant, Displaythe discount rates for the Plastics - Healthcare and Packaging projected operating profits across all future periodsProtexic reporting units would have to be reduced approximately 27%, or the discount rate increased to 12.5%11.0% and 11.5%, respectively, in order for the estimated fair valuevalues of the reporting units to fall below their carrying values. Total goodwill associated with the Plastics - Healthcare and Protexic reporting unit’s carrying value.units were $62,607 and $29,051, respectively, at December 31, 2022.
During the time subsequent to the annual evaluation, and at December 31, 2019,2022, the Company considered whether any events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its reporting units may have been impaired. It is management's opinion that no such events have occurred.

Other intangible assets
Details at December 31 are as follows:
20192018
Other Intangible Assets, Gross:
Patents$26,096  $22,509  
Customer lists632,036  548,038  
Trade names32,427  31,174  
Proprietary technology24,525  28,748  
Land use rights172  282  
Other2,125  2,093  
Other Intangible Assets, Gross$717,381  $632,844  
Accumulated Amortization:
Patents$(11,669) $(9,539) 
Customer lists(287,831) (246,946) 
Trade names(9,985) (7,413) 
Proprietary technology(17,910) (15,400) 
Land use rights(51) (48) 
Other(1,643) (1,461) 
Accumulated Amortization$(329,089) $(280,807) 
Other Intangible Assets, Net$388,292  $352,037  
20222021
Other Intangible Assets, Gross:
Patents$29,303 $29,315 
Customer lists1,092,232 592,195 
Trade names34,220 32,043 
Proprietary technology57,720 22,846 
Other6,721 2,807 
Other Intangible Assets, Gross$1,220,196 $679,206 
Accumulated Amortization:
Patents$(17,889)$(16,275)
Customer lists(417,034)(347,274)
Trade names(15,892)(14,106)
Proprietary technology(25,113)(21,394)
Other(2,670)(2,014)
Accumulated Amortization$(478,598)$(401,063)
Other Intangible Assets, Net$741,598 $278,143 

The acquisitions of CorensoMetal Packaging in August 2019January 2022 and TEQSkjern in December 2019November 2022 resulted in the addition of $29,170$498,000 and $56,170,$42,818, respectively, of intangible assets, mostlyprimarily related to customer lists. In addition, measurement period adjustments were made in 2019 to finalize theThese intangibles will be amortized over an average useful life of 14 years. The fair values of the assets acquired and the liabilities assumed in the 2018 acquisitions of Compositub and Conitex Sonoco resulting in increases in other intangible assets primarily customer lists, of $1,888 and $300, respectively. See Note 3 for additional information. In the fourth quarter of 2019, the Company wrote off patentsassociated with a net book value totaling $340 resulting from the loss of the single flexible packaging customer it servedthese acquisitions were determined using the particular technology.an income valuation approach.
Aggregate amortization expense on intangible assets was $51,580, $47,177$80,445, $49,419 and $38,165$52,899 for the years ended December 31, 2019, 20182022, 2021 and 2017,2020, respectively. Amortization expense on intangible assets is expected to approximate $54,200 in 2020, $52,500 in 2021, $49,700 in 2022, $44,500$80,900 in 2023, $74,100 in 2024, $63,600 in 2025, $60,400 in 2026 and $35,000$59,000 in 2024.2027 based on intangible assets as of December 31, 2022.
9. Debt
Details of the Company's debt at December 31 were as follows:
20222021
Commercial paper, average rate of 1.93% in 2022 and 0.16% in 2021$— $349,000 
Syndicated term loan due December 2023399,246 — 
Syndicated term loan due January 2025299,644 — 
1.80% notes due February 2025398,369 — 
2.25% notes due February 2027297,910 — 
2.85% notes due February 2032495,264 — 
3.125% notes due May 2030595,911 595,342 
5.75% notes due November 2040536,214 536,182 
Other foreign denominated debt, average rate of 5.7% in 2022 and 3.0% in 202120,668 55,432 
Finance lease obligations102,920 60,282 
Other debt76,077 14,425 
Total debt$3,222,223 $1,610,663 
Less: Notes payable and current portion of long-term debt502,440 411,557 
Long-term debt$2,719,783 $1,199,106 
20192018
5.75% debentures due November 2040$599,244  $599,208  
4.375% debentures due November 2021249,428  249,116  
9.2% debentures due August 20214,318  4,315  
1.00% Euro loan due May 2021167,272  169,976  
Term loan, due May 2020200,000  —  
Term loan, due July 2022146,569  158,949  
Commercial paper, average rate of 2.40% in 2019 and 2.15% in 2018250,000  120,000  
Other foreign denominated debt, average rate of 5.3% in 2019 and 3.7% in 201816,734  57,867  
Finance lease obligations33,077  —  
Other notes14,727  25,731  
Total debt1,681,369  1,385,162  
Less current portion and short-term notes488,234  195,445  
Long-term debt$1,193,135  $1,189,717  





F-17F-19 FORM 10-K SONOCO 20192022 ANNUAL REPORT


On May 17, 2019,December 2, 2022, the Company entered into a 364-day, $200,000$400,000 term loan facility (the "December Term Loan Facility") with Wells Fargo Bank, National Association.a syndicate of banks. The full $200,000amount was drawn on December 2, 2022 and will become payable in full on December 1, 2023. The proceeds from the December Term Loan Facility were used for general corporate purposes, including repayment of certain short-term debt. Borrowings will bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) the forward-looking Secured Overnight Financing Rate ("SOFR") term rate (such borrowings, “Term SOFR Loans”) or (ii) a base rate, plus, in each case, an applicable margin calculated based on the Company’s credit ratings. The Company has designated its borrowings under the December Term Loan Facility as Term SOFR Loans, and the margin currently applicable to Term SOFR Loans is 1.475%. There is no required amortization, and voluntary prepayments of borrowings under the December Term Loan Facility are permissible without penalty, subject to certain conditions, at the Company's discretion.
On January 21, 2022, the Company completed a registered public offering of green bonds with an aggregate principal amount of $1,200,000. These unsecured notes (the “Notes”) consisted of the following:
Principal AmountIssuance Costs and DiscountsNet ProceedsInterest RateMaturity
2025 Notes$400,000 $(2,356)$397,644 1.800%February 1, 2025
2027 Notes$300,000 $(2,565)$297,435 2.250%February 1, 2027
2032 Notes$500,000 $(5,220)$494,780 2.850%February 1, 2032
Total$1,200,000 $(10,141)$1,189,859 
The Notes are senior unsecured obligations and rank equal in right of payment to the Company’s other senior unsecured debt from time to time outstanding. The indenture governing the Notes contains certain covenants with respect to the Company that, among other things, restrict the entry into additional secured indebtedness, sale and leaseback transactions and certain mergers, consolidations and transfers of all or substantially all of the Company’s assets. The Company used an amount equal to the net proceeds from the Notes to partially fund the January 26, 2022 acquisition of Metal Packaging.
Also on January 21, 2022, the Company entered into a $300,000 three-year term loan facility (the “January Term Loan Facility”) with a syndicate of eight banks. The full $300,000 was drawn from this facility on May 20, 2019,January 26, 2022, and the proceeds were used to make voluntary contributions topartially fund the Company's U.S. defined benefit pension plans. This unsecured loan has a 364-day term and the Company has a one-time option to request an extensionacquisition of the term for an additional 364 days if it meets certain conditions.Metal Packaging. Interest is assessed at the London Interbank Offered Rate (LIBOR)SOFR plus a margin based on a pricing grid that uses the Company'sCompany’s credit ratings. The LIBORcurrent SOFR margin at December 31, 2019 was 100is 122.5 basis points. There is no required amortization and repayment can be accelerated at any time without penalty at the discretion ofCompany's discretion. Borrowings under the Company.January Term Loan Facility mature on January 27, 2025.
On July 20, 2017,June 30, 2021, the Company entered into a Credit Agreement in connection with a new five-year $750,000, bankunsecured revolving credit facility with a syndicate of 8 banks replacingwhich replaced an existing credit facility entered into on October 2, 2014,July 20, 2017, and reflectingreflects substantially the same terms and conditions. Included inConsistent with prior facilities, the new facility are a $500,000 five-year revolving credit facility and a $250,000 five-year term loan. Based on the pricing grid in the Credit Agreement and the Company's current credit ratings, the borrowing has an all-in drawn margin of 112.5 basis points above the LIBOR. Borrowings under the Credit Agreement are pre-payable at any time at the discretion of the Company and the term loan has annual amortization payments totaling $12,500. Proceeds from this term loan were used to repay an earlier term loan and to partially fund the Clear Lam acquisition. During 2018, the Company prepaid an additional $75,000 of the term loan.
The $500,000 revolving credit facility supports the Company's $500,000 commercial paper program. If circumstances were to preventBased on the pricing grid, the Credit Agreement and Sonoco's current credit ratings, a London Interbank Offering Rate ("LIBOR") borrowing has an all-in drawn margin of 125.0 basis points. On November 7, 2022, the Company borrowed $150,000 from issuing commercial paper, it has the contractual rightrevolving credit facility. These borrowings were repaid in full on December 2, 2022.
On April 28, 2021, the Company commenced a cash tender offer to draw funds directlypurchase up to $300,000 of the $600,000 outstanding principal amount of its 5.75% notes due November 2040. Upon expiration of the tender on May 25, 2021, the Company repurchased 10.53% of its outstanding 5.75% notes for a total cash cost of $81,961, as shown below:
Principal Amount TenderedPremium and Other Amounts PaidTotal Cash
Paid
 5.75% notes due November 2040$63,206 $18,755 $81,961 
On April 28, 2021, the Company entered into a reverse treasury lock agreement intended to fix the cash cost to fund approximately $100,000 of the maximum $300,000 principal amount subject to being tendered. The settlement of the reverse treasury lock on May 13, 2021 resulted in a loss of $1,356. In addition, the Company wrote off a proportional share of unamortized bond issuance costs and unamortized original issue discounts associated with the 5.75% notes. These non-cash write-offs net to $73, which combined with the hedge loss and premium and other amounts paid, resulted in a pretax loss from the early extinguishment of debt totaling $20,184.
The Company's 150,000 euro-denominated loan, which bore 1% annual interest, matured on May 25, 2021, and a U.S. dollar equivalent cash payment of $177,780 was made to settle the debt. On April 7, 2021, the Company entered into two forward contracts to buy a total of 150,000 euros, to manage foreign currency risk related to the Company's funding of the debt repayment upon maturity. The Company recognized a gain of $4,387 upon the May 21, 2021 maturity of these forward contracts. The gain is included in "Selling, general and administrative expenses" on the underlying bankCompany's Consolidated Statements of Income for the year ended December 31, 2021 and the proceeds from the settlement of the contracts and the debt maturity payment are reflected in "Net cash (used)/provided by financing activities" in the Company's Consolidated Statement of Cash Flows for the year ended December 31, 2021.
The principal requirements of debt maturing in the next five years are:
  
20232024202520262027
Debt maturities by year$502,440 $14,966 $715,332 $14,595 $301,960 
As of December 31, 2022, the Company has scheduled debt maturities through the next twelve months of $502,440. At December 31, 2022, the Company had $227,438 in cash and cash equivalents on hand and $750,000 in committed capacity available for drawdown under its revolving credit facility. The Company had $250,000believes that these amounts, combined with expected net cash flows from operating activities, provide ample liquidity to cover these debt maturities and other cash flow needs of outstanding commercial paper at December 31, 2019 and $120,000 at December 31, 2018.the Company over the course of the next year.
In addition, to the $500,000 committed revolving bank credit facility, the Company had approximately $237,000$225,763 available under unused short-term lines of credit at December 31, 2019.2022. These short-term lines of credit are available for general Companycorporate purposes with interest at mutually agreed-upon rates.of our subsidiaries, including working capital and hedging requirements.
F-20 FORM 10-K SONOCO 2022 ANNUAL REPORT

Certain of the Company’s debt agreements impose restrictions with respect to the maintenance of financial ratios and the disposition of assets. The most restrictive covenants currently require the Company to maintain a minimum level of interest coverage, and a minimum level of net worth, as defined.defined in the agreements. As of December 31, 2019,2022, the Company had substantial toleranceCompany's interest coverage and net worth were substantially above the minimum levels required under these covenants.
The principal requirements of debt maturing in the next five years are:
  
20202021202220232024
Debt maturities by year$488,234  $444,715  $130,812  $6,639  $3,646  

10. Financial instruments and derivatives
The following table sets forth the carrying amounts and fair values of the Company’s significant financial instruments wherefor which the carrying amount differs from the fair value.
 December 31, 2019December 31, 2018
  
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Long-term debt$1,193,135  $1,351,397  $1,189,717  $1,270,521  
 December 31, 2022December 31, 2021
  
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Long-term debt, net of current portion$2,719,783 $2,477,884 $1,199,106 $1,434,711 
The carrying value of cash and cash equivalents short-term debt and long-term variable-rateshort-term debt approximates fair value. The fair value of long-term debt is determined based on recent trade information in the financial markets of the Company’s public debt or is determined by discounting future cash flows using interest rates available to the Company for issues with similar terms and maturities. Itmaturities, which is considered a Level 2 fair value measurement.
Cash flow hedgesFlow Hedges
At December 31, 20192022 and 2018,2021, the Company had derivative financial instruments outstanding to hedge anticipated transactions and certain asset and liability related cash flows. ToThese contracts, which have maturities ranging through December 2024, qualify as cash flow hedges under U.S. GAAP. For derivative instruments that are designated and qualify as a cash flow hedge, the extent considered effective,gain or loss on the changes in fair valuederivative instrument is reported as a component of these contracts are recorded in other comprehensive income and reclassified to income or expenseinto earnings in the same period inor periods during which the hedged transaction affects earnings and is presented in the same income statement line item impacts earnings.as the earnings effect of the hedged item.
Commodity cash flow hedgesCash Flow Hedges
The Company hasCertain derivative contracts entered into certain derivative contracts to manage some of the cost of anticipated purchases of natural gas and aluminum. aluminum have been designated by the Company as cash flow hedges. At December 31, 2019,2022, these contracts included natural gas swaps covering approximately 4.40.2 million MMBTUs, were outstanding.representing approximately 1% of anticipated natural gas usage in both 2023 and 2024. The Company also has certain natural gas hedges that it does not treat as cash flow hedges. See "Non-Designated Derivatives" below for a discussion of these hedges. The Company has also designated swap contracts covering 983 metric tons of aluminum as cash flow hedges. These contracts represent approximately 61%13% of anticipated U.S. and Canadianaluminum usage for 2020. Additionally, the Company had swap contracts covering 1,225 metric tons of aluminum representing approximately 23% of anticipated usage for 2020.2023. The total fair values of the Company’s commodity cash flow hedges were in netnetted to a loss positions totaling $(1,625) and $(1,571)position of $(172) at December 31, 20192022, and a gain position of $1,491 at December 31, 2018, respectively.2021. The amount of the loss included in accumulated other comprehensive loss at December 31, 2019,2022, expected to be reclassified to the income statement during the next twelve months is $(1,578)$(145).
F-18 FORM 10-K SONOCO 2019 ANNUAL REPORT

Foreign currency cash flow hedgesCurrency Cash Flow Hedges
The Company has entered into forward contracts to hedge certain anticipated foreign currency denominated sales, purchases, and purchases forecastedcapital spending expected to occur in 2020.2023. The net positions of these contracts at December 31, 2019,2022, were as follows:
follows (in thousands):
CurrencyActionQuantity
Colombian pesoPurchase15,486,74530,854,789 
Mexican pesoPurchase550,275 335,494 
Polish zlotyPurchase89,750120,323 
Czech korunaPurchase76,927 40,333 
Canadian dollarPurchase20,81234,516 
British pound EuroPurchase9,880 6,187 
Turkish liraPurchase3,4199,691 
New Zealand dollar Brazilian RealPurchaseSell7,271 (439)
Australian dollarBritish poundSellPurchase(929)6,000 
Swedish krona Sell (3,933)
EuroSell(30,323)
Russian ruble Sell (182,187)
The fair valuesvalue of the Company’s foreign currency cash flow hedges related to forecasted sales and purchases netted to a loss position of $(299) at December 31, 2022, and a gain position of $1,058$336 at December 31, 2019 and a loss position2021. Losses of $(1,712) at December 31, 2018. Gains of $1,057$(299) are expected to be reclassified from accumulated other comprehensive loss to the income statement during the next twelve months. In addition, the Company has entered into forward contracts to hedge certain foreign currency cash flow transactions related to construction in progress. As of December 31, 20192022 and December 31, 2018,2021, the net positionpositions of these contracts was $1were $(564) and $(305)$(457), respectively. GainsDuring the twelve months ended December 31, 2022, losses from these hedges totaling $107 and losses of $(88)$(875) were reclassified from accumulated other comprehensive loss and netted againstincluded in the carrying value of the capitalized expenditures during the years ended December 31, 2019 and December 31, 2018, respectively. Gainsexpenditures. Losses of $1$(564) are expected to be reclassified from accumulated other comprehensive loss and included in the carrying value of the related fixed assets acquired during the next twelve months.
OtherNon-Designated Derivatives
The Company routinely enters into other derivative contracts which are not designated for hedge accounting treatment under ASC 815. As such, changes in fair value of these non-designated derivatives are recorded directly to income and expense in the periods that they occur.
F-21 FORM 10-K SONOCO 2022 ANNUAL REPORT

Foreign Currency Hedges
The Company routinely enters into forward contracts or swaps to economically hedge the currency exposure of intercompany debt and existing foreign currency denominated receivables and payables. The Company does not apply hedge accounting treatment under ASC 815 for these instruments. As such, changes in fair value are recorded directly to income and expense in the periods that they occur. The net currency positions of these non-designated contracts at December 31, 2019,2022, were as follows:follows (in thousands):
CurrencyActionQuantity
Colombian pesoPurchase22,519,674 
Colombian peso Indonesian rupiahPurchase16,409,007 10,536,995 
Mexican pesoPurchase447,007 
320,964 Turkish liraPurchase41,625 
Canadian dollarPurchase4,869 10,931 
Thai BahtSell
(15,624)
Commodity Hedges
The Company has entered into non-designated derivative contracts to manage the cost of anticipated purchases of natural gas. At December 31, 2022, these contracts consisted of natural gas swaps covering approximately 7.3 million MMBTUs and represented approximately 69% and 17% of anticipated usage in North America for 2023 and 2024, respectively.
Interest Rate Hedges
Pursuant to the registered public offering of unsecured 2.85% notes with a principal amount of $500,000 maturing on February 1, 2032, the Company entered into treasury lock derivative instruments with two banks, with a notional principal amount of $150,000 each on December 29, 2021. These instruments had the risk management objective of reducing exposure to the Company of increases in the underlying Treasury index up to the date of pricing of the notes. The fair value of the contracts was a net loss position of $(550) at December 31, 2021. The derivatives were settled when the bonds priced on January 11, 2022, with the Company recognizing a gain on the settlement of $5,201. The gain is included in “Selling, general and administrative expenses” on the Company's Consolidated Statements of Income for the year ended December 31, 2022.
The fair value of the Company’s othernon-designated derivatives position was $54a loss of $(8,692) and $166a gain of $92 at December 31, 20192022 and 2018,December 31, 2021, respectively.
The following table sets forth the location and fair values of the Company’s derivative instruments:instruments at December 31, 2022 and December 31, 2021:
 Fair Value at December 31  Fair Value at December 31
DescriptionDescriptionBalance Sheet Location                     20192018DescriptionBalance Sheet Location20222021
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:
Commodity ContractsCommodity ContractsPrepaid expenses$—  $282  Commodity ContractsPrepaid expenses$10 $1,599 
Commodity ContractsCommodity ContractsOther assets$—  $—  Commodity ContractsOther assets$8 $— 
Commodity ContractsCommodity ContractsAccrued expenses and other$(1,625) $(1,843) Commodity ContractsAccrued expenses and other$(155)$(108)
Commodity ContractsCommodity ContractsOther liabilities$—  $(10) Commodity ContractsOther liabilities$(35)$— 
Foreign Exchange ContractsForeign Exchange ContractsPrepaid expenses$1,236  $770  Foreign Exchange ContractsPrepaid expenses$1,251 $848 
Foreign Exchange ContractsForeign Exchange ContractsAccrued expenses and other$(178) $(2,482) Foreign Exchange ContractsAccrued expenses and other$(2,114)$(969)
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:
Commodity ContractsCommodity ContractsPrepaid expenses$5 $1815 
Commodity ContractsCommodity ContractsOther assets$251 $— 
Commodity ContractsCommodity ContractsAccrued expenses and other$(8,599)$(1,132)
Commodity ContractsCommodity ContractsOther liabilities$(295)$— 
Foreign Exchange ContractsForeign Exchange ContractsPrepaid expenses$88  $727  Foreign Exchange ContractsPrepaid expenses$115 $135 
Foreign Exchange ContractsForeign Exchange ContractsAccrued expenses and other$(34) $(561) Foreign Exchange ContractsAccrued expenses and other$(169)$(176)
Interest Rate Lock ContractInterest Rate Lock ContractAccrued expenses and other$— $(550)
While certain of the Company's derivative contract arrangements with its counterparties provide for the ability to settle contracts on a net basis, the Company reports its derivative positions on a gross basis. There are no collateral arrangements or requirements in these agreements.
Beginning in January 2020, the Company is party to a cross-currency swap agreement with a notional amount of $250,000 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 agreement matures November 1, 2024. Under the terms of the swap agreement, the Company will receive semi-annual interest payments in U.S. dollars at a rate of 5.75% and pay interest in euros at a rate of 3.856%.








F-19F-22 FORM 10-K SONOCO 20192022 ANNUAL REPORT














The following table setstables set forth the effect of the Company’s derivative instruments on financial performance for the twelve monthsyear ended December 31, 2019,2022 and December 31, 2021, excluding the gains or losses on foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:
Description
Amount of Gain or
(Loss) Recognized
in OCI on
Derivatives
Location of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
Amount of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
Derivatives in Cash Flow Hedging Relationships:
Year Ended December 31, 2022
Foreign Exchange Contracts$(1,009)Net sales$3,460 
Cost of sales$(2,852)
Commodity Contracts$5,321 Cost of sales$6,948 
Year Ended December 31, 2021
Foreign Exchange Contracts$210 Net sales$3,212 
Cost of sales$(2,544)
Commodity Contracts$10,039 Cost of sales$7,794 
Description
Amount of Gain or
(Loss) Recognized
in OCI on
Derivatives
Location of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
Amount of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
Derivatives in Cash Flow Hedging Relationships:
Foreign Exchange Contracts$2,495  Net sales$1,381  
Cost of sales$(1,758) 
Commodity Contracts$216  Cost of sales$270  
  
  
Location of Gain or
(Loss) Recognized
in Income
Statement
Gain or (Loss)
Recognized
Derivatives not designated as hedging instruments:
Foreign Exchange ContractsCost of sales$—  
Selling, general and
administrative
$(704) 
DescriptionRevenueCost of Sales
Total amount of income and expense line items presented in the Consolidated Statements of Income$1,381  $(1,488) 
The effects of cash flow hedging:
Gain or (loss) on cash flow hedging relationships:
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into net income$1,381  $(1,758) 
Commodity contract:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into net income$—  $270  
Description
Gain or (Loss)
Recognized
Location of Gain or (Loss) Recognized in Income Statement
Derivatives not Designated as Hedging Instruments:
Year Ended December 31, 2022
Commodity Contracts$1,831 
Cost of Sales
Foreign Exchange Contracts$355 Selling, general and administrative
Year Ended December 31, 2021
Commodity Contracts$1,118 Cost of sales
Foreign Exchange Contracts$(737)Selling, general and administrative
Interest Rate Lock Contracts$(550)Selling, general and administrative



















Year Ended December 31, 2022Year Ended December 31, 2021
DescriptionRevenueCost of SalesRevenueCost of Sales
Total amount of income and expense line items presented in the Consolidated Statements of Income$3,460 $4,096 $3,212 $5,250 
Gain or (loss) on cash flow hedging relationships:
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into net income$3,460 $(2,852)$3,212 $(2,544)
Commodity contract:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into net income$— $6,948 $— $7,794 

F-20F-23 FORM 10-K SONOCO 20192022 ANNUAL REPORT















The following table sets forth the effect of the Company’s derivative instruments on financial performance for the twelve months ended December 31, 2018, excluding the gains on foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:
Description
Amount of Gain or
(Loss) Recognized
in OCI  on
Derivatives
Location of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
Amount of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
Derivatives in Cash Flow Hedging Relationships:
Foreign Exchange Contracts$(2,354) Net sales$(203) 
Cost of sales$(20) 
Commodity Contracts$258  Cost of sales$115  
  
  
Location of Gain or
(Loss) Recognized in
Income 
Statement
Gain or (Loss)
Recognized
Derivatives not designated as hedging instruments:
Foreign Exchange ContractsCost of sales$—  
Selling, general
and administrative
$41  
DescriptionRevenueCost of Sales
Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income$(203) $95  
The effects of cash flow hedging:
Gain or (loss) on cash flow hedging relationships:
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into net income$(203) $(20) 
Commodity contract:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into net income$—  $115  
F-21 FORM 10-K SONOCO 2019 ANNUAL REPORT

11. Fair value measurements
Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
Level 1 –Observable inputs such as quoted market prices in active markets;
Level 2 –Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3 –Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
Assets that are calculated at net asset value per share (NAV) are not required to be categorized within the fair value hierarchy.
The following tables set forth information regarding the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis:
DescriptionDecember 31, 2019Assets measured at NAV (g)Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$(1,625) $—  $—  $(1,625) $—  
Foreign exchange contracts1,058  —  —  1,058  —  
Non-hedge derivatives, net:
Foreign exchange contracts54  —  —  54  —  
Postretirement benefit plan assets:
Common Collective Trust (a)$1,212,114  $1,212,114  $—  $—  $—  
Mutual funds(b)171,198  —  —  171,198  —  
Fixed income securities(c)192,598  —  —  192,598  —  
Short-term investments(d)1,201  23  1,178  —  
Hedge fund of funds(e)75,108  75,108  —  —  —  
Real estate funds(f)938  938  —  —  —  
Cash and accrued income43,244  —  43,244  —  —  
Total postretirement benefit plan assets$1,696,401  $1,288,160  $43,267  $364,974  $—  
DescriptionDecember 31, 2018Assets measured at NAV (g)Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$(1,571) $—  $—  $(1,571) $—  
Foreign exchange contracts(1,712) —  —  (1,712) —  
Non-hedge derivatives, net:
Foreign exchange contracts166  —  —  166  —  
Deferred compensation plan assets260  —  260  —  —  
Postretirement benefit plan assets:
Common Collective Trust (a)$862,565  $862,565  $—  $—  $—  
Mutual funds(b)157,088  —  —  157,088  —  
Fixed income securities(c)175,543  —  —  175,543  —  
Short-term investments(d)1,166  38  1,128  —  
Hedge fund of funds(e)71,354  71,354  —  —  —  
Real estate funds(f)61,249  61,249  —  —  —  
Cash and accrued income786  —  786  —  —  
Total postretirement benefit plan assets$1,329,751  $995,168  $824  $333,759  $—  
DescriptionDecember 31, 2022Assets measured at NAV (f)Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$(172)$— $— $(172)$— 
Foreign exchange contracts(863)— — (863)— 
Non-hedge derivatives, net:
Commodity contracts(8,638)— — (8,638)— 
Foreign exchange contracts(54)— — (54)— 
Postretirement benefit plan assets:
 Common Collective(a)$6,497 $6,497 $— $— $— 
Mutual funds(b)50,467 — — 50,467 — 
 Fixed income securities(c)198,628 32,927 — 165,701 — 
 Short-term investments(d)1,099 — — 1,099 — 
 Real estate funds(e)680 680 — — — 
      Cash and accrued income8,504 — 8,504 — — 
Total postretirement benefit plan assets$265,875 $40,104 $8,504 $217,267 $— 
DescriptionDecember 31, 2021Assets measured at NAV (f)Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$1,491 $— $— $1,491 $— 
Foreign exchange contracts(121)— — (121)— 
Non-hedge derivatives, net:
      Commodity contracts683 — — 683 — 
Foreign exchange contracts(41)— — (41)— 
     Interest rate lock contract(550)— — (550)— 
Postretirement benefit plan assets:
      Common Collective(a)$8,882 $8,882 $— $— $— 
      Mutual funds(b)118,559 — — 118,559 — 
      Fixed income securities(c)292,883 41,120 — 251,763 — 
      Short-term investments(d)1,211 — — 1,211 — 
      Real estate funds(e)592 592 — — — 
      Cash and accrued income8,920 — 8,920 — — 
Total postretirement benefit plan assets$431,047 $50,594 $8,920 $371,533 $— 
a.Common collective trust investments consist of domestic and international large and mid capitalization equities, including emerging markets and funds invested in both short-term and long-term bonds. Underlying investments are generally valued at closing prices from national exchanges. Commingled funds, private securities, and limited partnerships are valued at unit values or net asset values provided by the investment managers.
b.Mutual fund investments are comprised of equity securities of corporations with large capitalizations and also include funds invested in corporate equities in international and emerging markets and funds invested in long-term bonds, which are valued at closing prices from national exchanges.
c.Fixed income securities include funds that invest primarily in government securities and long-term bonds. Underlying investments are generally valued at closing prices from national exchanges, fixed income pricing models, and independent financial analysts. Fixed income commingled funds are valued at unit values provided by the investment managers.
d.Short-term investments include several money market funds used for managing overall liquidity. Underlying investments are generally valued at closing prices from national exchanges. Commingled funds are valued at unit values provided by the investment managers.
e.The hedge fund of funds category includes investments in funds representing a variety of strategies intended to diversify risks and reduce volatility. It includes event-driven credit and equity investments targeted at economic policy decisions, long and short positions in U.S. and
F-22F-24 FORM 10-K SONOCO 20192022 ANNUAL REPORT

international equities, arbitrage investments and emerging market equity investments. Investments are valued at unit values or net asset values provided by the investment managers.
f.e.This category includes investments in real estate funds (including office, industrial, residential and retail). Underlying real estate securities are generally valued at closing prices from national exchanges.
g.f.Certain assets that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The Company’s pension plan assets comprise more than 99%95% of its total postretirement benefit plan assets. TheAccordingly, the assets of the Company’s various pension plans and retiree health and life insurance plans are largely invested in the same funds and investments and in similar proportions and, as such, are not shown separately, but are combined in the tables above. Postretirement benefit plan assets are netted against postretirement benefit obligations to determine the funded status of each plan. The funded status is recognized in the Company’s Consolidated Balance Sheets as shown in Note 13.
As discussed in Note 10, the Company uses derivatives to mitigate some of the effect of raw material and energy costcommodity fluctuations, foreign currency fluctuations and, from time to time, interest rate movements. Fair value measurements for the Company’s derivatives are classified under Level 2 because such measurements are estimated based on observable inputs such as interest rates, yield curves, spot and future commodity prices, and spot and future exchange rates.
Certain deferred compensation plan liabilities are funded and the assets invested in various exchange traded mutual funds. These assets are measured using quoted prices in accessible active markets for identical assets.
The Company does not currently have any nonfinancial assets or liabilities that are recognized or disclosed at fair value on a recurring basis. None of the Company's financial assets or liabilities are measured at fair value using significant unobservable inputs. There were no transfers in or out of Level 1 or Level 2 fair value measurements during the years ended December 31, 20192022 or 2018.2021. For additional fair value information on the Company's financial instruments, see Note 10.
12. Share-based compensation plans
The Company provides share-based compensation to certain employees and non-employee directors in the form of restricted stock appreciation rights,units, performance contingent restricted stock units, and other share-based awards. Beginning in 2019, share-based awards were issued pursuant to the Sonoco Products Company 2019 Omnibus Incentive Plan (the "2019 Plan"), which became effective upon approval by the shareholders on April 17, 2019. Awards issued from 2014 through 2018 were issued pursuant to the Sonoco Products Company 2014 Long-Term Incentive Plan (the “2014 Plan”); awards issued from 2012 through 2013 were issued pursuant to the Sonoco Products Company 2012 Long-Term Incentive Plan (the “2012 Plan”); and awards issued from 2009 through 2011 were issued pursuant to the Sonoco Products Company 2008 Long-Term Incentive Plan (the “2008 Plan”). Awards issued prior to 2009 were issued pursuant to the 1991 Key Employee Stock Plan (the “1991 Plan”) or the 1996 Non-Employee Directors Stock Plan (the “1996 Plan”).
A total of 12,000,000 shares of common stock are reserved for awards granted under the 2019 Plan. As of the April 17, 2019 effective date, the 2019 Plan superseded the 2014 Plan and became the only plan under which equity-based compensation may be awarded to employees and non-employee directors. However, any awards under any of the prior plans that were outstanding on the effective date of the 2019 Plan remain subject to the terms and conditions, and continue to be governed, by such prior plans. Awards issued between January 1 and April 16, 2019 were effectively issued under the 2019 Plan when such awards were transferred over to be applied against the 2019 Plan’s reserve. Share reserve reductions for restricted and performance-based stock awards originally granted under the 2014 Plan were weighted higher than stock appreciation rights in accordance with the shareholder-approved conversion formula included within the 2019 Plan. Awards granted under all previous plans which are forfeited, expire or are canceled without delivery of shares, or which result in forfeiture of shares back to the Company, will be added to the total shares available under the 2019 Plan. At December 31, 2019,2022, a total of 10,765,3986,998,566 shares remain available for future grant under the 2019 Plan. The Company issues new shares for stock unit conversions and stock appreciation right exercises and stock unit conversions. The Company’s stock-based awards to non-employee directors have not been material.exercises.
Accounting for share-based compensation
Total compensation cost for share-based payment arrangements was $14,334, $10,730$31,309, $22,608 and $13,488,$10,607, for 2019, 20182022, 2021 and 2017,2020, respectively. The related tax benefit recognized in net income was $3,500, $2,678,$7,999, $5,715, and $5,058,$2,686, for the same years, respectively. Share-based compensation expense is included in “Selling, general and administrative expenses” in the Consolidated Statements of Income. The Company accounts for forfeitures of its share-based payment arrangements as they occur.
An “excess” tax benefit is created when the tax deduction for an exercised stock appreciation right, exercised stock option or converted stock unit exceeds the compensation cost that has been recognized in income. The additional net excess tax benefit realized was $3,520, $3,528$1,367, $1,110 and $2,453$2,528 for 2019, 20182022, 2021 and 2017,2020, respectively.
Restricted Stock appreciation rightsUnits
Stock appreciation rights (SARs) grantedThe Company grants awards of restricted stock units (RSUs) to executive officers and certain key management employees. These awards vest over three years anda three-year period with one-third vesting on each anniversary date of the grant. The expense for these RSUs is recognized following the graded-vesting method, which results in front-loaded expense being recognized during the early years of the required service period. Unvested SARs are cancelable upon termination of employment, except in the case of death, disability, or involuntary (or good reason) termination within two years of a change in control.
The CompanyFor grants SARs annually on a discretionary basis to key employees. These SARs have an exercise price equal to the closing market price on the date of the grant and can be settled only in stock. The SARs granted in and since 2015 vest over three years, with one-third vesting on each anniversary date of the grant, and have 10-year terms. As of December 31, 2019, unrecognized compensation cost related to nonvested SARs totaled $2,413. This cost will be recognized over the remaining weighted-average vesting period of approximately 24 months. Noncash stock-based compensation associated with SARs totaled $3,227,$2,415, and $3,719 for 2019, 2018, and 2017, respectively.
F-23 FORM 10-K SONOCO 2019 ANNUAL REPORT

The aggregate intrinsic value of SARS exercised during 2019, 2018, and 2017 was $11,836, $9,029, and $3,786, respectively. The weighted-average grant date fair value of SARs granted was $8.30, $6.55 and $7.29 per share in 2019, 2018 and 2017, respectively. The Company computed the estimated fair values of all SARs using the Black-Scholes option-pricing model applying the assumptions set forth in the following table:
201920182017
Expected dividend yield2.7 %3.1 %2.7 %
Expected stock price volatility16.6 %16.2 %17.2 %
Risk-free interest rate2.6 %2.8 %2.0 %
Expected life of SARs6 years6 years6 years
The assumptions employed in the calculation of the fair value of SARs were determined as follows:
•Expected dividend yield – the Company’s annual dividend divided by the stock price at the time of grant.
•Expected stock price volatility – based on historical volatility of the Company’s common stock measured weekly for a time period equal to the expected life.
•Risk-free interest rate – based on U.S. Treasury yields in effect at the time of grant for maturities equal to the expected life.
•Expected life – calculated using the simplified method as prescribed in U.S. GAAP, where the expected life is equal to the sum of the vesting period and the contractual term divided by two.
The activity related to the Company’s SARs is as follows:
NonvestedVestedTotal
Weighted-
average
Exercise
Price
Outstanding, December 31, 20181,119,602  712,756  1,832,358  $47.41  
   Vested(620,026) 620,026  —  
   Granted543,278  —  543,278  $60.76  
   Exercised—  (664,797) (664,797) $43.92  
   Forfeited/Expired(135,841) (12,875) (148,716) $53.36  
Outstanding, December 31, 2019907,013  655,110  1,562,123  $52.95  
Exercisable, December 31, 2019—  655,110  655,110  $47.69  

The weighted average remaining contractual life for SARs outstanding and exercisable at December 31, 2019 was 7.5 years and 6.0 years, respectively. The aggregate intrinsic value for SARs outstanding and exercisable at December 31, 2019 was $13,375 and $8,931, respectively. At December 31, 2019, the fair market value of the Company’s stock used to calculate intrinsic value was $61.72 per share.

Performance-based stock awards
The Company grants performance contingent restricted stock units (PCSUs) annually on a discretionary basis to executive officers and certain key management employees. The ultimate number of PCSUs awarded is dependent upon the degree to which performance, relative to defined targets related to earnings and return on net assets employed, are achieved over a three-year performance cycle. PCSUs granted vest at the end of the three-year performance period if the respective performance targets are met. No units will be awarded if the performance targets are not met. Upon vesting, PCSUs are convertible into common shares on a 1-for-one basis. Except in the event of the participant's death, disability, or retirement, if a participant is not employed by the Company at the end of the performance period, no PCSU's will vest. However, in the event of the participant’s death, disability or retirement prior to full vesting, shares will be issued on a pro rata basis up through the time the participant’s employment or service ceases. In the event of a change in control, as defined under the 2014 Plan and the 2019 Plan, all unvested PCSUs will vest at target on a pro rata basis if the change in control occurs during the three-year performance period.

The activity related to performance contingent restricted stock units is as follows:
NonvestedVestedTotalAverage Grant Date Fair Value per Share
Outstanding, December 31, 2018329,532  322,287  651,819  $40.21  
   Granted115,412  —  115,412  $56.04  
   Performance adjustments(42,866) —  (42,866) $45.75  
   Vested(84,522) 84,522  —  
   Converted—  (177,902) (177,902) $35.55  
   Cancelled(18,720) —  (18,720) $47.75  
   Dividend equivalents—  4,190  4,190  $60.42  
Outstanding, December 31, 2019298,836  233,097  531,933  $44.65  

F-24 FORM 10-K SONOCO 2019 ANNUAL REPORT

2019 PCSU. As of December 31, 2019, the 2019 PCSUs to be awarded are estimated to range from 0 to 228,650 units and are tied to the three-year performance period ending December 31, 2021.
2018 PCSU. As of December 31, 2019, the 2018 PCSUs to be awarded are estimated to range from 0 to 253,962 units and are tied to the three-year performance period ending December 31, 2020.
2017 PCSU. The performance cycle for the 2017 PCSUs was completed on December 31, 2019. Outstanding stock units of 84,522 units were determined to have been earned. The fair value of these units was $5,217 as of December 31, 2019.
2016 PCSU. The performance cycle for the 2016 PCSUs was completed on December 31, 2018. Outstanding stock units of 132,534 units were determined to have been earned, all of which qualified for vesting on December 31, 2018. The fair value of these units was $7,042 as of December 31, 2018.
2015 PCSU. The performance cycle for the 2015 PCSUs was completed on December 31, 2017. Outstanding stock units of 135,695 units were determined to have been earned, all of which qualified for vesting on December 31, 2017. The fair value of these units was $7,211 as of December 31, 2017.
The weighted-average grant-date fair value of PCSUs granted was $56.04, $46.33, and $50.11 per share in 2019, 2018 and 2017, respectively. Noncash stock-based compensation associated with PCSUs totaled $5,171, $4,725 and $3,896 for 2019, 2018 and 2017, respectively. As of December 31, 2019, there was approximately $6,806 of total unrecognized compensation cost related to nonvested PCSUs. This cost is expected to be recognized over a weighted-average period of 19 months.
Restricted stock awards
During 2019, 2018 and 2017, the Company granted awards of restricted stocks units (RSUs) to executive officers and certain key management employees. These awards vest over a three-year period with one-third vesting on each anniversary date of the grant. Participants2021, participants must be actively employed by the Company on the vesting date for shares to be issued, except in the event of the participant’s death, disability, or involuntary (or good reason) termination within two years of a change in control prior to full vesting, in which case shares will immediately vest. For awards granted since 2020, in the event of the participant’s death, disability or retirement prior to full vesting, shares will be issued on a pro rata basis up through the time the participant’s employment or service ceases. Once vested, these awards do not expire.
The Company from time to time grants special RSUs to certain of its executive officers and directors. These awards normally vest over a five-year period with one-third vesting on each of the third, fourth and fifth anniversaries of the grant, but in some circumstances may vest over a shorter period, or cliff vest at the end of the five-year period. ANormally a participant must be actively employed by, or serving as a director of, the Company on the vesting date for shares to be issued. However, certain award agreements provide thatissued, but the Company may make other arrangements in the eventconnection with termination of the participant’s death, disability or retirementemployment prior to fullthe vesting shares would be issued on a pro rata basis up through the time the participant’s employment or service ceases.
date. Officers and directors can elect to defer receipt of RSUs, but key management employees are required to take receipt of the stock issued. issued upon the vest date.
The weighted-average grant-date fair value of RSUs granted was $57.76, $48.36$53.55, $57.77 and $51.68$54.16 per share in 2019, 20182022, 2021 and 2017,2020, respectively. The fair value of shares vesting during the year was $3,217, $6,900,$6,243, $4,063, and $2,790$3,277 for 2019, 20182022, 2021 and 2017,2020, respectively.
Noncash stock-based compensation associated with restricted stock grants totaled $3,351, $2,138$11,113, $8,278 and $3,554$4,559 for 2019, 20182022, 2021 and 2017,2020, respectively. As of December 31, 2019,2022, there was $3,768$9,597 of total unrecognized compensation cost related to nonvested restricted stock units. This cost is expected to be recognized over a weighted-average period of 3329 months.
F-25 FORM 10-K SONOCO 2022 ANNUAL REPORT

The activity related to restricted stock units for the year ended December 31, 2022 is as follows:
NonvestedVestedTotal
Average Grant
Date Fair
Value Per Share
Outstanding, December 31, 2021332,597 82,264 414,861 $53.32 
   Granted291,365 — 291,365 $53.55 
   Vested(111,333)111,333 — 
   Converted(122,337)(122,337)$53.62 
   Cancelled(51,908)— (51,908)$55.04 
   Dividend equivalents1,674 2,049 3,723 $56.33 
Outstanding, December 31, 2022462,395 73,309 535,704 $53.23 
NonvestedVestedTotal
Average Grant
Date Fair
Value Per Share
Outstanding, December 31, 2018158,381  151,414  309,795  $38.41  
   Granted69,686  —  69,686  $57.76  
   Vested(54,352) 54,352  —  
   Converted—  (114,981) (114,981) $40.00  
   Cancelled(18,701) —  (18,701) $50.69  
   Dividend equivalents1,563  3,923  5,486  $60.71  
Outstanding, December 31, 2019156,577  94,708  251,285  $46.14  

Performance Contingent Restricted Stock Units
The Company grants performance contingent restricted stock units (PCSUs) annually on a discretionary basis to executive officers and certain key management employees. The ultimate number of PCSUs awarded is dependent upon the degree to which performance, relative to defined targets related to earnings, return on invested capital, and return on net assets employed, is achieved over a three-year performance cycle. PCSUs granted vest at the end of the three-year performance period if the respective performance targets are met. No units will be awarded if the performance targets are not met. Upon vesting, PCSUs are convertible into common shares on a one-for-one basis. Except in the event of the participant's death, disability, or retirement, if a participant is not employed by the Company at the end of the performance period, no PCSUs will vest. However, in the event of the participant’s death, disability or retirement prior to full vesting, shares will be issued on a pro rata basis up through the time the participant’s employment or service ceases. In the event of a change in control, as defined under the 2019 Plan, all unvested PCSUs will vest at target on a pro rata basis if the change in control occurs during the three-year performance period.
The activity related to performance contingent restricted stock units for the year ended December 31, 2022 is as follows:
NonvestedVestedTotalAverage Grant Date Fair Value per Share
Outstanding, December 31, 2021480,653 97,653 578,306 $53.67
   Granted201,835 — 201,835 $51.94
   Performance adjustments304,554 — 304,554 $51.96
   Vested(280,881)280,881 — 
   Converted— (77,167)(77,167)$52.62
   Cancelled(106,779)— (106,779)$53.59
   Dividend equivalents— 1,033 1,033 $59.32
Outstanding, December 31, 2022599,382 302,400 901,782 $52.81
2022 PCSU. As of December 31, 2022, the 2022 PSCUs to be awarded are estimated to range from 0 to 357,362 units and are tied to the three-year performance period ending December 31, 2024.
2021 PCSU. As of December 31, 2022, the 2021 PSCUs to be awarded are estimated to range from 0 to 242,020 units and are tied to the three-year performance period ending December 31, 2023.
2020 PCSU. The performance cycle for the 2020 PSCUs was completed on December 31, 2022. Outstanding stock units of 280,881 units were determined to have been earned. The fair value of these units was $17,052 as of December 31, 2022.
2019 PCSU. The performance cycle for the 2019 PCSUs was completed on December 31, 2021. Outstanding stock units of 64,243 were determined to have been earned. The fair value of these units was $3,719 as of December 31, 2021.
2018 PCSU. The performance cycle for the 2018 PCSUs was completed on December 31, 2020. Outstanding stock units of 139,886 units were determined to have been earned. The fair value of these units was $8,288 as of December 31, 2020.
The weighted-average grant-date fair value of PCSUs granted was $51.94, $55.95, and $52.00 per share in 2022, 2021 and 2020, respectively. Noncash stock-based compensation associated with PCSUs totaled $17,900, $11,477 and $2,023 for 2022, 2021 and 2020, respectively. As of December 31, 2022, there was approximately $16,889 of total unrecognized compensation cost related to nonvested PCSUs. This cost is expected to be recognized over a weighted-average period of 21 months.
Stock appreciation rights
Through 2019, the Company granted stock appreciation rights ("SARs") annually on a discretionary basis to key employees. These SARs had an exercise price equal to the closing market price on the date of the grant and can be settled only in stock. The SARs granted from 2015 through 2019 vested over three years, with one-third vesting on each anniversary date of the grant, and have 10-year terms. All outstanding SARs are vested as of December 31, 2022.
SARs expense was recognized following the graded-vesting method, which resulted in front-loaded expense being recognized during the early years of the required service period. As of December 31, 2022, there is no unrecognized compensation cost related to nonvested SARs. Noncash stock-based compensation expense associated with SARs totaled $40,$347, and $1,442 for 2022, 2021, and 2020, respectively.
The aggregate intrinsic value of SARS exercised during 2022, 2021, and 2020 was $582, $2,575, and $2,771, respectively.


F-26 FORM 10-K SONOCO 2022 ANNUAL REPORT

The activity related to the Company’s SARs for the year ended December 31, 2022 is as follows:
NonvestedVestedTotal
Weighted-
average
Exercise
Price
Outstanding, December 31, 2021124,164 755,507 879,671 $55.03 
   Vested(124,164)124,164 — 
   Granted— — — $— 
   Exercised— (105,681)(105,681)$55.20 
   Forfeited/Expired— (9,184)(9,184)$57.45 
Outstanding, December 31, 2022— 764,806 764,806 $54.98 
Exercisable, December 31, 2022— 764,806 764,806 $54.98 

The weighted average remaining contractual life for both SARs outstanding and exercisable at December 31, 2022 was 5.1 years. The aggregate intrinsic value for both SARs outstanding and exercisable at December 31, 2022 was $4,292. At December 31, 2022, the fair market value of the Company’s stock used to calculate intrinsic value was $60.71 per share.
Deferred compensation plans
Certain officers of the Company receive a portion of their compensation, either current or deferred, in the form of stock equivalent units. Units are granted as of the day the cash compensation would have otherwise been paid using the closing price of the Company’s common stock on that day. Deferrals into stock equivalent units are converted into phantom stock equivalents as if Sonoco shares were actually purchased. The units immediately vest and earn dividend equivalents. Units are distributed in the form of common stock upon retirement over a period elected by the employee.
Non-employee directors may elect to defer a portion of their cash retainer or other fees (except chair retainers) into phantom stock equivalent units as if Sonoco shares were actually purchased. The deferred stock equivalent units accrue dividend equivalents, and are issued in shares of Sonoco common stock six months following termination of Board service. Directors must elect to receive these deferred distributions in 1, 3one, three or 5five annual installments.
The activity related to deferred compensation for equity award units granted to both employees and non-employee directors combined is as follows:
Total
Outstanding, December 31, 20182021390,354380,757 
   Deferred46,06537,617 
   Converted(80,288)(144,244)
   Dividend equivalents11,01612,885 
Outstanding, December 31, 20192022367,147287,015 

Deferred compensationCompensation deferrals for employees and directors, all of $2,585, $1,452, and $2,850, which will be settled in Company stock at retirement, was deferredtotaled $2,256, $2,507, and $2,593, during 2019, 2018,2022, 2021, and 2017,2020, respectively.
F-25F-27 FORM 10-K SONOCO 20192022 ANNUAL REPORT


13. Employee benefit plans
Retirement plans and retiree health and life insurance plans
The Company provides non-contributory defined benefit pension plans for certain of its employees in the United States, Mexico, Belgium, Germany, Greece, France, and Turkey. The Company also sponsors contributory defined benefit pension plans covering certain of its employees in the United Kingdom, Canada and the Netherlands, and provides postretirement healthcare and life insurance benefits to a limited number of its retirees and their dependents in the United States and Canada, based on certain age and/or service eligibility requirements.
The Company froze participation in its U.S. qualified defined benefit pension plan for newly hired salaried and non-union hourly employees effective December 31, 2003. To replace this benefit, the Company provides non-union U.S. employees hired on or after January 1, 2004, with an annual contribution, called the Sonoco Retirement Contribution (SRC), to their participant accounts in the Sonoco Retirement and Savings Plan.
On February 4, 2009, the U.S. qualified defined benefit pension plan was further amended to freeze plan benefits for all active, non-union participants effective December 31, 2018. Remaining active participants in the U.S. qualified plan became eligible for SRC contributions effective January 1, 2019.
The components of net periodic benefit cost include the following:
201920182017
Retirement Plans
Service cost$3,968  $18,652  $18,543  
Interest cost57,348  54,970  55,873  
Expected return on plan assets(65,143) (91,021) (81,212) 
Amortization of prior service cost1,022  916  910  
Amortization of net actuarial loss30,681  37,391  39,209  
Effect of settlement loss2,377  730  32,761  
Effect of curtailment loss—  256  —  
Net periodic benefit cost$30,253  $21,894  $66,084  
Retiree Health and Life Insurance Plans
Service cost$308  $297  $313  
Interest cost467  452  463  
Expected return on plan assets(718) (1,135) (1,636) 
Amortization of prior service credit(498) (498) (499) 
Amortization of net actuarial gain(823) (1,120) (759) 
Net periodic benefit income$(1,264) $(2,004) $(2,118) 
202220212020
Retirement Plans
Service cost$3,304 $3,916 $3,969 
Interest cost10,562 24,186 51,297 
Expected return on plan assets(10,302)(22,888)(50,733)
Amortization of prior service cost913 900 1,006 
Amortization of net actuarial loss6,240 16,503 28,833 
Effect of settlement loss479 550,706 854 
Effect of curtailment loss43 — 32 
Net periodic benefit cost$11,239 $573,323 $35,258 
Retiree Health and Life Insurance Plans
Service cost$320 $374 $358 
Interest cost258 197 336 
Expected return on plan assets(439)(444)(371)
Amortization of prior service credit— — (279)
Amortization of net actuarial gain(681)(744)(834)
Net periodic benefit income$(542)$(617)$(790)

F-26 FORM 10-K SONOCO 2019 ANNUAL REPORT

The following tables set forth the Plans’ obligations and assets at December 31:
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
2022202120222021
Change in Benefit Obligation
Benefit obligation at January 1$514,633 $2,092,297 $13,745 $14,880 
Service cost3,304 3,916 320 374 
Interest cost10,562 24,186 258 197 
Plan participant contributions50 14 — — 
Plan amendments665 608 — — 
Actuarial gain(124,982)(138,157)(1,825)(939)
Benefits paid(22,268)(66,641)(1,224)(768)
Impact of foreign exchange rates(27,273)(4,999)(30)1 
Effect of settlements(1,736)(1,396,494)— — 
Effect of curtailments(112)(97)— — 
Benefit obligation at December 31$352,843 $514,633 $11,244 $13,745 
 Retirement Plans
Retiree Health
and
Life Insurance Plans
  
2019201820192018
Change in Benefit Obligation
Benefit obligation at January 1$1,684,277  $1,837,938  $14,048  $15,691  
Service cost3,968  18,652  308  297  
Interest cost57,348  54,970  467  452  
Plan participant contributions224  429  680  620  
Plan amendments1,343  155  —  —  
Actuarial loss/(gain)316,547  (115,153) 589  (398) 
Benefits paid(92,636) (93,053) (1,621) (2,569) 
Impact of foreign exchange rates11,952  (21,636) 24  (45) 
Effect of settlements(8,101) (2,210) —  —  
Effect of curtailments—  (253) —  —  
Acquisitions1,275  4,438  —  —  
Benefit obligation at December 31$1,976,197  $1,684,277  $14,495  $14,048  
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
2019201820192018
Change in Plan Assets
Fair value of plan assets at January 1$1,318,832  $1,494,713  $10,919  $27,177  
Actual return on plan assets242,823  (78,447) 2,327  (915) 
Company contributions215,979  24,524  682  (13,302) 
Plan participant contributions224  429  680  620  
Benefits paid(92,636) (93,053) (1,621) (2,569) 
Impact of foreign exchange rates12,869  (22,380) —  —  
Effect of settlements(8,101) (2,210) —  —  
Expenses paid(7,084) (6,670) (106) (92) 
Acquisitions614  1,926  —  —  
Fair value of plan assets at December 31$1,683,520  $1,318,832  $12,881  $10,919  
Funded Status of the Plans$(292,677) $(365,445) $(1,614) $(3,129) 
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
2022202120222021
Change in Plan Assets
Fair value of plan assets at January 1$417,105 $1,799,109 $13,942 $14,026 
Actual return on plan assets(119,714)(46,148)(532)(84)
Company contributions14,677 140,226 652 768 
Plan participant contributions50 14 — — 
Benefits paid(22,268)(66,641)(1,224)(768)
Impact of foreign exchange rates(33,800)(4,630)— — 
Effect of settlements(1,736)(1,396,494)— — 
Expenses paid(1,189)(8,331)(88)— 
Fair value of plan assets at December 31$253,125 $417,105 $12,750 $13,942 
Funded Status of the Plans$(99,718)$(97,528)$1,506 $197 

The negative contribution reported in 2018 for the Company's Retiree Health and Life Insurance Plans reflects $14,025 of cash withdrawn from a collectively bargained VEBA in 2018 pursuant to an IRS private letter ruling dated April 1, 2018, permitting the Company to amend the VEBA to provide benefits to active, non-collectively bargained employees in addition to retired collectively bargained employees.
F-28 FORM 10-K SONOCO 2022 ANNUAL REPORT

Retirement Plans
Retiree Health and
Life Insurance Plans
 Retirement Plans
Retiree Health and
Life Insurance Plans
2019201820192018
2022202120222021
Total Recognized Amounts in the Consolidated Balance SheetsTotal Recognized Amounts in the Consolidated Balance SheetsTotal Recognized Amounts in the Consolidated Balance Sheets
Noncurrent assetsNoncurrent assets$24,196  $18,520  $—  $—  Noncurrent assets$30,322 $70,221 $2,919 $1,758 
Current liabilitiesCurrent liabilities(13,913) (12,935) (784) (983) Current liabilities(9,478)(10,375)(1,049)(1,055)
Noncurrent liabilitiesNoncurrent liabilities(302,960) (371,030) (830) (2,146) Noncurrent liabilities(120,562)(157,374)(364)(506)
Net liability$(292,677) $(365,445) $(1,614) $(3,129) 
Net (liability)/assetNet (liability)/asset$(99,718)$(97,528)$1,506 $197 

Items not yet recognized as a component of net periodic pensionbenefit cost that are included in Accumulated Other Comprehensive Loss (Income) as of December 31, 20192022 and 2018,2021, are as follows:
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
2022202120222021
Net actuarial loss/(gain)$109,558 $111,481 $(6,437)$(6,357)
Prior service cost6,053 6,288 — — 
 $115,611 $117,769 $(6,437)$(6,357)
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
2019201820192018
Net actuarial loss/(gain)$759,610  $646,254  $(7,055) $(6,964) 
Prior service cost/(credit)6,159  5,514  (279) (777) 
 $765,769  $651,768  $(7,334) $(7,741) 
F-27 FORM 10-K SONOCO 2019 ANNUAL REPORT

The amounts recognized in Other Comprehensive Loss/(Income) include the following:
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
201920182017201920182017
Adjustments arising during the period:
Net actuarial loss/(gain)$146,414  $58,544  $(10,732) $(914) $1,738  $(3,525) 
Prior service cost/(credit)1,667  2,906  639  —  —  —  
Net settlements/curtailments(2,377) (986) (32,761) —  —  —  
Reversal of amortization:
Net actuarial (loss)/gain(30,681) (37,391) (39,209) 823  1,120  759  
Prior service (cost)/credit(1,022) (916) (910) 498  498  499  
Total recognized in other comprehensive loss/(income)$114,001  $22,157  $(82,973) $407  $3,356  $(2,267) 
Total recognized in net periodic benefit cost and other comprehensive loss/(income)$144,254  $44,051  $(16,889) $(857) $1,352  $(4,385) 
 Retirement Plans
Retiree Health and
Life Insurance Plans
  
202220212020202220212020
Adjustments arising during the period:
Net actuarial loss/(gain)$4,839 $(63,684)$12,452 $(761)$(412)$(468)
Prior service cost/(credit)$678 $837 $1,229 $— $— $— 
Net settlements/curtailments$(522)$(550,706)$(886)$— $— $— 
Amortization recognized during the period:
Net actuarial (loss)/gain$(6,240)$(16,503)$(28,833)$681 $744 $834 
Prior service (cost)/credit$(913)$(900)$(1,006)$— $— $279 
Total recognized in other comprehensive loss/(income)$(2,158)$(630,956)$(17,044)$(80)$332 $645 
Total recognized in net periodic benefit cost and other comprehensive loss/(income)$9,081 $(57,633)$18,214 $(622)$(285)$(145)

Of the amounts included in Accumulated Other Comprehensive Loss/(Income) as of December 31, 2019, the portions the Company expects to recognize as components of net periodic benefit cost in 2020 are as follows:
Retirement
Plans
Retiree Health and
Life Insurance Plans
Net actuarial loss/(gain)$22,486  $(808) 
Prior service cost/(credit)1,037  (279) 
 $23,523  $(1,087) 
The accumulated benefit obligation for all defined benefit plans was $1,959,010$347,608 and $1,668,396$504,944 at December 31, 20192022 and 2018,2021, respectively.
The projected benefit obligation (PBO), accumulated benefit obligation (ABO) and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were, $1,658,018, $1,651,740$176,702, $171,705 and $1,341,556,$48,277, respectively, as of December 31, 2019,2022, and $1,397,040, $1,391,129$228,127, $223,657 and $1,013,173,$61,686, respectively, as of December 31, 2018.
The following table sets forth the Company’s projected benefit payments for the next ten years:
YearRetirement Plans
Retiree Health and
Life Insurance Plans
2020$96,448  $1,344  
2021$93,436  $1,305  
2022$94,786  $1,269  
2023$95,830  $1,230  
2024$97,372  $1,173  
2025-2029$508,354  $5,344  

2021.
Plan termination, settlements, changes and amendments
In July 2019, the Company's Board of Directors approved a resolution to terminate the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan"), a tax-qualified defined benefit plan, effective September 30, 2019. Upon approval from the Pension Benefit Guaranty Corporation, and followingFollowing completion of a limited lump sum offering in April 2021, the Company is expected to settlesettled all remaining liabilities under the Inactive Plan in June 2021 through the purchase of annuities. The Company anticipates makingmade additional net contributions of $124,432 to the Inactive Plan of approximately $150,000 in late 2020 or early 2021 in order to be fully funded on a termination basis at the time of the annuity purchase. However, the actual amount of the Company's long-term liability when it is transferred, and the related cash contribution requirement, will depend upon the nature and timing of participant settlements, as well as prevailing market conditions. Non-cash, pretax settlement charges totaling approximately $600,000 are expected to be$538,722 were recognized beginning in 20202021 as the lump sum payouts and annuity purchases arewere made. The termination of the Inactive Plan will applyapplied to participants who havehad separated service from Sonoco and to non-union active employees who no longer accrueaccrued pension benefits. There iswas no change in the cumulative benefit previously earned by the approximately 11,000 impacted participants as a result ofaffected by these actions, and theactions. The Company will continuecontinues to manage and support the Active Plan, comprised of approximately 600700 active participants who continue to accrue benefits in accordance with a flat-dollar multiplier formula.
SettlementAdditional settlement charges totaling $2,377$479 and $730$11,984 were recognized in 20192022 and 2018,2021, respectively, primarily as a result of activity in our Canadian plans, including settlement charges in 2021 from the annuitization of the Trenton Union Plan in Ontario, Canada. This plan was terminated in June 2020 and the participants were fully annuitized in December 2021. Settlements in 2022 resulted from lump-sum payments made to certain participants of the Company's other Canadian pension planplans who elected a lump-sum distribution option upon retirement.
In February 2017, the Company initiated a program to settle a portion of the projected benefit obligation (PBO) relating to terminated vested participants in the U.S. qualified retirement plans through either a single, lump-sum payment or the purchase of an annuity. The terminated vested population comprised approximately 15% of the beginning of year PBO of these plans. The Company successfully settled approximately 47% of the PBO for the terminated vested plan participants. As a result of these and other smaller settlements, the Company recognized non-cash settlement charges of $32,761 in 2017. All settlement payments were funded from plan assets and did not require the Company to make any additional cash contributions.



F-28F-29 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Projected benefit payments
The following table sets forth the Company’s projected benefit payments for the next ten years:
YearRetirement Plans
Retiree Health and
Life Insurance Plans
2023$21,712 $1,172 
2024$22,129 $1,167 
2025$23,259 $1,149 
2026$24,859 $1,130 
2027$24,359 $1,080 
2028-2032$119,072 $4,912 
Assumptions
The following tables set forth the major actuarial assumptions used in determining the benefit obligation and net periodic benefit cost:
Weighted-average assumptions
used to determine benefit
obligations at December 31
U.S.
Retirement
Plans
U.S. Retiree
Health and
Life Insurance
Plans
Foreign Plans
Discount Rate
20225.01 %4.92 %4.97 %
20212.77 %2.48 %2.22 %
Rate of Compensation Increase
2022— %2.99 %3.29 %
2021— %3.01 %3.21 %
Weighted-average assumptions
used to determine benefit
obligations at December 31
U.S.
Retirement
Plans
U.S. Retiree
Health and
Life Insurance
Plans
Foreign Plans
Discount Rate
20192.87 %2.89 %2.28 %
20184.24 %4.02 %3.11 %
Rate of Compensation Increase
2019— %3.04 %3.37 %
2018— %3.06 %3.65 %
Weighted-average assumptions
used to determine net periodic benefit
cost for years ended December 31
U.S.
Retirement
Plans
U.S. Retiree
Health and
Life Insurance
Plans
Foreign
Plans
Discount Rate
20194.24 %4.02 %3.11 %
20183.59 %3.36 %2.78 %
20174.12 %3.70 %2.95 %
Expected Long-term Rate of Return
20196.63 %6.73 %4.62 %
20186.87 %6.95 %4.84 %
20176.86 %6.98 %4.52 %
Rate of Compensation Increase
2019— %3.06 %3.65 %
20183.40 %3.28 %3.62 %
20173.60 %3.32 %3.65 %
Weighted-average assumptions
used to determine net periodic benefit
cost for years ended December 31
U.S.
Retirement
Plans
U.S. Retiree
Health and
Life Insurance
Plans
Foreign
Plans
Discount Rate
20222.77 %2.48 %2.22 %
20212.32 %2.04 %1.70 %
20202.87 %2.89 %2.28 %
Expected Long-term Rate of Return
20223.27 %3.18 %3.00 %
20213.27 %2.01 %3.69 %
20202.93 %2.93 %4.10 %
Rate of Compensation Increase
2022— %3.01 %3.21 %
2021— %3.03 %3.20 %
2020— %3.04 %3.37 %
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 discount rate used to calculate the benefit obligation and funded status of the Inactive Plan at December 31, 2019, was determined on a plan termination basis. The expected long-term rate of return assumption is based on the Company’s current and expected future portfolio mix by asset class, and expected nominal returns of these asset classes using an economic “building block” approach. Expectations for inflation and real interest rates are developed and various risk premiums are assigned to each asset class based primarily on historical performance. The expected long-term rate of return also gives consideration to the expected level of outperformance to be achieved on that portion of the Company’s investment portfolio under active management. The assumed rate of compensation increase reflects historical experience and management’s expectations regarding future salary and incentive increases.
Medical trends
The U.S. Retiree Health and Life Insurance Plan makes up approximately 96% of the Retiree Health liability. Therefore, the following information relates to the U.S. plan only.
Healthcare Cost Trend RatePre-age 65Post-age 65
20196.25 %6.25 %
20186.50 %6.50 %
Ultimate Trend RatePre-age 65Post-age 65
20194.50 %4.50 %
20184.50 %4.50 %
Year at which the Rate Reaches
the Ultimate Trend Rate
Pre-age 65Post-age 65
201920262026
201820262026
Healthcare Cost Trend RatePre-age 65Post-age 65
20225.80 %6.50 %
20216.91 %8.27 %
Ultimate Trend RatePre-age 65Post-age 65
20224.50 %4.50 %
20214.45 %4.40 %
Year at which the Rate Reaches
the Ultimate Trend Rate
Pre-age 65Post-age 65
202220302030
202120302030

Increasing the assumed trend rate for healthcare costs by one percentage point would increase the accumulated postretirement benefit obligation (the APBO) and total service and interest cost component approximately $124 and $12, respectively. Decreasing the assumed trend rate for healthcare costs by one percentage point would decrease the APBO and total service and interest cost component approximately $115 and $11, respectively. Based on amendments to the U.S. plan approved in 1999, which became effective in 2003, cost increases borne by the Company are limited to the Urban CPI, as defined.



F-29F-30 FORM 10-K SONOCO 20192022 ANNUAL REPORT


Retirement plan assets
The assets of the U.S., U.K., and Canadian defined benefit plans comprise approximately 92% of the total postretirement benefit plan assets. Therefore, the following disclosures relate only to the assets of these plans.
The following table sets forth the weighted-average asset allocations of the Company’s retirement plans at 20192022 and 2018,2021, by asset category.
Asset Category
  
U.S.U.K.Canada
Equity securities2019— %42.1 %67.9 %
201848.3 %38.9 %55.4 %
Debt securities201991.6 %57.3 %31.6 %
201838.4 %60.5 %44.0 %
Alternative20195.7 %— %— %
201813.3 %— %— %
Cash and short-term investments20192.7 %0.6 %0.5 %
2018— %0.6 %0.6 %
Total2019100.0 %100.0 %100.0 %
2018100.0 %100.0 %100.0 %
Asset Category
  
U.S.U.K.Canada
Equity securities202223.4 %22.6 %34.0 %
202123.5 %32.8 %33.6 %
Debt securities202272.9 %76.3 %66.0 %
202172.0 %66.6 %66.4 %
Cash and short-term investments20223.7 %1.1 %— %
20214.5 %0.6 %— %
Total2022100.0 %100.0 %100.0 %
2021100.0 %100.0 %100.0 %
The Company employs a total-return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a desired level of risk. Alternative assets such as real estate funds, private equity funds and hedge funds may also be used to enhance expected long-term returns while improving portfolio diversification. Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. Investment risk is measured and monitored on an ongoing basis through periodic investment portfolio reviews and periodic asset/liability studies. The assets of the Company's U.S. pension plans were subject to de-risking measures during 2019 and reallocated to a more conservative mix of primarily fixed income investments pending the annuitization of the Inactive Plan expected in late 2020 or early 2021.
At December 31, 2019, postretirement benefit plan assets totaled $1,696,401, of which $1,322,822 were assets of the U.S. Defined Benefit Plans.
U.S. defined benefit plans
The Company completed separate asset/liability studies for both the Active Plan and Inactive Plan during 2011 andhas adopted investment guidelines for each.the Active Plan based on asset/liability studies. These guidelines established a dynamic de-riskingderisking framework for gradually shifting the allocation of assets to long-duration domestic fixed income from equity and other asset categories, as the relative funding ratio of eachthe plan increased over time. Beginning in 2019, the Company accelerated the de-riskingderisking measures in its U.S. defined benefit plans by making voluntary contributions totaling $200,000 to the plans and by reallocating plan assets to a more conservative mix of primarily fixed income investments. Subsequent to these de-risking actions, the Inactive Plan was terminated effective September 30, 2019. The current target allocation (midpoint) for the Inactive Plan investment portfolio is: Debt Securities – 97% and Cash – 3%. The current target allocation (midpoint) for the Active Plan investment portfolio is: Equity Securities - 20% and Debt Securities – 97% and Cash – 3%80%.
United Kingdom defined benefit plan
The equity investments consist of direct ownership and funds and are diversified among U.K. and international stocks of small and large capitalizations.capitalization. The current target allocation (midpoint) for the investment portfolio is: Equity Securities – 42%20% and Debt Securities – 58%80%.
Canada defined benefit plan
The equity investments consist of direct ownership and funds and are diversified among Canadian and international stocks of primarily large capitalizations and short to intermediate duration corporate and government bonds. The current target allocation (midpoint) for the investment portfolio is:is 28% Equity Securities – 55%,and 72% Debt Securities – 44% and Cash – 1%.Securities.
Retiree health and life insurance plan assets
The following table sets forth the weighted-average asset allocations by asset category of the Company’s retiree health and life insurance plan.
Asset Category20192018
Equity securities—%  48.3%  
Debt securities91.6%  38.4%  
Alternative5.7%  13.3%  
Cash2.7%  —%  
Total100.0%  100.0%  
Asset Category20222021
Equity securities—%—%
Debt securities100.0%100.0%
Cash—%—%
Total100.0%100.0%

Contributions
Based on current actuarial estimates, the Company anticipates that contributions to its defined benefit plans excluding the Inactive Plan, will be approximately $25,000$15,000 in 2020. Contributions to the Inactive Plan of approximately $150,000 are expected to be made in late 2020 or early 2021 in order for the plan to be fully funded on a termination basis at the time of the annuity purchase.2023. No assurances can be made however, about funding requirements beyond 2020,2023, however, as they will depend largely on actual investment returns and future actuarial assumptions, legislative actions, and timing of annuity purchases.changes to the Company's benefit offerings.
Sonoco SavingsRetirement and RetirementSavings Plan
The Sonoco SavingsRetirement and RetirementSavings Plan is a defined contribution retirement plan provided for certain of the Company’s U.S. employees. TheThrough December 31, 2021, the plan iswas comprised of both an elective and non-elective component.
The elective component of the plan, which is designed to meet the requirements of section 401(k) of the Internal Revenue Code, allows participants to set aside a portion of their wages and salaries for retirement and encourages saving by matching a portion of their contributions with contributions from the Company. The plan provides for participant contributions of 1% to 100% of gross pay. Since January 1, 2010,Effective December 31, 2021, the
F-30 FORM 10-K SONOCO 2019 ANNUAL REPORT

Company's 401(k) matching contribution was increased to 100% of the first 6% of pretax and/or Roth compensation contributed by the participant. Prior to this, the Company hashad matched 50% on the first 4% of compensation contributed by thesuch participant as pretax contributions whichcontributions. Participants are immediately fully vested.vested in these matching contributions. The Company’s expenses related to the plan for 2019, 20182022, 2021 and 20172020 were approximately $13,400, $12,500$38,900, $13,900 and $11,200,$13,700, respectively.
The non-elective component of the plan, the Sonoco Retirement Contribution (SRC), iswas eliminated effective December 31, 2021 and the benefit replaced by the higher matching 401(k) matching contribution discussed above. The SRC was available to certain employees who arewere not currently active participants in the Company’s U.S. qualified defined benefit pension plan. The SRC providesplan and provided for an annual Company contribution of 4% of all eligible pay plus 4% of eligible pay in excess of the Social Security wage base to eligible participant accounts. Participants arewere fully vested after
F-31 FORM 10-K SONOCO 2022 ANNUAL REPORT

three years of service or upon reaching age 55, if earlier. The Company’s expensesAs a result of the termination, the Company recognized no SRC expense in 2022. Expenses related to the plan for 2019, 20182021 and 20172020 were approximately $23,752, $14,995$22,914 and $14,540,$23,505, respectively. Cash contributions to the SRC, which were made annually in March following the year in which they were earned, totaled $14,573, $14,151$21,948, $22,665 and $14,066$22,503 in 2019, 20182022, 2021 and 2017, respectively, and are expected to total approximately $23,0002020, respectively. No additional SRC contributions will be made in 2020.2023 or beyond.
Other plans
The Company also provides retirement and postretirement benefits to certain other non-U.S. employees through various Company-sponsored and local government sponsored defined contribution arrangements. For the most part, the liabilities related to these arrangements are funded in the period they arise. The Company’s expenses for these plans were not material for all years presented.
14. Income taxes
The provision for taxes on income for the years ended December 31 consists of the following:
202220212020
Pretax income
Domestic$363,518 $(342,951)$54,397 
Foreign207,764 181,969 201,195 
Total pretax income$571,282 $(160,982)$255,592 
Current
Federal$55,016 $21,247 $10,868 
State15,997 15,212 4,608 
Foreign59,762 55,018 42,764 
Total current$130,775 $91,477 $58,240 
Deferred
Federal$(2,495)$(120,243)$432 
State(5,441)(39,709)512 
Foreign(4,330)1,045 (6,154)
Total deferred$(12,266)$(158,907)$(5,210)
Total taxes$118,509 $(67,430)$53,030 
201920182017
Pretax income
Domestic$217,098  $225,442  $168,180  
Foreign163,668  153,089  146,374  
Total pretax income$380,766  $378,531  $314,554  
Current
Federal$14,933  $37,345  $120,398  
State2,565  6,164  5,623  
Foreign45,911  38,648  40,328  
Total current$63,409  $82,157  $166,349  
Deferred
Federal$25,064  $(5,571) $(16,797) 
State8,599  $(738) 3,499  
Foreign(3,803) (840) (6,462) 
Total deferred$29,860  $(7,149) $(19,760) 
Total taxes$93,269  $75,008  $146,589  
Deferred tax (liabilities)/assets are comprised of the following at December 31:
20192018
Property, plant and equipment$(91,207) $(102,007) 
Intangibles(134,868) (178,883) 
Leases(79,332) —  
Gross deferred tax liabilities$(305,407) $(280,890) 
Retiree health benefits$2,405  $2,989  
Foreign loss carryforwards58,527  57,581  
U.S. Federal loss and credit carryforwards86,748  86,655  
Capital loss carryforwards2,703  2,757  
Employee benefits87,295  114,872  
Leases79,673  —  
Accrued liabilities and other63,700  102,349  
Gross deferred tax assets$381,051  $367,203  
Valuation allowance on deferred tax assets$(105,347) $(103,289) 
Total deferred taxes, net$(29,703) $(16,976) 
20222021
Property, plant and equipment$(104,162)$(97,806)
Intangibles(104,171)(96,057)
Leases(89,226)(75,587)
Outside basis in Metal Packaging(74,092)— 
Gross deferred tax liabilities$(371,651)$(269,450)
Retiree health benefits$1,222 $2,935 
Foreign loss carryforwards79,460 76,462 
U.S. Federal loss and credit carryforwards36,529 34,700 
Capital loss carryforwards3,626 4,050 
U.S. State loss and credit carryforwards20,961 21,900 
Capitalized research and development costs45,826 22,875 
Employee benefits42,641 46,503 
Leases89,416 78,518 
Accrued liabilities and other assets56,601 30,835 
Gross deferred tax assets$376,282 $318,778 
Valuation allowance on deferred tax assets$(82,046)$(93,992)
Total deferred taxes, net$(77,415)$(44,664)
The Company has total federal net operating loss carryforwards of approximately $77,200$64,646 remaining at December 31, 2019.2022. These losses are limited based upon future taxable earnings of the respective entitiesCompany and expire between 20302031 and 2036.2037. U.S. foreign tax credit carryforwards of approximately $70,400$22,873 exist at December 31, 20192022 and expire in 2027. The Company is evaluating the feasibility of tax planning strategies which could allow a release of valuation allowance related to its foreign tax credits. A conclusion on this matter is expected to be reached in a subsequent quarter and it is reasonably possible that a benefit material to the Company's financial statements will be recognized at that time. Foreign subsidiary loss carryforwards of approximately $238,600$321,473 remain at December 31, 2019.2022. Their use is limited to future taxable earnings of the respective foreign subsidiaries or filing groups. Approximately $212,400$205,054 of these loss carryforwards do not have an expiration date. Of the remaining foreign subsidiary loss carryforwards, approximately $9,200$22,860 expire within the next five years and approximately $17,000$93,559 expire between 20252028 and 2039.2042. Foreign subsidiary capital loss carryforwards of approximately $15,800$14,493 exist at December 31, 20192022 and do not have an expiration date. Their use is limited to future capital gains of the respective foreign subsidiaries.
Approximately $12,300$9,662 in tax value of state loss carryforwards and $17,600$16,871 of state credit carryforwards remain at December 31, 2019.2022. These state loss and credit carryforwards are limited based upon future taxable earnings of the respective entities or filing group and expire between 20202023 and 2039.2042. State loss and credit carryforwards are reflected at their "tax" value, as opposed to the amount of expected gross deduction due to the vastly different apportionment and statutory tax rates applicable to the various entities and states in which the Company files.

F-31F-32 FORM 10-K SONOCO 20192022 ANNUAL REPORT

A reconciliation of the U.S. federal statutory tax rate to the actual consolidated tax expenseprovision for/(benefit from) income taxes is as follows:
  
201920182017
Statutory tax rate$79,961  21.0 %$79,491  21.0 %$110,094  35.0 %
State income taxes, net of federal tax benefit7,767  2.0 %7,534  2.0 %4,780  1.5 %
Valuation allowance3,174  0.8 %(14,902) (3.9)%(3,333) (1.1)%
Tax examinations including change in reserve for uncertain tax positions(1,639) (0.4)%(3,076) (0.8)%4,895  1.6 %
Adjustments to prior year deferred taxes(499) (0.1)%(1,899) (0.5)%(1,415) (0.4)%
Foreign earnings taxed at other than U.S. rates5,083  1.3 %8,224  2.2 %(16,233) (5.2)%
Disposition of business—  — %—  — %537  0.2 %
Effect of tax rate changes531  0.1 %(6,218) (1.6)%(22,183) (7.1)%
Deduction related to qualified production activities—  — %341  0.1 %(5,384) (1.7)%
Transition tax—  — %3,647  1.0 %76,933  24.5 %
Tax credits(13,310) (3.5)%(10,083) (2.7)%(1,197) (0.4)%
Global intangible low-taxed income (GILTI)12,340  3.2 %12,878  3.4 %—  — %
Foreign-derived intangible income(1,225) (0.3)%(1,174) (0.3)%—  — %
Other, net1,086  0.3 %245  0.1 %(905) (0.3)%
Total taxes$93,269  24.5 %$75,008  19.8 %$146,589  46.6 %
  
202220212020
Statutory tax rate$119,945 21.0 %$(33,806)21.0 %$53,674 21.0 %
State income taxes, net of federal tax benefit13,149 2.3 %(15,863)9.9 %4,859 1.9 %
Valuation allowance(10,477)(1.8)%(33,576)20.9 %1,589 0.6 %
Tax examinations including change in reserve for uncertain tax positions567 0.1 %5,665 (3.5)%5,546 2.2 %
Adjustments to prior year deferred taxes(2,110)(0.4)%1,239 (0.8)%(265)(0.1)%
Foreign earnings taxed at other than U.S. rates12,334 2.2 %9,659 (6.0)%3,275 1.3 %
Divestiture of business— — %(808)0.5 %(15,356)(6.0)%
Effect of tax rate changes(2,151)(0.4)%275 (0.2)%(523)(0.2)%
Foreign withholding taxes4,670 0.8 %8,107 (5.0)%2,157 0.8 %
Tax credits(14,077)(2.5)%(21,936)13.6 %(13,529)(5.3)%
Global intangible low-taxed income (GILTI)2,851 0.5 %11,323 (7.0)%15,795 6.2 %
Foreign-derived intangible income(657)(0.1)%(202)0.1 %(1,238)(0.5)%
Foreign currency gain/(loss) on distributions of previously taxed income(1,280)(0.2)%3,365 (2.1)%(344)(0.1)%
Other, net(4,255)(0.7)%(872)0.5 %(2,610)(1.0)%
Provision for/(Benefit from) income taxes$118,509 20.7 %$(67,430)41.9 %$53,030 20.8 %

The total amount of the one-time transition tax on certain accumulated foreign earnings as part of the Tax Cuts and Jobs Act ("Tax Act") was $80,580. Under the provisions of the Tax Act, the transition tax is payable in installments over a period of 8 years. The first twoCompany has satisfied all installments were paid in 2018through 2022 and 2019 withfurther reduced the filingliability by amendment of the Company'sits 2017 and 2018 federalU.S. income tax returns.return to reflect a decrease in the transition tax from the increased use of foreign tax credits. The liability is furtherresulting overpayment reduced the remaining installment payments by the deemed overpayment of federal income taxes.$44,929. The remaining obligation of $46,295$1,366 is included in "Other Liabilities""Accrued taxes" in the Company's Consolidated Balance Sheet at December 31, 2019.2022.
The change in “Tax examinations including change in reserve for uncertain tax positions” is shown net of associated deferred taxes and accrued interest. Included in the change are net increases in reserves for uncertain tax positions of approximately $1,800, $1,700$2,051, $2,330 and $2,600$1,866 for uncertain items arising in 2019, 20182022, 2021 and 2017,2020, respectively, combined with adjustments related to prior year items, primarily decreases related to lapses of statutes of limitations in international, federal and state jurisdictions as well as overall changes in facts and judgment. These adjustments decreasedchanged the reserve by a total of approximately $(3,500)$(1,484), $(2,900)$3,743 and $(2,300)$(2,601) in 2019, 20182022, 2021 and 2017,2020, respectively.
In many of the countries in which the Company operates, earnings are taxed at rates different than in the U.S. This difference is reflected in “Foreign earnings taxed at other than U.S. rates” along with other items, if any, that impacted taxes on foreign earnings in the periods presented.
The benefits included in “Adjustments to prior year deferred taxes” for each of the years presented consist primarily of adjustments to deferred tax assets and liabilities arising from changes in estimates. The 2017 benefit included in the "Effect of tax rate changes for the year" relates primarily to changes made as a result of the Tax Act.
The 2018 benefits included in "Valuation allowance" includes a benefit of $16,100 related to the revaluation of the valuation allowance on foreign tax credits due to the Tax Act.
Of the $13,310$14,077 of tax credits for 2019, $10,4842022, $1,245 directly offsetsoffset the $12,340$2,851 of GILTI tax, resulting in a net GILTI tax of $1,856. This$1,606. Of the remainder, $6,563 relates to research and development tax credits. The GILTI tax in 2021 of $11,323 was partially offset by GILTI tax credits of $7,872, resulting in a net GILTI tax includesof $3,451.
The benefits included in "Valuation allowance" include a favorable adjustment for revising$13,182 net recognized benefit associated with the estimaterelease of net GILTIvaluation allowance on foreign tax credits due onto an increase in the 2018 tax return of $2,097.projected foreign source income in future years.
The Company maintains its assertion that its undistributed foreign earnings are indefinitely reinvested and, accordingly, has not recorded any deferred income tax liabilities that would be due if those earnings were repatriated. As of December 31, 2019,2022, these undistributed earnings total $916,457.$955,833. While the majority of these earnings have already been taxed in the U.S., a portion would be subject to foreign withholding and U.S. income taxes and credits if distributed. Computation of the deferred tax liability associated with unremitted earnings deemed to be indefinitely reinvested is not practicable at this time.
Reserve for uncertain tax positions
The following table sets forth the reconciliation of the gross amounts of unrecognized tax benefits at the beginning and ending of the periods indicated: 
201920182017202220212020
Gross Unrecognized Tax Benefits at January 1Gross Unrecognized Tax Benefits at January 1$14,400  $17,100  $17,700  Gross Unrecognized Tax Benefits at January 1$18,142 $11,230 $12,200 
Increases in prior years’ unrecognized tax benefitsIncreases in prior years’ unrecognized tax benefits—  —  700  Increases in prior years’ unrecognized tax benefits223 12,283 91 
Decreases in prior years’ unrecognized tax benefitsDecreases in prior years’ unrecognized tax benefits(1,300) (700) (2,400) Decreases in prior years’ unrecognized tax benefits(144)(275)(464)
Increases in current year's unrecognized tax benefitsIncreases in current year's unrecognized tax benefits1,300  1,200  1,600  Increases in current year's unrecognized tax benefits1,807 1,088 1,569 
Decreases in unrecognized tax benefits from the lapse of statutes of limitationsDecreases in unrecognized tax benefits from the lapse of statutes of limitations(2,300) (2,600) (300) Decreases in unrecognized tax benefits from the lapse of statutes of limitations(1,174)(6,170)(1,866)
SettlementsSettlements100  (600) (200) Settlements(233)(14)(300)
Gross Unrecognized Tax Benefits at December 31Gross Unrecognized Tax Benefits at December 31$12,200  $14,400  $17,100  Gross Unrecognized Tax Benefits at December 31$18,621 $18,142 $11,230 
Of the unrecognized tax benefit balances at December 31, 20192022 and December 31, 2018, approximately $11,4002021, $17,821 and $13,500,$17,425, respectively, would have an impact on the effective tax rate if ultimately recognized.
Interest and/or penalties related to income taxes are reported as part of income tax expense. The Company had approximately $2,000$859 and $2,100$875 accrued for interest related to uncertain tax positions at December 31, 20192022 and December 31, 2018,2021, respectively. Tax expense for the year ended
F-33 FORM 10-K SONOCO 2022 ANNUAL REPORT

December 31, 2019,2022, includes approximately $600an interest benefit of interest expense,$16, which is comprised of an interest benefit of approximately $900$501 related to the adjustment of prior years' items and interest expense of $1,500$485 on unrecognized tax benefits. The amounts listed above for
F-32 FORM 10-K SONOCO 2019 ANNUAL REPORT

accrued interest and interest expense do not reflect the benefit of a federal tax deduction which would be available if the interest were ultimately paid. Activity for the year also included $700 of settlements.
The Company and/or its subsidiaries file federal, state and local income tax returns in the United States and various foreign jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2012.2016.
The Company believes that it is reasonably possible that the amount reserved for uncertain tax positions at December 31, 20192022 will decreaseincrease by approximately $900$470 over the next twelve months. This change includes the anticipated increase in reserves related to existing positions offset by settlements of issues currently under examination and the release of existing reserves due to the expiration of the statute of limitations. Although the Company's estimate for the potential outcome for any uncertain tax issue is highly judgmental, management believes that any reasonably foreseeable outcomes related to these matters have been adequately provided for. 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 limitation on potential assessments expire. Additionally, the jurisdictions in which earnings or deductions are realized may differ from current estimates. As a result, the effective tax rate may fluctuate significantly on a quarterly basis. The Company has operations in many countries outside of the United States and the taxes paid on those earnings are subject to varying rates. The Company is not dependent upon the favorable benefit of any one jurisdiction to an extent that loss of those benefits would have a material effect on the Company's overall effective tax rate.
As previously disclosed, the Company received a draft Notice of Proposed Adjustment (“NOPA”) from the Internal Revenue Service (IRS) in February 2017 proposing an adjustment to income for the 2013 tax year based on the IRS's recharacterization of a distribution of an intercompany note made in 2012, and the subsequent repayment of the note over the course of 2013, as if it were a cash distribution made in 2013. In March 2017, the Company received a draft NOPA proposing penalties of $18,000 associated with the IRS’s recharacterization, as well as an Information Document Request (“IDR”) requesting the Company’s analysis of why such penalties should not apply. The Company responded to this IDR in April 2017. On October 5, 2017, the Company received 2 revised draft NOPAs proposing the same adjustments and penalties as in the prior NOPAs. On November 14, 2017, the Company received 2 final NOPAs proposing the same adjustments and penalties as in the prior draft NOPAs. On November 20,  2017, the Company received a Revenue Agent's Report (“RAR”) that included the same adjustments and penalties as in the prior NOPAs.  At the time of the distribution in 2012, it was characterized as a dividend to the extent of earnings and profits, with the remainder as a tax free return of basis and taxable capital gain. As the IRS proposes to recharacterize the distribution, the entire distribution would be characterized as a dividend. The incremental tax liability associated with the income adjustment proposed in the RAR would be approximately $89,000, excluding interest and the previously referenced penalties. On January 22, 2018, the Company filed a protest to the proposed deficiency with the IRS. The Company received a rebuttal of its protest from the IRS on July 10, 2018, and the matter has now been referred to the Appeals Division of the IRS. The Company had a pre-conference hearing with IRS Appeals during the second quarter of 2019, and has had continued discussions with IRS Appeals throughout the year. If the matter is not resolved in IRS Appeals, the next step would be to file a petition in Tax Court. The Company strongly believes the position of the IRS with regard to this matter is inconsistent with applicable tax laws and existing Treasury regulations, and that the Company's previously reported income tax provision for the year in question is appropriate. However, there can be no assurance that this matter will be resolved in the Company's favor. Regardless of whether the matter is resolved in the Company's favor, the final resolution of this matter could be expensive and time consuming to defend and/or settle. While the Company believes that the amount of tax originally paid with respect to this distribution is correct, and accordingly has not provided additional reserve for tax uncertainty, there is still a possibility that an adverse outcome of the matter could have a material effect on its results of operations and financial condition.
15. Revenue Recognition
The Company records revenue when control is transferred to the customer, which is either upon shipment or over time in cases where the Company is entitled to payment with margin for products produced that are customer specific without alternative use. The Company recognizes over time revenue under the input method as goods are produced. Revenue that is recognized at a point in time is recognized when the customer obtains control of the goods. Customers obtain control either when goods are delivered to the customer facility, if the Company is responsible for arranging transportation, or when picked up by the customer's designated carrier. The Company commonly enters into Master Supply Arrangements (MSA) with customers to provide goods and/or services over specific time periods. Customers submit purchase orders with quantities and prices to create a contract for accounting purposes. Shipping and handling expenses are included in "Cost of Sales," and freight charged to customers is included in "Net Sales" in the Company's Consolidated Statements of Income.
The Company has rebate agreements with certain customers. These rebates are recorded as reductions of sales and are accrued using sales data and rebate percentages specific to each customer agreement. Accrued customer rebates are included in "Accrued expenses and other" in the Company's Consolidated Balance Sheets.
Payment terms under the Company's arrangements are short term in nature, generally no longer than 120 days. The Company does provide prompt payment discounts to certain customers if invoices are paid within a predetermined period. Prompt payment discounts are treated as a reduction of revenue and are determinable within a short period after the originating sale.
The following table setstables set forth information about contract assetsrevenue disaggregated by primary geographic regions for the years ended December 31, 2022, 2021 and liabilities from contracts2020. The tables also include a reconciliation of disaggregated revenue with customers. reportable segments. The balances of the contract assets and liabilitiesCompany's reportable segments are locatedaligned by product nature as disclosed in "Other receivables" and "Accrued expenses and other" on the Consolidated Balance Sheets.

Note 18.
December 31, 2019December 31, 2018
Contract Assets$56,364  $48,786  
Contract Liabilities(17,047) (18,533) 
Year Ended December 31, 2022Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary geographical markets:
   United States$2,960,098 $1,611,390 $660,604 $5,232,092 
   Europe442,743 434,076 84,878 961,697 
   Canada117,671 109,997 — 227,668 
   Asia Pacific97,182 275,395 1,157 373,734 
   Other150,262 253,705 51,394 455,361 
          Total$3,767,956 $2,684,563 $798,033 $7,250,552 

Year Ended December 31, 2021Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary geographical markets:
   United States$1,607,810 $1,421,684 $620,596 $3,650,090 
   Europe444,734 408,093 88,828 941,655 
   Canada117,492 94,780 — 212,272 
   Asia Pacific82,882 316,841 1,280 401,003 
   Other115,429 222,914 47,075 385,418 
          Total$2,368,347 $2,464,312 $757,779 $5,590,438 








F-33 FORM 10-K SONOCO 2019 ANNUAL REPORT

Significant changes in the contract assets and liabilities balances during the period were as follows:
December 31, 2019December 31, 2018
Contract AssetContract LiabilityContract AssetContract Liability
Beginning balance$48,786  $(18,533) $45,877  $(17,736) 
Revenue deferred or rebates accrued—  (29,062) —  (19,730) 
Recognized as revenue—  8,473  —  1,652  
Rebates paid to customers—  22,075  —  17,281  
Increases due to rights to consideration for customer specific goods produced, but not billed during the period51,797  —  48,786  —  
Transferred to receivables from contract assets recognized at the beginning of the period(48,786) —  (45,877) —  
Increase as a result of cumulative catch-up arising from changes in the estimate of completion, excluding amounts transferred to receivables during the period—  —  —  —  
Impairment of contract asset—  —  —  —  
Contract asset acquired in a business combination4,567  —  —  —  
Ending balance$56,364  $(17,047) $48,786  $(18,533) 
Year Ended December 31, 2020Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary geographical markets:
   United States$1,581,639 $1,177,903 $651,721 $3,411,263 
   Europe394,473 328,410 332,947 1,055,830 
   Canada96,457 84,968 — 181,425 
   Asia Pacific74,823 241,163 684 316,670 
   Other82,467 159,030 30,758 272,255 
          Total$2,229,859 $1,991,474 $1,016,110 $5,237,443 

Contract assets and liabilities are generally short in duration given the nature of products produced by the Company. Contract assets representsrepresent goods produced without alternative use for which the Company is entitled to payment with margin prior to shipment. Upon shipment, the Company is entitled to bill the customer, and therefore amounts included in contract assets will be reduced with the recording of an account receivable as they represent an unconditional right to payment. Contract liabilities represent revenue deferred due to pricing mechanisms utilized by the Company in certain multi-year arrangements, volume rebates, and receipts of advanced payments. For multi-year arrangements with pricing mechanisms, the Company will generally defer revenue during the initial term of the arrangement, and will
F-34 FORM 10-K SONOCO 2022 ANNUAL REPORT

release the deferral over the back half of the contract term. The Company's reportable segmentsContract assets and liabilities are alignedgenerally short in duration given the nature of products produced by product nature as disclosed in Note 18.the Company.
The following tables settable sets forth information about revenue disaggregated by primary geographic regions forcontract assets and liabilities from contracts with customers. The balances of the years ended December 31, 2019contract assets and 2018. The tables also include a reconciliation of disaggregated revenue with reportable segments.liabilities are located in "Other receivables" and "Accrued expenses and other" on the Consolidated Balance Sheets.

Twelve Months Ended December 31, 2019Consumer PackagingDisplay and PackagingPaper and Industrial Converted ProductsProtective SolutionsTotal
Primary geographical markets:
   United States$1,659,071  $246,735  $1,095,437  $407,216  $3,408,459  
   Europe407,759  301,866  346,102  23,039  1,078,766  
   Canada108,848  —  117,201  —  226,049  
   Asia Pacific70,504  —  277,385  2,370  350,259  
   Other87,204  5,524  138,614  79,332  310,674  
          Total$2,333,386  $554,125  $1,974,739  $511,957  $5,374,207  

Twelve Months Ended December 31, 2018Consumer PackagingDisplay and PackagingPaper and Industrial Converted ProductsProtective SolutionsTotal
Primary geographical markets:
   United States$1,676,204  $290,295  $1,108,735  $415,135  $3,490,369  
   Europe418,129  294,156  354,705  25,664  1,092,654  
   Canada115,183  —  131,025  —  246,208  
   Asia Pacific69,242  —  178,509  3,548  251,299  
   Other81,241  7,858  137,979  83,330  310,408  
          Total$2,359,999  $592,309  $1,910,953  $527,677  $5,390,938  
December 31, 2022December 31, 2021
Contract Assets$56,008 $51,106 
Contract Liabilities(22,423)(18,993)


Significant changes in the contract assets and liabilities balances during the twelve months ended December 31, 2022 and 2021 were as follows:
December 31, 2022December 31, 2021
Contract AssetContract LiabilityContract AssetContract Liability
Beginning balance$51,106 $(18,993)$48,390 $(16,687)
Acquired as part of a business acquisition8,107 (5,418)— — 
Revenue deferred or rebates accrued— (57,510)— (36,527)
Recognized as revenue— 18,201 — 7,238 
Rebates paid to customers— 41,297 — 26,983 
Increases due to rights to consideration for customer specific goods produced, but not billed during the period56,008 — 51,106 — 
Transferred to receivables from contract assets recognized at the beginning of the period and acquired as part of business acquisition(59,213)— (48,390)— 
Ending balance$56,008 $(22,423)$51,106 $(18,993)
F-34 FORM 10-K SONOCO 2019 ANNUAL REPORT

16. Commitments and contingencies
Pursuant to U.S. GAAP, accruals for estimated losses are recorded at the time information becomes available indicating that losses are probable and that the amounts are reasonably estimable. As is the case with other companies in similar industries, the Company faces exposure from actual or potential claims and legal proceedings from a variety of sources. Some of these exposures, as discussed below, have the potential to be material.
Environmental matters
The Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates.

Spartanburg
In connection with its acquisition of Tegrant in November 2011, the Company identified potential environmental contamination at a site in Spartanburg, South Carolina. The total remediation cost of the Spartanburg site was estimated to be $17,400 at the time of the acquisition and an accrual in this amount was recorded on Tegrant’s opening balance sheet. Since the acquisition, the Company has spent a total of $1,611$1,975 on remediation of the Spartanburg site.
Based on favorable developments at the Spartanburg site, the Company reduced its estimated environmental reserve by $10,000 during the third quarter of 2019 in order to reflect its revised best estimate of what it is likely to pay in order to complete the remediation. This adjustment resulted in a $10,000 reduction in "Selling, general and administrative expenses" in the Company's Consolidated Statement of Income for the year ended December 31, 2019.
At December 31, 20192022 and 2018,2021, the Company's accrual for environmental contingencies related to the Spartanburg site totaled $5,789$5,425 and $15,964,$5,555, respectively.
The Company cannot currently estimate its potential liability, damages or range of potential loss, if any, beyond the amounts accrued with respect to this exposure. However, the Company does not believe that the resolution of this matter has a reasonable possibility of having a material adverse effect on the Company's financial statements.

Other environmental matters
The Company has been named as a potentially responsible party at several other environmentally contaminated sites. All of the sites are also the responsibility of other parties. The potential remediation liabilities are shared with such other parties, and, in most cases, the Company’s share, if any, cannot be reasonably estimated at the current time. However, the Company does not believe that the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company's financial statements. At December 31, 20192022 and 2018,2021, the Company's accrual for these other sites totaled $2,938$1,840 and $4,136,$1,825, respectively.

Summary
As of December 31, 20192022 and 2018,2021, the Company (and its subsidiaries) had accrued $8,727$7,265 and $20,100,$7,380, respectively, related to environmental contingencies. These accruals are included in “Accrued“Accrued expenses and other”other” on the Company’s Consolidated Balance Sheets.
Other legal and regulatory matters
As described more fully in Note 14 to these Consolidated Financial Statements, the Company has received a final Revenue Agent's Report ("RAR") from the IRS proposing an adjustment to income for the 2013 tax year. The incremental tax liability associated with the proposed adjustment would be approximately $89,000, excluding interest and penalties. On January 22, 2018, the Company filed a protest to the proposed deficiency with the IRS. The Company received a rebuttal of its protest from the IRS on July 10, 2018, and the matter has now been referred to the Appeals Division of the IRS. The Company had a pre-conference hearing with IRS Appeals during the second quarter of 2019, and has had continued discussions with IRS Appeals throughout the year. If the matter is not resolved in IRS appeals, the next step would be to file a petition in Tax Court. The Company strongly believes the position of the IRS with regard to this matter is inconsistent with applicable tax laws and existing Treasury regulations, and that the Company's previously reported income tax provision for the year in question is appropriate. However, there can be no assurance that this matter will be resolved in the Company's favor. Regardless of whether the matter is resolved in the Company's favor, the final resolution of this matter could be expensive and time consuming to defend and/or settle. While the Company believes that the amount of tax originally paid with respect to this distribution is correct, and accordingly has not provided additional reserve for tax uncertainty, there is still a possibility that an adverse outcome of the matter could have a material effect on its results of operations and financial condition.

In addition to those described above, the Company is subject to other various legal proceedings, claims and litigation arising in the normal course of business. While the outcome of these matters could differ from management’s expectations, the Company does not believe that the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company’s financial statements.
Commitments
As of December 31, 2019,2022, 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. These purchase commitments require the Company to make total payments of approximately $99,323, approximately $217,920, as follows: $39,707$125,411 in 2020; $20,9602023; $50,172 in 2021; $23,1342024; $41,068 in 2022, $9,3252025; $1,269 in 20232026, and a total of $6,197$0 from 20242027 through 2028.2031.

F-35 FORM 10-K SONOCO 2022 ANNUAL REPORT

17. Shareholders’ equity and earnings per share
StockShare 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 transactions in 2021, a total of $137,972 remained available for share repurchases under this authorization as of December 31, 2021 and December 31, 2022. No shares were purchased under this authorization during 2022.
On May 6, 2021, the Company repurchased approximately 53,500 shares for $3,615 from a private stockholder based upon the average closing stock price on that day.
On May 10, 2021, the Company entered into an accelerated share repurchase agreement ("ASR Agreement") with a financial institution to repurchase outstanding shares of the Company's common stock. In exchange for an upfront payment of $150,000, which was funded with available cash on hand, the financial institution delivered 1,751,825 initial shares to the Company, representing 80% of the expected number of shares to be repurchased during the repurchase period based upon an estimated average repurchase price of $68.50 per share. The initial shares received were retired by the Company. The final number of shares repurchased and retired was based on the Company's volume-weighted average share price during the repurchase period, less a discount and subject to certain adjustments.
Pursuant to the ASR Agreement, the financial institution elected to accelerate the settlement of the transaction in two tranches. On July 21, 2021, the financial institution transferred 167,743 additional shares to the Company based upon an effective settlement price of $66.52 and a notional value of $50,000, or one third of the total $150,000 prepayment. On July 26, 2021, the financial institution transferred 336,996 additional shares to the Company upon full settlement of the remaining $100,000 notional value of the transaction at the final settlement price of $66.45.
On October 25, 2021, the Company entered into a Rule 10b5-1 Repurchase Plan with a financial institution to repurchase outstanding shares of the Company's common stock pursuant to its Board authorization. The Company repurchased and retired 976,191 shares for $58,413 prior to the termination of the trading period on November 23, 2021.
The costs of these share repurchases were allocated to "Capital in excess of stated value" on the Company's Consolidated Balance Sheet as of the fiscal period ended December 31, 2021.
The Company occasionally repurchases shares of its common stock to satisfy employee tax withholding obligations in association with the exercise of stock appreciation rights, restricted stock units, and performance-basedperformance contingent stock awards.units. These repurchases, which are not part of a publicly announced plan or program, totaled 169,29079,347 shares during 2019, 266,6522022, 99,824 shares during 2018,2021, and 119,349148,680 shares during 2017,2020, at a cost of $9,608, $14,561$4,547, $6,057 and $6,335,$8,483, respectively.

On February 10, 2016, the Company’s Board of Directors authorized the repurchase of up to 5,000,000 shares of the Company’s common stock. During 2016, a total of 2,030,389 shares were repurchased under this authorization at a cost of $100,000. NaN shares were repurchased during 2017 and 2018. Accordingly, at December 31, 2019, a total of 2,969,611 shares remain available for repurchase under this authorization.

F-35 FORM 10-K SONOCO 2019 ANNUAL REPORT

Earnings per share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
201920182017
Numerator:
Net income attributable to Sonoco$291,785  $313,560  $175,345  
Denominator:
Weighted average common shares outstanding100,742  100,539  100,237  
Dilutive effect of stock-based compensation434  477  615  
Diluted outstanding shares101,176  101,016  100,852  
Per common share:
Net income attributable to Sonoco:
Basic$2.90  $3.12  $1.75  
Diluted$2.88  $3.10  $1.74  
Cash dividends$1.70  $1.62  $1.54  
202220212020
Numerator:
Net income/(loss) attributable to Sonoco$466,437 $(85,477)$207,463 
Denominator:
Weighted average common shares outstanding97,991 99,608 100,939 
Dilutive effect of stock-based compensation741 — 270 
Diluted outstanding shares98,732 99,608 101,209 
Per common share:
Income/(Loss) available to common shareholders:
Basic$4.76 $(.86)$2.06 
Diluted$4.72 $(.86)$2.05 
Cash dividends$1.92 $1.80 $1.72 
No adjustments were made to reported net income"Net income/(loss) attributable to Sonoco" in the computationcomputations of earningsnet income/(loss) attributable to Sonoco per common share.
Anti-dilutive securities
Potentially dilutive securities are calculated in accordance with the treasury stock method. For stock appreciation rights (SARs), in particular, the treasury stock method which assumes the proceeds from the exercise of all dilutive stock appreciation rights (SARs)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 antidilutive.

The average number of shares that were not dilutive and therefore not included in the computation of diluted incomeincome/ (loss) per share was as follows for the years ended December 31, 2019, 20182022, 2021 and 20172020 (in thousands):
201920182017
Anti-dilutive stock appreciation rights475  786  487  
202220212020
Anti-dilutive stock appreciation rights373 202 772 
These stock appreciation rights may become dilutive in future periods if the market price of the Company’s common stock appreciates.
Noncontrolling interests
In 1994,Diluted earnings per share is computed by dividing net income by the Company entered intoweighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive. Such securities have an anti-dilutive impact in those periods in which a joint venture agreement with two partners in Asialoss is reported. Diluted net loss per share of common stock for the manufacturing and marketing of products in the Asian markets. Prior toyear ended December 31, 2018,2021 is the Company owned a controlling interest of 79.25% of the joint venture and consolidated thesame as basic net assets of the Asia joint venture. On December 31, 2018, the Company acquired the 19.08% ownership interest of PFE Hong Kong Limited, one of the joint venture partners, for $35,000 in cash, bringing the Company’s total ownership in the Asia joint venture to 98.33%. As a result of the purchase, the Company wrote off the $11,695 book value of the noncontrolling interest and recorded a $23,305 reduction in Capital in Excess of Stated Value. One of the Company's directors, Harry A. Cockrell, is a principal shareholder of PFE Hong Kong Limited.

On October 1, 2018, the Company completed the acquisition of the remaining 70% interest in Conitex Sonoco (see Note 3). The acquisition of Conitex Sonoco included joint ventures in Indonesia and China in which the Company owns a controlling interest. The noncontrolling interests relating to these joint ventures were recorded on the opening balance sheet at their fair value of $2,655.

During the third quarter of 2017, the Company recorded a $1,341 noncontrolling interest related to the creation of a joint venture for the manufacture of tubes and cores from a facility in Saudi Arabia. The Company owns a 51%loss per share in the joint venture and the assets have been consolidated. 
18. Segment reporting
The Company reports its financial results in 4 reportable segments – Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions.
The Consumer Packaging segment includes the following products and services: round and shaped rigid containers and trays (both composite and thermoformed plastic); extruded and injection-molded plastic products; printed flexible packaging; global brand artwork management; and metal and peelable membrane ends and closures.
The Display and Packaging segment includes the following products and services: designing, manufacturing, assembling, packing and distributing temporary, semi-permanent and permanent point-of-purchase displays; supply chain management services, including contract packing, fulfillment and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities, such as coasters and glass covers.
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes, cones and cores; fiber-based construction tubes; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper and material recycling services.
The Protective Solutions segment includes the following products: custom-engineered paperboard-based and expanded foam protective packaging and components; and temperature-assurance packaging.
Restructuring charges, asset impairment charges, gains from the disposition of businesses, insurance settlement gains, acquisition-related costs, non-operating pension costs, interest expense and interest income are included in income before income taxes under “Corporate.”because
F-36 FORM 10-K SONOCO 20192022 ANNUAL REPORT

otherwise dilutive securities are excluded from the computation of diluted net loss per share. The number of potentially dilutive securities excluded from the computation of diluted net loss per share during the year ended December 31, 2021 was 470.
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 Consolidated Balance Sheet.
18. Segment reporting
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.
The products produced and sold within the Consumer Packaging segment are generally used to package a variety of consumer products and consist primarily of round and shaped rigid paper, steel and plastic containers; metal and peelable membrane ends, closures, and components; thermoformed plastic trays; and high-barrier flexible packaging.
The primary products produced and sold within the Industrial Paper Packaging segment include paperboard tubes, cones, and cores; paper-based protective packaging; and uncoated recycled paperboard.
The primary products produced within the All Other group of businesses consist of a variety of packaging materials, including plastic, paper, foam, and various other specialty materials. Prior to the divestiture of the Company's global display and packaging business in two separate transactions, the European contract packaging business on November 30, 2020 and the U.S. display and packaging business on April 4, 2021, these businesses, which included point-of-purchase displays, fulfillment operations, and contract packaging, were reported in All Other.
Restructuring charges, asset impairment charges, gains or losses from the divestiture of businesses, insurance settlement gains, acquisition/divestiture-related costs, non-operating pension costs, changes in LIFO inventory reserves, amortization of acquired intangibles, interest expense and interest income, and other non-operational income and expenses are included in "Income/(Loss) Before Income Taxes" under "Corporate".


F-37 FORM 10-K SONOCO 2022 ANNUAL REPORT

The following table sets forth financial information about each of the Company's business segments:
  
Years ended December 31
  
Consumer
Packaging
Display and PackagingPaper and
Industrial
Converted
Products
Protective
Solutions
CorporateConsolidated
Total Revenue
2019$2,338,881  $558,747  $2,111,491  $513,584  $—  $5,522,703  
20182,363,292  595,855  2,042,732  529,324  —  5,531,203  
20172,129,022  511,099  2,007,321  540,665  —  5,188,107  
Intersegment Sales1
2019$5,495  $4,622  $136,752  $1,627  $—  $148,496  
20183,293  3,546  131,779  1,647  —  140,265  
20175,557  2,863  141,141  1,896  —  151,457  
Sales to Unaffiliated Customers
2019$2,333,386  $554,125  $1,974,739  $511,957  $—  $5,374,207  
20182,359,999  592,309  1,910,953  527,677  —  5,390,938  
20172,123,465  508,236  1,866,180  538,769  —  5,036,650  
Income Before Income Taxes2
2019$228,416  $27,723  $219,052  $50,201  $(144,626) $380,766  
2018224,505  13,291  211,122  42,902  (113,289) 378,531  
2017255,759  2,632  161,591  42,357  (147,785) 314,554  
Identifiable Assets3
2019$2,239,674  $452,155  $1,701,902  $580,411  $152,147  $5,126,289  
20181,993,417  440,972  1,472,148  535,443  141,485  4,583,465  
20171,890,516  480,892  1,346,391  552,425  287,497  4,557,721  
Depreciation, Depletion and Amortization4
2019$111,919  $14,926  $85,619  $26,676  $—  $239,140  
2018116,841  18,020  74,434  26,950  —  236,245  
201798,882  17,090  74,850  26,803  —  217,625  
Capital Expenditures
2019$64,590  $5,065  $112,308  $6,880  $7,091  $195,934  
201866,659  19,849  91,423  5,879  8,764  192,574  
201763,617  23,908  61,443  19,031  20,914  188,913  
segments and All Other group of businesses.
 Effective January 1, 2022, the Company changed its measure of segment operating profit to exclude amortization of acquisition intangibles. Accordingly, the segment financial information reported in 2021 and 2020 under "Income/(Loss) Before Income Taxes" and "Depreciation, Depletion and Amortization" have been revised to conform with the current presentation.
  
Years ended December 31
  
Consumer
Packaging
Industrial Paper PackagingAll OtherCorporateConsolidated
Total Revenue
20223,774,957 2,818,778 808,069 — $7,401,804 
20212,373,583 2,578,379 768,476 — 5,720,438 
20202,234,292 2,090,731 1,024,060 — 5,349,083 
Intersegment Sales1
20227,001 134,215 10,036 — $151,252 
20215,236 114,067 10,697 — 130,000 
20204,433 99,257 7,950 — 111,640 
Sales to Unaffiliated Customers
20223,767,956 2,684,563 798,033 — $7,250,552 
20212,368,347 2,464,312 757,779 — 5,590,438 
20202,229,859 1,991,474 1,016,110 — 5,237,443 
Income/(Loss) Before Income Taxes2
2022526,028 327,859 65,978 (348,583)$571,282 
2021274,926 226,798 63,060 (725,766)(160,982)
2020304,437 184,495 90,956 (324,296)255,592 
Identifiable Assets3
20223,825,675 2,079,326 871,800 276,139 $7,052,940 
20211,956,688 1,971,293 886,647 258,607 5,073,235 
20201,926,294 1,805,388 1,018,091 527,486 5,277,259 
Depreciation, Depletion and Amortization4
2022111,599 91,944 24,854 80,427 $308,824 
202178,802 91,141 25,822 49,419 245,184 
202084,509 91,388 32,494 52,899 261,290 
Capital Expenditures
2022127,478 145,021 21,177 35,093 $328,769 
202160,532 150,225 22,780 22,482 256,019 
202059,040 87,549 24,701 22,837 194,127 
1
Intersegment sales are recorded at a market-related transfer price.

2
Included in Corporate above are interest expense, interest income, restructuring/restructuring charges, asset impairment charges, propertygains or losses from the divestiture of businesses, insurance settlement gains, non-operating pensionacquisition/divestiture-related costs, acquisition-related charges,amortization of acquired intangibles, and other non-operational income and expenses associated with the following segments:

Consumer
Packaging
Display
and
Packaging
Paper and
Industrial
Converted
Products
Protective
Solutions
CorporateTotal
2019$41,155  $(7,358) $5,270  $9,083  $96,476  $144,626  
201818,391  19,046  11,773  1,529  62,550  113,289  
20179,990  2,082  24,281  3,071  108,361  147,785  

Consumer
Packaging
Industrial Paper
Packaging		All OtherCorporateTotal
2022$(138,343)$(40,805)$(18,800)$(150,635)$(348,583)
2021(25,983)(2,570)(23,312)(673,900)(725,765)
2020(126,149)(41,127)(47,074)(109,946)(324,296)
 The remaining amounts reported as Corporate consist of interest expense, interest income, non-operating pension costs, acquisition/divestiture-related costs, and other non-operational income and expenses not associated with a particular segment.
3
Identifiable assets are those assets used by each segment in its operations. Corporate assets consist primarily of cash and cash equivalents, investments in affiliates, headquarters facilities, deferred income taxes and prepaid expenses.
4
Depreciation depletion and amortizationdepletion incurred at Corporate are allocated to the reportable segments.
F-37F-38 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Geographic regions
Sales to unaffiliated customers and long-lived assets by geographic region are as follows:
201920182017
Sales to Unaffiliated Customers
United States$3,408,459  $3,490,369  $3,263,975  
Europe1,078,766  1,092,654  981,178  
Canada226,049  246,208  245,992  
All other660,933  561,707  545,505  
Total$5,374,207  $5,390,938  $5,036,650  
Long-lived Assets
United States$2,177,918  $1,953,391  $1,962,196  
Europe648,648  641,600  659,615  
Canada107,470  113,782  120,062  
All other224,783  241,767  108,395  
Total$3,158,819  $2,950,540  $2,850,268  
202220212020
Sales to Unaffiliated Customers
United States$5,232,092 $3,650,090 $3,411,263 
Europe961,697 941,655 1,055,830 
Canada227,668 212,272 181,425 
Asia Pacific373,734 401,003 316,670 
Other455,361 385,418 272,255 
Total$7,250,552 $5,590,438 $5,237,443 
Long-lived Assets
United States$3,240,011 $2,078,342 $2,016,185 
Europe607,996 545,211 673,725 
Canada96,210 104,913 102,932 
Asia Pacific157,030 157,084 163,393 
Other85,233 68,949 51,001 
Total$4,186,480 $2,954,499 $3,007,236 
Sales are attributed to countries/regions based upon the plant location from which products are shipped. Long-lived assets are comprised of investments in affiliates, property, plant and equipment, and goodwill and other intangible assets and investment in affiliates (see Notes 1, 6 and 8).
19. Accumulated other comprehensive loss
The following table summarizes the components of accumulated other comprehensive loss and the changes in accumulated other comprehensive loss, net of tax as applicable, for the years ended December 31, 20192022 and 2018:
Foreign
Currency
Items
Defined
Benefit
Pension Items
Gains and Losses on Cash Flow Hedges
Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2017$(198,495) $(467,136) $(641) $(666,272) 
Other comprehensive income/(loss) before reclassifications(53,504) (50,232) (1,380) (105,116) 
Amounts reclassified from accumulated other comprehensive loss to net income897  29,988  71  30,956  
Amounts reclassified from accumulated other comprehensive loss to fixed assets—  —  (305) (305) 
Other comprehensive income/(loss)(52,607) (20,244) (1,614) (74,465) 
Amounts reclassified from accumulated other comprehensive loss to retained earnings—  —  (176) (176) 
Balance at December 31, 2018$(251,102) $(487,380) $(2,431) $(740,913) 
Other comprehensive income/(loss) before reclassifications9,108  (111,493) 2,061  (100,324) 
Amounts reclassified from accumulated other comprehensive loss to net income—  24,460  81  24,541  
Amounts reclassified from accumulated other comprehensive loss to fixed assets—  —  (107) (107) 
Other comprehensive income/(loss)9,108  (87,033) 2,035  (75,890) 
Balance at December 31, 2019$(241,994) $(574,413) $(396) $(816,803) 
2021:
Foreign
Currency
Items
Defined
Benefit
Pension Items
Gains and Losses on Cash Flow Hedges
Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2020$(194,024)$(562,747)$(71)$(756,842)
Other comprehensive (loss)/income before reclassifications(75,052)49,145 7,589 (18,318)
Amounts reclassified from accumulated other comprehensive loss to net loss— 422,205 (6,258)415,947 
Amounts reclassified from accumulated other comprehensive loss to fixed assets— — (212)(212)
Other comprehensive income/(loss)(75,052)471,350 1,119 397,417 
Balance at December 31, 2021$(269,076)$(91,397)$1,048 $(359,425)
Other comprehensive (loss)/income before reclassifications(72,987)(3,471)3,244 (73,214)
Amounts reclassified from accumulated other comprehensive loss to net income3,747 3,895 (5,593)2,049 
Amounts reclassified from accumulated other comprehensive loss to fixed assets— — 507 507 
Other comprehensive (loss)/income(69,240)424 (1,842)(70,658)
Balance at December 31, 2022$(338,316)$(90,973)$(794)$(430,083)



F-38F-39 FORM 10-K SONOCO 20192022 ANNUAL REPORT

The following table summarizes the amounts reclassified from accumulated other comprehensive loss and the affected line items in the consolidated statements of net income for the years ended December 31, 20192022 and 2018:2021:
Amount Reclassified from Accumulated Other Comprehensive Loss
Details about Accumulated Other Comprehensive Loss ComponentsYear Ended December 31, 2022Year Ended December 31, 2021Affected Line Item in the Consolidated Statements of Net Income
Foreign currency items
     Loss on Russia restructuring (see Note 4)$(3,747)$— Restructuring/Asset impairment charges
(3,747)— Net income/(loss)
Defined benefit pension items (see Note 13)
Effect of settlement loss(479)(550,706)Non-operating pension cost
Effect of curtailment loss(43)— Non-operating pension cost
Amortization of defined benefit pension items(6,472)(16,659)Non-operating pension cost
(6,994)(567,365)Income/(loss) before income taxes
3,099 145,160 Provision for/(Benefit from) income taxes
(3,895)(422,205)Net income/ (loss)
Gains and losses on cash flow hedges (see Note 10)
Foreign exchange contracts3,460 3,212 Net Sales
Foreign exchange contracts(2,852)(2,544)Cost of sales
Commodity contracts6,948 7,794 Cost of sales
7,556 8,462 Income/(loss) before income taxes
(1,963)(2,204)Provision for/(Benefit from) income taxes
5,593 6,258 Net income/ (loss)
Amounts reclassified to net income/(loss) from accumulated other comprehensive loss$(2,049)$(415,947)Net income/ (loss)

Details about Accumulated Other Comprehensive Loss ComponentsTwelve Months Ended 
 December 31, 2019		Twelve Months Ended 
 December 31, 2018		Affected Line Item in the Consolidated Statements of Net Income
Foreign currency items
Amounts reclassified to net income$—  $(897) Selling, general and administrative expenses  
—  (897) 
Defined benefit pension items (see Note 13)
Effect of settlement loss(2,377) (730) Non-operating pension cost  
Effect of curtailment loss—  (256) Non-operating pension cost  
Amortization of defined benefit pension items(30,382) (36,689) Non-operating pension cost  
(32,759) (37,675) 
8,299  7,687  Provision for income taxes  
(24,460) (29,988) Net income  
Gains and losses on cash flow hedges (see Note 10)
Foreign exchange contracts1,381  (203) Net Sales  
Foreign exchange contracts(1,758) (20) Cost of sales  
Commodity contracts270  115  Cost of sales  
(107) (108) Income before income taxes  
26  37  Provision for income taxes  
(81) (71) Net income  
Total reclassifications for the period$(24,541) $(30,956) Net income  

The following table summarizes the tax (expense) benefit amounts for the other comprehensive loss components for the years ended December 31, 20192022 and 2018:
For the year ended December 31, 2019For the year ended December 31, 2018
Before Tax AmountTax (Expense) BenefitAfter Tax AmountBefore Tax AmountTax (Expense) BenefitAfter Tax Amount
Foreign currency items:
Other comprehensive income/(loss) before reclassifications$9,108  $—  $9,108  $(53,504) $—  $(53,504) 
Amounts reclassified from accumulated other comprehensive income/(loss) to net income—  —  —  897  —  897  
Gains and losses on foreign currency items:9,108  —  9,108  (52,607) —  (52,607) 
Defined benefit pension items:
Other comprehensive income/(loss) before reclassifications(147,948) 36,455  (111,493) (63,259) 13,027  (50,232) 
Amounts reclassified from accumulated other comprehensive income/(loss) to net income32,759  (8,299) 24,460  37,675  (7,687) 29,988  
Net other comprehensive income/(loss) from defined benefit pension items(115,189) 28,156  (87,033) (25,584) 5,340  (20,244) 
Gains and losses on cash flow hedges:
Other comprehensive income/(loss) before reclassifications2,711  (650) 2,061  (2,096) 716  (1,380) 
Amounts reclassified from accumulated other comprehensive income/(loss) to net income107  (26) 81  108  (37) 71  
Amounts reclassified from accumulated other comprehensive income/(loss) to fixed assets(107) —  (107) (305) —  (305) 
Net other comprehensive income/(loss) from cash flow hedges2,711  (676) 2,035  (2,293) 679  (1,614) 
Other comprehensive income/(loss)$(103,370) $27,480  $(75,890) $(80,484) $6,019  $(74,465) 
2021:
For the year ended December 31, 2022For the year ended December 31, 2021
Before Tax AmountTaxAfter Tax AmountBefore Tax AmountTaxAfter Tax Amount
Foreign currency items:
Other comprehensive loss before reclassifications$(72,987)$— $(72,987)$(75,052)$— $(75,052)
Amounts reclassified from accumulated other comprehensive loss to net income/(loss)3,747 — 3,747 — — — 
Net other comprehensive loss from foreign currency items(69,240)— (69,240)(75,052)— (75,052)
Defined benefit pension items:
Other comprehensive (loss)/ income before reclassifications(3,365)(106)(3,471)63,559 (14,414)49,145 
Amounts reclassified from accumulated other comprehensive loss to net income/(loss)(a)
6,994 (3,099)3,895 567,365 (145,160)422,205 
Net other comprehensive income/(loss) from defined benefit pension items(b)
3,629 (3,205)424 630,924 (159,574)471,350 
Cash flow hedges:
Other comprehensive income/(loss) before reclassifications4,312 (1,068)3,244 10,249 (2,660)7,589 
Amounts reclassified from accumulated other comprehensive loss to net income/(loss)(7,556)1,963 (5,593)(8,462)2,204 (6,258)
Amounts reclassified from accumulated other comprehensive loss to fixed assets805 (298)507 (289)77 (212)
Net other comprehensive (loss)/income from cash flow hedges(2,439)597 (1,842)1,498 (379)1,119 
Other comprehensive (loss)/income$(68,050)$(2,608)$(70,658)$557,370 $(159,953)$397,417 

(a) See Note 13 for more information.
(b) The change innet other comprehensive income/(loss) from defined benefit planspension items includes pretax changes of $(781)$1,391 and $(71)$(32) during the years ended December 31, 20192022 and 2018,2021, related to one of the Company’s equity method investments.

F-39 FORM 10-K SONOCO 2019 ANNUAL REPORT

20. Selected quarterly financial data
The following table sets forth selected quarterly financial data of the Company:
(unaudited)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2019
Net sales$1,351,705  $1,359,721  $1,353,931  $1,308,850  
Gross profit270,121  275,336  265,485  246,887  
Restructuring/Asset impairment charges10,672  13,355  6,615  29,238  
Net income attributable to Sonoco73,663  81,159  92,064  44,899  
Per common share:
Net income attributable to Sonoco:
- basic$0.73  $0.81  $0.91  $0.45  
- diluted$0.73  $0.80  $0.91  $0.44  
Cash dividends
- common$0.41  $0.43  $0.43  $0.43  
Market price
- high$61.79  $66.23  $66.57  $62.77  
- low$51.29  $59.65  $55.44  $55.12  
2018
Net sales$1,304,187  $1,366,373  $1,364,762  $1,355,616  
Gross profit250,602  276,460  259,636  254,308  
Restructuring/Asset impairment charges3,063  3,567  22,061  11,380  
Net income attributable to Sonoco74,055  89,412  72,415  77,678  
Per common share:
Net income attributable to Sonoco:
- basic$0.74  $0.89  $0.72  $0.78  
- diluted$0.73  $0.88  $0.72  $0.77  
Cash dividends
- common$0.39  $0.41  $0.41  $0.41  
Market price
- high$55.43  $53.80  $58.69  $58.31  
- low$46.55  $46.94  $51.18  $50.30  

F-40 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Item 9. Changes in and disagreements with accountantsDisagreements With Accountants on accountingAccounting and financial disclosureFinancial Disclosure
None.
Item 9A. Controls and proceduresProcedures
Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), conducted an evaluation of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act").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, 2019,2022, 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 Overover 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, 2019,2022, 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 ("COSO").
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, 2019.2022. In conducting management's evaluation as described above, Corenso Holdings America, Inc.Sonoco Metal Packaging, LLC ("Corenso") acquired August 9, 2019, as well as Thermoform Engineered Quality, LLC, and Plastique Holdings, LTD, (together "TEQ"Metal Packaging"), a wholly owned subsidiary acquired December 31, 2019,in a business combination on January 26, 2022, and S.P. Holding, Skjern A/S (“Skjern”), a wholly owned subsidiary based in Skjern, Denmark and acquired on November 15, 2022, were excluded. The operations of CorensoMetal Packaging and TEQ, excluded from management's assessment of internal control over financial reporting, collectivelySkjern represent approximately 0.7%14.3% of the Company's consolidated revenues and approximately 2.9%14.7% of total assets as of December 31, 2019.2022 in the aggregate.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 20192022 as stated in their report, which appears at the beginning of Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company's internal control over financial reporting during the three months ended December 31, 2019, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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, 2022, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other informationInformation
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
32
35 FORM 10-K SONOCO 20192022 ANNUAL REPORT

PART III
Item 10. Directors, executive officersExecutive Officers, and corporate governanceCorporate Governance
The information set forth in the Company’s definitive Proxy Statement for the annual meeting of shareholders to be held on April 15, 202019, 2023, to be filed with the SEC within 120 days after December 31, 2022 (the Proxy Statement)"Proxy Statement"), under the captions “Proposal 1: Election of Directors,” and “Delinquent Section 1616(a) Reports,” is incorporated herein by reference. Information about executive officers of the Company is set forth in Item 1 of this Annual Report on Form 10-K under the caption “Executive Officers of the Registrant.“Information About our Executive Officers.”
Code of Ethics – The Company has adopted a code of ethics (as defined in Item 406 of Regulation S-K) that applies to its principal executive officer, principal financial officer, principal accounting officer, and other senior executive and senior financial officers. This code of ethics is available through the Company’s website,www.sonoco.com, and is available in print to any shareholder who requests it. Any waivers or amendments to the provisions of this code of ethics will be posted to this website within four business days after the waiver or amendment.
Audit Committee Members – The Company has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934.Act. The audit committee is comprised of the following members: Theresa J. Drew, Chairperson; Thomas E. Whiddon, Chairman; Sundaram Nagajaran; Philippe Guillemot; Marc D. Oken;Whiddon; Blythe J. McGarvie; Richard G. Kyle; Robert R. Hill; and Lloyd M. Yates.Steven L. Boyd.
Audit Committee Financial Expert – The Company’s Board of Directors has determined that the Company has at least threetwo “audit committee financial experts,” as that term is defined by Item 407(d)(5) of Regulation S-K promulgated by the Securities and Exchange Commission, serving on its audit committee. Theresa J. Drew and Thomas E. Whiddon Blythe J. McGarvie, and Marc D. Oken meet the terms of the definition and are independent based on the criteria in the New York Stock Exchange Listing Standards. Pursuant to the terms of Item 407(d)(5) of Regulation S-K, a person who is determined to be an “audit committee financial expert” will not be deemed an expert for any purpose as a result of being designated or identified as an “audit committee financial expert” pursuant to Item 407, and such designation or identification does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification. Further, the designation or identification of a person as an “audit committee financial expert” pursuant to Item 407 does not affect the duties, obligations or liability of any other member of the audit committee or Board of Directors.
The Company’s Corporate Governance Guidelines, Audit Committee Charter, Corporate Governance and Nominating Committee Charter, and Executive Compensation Committee Charter are available through the Company’s website, www.sonoco.com.website. This information is available in print to any shareholder who requests it.
Item 11. Executive compensationCompensation
The information set forth in the Proxy Statement under the caption “Compensation Committee Interlocks and Insider Participation,” under the caption “Executive Compensation,” and under the caption “Director Compensation” is incorporated herein by reference. The information set forth in the Proxy Statement under the caption “Compensation Committee Report” is also incorporated herein by reference, but pursuant to the Instructions to Item 407(e)(5) of Regulation S-K, such report shall not be deemed to be “soliciting material” or subject to Regulation 14A, and shall be deemed to be “furnished” and not “filed” and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934 as a result of being so furnished.
Item 12. Security ownershipOwnership of certain beneficial ownersCertain Beneficial Owners and managementManagement and related stockholder mattersRelated Stockholder Matters
The information set forth in the Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners,” and under the caption “Security Ownership of Management” is incorporated herein by reference.
 
Equity Compensation Plan Information
The following table sets forth aggregated information about all of the Company’s compensation plans (including individual compensation arrangements) under which equity securities of the Company are authorized for issuance as of December 31, 2019:
Plan category
Number of securities  
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
Weighted-average
exercise price of
outstanding options,  
warrants and rights
(b)
Number of securities
remaining available for  
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))1
(c)
Equity compensation plans approved by security holders2,711,373  $52.95  10,765,398
Equity compensation plans not approved by security holders—  —  —  
Total2,711,373  $52.95  10,765,398  

2022:
Plan category
Number of securities  
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
Weighted-average
exercise price of
outstanding options,  
warrants and rights
(b)
Number of securities
remaining available for  
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))1
(c)
Equity compensation plans approved by security holders2,489,307 $54.98 6,998,566
Equity compensation plans not approved by security holders— — — 
Total2,489,307 $54.98 6,998,566 
1
The Sonoco Products Company 2019 Omnibus Incentive Plan (the "2019 Plan") was adopted at the Company’s 2019 Annual Meeting of Shareholders. The maximum number of shares of common stock that may be issued under this plan was set at 12,000,000 shares, which included all shares remaining under the 2014 Plan. Awards granted under all previous plans which are forfeited, expire or are cancelled without delivery of shares, or which result in forfeiture of shares back to the Company, will be added to the total shares available under the 2019 Plan.shares. At December 31, 2019,2022, a total of 10,765,3986,998,566 shares remain available for future grant under the 2019 Plan.
The weighted-average exercise price of $52.95$54.98 relates to stock appreciation rights, which account for 1,562,123764,806 of the 2,711,3732,489,307 securities issuable upon exercise. The remaining 1,149,2501,724,501 securities relate to deferred compensation stock units, performance-contingent restricted stock units and restricted stock unit awards that have no exercise price requirement.
Item 13. Certain relationshipsRelationships and related transactions,Related Transactions, and director independenceDirector Independence
The information set forth in the Proxy Statement under the captions “Related Party Transactions” and “Corporate Governance – Director Independence Policies” is incorporated herein by reference. Each current member of the Audit, Corporate Governance, and Nominating and Executive Compensation Committees is independent as defined in the listing standards of the New York Stock Exchange.

3336 FORM 10-K SONOCO 20192022 ANNUAL REPORT

Item 14. Principal accountant feesAccountant Fees and servicesServices
The information set forth in the Proxy Statement under the caption “Independent Registered Public Accounting Firm” is incorporated herein by reference.


PART IV 

Item 15. Exhibits and financial statement schedules
Financial Statement Schedules
(a)1 
Financial Statements – The following financial statements are provided under Item 8 – Financial Statements and Supplementary Data of this Annual Report on Form 10-K:
–  Consolidated Statements of Comprehensive Income for the years ended December 31, 20120292, 20120281, and 20120720
–  Consolidated Statements of Changes in Total Equity for the years ended December 31, 20120292, 20120281, and 20120720
2 Financial Statement Schedules
Schedule II – Valuation and Qualifying Accounts for the Years Ended December 31, 2019, 20182022, 2021, and 20172020

Column AColumn BColumn C - Additions Column D Column E
Description
Balance at
Beginning
of Year
Charged to
Costs and
Expenses
 
Charged to
Other
 Deductions 
Balance
at End
of Year
2019
Allowance for Doubtful Accounts$11,692  $4,320    $322  1$1,952  2$14,382  
LIFO Reserve18,854  1,349  3—  —  20,203  
Valuation Allowance on Deferred Tax Assets103,289  2,662    (1,116) 4(512) 5105,347  
2018
Allowance for Doubtful Accounts$9,913  $3,471    $(425) 1$1,267  2$11,692  
LIFO Reserve17,632  1,222  3—  —  18,854  
Valuation Allowance on Deferred Tax Assets47,199  (11,187)   70,993  43,716  5103,289  
2017
Allowance for Doubtful Accounts$10,884  $1,439    $243  1$2,653  2$9,913  
LIFO Reserve17,319  313  3—  —  17,632  
Valuation Allowance on Deferred Tax Assets49,797  6,967    (2,365) 47,200  547,199  

Column AColumn BColumn C - Additions Column D Column E
Description
Balance at
Beginning
of Year
Charged to
Costs and
Expenses
 
Charged to
Other
 Deductions 
Balance
at End
of Year
2022
Allowance for Doubtful Accounts$19,651 $(327)  $(108)1$2,337 2$16,879 
LIFO Reserve22,900 28,442 3— — 51,342 
Valuation Allowance on Deferred Tax Assets93,992 (10,582)  (1,440)4(76)582,046 
2021
Allowance for Doubtful Accounts$20,920 $(824)  $(18)1$427 2$19,651 
LIFO Reserve20,317 2,583 3— — 22,900 
Valuation Allowance on Deferred Tax Assets128,435 (33,532)  (866)445 593,992 
2020
Allowance for Doubtful Accounts$14,382 $8,067   $54 1$1,583 2$20,920 
LIFO Reserve20,203 114 3— — 20,317 
Valuation Allowance on Deferred Tax Assets105,347 22,816   2,447 42,175 5128,435 
1    Includes translation adjustments and other insignificant adjustments.
2    Includes amounts written off.
3    Includes adjustments based on pricing and inventory levels.
4    Includes translation adjustments and increases to deferred tax assets which were previously fully reserved.
5    Includes utilization of capital loss carryforwards, net operating loss carryforwards and other deferred tax assets.
All other schedules not included have been omitted because they are not required, are not applicable or the required information is given in the financial statements or notes thereto.

3 
The exhibits listed on the Exhibit Index to this Form 10-K are incorporated herein by reference.


Item 16. Form 10-K summarySummary
The Company has chosen not to provide a Form 10-K summary.

None.

3437 FORM 10-K SONOCO 20192022 ANNUAL REPORT



Exhibit Index
3-1
3-2
4-1  
4-2  
4-3  
4-4
4-5
10-14-6  
10-2
10-310-1**  

10-410-2**  
10-510-3**  
10-610-4**  
10-710-5**  
10-810-6**  
10-910-7**  
10-1010-8**  
10-1110-9**  
10-1210-10**  
10-1310-11**
10-1410-12**
10-1510-13**
10-1610-14**
10-1710-15**
10-18.110-16**
10-18.2
10-19
10-2010-17**
10-18*


10-2110-19*
10-20**
10-21**
10-22**
10-23*
21
23
31
32
99Proxy Statement, filed in conjunction with annual shareholders’ meeting scheduled for April 15, 2020 (to be filed within 120 days after December 31, 2019)
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHTaxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABTaxonomy ExensionExtension Label Linkbase Document
101.PRETaxonomy Extension PresentaitonPresentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Certain portions of these exhibits have been redacted pursuant to Item 601(b)(2)(ii) or Item 601(b)(10)(iv) of Regulation S-K. The Company hereby agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request.
** Indicates management contract or compensatory plan.



SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 28th day of February 2020.2023.
SONOCO PRODUCTS COMPANY
/s/ R. Howard Coker
R. Howard Coker
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on this 28th day of February 2020.2023.
/s/ Julie C. AlbrechtRobert R. Dillard/s/ James W. KirklandAditya Gandhi
Julie C. AlbrechtRobert R. DillardJames W. KirklandAditya Gandhi
Vice President and Chief Financial OfficerCorporate ControllerVice President and Chief Accounting Officer
(principal financial officer)(principal accounting officer)


/s/ J.R. Haley  Director (Chairman)/s/ R. H. Coker
J.R. HaleyHaley/Director (Chairman)R. H. Coker/President, Chief Executive Officer and Director
/s/ R. H. CokerS.L. Boyd  President, Chief Executive Officer and Director
R. H. Coker
/s/ H.A. CockrellDirector
H.A. Cockrell
/s/ P.L. DaviesDirector
P.L. DaviesS.L. Boyd/DirectorP.L. Davies/Director
/s/ T.J. DrewDirector/s/ P. Guillemot
T.J. DrewDrew/Director
/s/ P. GuillemotDirector
P. GuillemotGuillemot/Director
/s/ R.R. Hill, Jr.Director/s/ E. Istavridis
R.R. Hill, Jr./Lead Independent DirectorE. Istavridis/Director
/s/ R.G. KyleDirector
R.G. Kyle
/s/ B.J. McGarvieDirector
B.J. McGarvieR.G. Kyle/Director
/s/ J.M. MicaliB.J. McGarvie/Director
J.M. Micali
/s/ S. NagarajanDirector
S. Nagarajan
/s/ M.D. OkenDirector
M.D. Oken
/s/ T.E. WhiddonDirector
T.E. WhiddonWhiddon/Director
/s/ L.M. YatesDirector
L.M. Yates