UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
FORM 10-QAmendment No. 1
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 20173, 2021
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-11261
SONOCO PRODUCTS COMPANY
Incorporated under the laws
of South Carolina
I.R.S. Employer Identification
No. 57-0248420
1 N. Second St.
Hartsville, South Carolina 29550
Telephone: 843/383-7000

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
No par value common stockSONNew York Stock Exchange, LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý☒   No  ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ý☒    No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerý☒Accelerated filer¨☐
Non-accelerated filer
¨(do not check if a smaller reporting company)
☐		Smaller reporting company¨☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  ý☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock at October 20, 2017:22, 2021:
Common stock, no par value: 99,400,898

98,326,308



EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 on Form 10-Q/A is to amend the certification filed as Exhibit 32 to Sonoco Products Company's (the "Company") Form 10-Q for the quarter ended October 3, 2021, filed on November 2, 2021 (the “Original Filing”) to correct the inadvertent omission of the conformed signature of the Chief Executive Officer and the Chief Financial Officer. The certification was fully executed on November 2, 2021 and was in the Company's possession at the time of the Original Filing. Other than as set forth above, this Amendment No. 1 does not modify, amend or update in any way the financial or other information contained in the Original Filing, nor does this Amendment No. 1 reflect events that may have occurred after the Original Filing.





SONOCO PRODUCTS COMPANY
INDEX
4
Item 1.
34
Item 1.
3
Condensed Consolidated Balance Sheets - October 1, 20173, 2021 (unaudited) and December 31, 20162020 (unaudited)
34
45
6
57
69
710
3038
Item 2.
3139
Item 3.
4760
Item 4.
4760
4860
Item 1.
4860
Item 2.
4961
Item 6.Exhibits.
Exhibits.62
49



3


Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars and shares in thousands)
  October 1,
2017		 December 31,
2016*
Assets    
Current Assets    
Cash and cash equivalents $247,908
 $257,226
Trade accounts receivable, net of allowances 751,445
 625,411
Other receivables 51,229
 43,553
Inventories:    
Finished and in process 187,133
 127,446
Materials and supplies 285,823
 245,368
Prepaid expenses 51,787
 49,764
  1,575,325
 1,348,768
Property, Plant and Equipment, Net 1,182,384
 1,060,017
Goodwill 1,240,439
 1,092,215
Other Intangible Assets, Net 342,316
 224,958
Deferred Income Taxes 52,549
 42,130
Other Assets 176,615
 155,115
Total Assets $4,569,628
 $3,923,203
Liabilities and Equity    
Current Liabilities    
Payable to suppliers $559,432
 $477,831
Accrued expenses and other 294,889
 273,996
Notes payable and current portion of long-term debt 125,916
 32,045
Accrued taxes 10,931
 18,744
  991,168
 802,616
Long-term Debt, Net of Current Portion 1,300,191
 1,020,698
Pension and Other Postretirement Benefits 388,492
 447,339
Deferred Income Taxes 91,009
 59,753
Other Liabilities 40,142
 38,092
Commitments and Contingencies 
 
Sonoco Shareholders’ Equity    
Common stock, no par value    
Authorized 300,000 shares
99,398 and 99,193 shares issued and outstanding at
October 1, 2017 and December 31, 2016, respectively		 7,175
 7,175
Capital in excess of stated value 325,707
 321,050
Accumulated other comprehensive loss (596,953) (738,380)
Retained earnings 1,996,244
 1,942,513
Total Sonoco Shareholders’ Equity 1,732,173
 1,532,358
Noncontrolling Interests 26,453
 22,347
Total Equity 1,758,626
 1,554,705
Total Liabilities and Equity $4,569,628
 $3,923,203
October 3,
2021		December 31,
2020*
Assets
Current Assets
Cash and cash equivalents$160,012 $564,848 
Trade accounts receivable, net of allowances755,638 658,808 
Other receivables94,884 103,636 
Inventories, net:
Finished and in process186,872 167,018 
Materials and supplies343,239 283,673 
Prepaid expenses60,010 52,564 
1,600,655 1,830,547 
Property, Plant and Equipment, Net1,232,074 1,244,110 
Goodwill1,323,723 1,389,255 
Other Intangible Assets, Net281,533 321,934 
Deferred Income Taxes38,398 42,479 
Right of Use Asset-Operating Leases269,855 296,020 
Other Assets178,912 152,914 
Total Assets$4,925,150 $5,277,259 
Liabilities and Equity
Current Liabilities
Payable to suppliers$686,113 $536,939 
Accrued expenses and other366,126 511,489 
Notes payable and current portion of long-term debt275,799 455,784 
Accrued taxes21,203 7,415 
1,349,241 1,511,627 
Long-term Debt, Net of Current Portion1,192,707 1,244,440 
Noncurrent Operating Lease Liabilities236,590 262,048 
Pension and Other Postretirement Benefits164,584 171,518 
Deferred Income Taxes67,627 86,018 
Other Liabilities53,669 91,080 
Sonoco Shareholders’ Equity
Common stock, no par value
Authorized 300,000 shares
98,326 and 100,447 shares issued and outstanding
at October 3, 2021 and December 31, 2020, respectively
7,175 7,175 
Capital in excess of stated value172,655 314,056 
Accumulated other comprehensive loss(378,910)(756,842)
Retained earnings2,049,072 2,335,216 
Total Sonoco Shareholders’ Equity1,849,992 1,899,605 
Noncontrolling Interests10,740 10,923 
Total Equity1,860,732 1,910,528 
Total Liabilities and Equity$4,925,150 $5,277,259 
*The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.
See accompanying Notes to Condensed Consolidated Financial Statements

4



SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars and shares in thousands except per share data)
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net sales$1,415,193 $1,312,314 $4,151,251 $3,861,095 
Cost of sales1,157,462 1,055,304 3,352,966 3,089,512 
Gross profit257,731 257,010 798,285 771,583 
Selling, general and administrative expenses130,580 126,117 404,617 371,376 
Restructuring/Asset impairment charges3,488 24,149 8,889 59,633 
Gain/(Loss) on divestiture of businesses2,849 — (2,667)— 
Operating profit126,512 106,744 382,112 340,574 
Non-operating pension costs525 7,453 562,818 22,632 
Interest expense14,753 19,377 50,767 55,469 
Interest income534 796 4,023 2,158 
Loss from the early extinguishment of debt— — 20,184 — 
Income/(Loss) before income taxes111,768 80,710 (247,634)264,631 
Provision for/(Benefit from) income taxes2,564 (649)(91,542)49,337 
Income/(Loss) before equity in earnings of affiliates109,204 81,359 (156,092)215,294 
Equity in earnings of affiliates, net of tax2,351 1,939 5,701 3,230 
Net income/(loss)111,555 83,298 (150,391)218,524 
Net (income)/loss attributable to noncontrolling interests(415)151 (243)581 
Net income/(loss) attributable to Sonoco$111,140 $83,449 $(150,634)$219,105 
Weighted average common shares outstanding:
Basic98,955 100,974 100,039 100,935 
Diluted99,425 101,245 100,039 101,155 
Per common share:
Net income/(loss) attributable to Sonoco:
Basic$1.12 $0.83 $(1.51)$2.17 
Diluted$1.12 $0.82 $(1.51)$2.17 
  Three Months Ended Nine Months Ended
  October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
Net sales $1,324,634
 $1,208,724
 $3,737,632
 $3,640,680
Cost of sales 1,073,761
 973,351
 3,030,662
 2,918,041
Gross profit 250,873
 235,373
 706,970
 722,639
Selling, general and administrative expenses 130,280
 121,583
 413,626
 382,387
Restructuring/Asset impairment charges 511
 8,947
 12,519
 41,453
Income before interest and income taxes 120,082
 104,843
 280,825
 298,799
Interest expense 14,741
 13,133
 41,649
 41,414
Interest income 1,094
 696
 3,152
 1,646
Income before income taxes 106,435
 92,406
 242,328
 259,031
Provision for income taxes 35,545
 29,618
 78,251
 83,602
Income before equity in earnings of affiliates 70,890
 62,788
 164,077
 175,429
Equity in earnings of affiliates, net of tax 2,521
 3,190
 7,320
 7,457
Net income $73,411
 $65,978
 $171,397
 $182,886
Net income attributable to noncontrolling interests (599) (583) (1,727) (1,325)
Net income attributable to Sonoco $72,812
 $65,395
 $169,670
 $181,561
Weighted average common shares outstanding:        
Basic 100,275
 100,925
 100,214
 101,320
Diluted 100,684
 101,579
 100,793
 101,960
Per common share:        
Net income attributable to Sonoco:        
Basic $0.73
 $0.65
 $1.69
 $1.79
Diluted $0.72
 $0.64
 $1.68
 $1.78
Cash dividends $0.39
 $0.37
 $1.15
 $1.09

See accompanying Notes to Condensed Consolidated Financial Statements

5



SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (unaudited)
(Dollars in thousands)
  Three Months Ended Nine Months Ended
  October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
Net income $73,411
 $65,978
 $171,397
 $182,886
Other comprehensive income/(loss):        
Foreign currency translation adjustments 27,445
 (3,157) 87,807
 10,282
Changes in defined benefit plans, net of tax 10,301
 5,799
 58,311
 14,753
Changes in derivative financial instruments, net of tax (186) 641
 (3,653) 5,263
Other comprehensive income 37,560
 3,283
 142,465
 30,298
Comprehensive income 110,971
 69,261
 313,862
 213,184
Net income attributable to noncontrolling interests (599) (583) (1,727) (1,325)
Other comprehensive loss (income) attributable to noncontrolling interests (517) 363
 (1,038) (1,775)
Comprehensive income attributable to Sonoco $109,855
 $69,041
 $311,097
 $210,084
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net income/(loss)$111,555 $83,298 $(150,391)$218,524 
Other comprehensive (loss)/ income:
     Foreign currency translation adjustments(37,741)24,647 (57,686)(37,701)
     Changes in defined benefit plans, net of tax1,693 5,280 429,823 15,476 
Changes in derivative financial instruments, net of tax930 2,285 5,370 (440)
Other comprehensive (loss)/income$(35,118)$32,212 $377,507 $(22,665)
Comprehensive income:76,437 115,510 227,116 195,859 
Net (income)/loss attributable to noncontrolling interests(415)151 (243)581 
Other comprehensive loss attributable to noncontrolling interests664 27 425 2,254 
Comprehensive income attributable to Sonoco$76,686 $115,688 $227,298 $198,694 
See accompanying Notes to Condensed Consolidated Financial Statements

6


SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CHANGES IN TOTAL EQUITY (unaudited)
(Dollars in thousands)
Total
Equity		Common SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2019$1,815,705 100,198 $7,175 $310,778 $(816,803)$2,301,532 $13,023 
Net income/(loss)80,236 80,445 (209)
Other comprehensive income/(loss):
Translation loss(95,212)(93,575)(1,637)
Defined benefit plan adjustment, net of tax5,780 5,780 
Derivative financial instruments, net of tax(4,555)(4,555)
Other comprehensive loss$(93,987)$(92,350)$(1,637)
Dividends(43,339)(43,339)
Issuance of stock awards376 196 376 
Shares repurchased(3,938)(65)(3,938)
Stock-based compensation597 597 
Impact of new accounting pronouncements(209)(209)
March 29, 2020$1,755,441 100,329 $7,175 $307,813 $(909,153)$2,338,429 $11,177 
Net income/(loss)54,990 55,211 $(221)
Other comprehensive income/(loss):
Translation gain/(loss)32,864 33,454 (590)
Defined benefit plan adjustment, net of tax4,416 4,416 
Derivative financial instruments, net of tax1,830 1,830 
Other comprehensive income/(loss)$39,110 $39,700 $(590)
Dividends(43,451)(43,451)
Issuance of stock awards287 2 287 
Shares repurchased(12)(1)(12)
Stock-based compensation1,339 1,339 
June 28, 2020$1,807,704 100,330 $7,175 $309,427 $(869,453)$2,350,189 $10,366 
Net income/(loss)83,298 83,449 (151)
Other comprehensive income/(loss):
Translation gain/(loss)24,647 24,674 (27)
Defined benefit plan adjustment, net of tax5,280 5,280 — 
Derivative financial instruments, net of tax2,285 2,285 — 
Other comprehensive income/(loss)$32,212 $32,239 $(27)
Dividends(43,366)(43,366)
Issuance of stock awards256 150 256 
Shares repurchased(3,385)(64)(3,385)
Stock-based compensation4,614 4,614 
September 27, 2020$1,881,333 100,416 $7,175 $310,912 $(837,214)$2,390,272 $10,188 
7

  Nine Months Ended
  October 1,
2017		 October 2,
2016
Cash Flows from Operating Activities:    
Net income $171,397
 $182,886
Adjustments to reconcile net income to net cash provided by operating activities:    
Asset impairment 1,486
 7,157
Depreciation, depletion and amortization 159,130
 156,542
Share-based compensation expense 9,028
 14,277
Equity in earnings of affiliates (7,320) (7,457)
Cash dividends from affiliated companies 5,467
 7,090
Net gain on disposition of assets 833
 14,809
Pension and postretirement plan expense 66,245
 34,165
Pension and postretirement plan contributions (52,549) (39,946)
Tax effect of share-based compensation exercises —
 2,365
Excess tax benefit of share-based compensation —
 (2,406)
Net increase/(decrease) in deferred taxes (2,126) 2,998
Change in assets and liabilities, net of effects from acquisitions, dispositions, and foreign currency adjustments:    
Trade accounts receivable (70,908) (69,189)
Inventories (14,965) (11,289)
Payable to suppliers 29,321
 7,678
Prepaid expenses (2,504) 3,996
Accrued expenses 1,229
 16,350
Income taxes payable and other income tax items (1,886) 22,951
Other assets and liabilities (9,769) 5,700
Net cash provided by operating activities 282,109
 348,677
Cash Flows from Investing Activities:    
Purchase of property, plant and equipment (144,738) (142,073)
Cost of acquisitions, net of cash acquired (383,358) (21,338)
Cash paid for disposition of assets —
 (8,436)
Proceeds from the sale of assets 3,743
 6,565
Investment in affiliates and other, net 1,739
 63
Net cash used in investing activities (522,614) (165,219)
Cash Flows from Financing Activities:    
Proceeds from issuance of debt 436,335
 230,393
Principal repayment of debt (196,198) (269,017)
Net change in commercial paper 98,000
 —
Net increase in outstanding checks 500
 6,796
Excess tax benefit of share-based compensation —
 2,406
Cash dividends (114,368) (109,821)
Shares acquired (5,942) (65,015)
Net cash provided by/(used in) financing activities 218,327
 (204,258)
Effects of Exchange Rate Changes on Cash 12,860
 (2,313)
Net Decrease in Cash and Cash Equivalents (9,318) (23,113)
Cash and cash equivalents at beginning of period 257,226
 182,434
Cash and cash equivalents at end of period $247,908
 $159,321
Total EquityCommon SharesCapital in
Excess of
Stated Value		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Noncontrolling
Interests
OutstandingAmount
December 31, 2020$1,910,528 100,447 $7,175 $314,056 $(756,842)$2,335,216 $10,923 
Net income/(loss)72,293 72,297 (4)
Other comprehensive income/(loss):
Translation loss(32,541)(32,021)(520)
Defined benefit plan adjustment, net of tax5,385 5,385 
Derivative financial instruments, net of tax958 958 
Other comprehensive loss$(26,198)$(25,678)$(520)
Dividends(45,510)(45,510)
Issuance of stock awards364 245 364 
Shares repurchased(5,051)(85)(5,051)
Stock-based compensation6,372 6,372 
April 4, 2021$1,912,798 100,607 $7,175 $315,741 $(782,520)$2,362,003 $10,399 
Net loss(334,239)(334,070)(169)
Other comprehensive income
Translation gain12,596 11,837 759 
Defined benefit plan adjustment, net of tax422,745 422,745 
Derivative financial instruments, net of tax3,482 3,482 
Other comprehensive income$438,823 $438,064 $759 
Dividends(45,503)(45,503)
Issuance of stock awards246 41 246 
Shares repurchased(154,519)(1,819)(154,519)
Stock-based compensation4,827 4,827 
July 4, 2021$1,822,433 98,829 $7,175 $166,295 $(344,456)$1,982,430 $10,989 
Net income111,555 111,140 415 
Other comprehensive loss:
Translation loss(37,741)(37,077)(664)
Defined benefit plan adjustment, net of tax1,693 1,693 — 
Derivative financial instruments, net of tax930 930 — 
Other comprehensive loss(35,118)(34,454)(664)
Dividends(44,498)(44,498)
Issuance of stock awards251 3 251 
Shares repurchased(83)(506)(83)
Stock-based compensation6,192 6,192 
October 3, 2021$1,860,732 98,326 $7,175 $172,655 $(378,910)$2,049,072 $10,740 

See accompanying Notes to Condensed Consolidated Financial Statements
8

SONOCO PRODUCTS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in thousands)
Nine Months Ended
October 3, 2021September 27, 2020
Cash Flows from Operating Activities:
Net (loss)/income$(150,391)$218,524 
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Asset impairment3,490 25,364 
Depreciation, depletion and amortization181,408 186,602 
Loss on early extinguishment of debt20,184 — 
Share-based compensation expense17,392 6,551 
Equity in earnings of affiliates(5,701)(3,230)
Cash dividends from affiliated companies5,182 4,367 
Net gain on disposition of assets(2,376)(3,298)
Net loss on divestiture of businesses2,667 — 
Pension and postretirement plan expense583,340 43,146 
Pension and postretirement plan contributions(165,280)(34,795)
Net (decrease)/increase in deferred taxes(164,581)10,013 
Change in assets and liabilities, net of effects from acquisitions and foreign currency adjustments:
Trade accounts receivable(142,699)(42,102)
Inventories(95,066)10,621 
Payable to suppliers163,193 15,708 
Prepaid expenses(17,756)(1,857)
Accrued expenses10,354 40,854 
Income taxes payable and other income tax items(8,531)(17,466)
Other assets and liabilities(14,751)30,499 
Net cash provided by operating activities220,078 489,501 
Cash Flows from Investing Activities:
Purchases of property, plant and equipment(156,592)(116,667)
Cost of acquisitions, net of cash acquired(3,155)(49,262)
Proceeds from the sale of businesses, net91,569 — 
Proceeds from the sale of assets10,536 8,240 
Other net investing proceeds6,776 571 
Net cash used in investing activities(50,866)(157,118)
Cash Flows from Financing Activities:
Proceeds from issuance of debt138,382 1,107,127 
Principal repayment of debt(582,838)(428,966)
Net change in commercial paper202,000 (250,000)
Net (decrease)/increase in outstanding checks(10,736)8,544 
Proceeds from foreign exchange forward contracts and interest rate swaps4,387 14,480 
Payment of contingent consideration— (3,000)
Cash dividends(134,648)(129,446)
Excess cash costs of early extinguishment of debt(20,111)— 
Payments for share repurchases(159,654)(7,335)
Net cash (used)/provided by financing activities(563,218)311,404 
Effects of Exchange Rate Changes on Cash(10,830)(6,391)
Net (Decrease)/Increase in Cash and Cash Equivalents(404,836)637,396 
Cash and cash equivalents at beginning of period564,848 145,283 
Cash and cash equivalents at end of period$160,012 $782,679 
See accompanying Notes to Condensed Consolidated Financial Statements
9
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)





Note 1: Basis of Interim Presentation
In the opinion of the management of Sonoco Products Company (the “Company” or “Sonoco”), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments, unless otherwise stated) necessary to state fairly the consolidated financial position, results of operations and cash flows for the interim periods reported herein. Operating results for the three and nine months ended October 1, 2017,3, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2021. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.2020.
With respect to the unaudited condensed consolidated financial information of the Company for the three- and nine-month periods ended October 1, 20173, 2021 and October 2, 2016September 27, 2020 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated October 31, 2017November 2, 2021 appearing herein, states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.
As previously disclosed, the Company changed its operating and reporting structure in January 2021 and, as a result, realigned certain of its reportable segments effective January 1, 2021. The revised structure consists of 2 reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as "All Other." Additional information regarding segment realignment is provided in Note 15 to these Condensed Consolidated Financial Statements. All segment results for prior periods have been recast to conform to the new presentation.


Note 2: New Accounting Pronouncements
In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities, which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The update to the standard is effective for periods beginning after December 15, 2018, with early adoption permitted in any interim period after issuance of this update. The Company does not expect the implementation of ASU 2017-12 to have a material effect on its consolidated financial statements.
In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires an employer to report service cost in the same line item as other compensation costs arising from employees during the period. The other components of net benefit cost as defined are required to be presented separately from the service cost component and outside a subtotal of income from operations, if one is presented, or disclosed. This update also allows only the service cost component to be eligible for capitalization when applicable and is effective for periods beginning after December 15, 2017. The amendments should be applied retrospectively for the presentation of the components of net benefit cost in the income statement and prospectively for the capitalization of the service cost component. The Company does not expect the implementation of ASU 2017-07 to have a material effect on its consolidated financial statements.
In November 2016, the FASB issued ASU 2016-18, "Restricted Cash,"requiring that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in ASU 2016-18 do not provide a definition of restricted cash or restricted cash equivalents. The guidance is effective for periods beginning after December 15, 2017, on a retrospective basis. The Company does not expect the implementation of ASU 2016-18 to have a material impact on its consolidated financial statements.



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

In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," providing clarification on eight cash flow classification issues, including 1) debt prepayment or debt extinguishment costs, 2) settlement of relatively insignificant debt instruments, 3) contingent consideration payments, 4) insurance claim settlements, 5) life insurance settlements, 6) distributions received from equity method investees, 7) beneficial interests in securitization transactions, and 8) separately identifiable cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not expect the implementation of ASU 2016-15 to have a material effect on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which impacts several aspects of the accounting for share-based payment transactions, including among others, the classification of excess tax benefits in the statements of income and cash flows and accounting for forfeitures. The Company's adoption of this update effective January 1, 2017 resulted in the recognition of $2,273 of excess tax benefits in the income statement duringDuring the nine-month period ended October 1, 2017. In accordance with the provisions of this ASU, excess tax benefits have also been recognized on a prospective basis within the operating section of the consolidated statement of cash flows for the nine-month period ended October 1, 2017, rather than the financing section. Pursuant to adoption of the new ASU, the Company recorded a cumulative charge to retained earnings of $318 for the elimination of estimated forfeitures associated with the Company's share-based compensation. The Company has elected to recognize forfeitures prospectively as they occur beginning January 1, 2017.
In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," which provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. The amendments in this update affect the guidance in ASU No. 2014-09 and are effective in the same time frame as ASU 2014-09 as discussed below.
In February 2016, the FASB issued ASU 2016-02, "Leases" which changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance on the balance sheet and requires disclosure of key information about leasing arrangements 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. The guidance is effective for reporting periods beginning after December 15, 2018, including interim periods within those fiscal years and requires retrospective application. The Company is still assessing the impact of ASU 2016-02 on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, "Revenue From Contracts With Customers," which changes the definitions/criteria used to determine when revenue should be recognized from being based on risks and rewards to being based on control. Among other changes, ASU 2014-09 changes the manner in which variable consideration is recognized, requires recognition of the time value of money when payment terms exceed one year, provides clarification on accounting for contract costs, and expands disclosure requirements. ASU 2014-09 is effective for reporting periods beginning after December 15, 2017.  Although the Company will not complete its final assessment and quantification of the impact of ASU 2014-09 on its consolidated financial statements until adoption, it expects the adoption to have the effect of accelerating the timing of revenue recognition compared to current standards for those arrangements under which the Company is producing customer-specific products without alternative use and would be entitled to payment for work completed, including a reasonable margin. The Company is still in the process of developing an estimate of the impact of the transition adjustment on its consolidated financial statements. The Company plans to adopt ASU 2014-09 in the first quarter of fiscal 2018 following the modified retrospective transition method.
During the three- and nine-month periods ended October 1, 2017,3, 2021, 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 October 1, 2017,3, 2021, there wereare no other pronouncements pending adoption that are expected to have a material impact on the Company’s consolidated financial statements.




Note 3: Acquisitions and Divestitures

Acquisitions
On August 3, 2021, the Company completed the acquisition of Allied Packaging Pty Ltd, a privately owned manufacturer of paper packaging and related manufacturing equipment, consisting of a single manufacturing facility in Sydney, Australia, for total cash consideration of $802. Allied Packaging's financial results from the date acquired are included in the Company's Industrial Paper Packaging segment.
On March 8, 2021, the Company completed the acquisition of TuboTec, a small tube and core operation in Brazil, for total cash consideration of $841. TuboTec's financial results from the date acquired are included in the Company's Industrial Paper Packaging segment.
During the nine months ended October 3, 2021, the Company reached a final working capital settlement related to the August 3, 2020 acquisition of Can Packaging, a designer and manufacturer of sustainable paper packaging and related manufacturing equipment, based in Habsheim, France. Under the settlement, the Company made an additional cash payment of $1,512 and recorded a corresponding increase in goodwill. Goodwill for Can Packaging, none of which is expected to be deductible for income tax purposes, consists of increased access to certain markets. Can Packaging's financial results from the date acquired are included in the Company's Consumer Packaging segment.
The valuations of the assets acquired and liabilities assumed in the 2020 acquisitions of Can Packaging and a small tube and core operation in Jacksonville, Florida, were finalized in the first quarter of 2021. No additional measurement period adjustments were subsequently recorded.
10
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


Note 3: Acquisitions
On July 24, 2017, the Company completed the acquisition of Clear Lam Packaging, Inc. ("Clear Lam") for $164,585, net of cash acquired. Final consideration will be subject to an adjustment for working capital, which is expected to be completed by the end of the first quarter of 2018. Clear Lam manufactures high barrier flexible and forming films used to package a variety 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. The Company financed a portion of the transaction with $100,000 in borrowings from a $250,000 five-year term loan with the remaining purchase price funded from available short-term credit facilities.
The provisional fair values of the assets acquired and liabilities assumed in connection with the acquisition of Clear Lam are as follows:
Trade accounts receivable$10,578
Inventories27,299
Property, plant and equipment25,673
Goodwill48,818
Other intangible assets77,600
Trade accounts payable(14,455)
Other net tangible assets /(liabilities)(10,928)
Net assets$164,585
  
Management is continuing to finalize its valuation of certain assets and liabilities of Clear Lam including, but not limited to: inventory; property, plant and equipment; other intangible assets; deferred income taxes; and capital leases. Factors comprising goodwill, all of which is expected to be deductible for income tax purposes, include increased access to certain markets as well as the value of the assembled workforce. Clear Lam's financial results are included in the Company's Consumer Packaging segment. 
On March 14, 2017, the Company completed the acquisition of Packaging Holdings, Inc. and subsidiaries, including Peninsula Packaging LLC ("Packaging Holdings"), for $218,774, net of cash acquired. Packaging Holdings manufactures thermoformed packaging for a wide range of whole fresh fruits, pre-cut fruits and produce, prepared salad mixes, as well as baked goods in retail supermarkets from five manufacturing facilities, including four in the United States and one in Mexico. The Company financed the transaction with a combination of cash and borrowings including a $150,000 three-year term loan.
The fair values of the assets acquired and liabilities assumed in connection with the acquisition of Packaging Holdings are as follows:
Trade accounts receivable$14,143
Inventories43,276
Property, plant and equipment53,787
Goodwill72,316
Other intangible assets60,190
Trade accounts payable(22,286)
Other net tangible assets /(liabilities)(2,652)
Net assets$218,774
  
During the third quarter of 2017, the Company continued to finalize its valuations of certain assets and liabilities of Packaging Holdings based on new information obtained about facts and circumstances that existed as of the acquisition date. The continuing valuation includes, but is not limited to: inventory; property, plant and equipment; other intangible assets; deferred income taxes; and capital leases. The valuations are expected to be completed in the fourth quarter of 2017. Factors comprising goodwill, of which approximately $30,500 is expected to be deductible for income tax purposes, include increased access to certain markets as well as the value of the assembled workforce. Packaging
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
(unaudited)

Holding's financial results are included in the Company's Consumer Packaging segment and the business will operate as the Peninsula brand of thermoformed packaging products within the Company's global plastics division. 
The Company has accounted for the Packaging Holdings and Clear Lamits acquisitions as business combinations under the acquisition method of accounting, in accordance with the business combinations subtopic of the Accounting Standards Codification and has included theirthe results of operations of the acquired businesses in the Company’sCompany's Condensed Consolidated Statements of Income.
The following table presents the aggregate, unaudited financial results for Packaging Holdings and Clear LamIncome from their respective dates of acquisition:acquisition.
Divestitures
 (unaudited)
Aggregate Supplemental InformationThree Months Ended Nine Months Ended
Packaging Holdings and Clear LamOctober 1, 2017 October 1, 2017
Actual net sales$77,764
 $145,983
Actual net income$1,976
 $2,160
    
Although neitherAs previously disclosed, the Company completed the sale of its U.S. display and packaging business, part of the acquisitions completed during"All Other" group of businesses, to Hood Container Corporation on April 4, 2021 for $80,000 in cash. This business provided design, manufacturing and fulfillment of point-of-purchase displays, as well as contract packaging services, for consumer product customers and had approximately 450 employees. Its operations included 8 manufacturing and fulfillment facilities and 4 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 nine monthsprojected levels at the time of closing. Net cash proceeds of $79,704 were received on April 5, 2021 and the Company recognized a loss on the divestiture of this business of $5,516, before tax, in the first quarter of 2021. During the quarter ended October 1, 2017, is considered individually material, they are considered material on a combined basis. The following table presents3, 2021, the Company's estimated unaudited pro forma consolidated results forCompany finalized the three and nine-month periods ended October 1, 2017 and October 2, 2016, assuming both acquisitions had occurred on 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.
 (unaudited) (unaudited)
Pro Forma Supplemental InformationThree Months Ended Nine Months Ended
ConsolidatedOctober 1, 2017October 2, 2016 October 1, 2017October 2, 2016
Net sales$1,332,532
$1,293,139
 $3,844,048
$3,873,977
Net income attributable to Sonoco$73,284
$66,334
 $172,470
$173,219
Earnings per share:     
  Pro forma basic$0.73$0.66 $1.72$1.71
  Pro forma diluted$0.73$0.65 $1.71$1.70
    
The pro forma information above does not project the Company’s expected results of 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 those of the Company. Pro forma information for both 2017 and 2016 includes adjustments to depreciation, amortization, interest expense, and income taxes. Acquisition-related costs of $4,285 and non-recurring expensesworking capital settlement related to fair value adjustments to acquisition-date inventorythis sale. The settlement resulted in additional cash proceeds of $5,750 were recognized in 2017 in connection with$1,971 and the acquisitionsbuyer's assumption of Packaging Holdings and Clear Lam. These costs are excluded from 2017 pro forma net income and reflected as though having been incurred on January 1, 2016.
During the nine-month period ended October 1, 2017, the Company updated its valuations of the assets andcertain liabilities acquired in conjunction with the 2016 acquisitions of Plastic Packaging Inc. (“PPI”) and Laminar Medica (“Laminar”) based on information obtained about facts and circumstances that existed as of their respective acquisition dates.totaling $786. As a result, measurement period adjustments were made tothe Company recognized a reduction in the previously disclosed provisional fair valuesreported loss on the sale of PPI'sthis 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 foods thermoforming business in Wilson, North Carolina ("Wilson Thermoforming") to Placon for net assets that increased identifiable intangibles by $1,400, increased property, plantcash proceeds of $3,528, resulting in the recognition of a pre-tax gain on the sale of $92.
Assets and equipment by $400, increasedliabilities disposed of in the deferred tax liability by $1,085,sales of U.S. Display and decreased goodwill by $715.  The measurement period adjustments toPackaging 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 sale of business$2,759 $(92)

As previously disclosed, provisional fair valuesthe Company completed the divestiture of Laminar'sits 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 assets decreased goodwill by $326, decreased deferred tax liabilities by $487cash 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 to be released in the second quarter of 2022, pending any indemnity claims. The receipt of the additional cash proceeds is reflected in "Proceeds from the sale of businesses, net" in the Condensed Consolidated Statement of Cash Flows.
The decision to sell its global display and decreased property, plantpackaging businesses was part of the Company's efforts to simplify its operating structure to focus on growing its core Consumer and equipment by $161.Industrial packaging businesses around the world. These

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


sales are not expected to notably affect consolidated operating margin percentages, nor do they represent a strategic shift for the Company that will 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.
Acquisition-relatedThe 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.
Acquisition and Divestiture-Related Transaction Costs
Acquisition and divestiture-related transaction costs of $963totaling $1,015 and $943$913 were incurred during the three months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively, and $6,233$12,503 and $2,092$2,941 during the nine months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively. Acquisition-relatedThese costs, consistconsisting primarily of legal and professional fees, and are included in "Selling,“Selling, general and administrative expenses"expenses” in the Company'sCompany’s Condensed Consolidated Statements of Income.

Note 4: Shareholders' Equity
EarningsEarnings/(Loss) per Share
The following table sets forth the computation of basic and diluted earningsearnings/(loss) per share (dollars and sharesshare:
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Numerator:
Net income/(loss) attributable to Sonoco$111,140 $83,449 $(150,634)$219,105 
Denominator:
Weighted average common shares outstanding:
Basic98,955 100,974 100,039 100,935 
Dilutive effect of stock-based compensation470 271 — 220 
Diluted99,425 101,245 100,039 101,155 
Net income/(loss) attributable to Sonoco per common share:
Basic$1.12 $0.83 $(1.51)$2.17 
Diluted$1.12 $0.82 $(1.51)$2.17 
Cash dividends$0.45 $0.43 $1.35 $1.29 
No adjustments were made to "Net income/(loss) attributable to Sonoco" in thousands, exceptthe computations of net income/(loss) attributable to Sonoco per share data): common share.
Anti-dilutive Securities
  Three Months Ended Nine Months Ended
  October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
Numerator:        
Net income attributable to Sonoco $72,812
 $65,395
 $169,670
 $181,561
Denominator:        
Weighted average common shares outstanding:        
Basic 100,275
 100,925
 100,214
 101,320
Dilutive effect of stock-based compensation 409
 654
 579
 640
Diluted 100,684
 101,579
 100,793
 101,960
Net income attributable to Sonoco per common share:      
Basic $0.73
 $0.65
 $1.69
 $1.79
Diluted $0.72
 $0.64
 $1.68
 $1.78
Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes the proceeds from the exercise of all dilutive stock appreciation rights (SARs) are used to repurchase the Company’s common stock. Certain SARs are not dilutive because either the exercise price is greater than the average market price of the stock during the reporting period or assumed repurchases from proceeds from the exercise of the SARs were antidilutive. These stock appreciation rightsSARs may become dilutive in the future if the market price of the Company's common stock appreciates.
The average numbernumbers of stock appreciation rightsSARs that were not dilutiveanti-dilutive and, therefore, not included in the computation of diluted earnings per share during the three- and nine-month periods ended October 1, 20173, 2021 and October 2, 2016 wasSeptember 27, 2020 were as follows (in thousands):follows:
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Anti-dilutive stock appreciation rights— 752 142 844 
12
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

  Three Months Ended Nine Months Ended
  October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
         
Anti-dilutive stock appreciation rights 531
 —
 473
 477
No adjustments were made toDiluted earnings per share is computed by dividing net income attributable to Sonocoby the weighted 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 loss is reported. Diluted net loss per share of common stock for the computationsnine-month period ended October 3, 2021 is the same as basic net loss per share because otherwise dilutive securities are excluded from the computation of earningsdiluted net loss per share. The following table sets forth the potentially dilutive securities excluded from the computation of diluted net loss per share during the nine-month period ended October 3, 2021:
Nine Months Ended
October 3, 2021
Dilutive securities excluded due to reported loss469 
Stock Repurchases
On February 10, 2016,April 20, 2021, the Company’sCompany's Board of Directors (the "Board") authorized the repurchase of the Company's common stock in an aggregate amount of up to 5,000$350,000. Following the transactions described below, a total of $196,385 remains available to be used for share repurchases under this authorization as of October 3, 2021.
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. AIn exchange for an upfront payment of $150,000, which was funded with available cash on hand, the financial institution delivered 1,751 initial shares to the Company, representing 80% of the expected number of shares to be repurchased during the repurchase period based upon the closing stock price on May 10, 2021 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 (the "Settlement Price").
Pursuant to the ASR Agreement, the financial institution elected to accelerate the settlement of the transaction in 2 tranches. On July 21, 2021, the financial institution transferred 168 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 337 additional shares to the Company upon full settlement of 2,030the remaining $100,000 notional value of the transaction at the final Settlement Price of $66.45.
On May 6, 2021, the Company repurchased approximately 54 shares were purchased during 2016 atfor $3,615 from a private stockholder based upon the average stock price on that day. The cost of $100,000, leaving a totalthese share repurchases, as well as those related to the accelerated share agreement mentioned above, was allocated to "Capital in excess of 2,970 shares remaining available for repurchase at December 31, 2016. No shares were repurchased under this authorization duringstated value" on the nine months endedCompany's Condensed Consolidated Balance Sheet as of October 1, 2017. At October 1, 2017, a total of 2,970 shares remain available for repurchase.3, 2021.
The Company frequently repurchases shares of its common stock to satisfy employee tax withholding obligations in association with certain share-based compensation awards. These repurchases, which are not part of a publicly announced plan or program, totaled 113100 shares induring the nine months ended October 1, 20173, 2021, at a cost of $5,942,$6,039, and 136130 shares induring the nine months endedOctober 2, 2016 September 27, 2020, at a cost of $6,072.$7,335.
Dividend Declarations
On July 21, 2021, the Board of Directors declared a regular quarterly dividend of $0.45 per share. This dividend was paid on September 10, 2021 to all shareholders of record as of August 10, 2021.
On October 19, 2021, the Board of Directors declared a regular quarterly dividend of $0.45 per share. This dividend is payable on December 10, 2021 to all shareholders of record as of November 10, 2021.
13
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)



Dividend Declarations
On July 19, 2017, the Board of Directors declared a regular quarterly dividend of $0.39 per share. This dividend was paid on September 8, 2017 to all shareholders of record as of August 11, 2017.
On October 16, 2017, the Board of Directors declared a regular quarterly dividend of $0.39 per share. This dividend is payable on December 8, 2017 to all shareholders of record as of November 10, 2017.
Noncontrolling Interests
During the third quarter of 2017, the Company recorded a 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% share in the joint venture, which is not yet operational. The assets of the joint venture have been consolidated, and a noncontrolling interest in the amount of $1,341 recorded in the Company’s Condensed Consolidated Balance Sheet at October 1, 2017.

Note 5: Restructuring and Asset Impairment
Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking the most cost-effective means and structure to serve its customers and to respond to fundamental changes in its markets. As such, restructuring costs have been, and are expected to be, a recurring component of the Company's operating costs. The Company has engaged in a numberamount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope and location of the restructuring actions over the past several years. Actions initiated in 2017 and 2016 are reported as “2017 Actions” and “2016 Actions,” respectively. Actions initiated prior to 2016, all of which were substantially complete at October 1, 2017, are reported as “2015 and Earlier Actions.”activities.
Following are the total restructuring and asset impairment charges/(credits),charges, net of adjustments, and gains on dispositions recognized by the Company during the periods presented:
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Restructuring and restructuring-related asset impairment charges$3,204 $24,149 $4,048 $59,633 
Other asset impairments284 — 4,841 — 
Restructuring/Asset Impairment Charges$3,488 $24,149 $8,889 $59,633 

  2017 2016
  Third Quarter Nine Months Third Quarter Nine Months
Restructuring/Asset impairment:        
2017 Actions $1,610
 $7,798
 $—
 $—
2016 Actions (68) 1,816
 3,389
 29,434
2015 and Earlier Actions (1,233) 2,365
 2,941
 9,402
Other asset impairments 202
 540
 2,617
 2,617
Restructuring/Asset impairment charges $511
 $12,519
 $8,947
 $41,453
Income tax benefit $(445) (4,081) $(2,097) (10,442)
Less: Costs attributable to noncontrolling interests, net of tax (21) (35) (34) (78)
Restructuring/asset impairment charges attributable to Sonoco, net of tax $45
 $8,403
 $6,816
 $30,933
The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:
Pre-tax
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Severance and Termination Benefits$3,726 $4,607 $7,592 $29,866 
Asset Impairments/(Gains from Disposal of Assets)(1,722)16,605 (8,207)25,364 
Other Costs1,200 2,937 4,663 4,403 
Restructuring and restructuring-related asset impairment charges$3,204 $24,149 $4,048 $59,633 

The table below sets forth restructuring and restructuring-related asset impairment charges/(gains) by reportable segment:
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Consumer Packaging$2,450 $16,498 $3,708 $20,707 
Industrial Paper Packaging(1,888)6,990 (4,827)30,189 
All Other555 762 3,075 6,727 
Corporate2,087 (101)2,092 2,010 
Restructuring and restructuring-related asset impairment charges$3,204 $24,149 $4,048 $59,633 

Restructuring and asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company's Condensed Consolidated Statements of Income.
When recognizable
14
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in accordancethousands except per share data)
(unaudited)

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:
Severance
and
Termination
Benefits		Asset
Impairment/
Disposal
of Assets		Other
Costs		Total
Accrual Activity
Liability at December 31, 2020$15,955 $— $511 $16,466 
2021 charges/(gains)7,592 (8,207)4,663 4,048 
Cash receipts/(payments)(14,790)13,442 (5,059)(6,407)
Asset write downs/disposals— (5,235)356 (4,879)
Foreign currency translation(294)— 1 (293)
Liability at October 3, 2021$8,463 $— $472 $8,935 

"Severance and Termination Benefits" during the first nine months of 2021 includes the cost of severance for approximately 475 employees whose positions were eliminated in conjunction with GAAP, the Company's ongoing organizational effectiveness efforts.
"Asset Impairment/Disposal of Assets" during the first nine months of 2021 consists primarily of 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 foods operations, partially offset by restructuring-related asset impairment charges in the Company's temperature-assured packaging business.
“Other Costs” during the first nine months of 2021 consists primarily of costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance.
The Company expects to pay the majority of the remaining restructuring reserves by the end of 2022 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $1,500$1,800 in connection with previously announced restructuring actions. The Companyactions and believes that the majority of these charges will be incurred and paid by the end of 2017.2021. The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.

Other Asset Impairments

The Company recognized other asset impairment charges totaling $284 and $4,841 in the three and nine months ended October 3, 2021, respectively. The year-to-date charges consist of fixed asset impairments totaling $2,442 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 their projected undiscounted cash flows was determined to no longer be sufficient to recover their carrying value.

These asset impairment charges are included in “Restructuring/Asset impairment charges” in the Company’s Condensed Consolidated Statements of Income.

15

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

2017 Actions
During 2017, the Company announced the closure of an expanded foam protective packaging plant in North Carolina (part of the Protective Solutions segment) and a tubes and cores plant in Iowa (part of the Paper and Industrial Converted Products segment). In addition, approximately 120 positions were eliminated in the first nine months of 2017 in conjunction with the Company's ongoing organizational effectiveness efforts.
Below is a summary of 2017 Actions and related expenses by segment and by type incurred and estimated to be incurred through completion. 

2017 Actions Third Quarter 2017 Total
Incurred
to Date		 Estimated
Total Cost
Severance and Termination Benefits      
Consumer Packaging $60
 $1,376
 $1,576
Display and Packaging —
 172
 172
Paper and Industrial Converted Products 748
 $2,952
 3,452
Protective Solutions 83
 1,057
 1,157
Corporate (4) 452
 452
Asset Impairment / Disposal of Assets      
Consumer Packaging 126
 126
 126
Paper and Industrial Converted Products 13
 13
 13
Protective Solutions 55
 832
 832
Other Costs      
Consumer Packaging 37
 288
 288
Paper and Industrial Converted Products 62
 100
 650
Protective Solutions 430
 430
 430
Total Charges and Adjustments $1,610
 $7,798
 $9,148
The following table sets forth the activity in the 2017 Actions restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets: 
2017 Actions 
Severance
and
Termination
Benefits
 
Asset
Impairment/
Disposal
of Assets
 
Other
Costs
 Total
Accrual Activity
2017 Year to Date		   
Liability at December 31, 2016 $—
 $—
 $—
 $—
2017 charges 6,009
 971
 818
 7,798
Cash receipts/(payments) (3,674) 457
 (818) (4,035)
Asset write downs/disposals —
 (1,428) —
 (1,428)
Foreign currency translation 29
 —
 —
 29
Liability at October 1, 2017 $2,364
 $—
 $—
 $2,364
Included in "Asset Impairment/Disposal of Assets" above is a loss of $903 primarily relating to the impairment of fixed assets resulting from the closure of an expanded foam protective packaging plant in North Carolina, and losses of $68 relating primarily to the sale of a vacated building. The Company received proceeds of $457 from the sale of this building and wrote off assets of $525.
"Other costs" consists primarily of costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance. The Company expects to pay the majority of the remaining 2017 Actions restructuring costs by the end of 2017 using cash generated from operations.


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

2016 Actions
During 2016, the Company closed four tubes and cores plants - one in the United States, one in Canada, one in Ecuador, and one in Switzerland (all part of the Paper and Industrial Converted Products segment), a packaging services center in Mexico (part of the Display and Packaging segment) and a fulfillment service center in Brazil (part of the Display and Packaging segment). The Company also began manufacturing rationalization efforts in its Reels division (part of the Paper and Industrial Converted Products segment) and completed the sales of a paper mill in France (part of the Paper and Industrial Converted Products segment) and a retail security packaging plant in Puerto Rico (part of the Display and Packaging segment). In addition, the Company continued to realign its cost structure, resulting in the elimination of approximately 180 positions.
Below is a summary of 2016 Actions and related expenses by segment and by type incurred and estimated to be incurred through completion. 
  2017 2016 
Total
Incurred
to Date
  Estimated
Total Cost
2016 Actions Third Quarter Nine Months Third Quarter Nine Months  
Severance and Termination Benefits            
Consumer Packaging $—
 $1
 $766
 $2,218
 $2,408
 $2,408
Display and Packaging (22) (18) 372
 3,025
 4,286
 4,286
Paper and Industrial Converted Products 5
 419
 1,187
 5,328
 6,306
 6,306
Protective Solutions —
 —
 109
 469
 678
 678
Corporate 14
 14
 3
 1,442
 1,564
 1,564
Asset Impairment / Disposal of Assets            
Consumer Packaging $—
 —
 —
 (306) (306) (306)
Display and Packaging —
 96
 475
 2,712
 2,808
 2,808
Paper and Industrial Converted Products —
 45
 —
 13,279
 13,345
 13,345
Other Costs            
Consumer Packaging $14
 42
 12
 314
 773
 773
Display and Packaging 20
 388
 37
 48
 674
 674
Paper and Industrial Converted Products (99) 779
 428
 905
 2,077
 2,077
Protective Solutions —
 50
 —
 —
 200
 200
Total Charges and Adjustments $(68) $1,816
 $3,389
 $29,434
 $34,813
 $34,813
The following table sets forth the activity in the 2016 Actions restructuring accrual included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets:
2016 Actions Severance
and
Termination
Benefits		 Asset
Impairment/
Disposal
of Assets		 Other
Costs		 Total
Accrual Activity
2017 Year to Date
    
Liability at December 31, 2016 $3,558
 $—
 $640
 $4,198
2017 charges 416
 141
 1,259
 1,816
Adjustments —
 —
 —
 —
Cash payments (3,098) —
 (1,354) (4,452)
Asset write downs/disposals —
 (141) (252) (393)
Foreign currency translation 12
 —
 34
 46
Liability at October 1, 2017 $888
 $—
 $327
 $1,215
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
(unaudited)

“Other costs” consist primarily of costs related to plant closures including equipment removal, utilities, plant security, property taxes and insurance. The Company expects to pay the majority of the remaining 2016 Actions restructuring costs by the end of 2017 using cash generated from operations.
2015 and Earlier Actions
2015 and Earlier Actions are comprised of a number of plant closures and workforce reductions initiated prior to 2016. Included in "Total Charges and Adjustments" below is a gain of $2,022 related to the sale of land and building of a rigid paper plant in Manchester, England (part of the Consumer Packaging Segment). The Company received proceeds from the sale of $2,741 and wrote off assets of $719. Additional charges for these actions in both 2017 and 2016 primarily relate to the cost of plant closures including severance, equipment removal, plant security, property taxes and insurance.
The Company expects to recognize future pretax charges of approximately $100 associated with 2015 and Earlier Actions.
Below is a summary of expenses incurred by segment for 2015 and Earlier Actions for the three- and nine- month periods ended October 1, 2017 and October 2, 2016. 
  2017 2016
2015 and Earlier Actions Third Quarter Nine Months Third Quarter Nine Months
Consumer Packaging $(1,348) $1,216
 $2,079
 $7,216
Display and Packaging —
 83
 113
 679
Paper and Industrial Converted Products 62
 953
 744
 1,368
Protective Solutions 53
 106
 18
 152
Corporate —
 7
 (13) (13)
Total Charges and Adjustments $(1,233) $2,365
 $2,941
 $9,402
The accrual for 2015 and Earlier Actions totaled $3,211 and $3,608 at October 1, 2017 and December 31, 2016, respectively, and is included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets. The accrual relates primarily to unpaid severance and building lease terminations. The Company expects the majority of the liability associated with 2015 and Earlier Actions to be paid by the end of 2017 using cash generated from operations.
Other asset impairments
In addition to the restructuring charges discussed above, as a result of the continued devaluation of the Venezuelan Bolivar in 2017, 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 $202.
During the Company's annual goodwill impairment testing conducted during the third quarter of 2016, management concluded that goodwill associated with the Company's Paper and Industrial Converted Products - Brazil reporting unit had become impaired as a result of the continued deterioration of economic conditions in Brazil. Accordingly, an impairment charge totaling $2,617, the entire amount of goodwill associated with this reporting unit, was recognized during the third quarter of 2016.
The asset impairment charges and remeasurement loss are included in "Restructuring/Asset impairment charges" in the Company's Condensed Consolidated Statements of Income.

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

Note 6: Accumulated Other Comprehensive Loss
The following table summarizes the components of accumulated other comprehensive loss and the changes in the balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the nine months ended October 1, 20173, 2021 and October 2, 2016:September 27, 2020:
Foreign
Currency
Items		Defined
Benefit
Pension Items		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(57,261)11,302 7,804 (38,155)
Amounts reclassified from accumulated other comprehensive loss to net loss— 418,521 (2,403)416,118 
Amounts reclassified from accumulated other comprehensive loss to fixed assets— — (31)(31)
Other comprehensive (loss)/income(57,261)429,823 5,370 377,932 
Balance at October 3, 2021$(251,285)$(132,924)$5,299 $(378,910)
Balance at December 31, 2019$(241,994)$(574,413)$(396)$(816,803)
Other comprehensive loss before reclassifications(35,447)(885)(3,362)(39,694)
Amounts reclassified from accumulated other comprehensive loss to net income— 16,361 2,922 19,283 
Other comprehensive (loss)/income(35,447)15,476 (440)(20,411)
Balance at September 27, 2020$(277,441)$(558,937)$(836)$(837,214)


16
  
Gains and
Losses on Cash
Flow Hedges
 
Defined
Benefit
Pension Items
 
Foreign
Currency
Items
 
Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2016
$1,939

$(453,821)
$(286,498)
$(738,380)
Other comprehensive income/(loss) before reclassifications
(654)
22,337

86,769

108,452
Amounts reclassified from accumulated other comprehensive loss to net income
(2,984)
35,974

—

32,990
Amounts reclassified from accumulated other comprehensive loss to fixed assets
(15)
—

—

(15)
Other comprehensive income/(loss)
(3,653)
58,311

86,769

141,427
Balance at October 1, 2017
$(1,714)
$(395,510)
$(199,729)
$(596,953)
         
Balance at December 31, 2015 $(5,152) $(444,244) $(253,137) $(702,533)
Other comprehensive income/(loss) before reclassifications 1,318
 (5,020) 10,282
 6,580
Amounts reclassified from accumulated other comprehensive loss to net income 3,897
 19,773
 —
 23,670
Amounts reclassified from accumulated other comprehensive loss to fixed assets 48
 —
 —
 48
Other comprehensive income 5,263
 14,753
 10,282
 30,298
Balance at October 2, 2016 $111
 $(429,491) $(242,855) $(672,235)
         

"Other comprehensive income/(loss) before reclassifications" during the nine months ended October 1, 2017, includes $5,071 of "Defined Benefit Pension Items" related to the release of a portion of the valuation allowance on deferred tax assets related to the pension plan of a foreign subsidiary.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


The following table summarizes the effects on net incomeincome/(loss) of significant amounts reclassified from each component of accumulated other comprehensive loss for the three- and nine-month periods ended October 1, 20173, 2021 and October 2, 2016: 
  
Amount Reclassified from Accumulated
Other Comprehensive Loss
  
  Three Months EndedNine Months Ended  
Details about Accumulated Other Comprehensive
Loss Components
 October 1,
2017		October 2,
2016		October 1,
2017		 October 2,
2016		 
Affected Line Item in 
the Condensed Consolidated 
Statements of Income
Gains and losses on cash flow hedges        
Foreign exchange contracts $4,814
$(2,370)$8,097
 $(5,217) Net sales
Foreign exchange contracts (2,766)907
(4,808) 2,339
 Cost of sales
Commodity contracts 656
(541)1,367
 (3,346) Cost of sales
  2,704
(2,004)4,656
 (6,224) Income before income taxes
  (977)630
(1,672) 2,327
 Provision for income taxes
  $1,727
$(1,374)$2,984
 $(3,897) Net income
Defined benefit pension items 
      
Effect of settlement loss(a)
 $(476)$—
$(31,550) $—
 Selling, general and 
administrative expenses
Amortization of defined benefit pension items(a)
 (7,155)(7,392)(21,994) (21,903) Cost of sales
Amortization of defined benefit pension items(a)
 (2,385)(2,464)(7,331) (7,301) Selling, general and 
administrative expenses
  (10,016)(9,856)(60,875) (29,204) Income before income taxes
  3,935
2,227
24,901
 9,431
 Provision for income taxes
  $(6,081)$(7,629)$(35,974) $(19,773) Net income
Total reclassifications for the period $(4,354)$(9,003)$(32,990) $(23,670) Net income
September 27, 2020:
Amount Reclassified from Accumulated
Other Comprehensive Loss
Three Months EndedNine Months Ended
Details about Accumulated Other
Comprehensive
Loss Components		October 3,
2021		September 27,
2020		October 3,
2021		September 27,
2020		Affected Line Item in
the Condensed Consolidated
Statements of Income
Gains/(losses) on cash flow hedges
Foreign exchange contracts$937 $(1,723)$2,766 $(6,245)Net sales
Foreign exchange contracts(711)867 (2,129)3,744 Cost of sales
Commodity contracts2,051 (792)2,626 (1,346)Cost of sales
$2,277 $(1,648)$3,263 (3,847)Income/(Loss) before income taxes
(607)403 (860)925 (Benefit from)/Provision for income taxes
$1,670 $(1,245)$2,403 (2,922)Net income/ (loss)
Defined benefit pension items
Effect of curtailment loss(a)
— — — (31)Non-operating pension costs
Effect of settlement loss(a)
(21)— (547,652)(661)Non-operating pension costs
Amortization of defined
   benefit pension items(a)
(1,640)(7,103)(14,973)(21,185)Non-operating pension costs
$(1,661)$(7,103)$(562,625)(21,877)(Loss)/Income before income taxes
382 1,800 144,104 5,516 Provision for/(Benefit from) income taxes
$(1,279)$(5,303)$(418,521)(16,361)Net (loss)/income
Total reclassifications for the period$391 $(6,548)$(416,118)$(19,283)Net income/(loss)
 
(a)See Note 10 for additional details.

(a) See Note 11 for additional details.



17














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



The following table summarizes the before and after tax amounts for the various components of other comprehensive income/(loss)/income for the three-month periods ended October 1, 20173, 2021 and October 2, 2016: September 27, 2020:
Three months ended
October 3, 2021
Three months ended
September 27, 2020
Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount		Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount
Foreign currency items:
Net other comprehensive (loss)/income from foreign currency items$(37,077)$— $(37,077)$24,674 $— $24,674 
Defined benefit pension items:
Other comprehensive income/(loss) before
reclassifications		559 (145)414 (31)8 (23)
Amounts reclassified from accumulated other
   comprehensive loss to net income(a)
1,661 (382)1,279 7,103 (1,800)5,303 
Net other comprehensive income/(loss) from
defined benefit pension items		2,220 (527)1,693 7,072 (1,792)5,280 
Gains and losses on cash flow hedges:
Other comprehensive income/(loss) before
reclassifications		3,525 (940)2,585 1,376 (336)1,040 
Amounts reclassified from accumulated other
comprehensive loss to net income		(2,277)607 (1,670)1,648 (403)1,245 
Amounts reclassified from accumulated other
comprehensive loss to fixed assets		20 (5)15 — — — 
Net other comprehensive income/(loss) from
cash flow hedges		1,268 (338)930 3,024 (739)2,285 
Other comprehensive (loss)/income$(33,589)$(865)$(34,454)$34,770 $(2,531)$32,239 

(a) See Note 11 for additional details.
18
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

   Three months ended October 1, 2017 Three months ended October 2, 2016
   Before Tax AmountTax (Expense) BenefitAfter Tax Amount Before Tax AmountTax (Expense) BenefitAfter Tax Amount
Foreign currency items $26,928
$—
$26,928
 $(3,157)$—
$(3,157)
Defined benefit pension items:        
 
Other comprehensive income/(loss) before
   reclassifications
 6,634
(2,414)4,220
 (2,531)701
(1,830)
 
Amounts reclassified from accumulated other
   comprehensive income/(loss) to net income
 10,016
(3,935)6,081
 9,856
(2,227)7,629
 
Net other comprehensive income/(loss) from
   defined benefit pension items
 16,650
(6,349)10,301
 7,325
(1,526)5,799
Gains and losses on cash flow hedges:        
 
Other comprehensive income/(loss) before
   reclassifications
 2,425
(859)1,566
 (1,024)221
(803)
 
Amounts reclassified from accumulated other
   comprehensive income/(loss) to net income
 (2,704)977
(1,727) 2,004
(630)1,374
 
Amounts reclassified from accumulated other
   comprehensive income/(loss) to fixed assets
 (25)—
(25) 70
—
70
 
Net other comprehensive income/(loss) from
   cash flow hedges
 (304)118
(186) 1,050
(409)641
Other comprehensive income/(loss) $43,274
$(6,231)$37,043
 $5,218
$(1,935)$3,283



The following table summarizes the before and after tax amounts for the various components of other comprehensive income/(loss) for the nine-month periods ended October 1, 20173, 2021 and October 2, 2016:September 27, 2020:
Nine months ended October 3, 2021Nine months ended September 27, 2020
Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount		Before Tax
Amount		Tax
(Expense)
Benefit		After Tax
Amount
Foreign currency items:
Net other comprehensive loss from foreign currency items(a)
$(57,261)— $(57,261)$(27,866)(7,581)$(35,447)
Defined benefit pension items:
Other comprehensive income/(loss) before
reclassifications		14,923 (3,621)11,302 (1,177)292 (885)
Amounts reclassified from accumulated other
   comprehensive loss to net (loss)/income(b)
562,625 (144,104)418,521 21,877 (5,516)16,361 
Net other comprehensive income/(loss) from
defined benefit pension items		577,548 (147,725)429,823 20,700 (5,224)15,476 
Gains and losses on cash flow hedges:
Other comprehensive income/(loss) before
reclassifications		10,536 (2,732)7,804 (4,345)983 (3,362)
Amounts reclassified from accumulated other
comprehensive loss to net (loss)/income		(3,263)860 (2,403)3,847 (925)2,922 
Amounts reclassified from accumulated other
comprehensive loss to fixed assets		(42)11 (31)— — — 
Net other comprehensive income/(loss) from
cash flow hedges		7,231 (1,861)5,370 (498)58 (440)
Other comprehensive income/(loss):$527,518 $(149,586)$377,932 $(7,664)$(12,747)$(20,411)

(a) Other comprehensive loss from foreign currency items for the nine-month period ended September 27, 2020 includes the settlement gain and corresponding tax provision related to the termination of a net investment hedge. See Note 9 for more information.
(b) See Note 11 for additional details.
19
   Nine months ended October 1, 2017 Nine months ended October 2, 2016
   Before Tax AmountTax (Expense) BenefitAfter Tax Amount Before Tax AmountTax (Expense) BenefitAfter Tax Amount
Foreign currency items $86,769
$—
$86,769
 $10,282
$—
$10,282
Defined benefit pension items:        
 
Other comprehensive income/(loss) before
   reclassifications
 25,655
(3,318)22,337
 (7,926)2,906
(5,020)
 
Amounts reclassified from accumulated other
   comprehensive income/(loss) to net income
 60,875
(24,901)35,974
 29,204
(9,431)19,773
 
Net other comprehensive income/(loss) from
   defined benefit pension items
 86,530
(28,219)58,311
 21,278
(6,525)14,753
Gains and losses on cash flow hedges:        
 
Other comprehensive income/(loss) before
   reclassifications
 (1,021)367
(654) 2,106
(788)1,318
 
Amounts reclassified from accumulated other
   comprehensive income/(loss) to net income
 (4,656)1,672
(2,984) 6,224
(2,327)3,897
 
Amounts reclassified from accumulated other
   comprehensive income/(loss) to fixed assets
 (15)—
(15) 48
—
48
 
Net other comprehensive income/(loss) from
   cash flow hedges
 (5,692)2,039
(3,653) 8,378
(3,115)5,263
Other comprehensive income/(loss) $167,607
$(26,180)$141,427
 $39,938
$(9,640)$30,298




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



Note 7: Goodwill and Other Intangible Assets
Goodwill
During the first quarter of 2021, the Company changed its operating and reporting structure and, as a result, realigned certain of its reportable segments effective January 1, 2021. During the third quarter of 2021, the Company discovered that the effect of this segment realignment was not properly reflected in its goodwill footnote disclosures for the first two quarters of 2021. While the consolidated goodwill presented in the financial statements and the reported changes in activity presented in the notes were correctly stated in the previous filings, the disclosed balances by segment were incorrect. A summary of the changes in goodwill by quarter, as well as the corrected goodwill balances by segment, for the nine months ended October 1, 20173, 2021 is as follows: 
Consumer
Packaging		Industrial Paper PackagingAll OtherTotal
Goodwill at December 31, 2020, as reported$592,310 $317,958 $478,987 $1,389,255 
Adjustment to correct goodwill by segment(11,066)51,357 (40,291)— 
Goodwill at December 31, 2020, as corrected$581,244 $369,315 $438,696 $1,389,255 
2021 Acquisitions— — — — 
Dispositions— — (53,039)(53,039)
Foreign currency translation(4,536)(4,286)(692)(9,514)
Measurement period adjustments1,512 — — 1,512 
Goodwill at April 4, 2021, as corrected$578,220 $365,029 $384,965 $1,328,214 
2021 Acquisitions— 917 — 917 
Dispositions— — — — 
Foreign currency translation2,471 1,328 470 4,269 
Measurement period adjustments— — — — 
Goodwill at July 4, 2021, as corrected$580,691 $367,274 $385,435 $1,333,400 
2021 Acquisitions— — — — 
Dispositions(1,058)— — (1,058)
Foreign currency translation(4,744)(2,911)(964)(8,619)
Measurement period adjustments— — — — 
Goodwill at October 3, 2021$574,889 $364,363 $384,471 $1,323,723 
  
Consumer
Packaging
 
Display
and
Packaging
 
Paper and
Industrial
Converted
Products
Protective
Solutions
 Total
Goodwill at December 31, 2016 $435,590
 $203,414
 $221,983
$231,228
 $1,092,215
Acquisitions 121,134
 —
 —
—
 121,134
Foreign currency translation 16,533
 —
 10,681
917
 28,131
Other (715) —
 —
(326) (1,041)
Goodwill at October 1, 2017 $572,542
 $203,414
 $232,664
$231,819
 $1,240,439

TheGoodwill from 2021 acquisitions relates to the acquisition of Packaging Holdings in March 2017 and Clear Lam in July 2017 resulted in the recognition of $72,316 and $48,818 of goodwill, respectively. In addition, measurementTuboTec. Measurement period adjustments wererelate to final working capital settlements made in the first nine monthsquarter of 20172021 for the prior-year acquisition of Can Packaging. Dispositions of goodwill in 2021 relate to the provisional fair valuesdivestiture of the assets acquiredCompany's U. S. display and packaging business in April 2021 and the liabilities assumeddivestiture of a small plastics foods thermoforming business in the November 2016 acquisition of PPI and the September 2016 acquisition of Laminar, resulting in reductions in goodwill of $715 for PPI and $326 for Laminar.2021. See Note 3 for additional information.
The Company assesses goodwill for impairment annually andduring 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 2017. As part of this testing, the Company2021, 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, volumes and prices, profit margins, income taxes, capital expenditures and changes in working capital requirements.discount rates. Changes in these assumptions and/or discount rates could materially impact the 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 reporting units havinggoodwill of the greatest risk of a significant future impairment if actual results fall short of expectations are Display and Packaging, and Paper and Industrial Converted ProductsPlastics - Europe. Total goodwill associated with these reporting units was $203,414 and $93,277, respectively, at October 1, 2017. A large portion of projected sales in the Display and PackagingHealthcare reporting unit is concentratedat risk of impairment in two customers, the loss of either of which could impactnear term if the Company's conclusion regardingreporting unit's operations do not perform in line with management's expectations, or if there is a negative change in the likelihood of goodwill impairmentlong-term outlook for the unit.business or in other factors such as the discount rate.

20













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


Although beginning to benefit from economic recovery, the results of the Plastics – Healthcare reporting unit have been negatively impacted by end-market weakness due to the COVID-19 pandemic. In addition, the unit is facing near-term headwinds from higher raw material and other cost increases. Assuming COVID-19 infection rates continue to decline, management expects market demand will improve over the coming year and that selling price increases and/or cost reductions, including restructuring actions and investments in production efficiency projects, will mitigate the impacts of recent raw material and other cost inflation. However, should it become apparent that the ongoing post-COVID-19 recovery is likely to be significantly weaker, delayed, or prolonged compared to management’s current expectations, significant negative price/cost relationships will persist over the long-term, or profit margins do not improve as expected, goodwill impairment charges may be possible in the future.
In its annual goodwill impairment analysis as of October 3, 2021, projected future cash flows for the Plastics -Healthcare reporting unit were discounted at 8.3%. Total goodwill associated with this reporting unit was $64,425 at October 3, 2021. In the latest annual impairment test, the estimated fair value of the Plastics - Healthcare reporting unit was determined to exceed its carrying value by approximately 13.3%. Based on the discounted cash flow model and holding other valuation assumptions constant, projected operating profits across all future periods would have to be reduced approximately 13.0%, or the discount rate increased to 9.3%, in order for the estimated fair value of the reporting unit to fall below carrying value.
Other Intangible Assets
A summary of other intangible assets as of October 1, 20173, 2021 and December 31, 20162020 is as follows:
October 3,
2021		December 31,
2020
Other Intangible Assets, gross:
Patents$29,314 $29,325 
Customer lists585,108 622,430 
Trade names32,086 32,088 
Proprietary technology22,870 22,813 
Other2,808 2,831 
Total Other Intangible Assets, gross$672,186 $709,487 
Accumulated Amortization:
Patents$(15,843)$(14,511)
Customer lists(338,039)(339,159)
Trade names(13,658)(12,156)
Proprietary technology(21,130)(19,833)
Other(1,983)(1,894)
Total Accumulated Amortization$(390,653)$(387,553)
Other Intangible Assets, net$281,533 $321,934 
  October 1,
2017		 December 31,
2016
Other Intangible Assets, gross:    
Patents $21,957
 $13,164
Customer lists 496,623
 362,162
Trade names 25,127
 19,902
Proprietary technology 20,771
 20,721
Land use rights 294
 288
Other 1,737
 1,701
Other Intangible Assets, gross $566,509
 $417,938
     
Accumulated Amortization:    
Patents (6,469) (5,647)
Customer lists (199,924) (172,292)
Trade names (3,881) (2,733)
Proprietary technology (12,709) (11,236)
Land use rights (46) (41)
Other (1,164) (1,031)
Total Accumulated Amortization $(224,193) $(192,980)
Other Intangible Assets, net $342,316
 $224,958
The Packaging Holdings acquisition in March 2017 resulted in the addition of $60,190 of intangible assets, of which $48,400 related to customer lists, $8,790 related to patents, and $3,000 related to trade names. The Clear Lam acquisition in July 2017 resulted in the addition of $77,600 of intangible assets, of which $75,500 related to customer lists and $2,100 related to trade names. In addition, measurement period adjustments were made in the first quarter of 2017 to the provisional fair values of the assets acquired and the liabilities assumed in the November 2016 acquisition of PPI which resulted in the recognition of an additional $1,400 of intangible assets, all of which related to customer lists. These intangible assets will be amortized over an expected average useful life of 13.4 years.
Other intangible assetsIntangible Assets are amortized on a straight-line basis over their respective useful lives, which generally range from three to forty years. The Company has no intangible assets with indefinite lives.
Aggregate amortization expense was $10,117$12,257 and $7,767$12,993 for the three months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively, and $26,706$37,117 and $24,334$39,624 for the nine monthsnine-months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively. Amortization expense on other intangible assets is expected to total approximately $37,500$49,500 in 2017, $42,7002021, $45,600 in 2018, $41,5002022, $41,200 in 2019, $38,9002023, $34,100 in 20202024 and $37,100$24,700 in 2021.2025.


Note 8: Debt
21
On July 20, 2017, the Company entered into a Credit Agreement in connection with a new $750,000 bank credit facility which replaced an existing credit facility entered into on October 2, 2014, and reflects substantially the same terms and conditions. Included in 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 above the London Interbank Offered Rate (LIBOR) of 112.5 basis points. 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.
Consistent with prior facilities, the $500,000 revolving credit facility will continue to support the Company's $350,000 commercial paper program. Proceeds from the $250,000 term loan were used to repay the $150,000 term loan entered into on March 13, 2017, and the remaining $100,000 was used to partially fund the Clear Lam acquisition.


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


Note 8: Debt
Details of the Company's debt at October 3, 2021 and December 31, 2020 are as follows:
October 3,
2021		December 31,
2020
Commercial paper$202,000 $— 
1.0% Euro loan due May 2021— 183,662 
9.2% debentures due August 2021— 4,320 
4.375% debentures due November 2021— 249,741 
3.125% debentures due May 2030595,193 594,687 
5.75% debentures due November 2040536,173 599,279 
Other foreign denominated debt69,625 15,522 
Finance lease obligations51,336 37,943 
Other notes14,179 15,070 
Total debt$1,468,506 $1,700,224 
Less current portion and short-term notes275,799 455,784 
Long-term debt$1,192,707 $1,244,440 

On April 28, 2021, the Company commenced a cash tender offer to purchase 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% debentures 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 1%, 150,000 euro-denominated debt 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 Company's Condensed Consolidated Statements of Income for the nine months ended October 3, 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 Condensed Consolidated Statement of Cash Flows for the nine months ended October 3, 2021.
On June 30, 2021, the Company entered into a new five-year $750,000, unsecured revolving credit facility which replaced an existing credit facility entered into on July 20, 2017, and reflects substantially the same terms and conditions. Consistent with prior facilities, the new revolving credit facility supports the Company's $500,000 commercial paper program. Based 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 September 21, 2021, the Company borrowed $50,000 from the revolving credit facility. These borrowings were repaid in full on October 1, 2021, prior to the end of the third quarter.
On August 1, 2021, the Company repaid its $250,000, 4.375% debentures without penalty ahead of their November 2021 maturity. Also on August 1, 2021, the Company repaid its $4,321, 9.2% debentures upon their maturity.
22
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

As of October 3, 2021, the Company has scheduled debt maturities through the next twelve months of $275,799 including $202,000 of outstanding commercial paper. At October 3, 2021, the Company has $160,012 in cash and cash equivalents on hand and $750,000 in committed capacity under its revolving credit facility, of which $548,000 was available for draw down net of outstanding commercial paper balances. The Company believes 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 the Company over the course of the next year.
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 in the agreements. As of October 3, 2021, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

Note 9: Financial Instruments and Derivatives
The following table sets forth the carrying amounts and fair values of the Company’s significant financial instruments for which the carrying amount differs from the fair value.
October 3, 2021December 31, 2020
Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Long-term debt, net of current portion$1,192,707 $1,428,316 $1,244,440 $1,538,132 
  October 1, 2017 December 31, 2016
  
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Long-term debt, net of current portion $1,300,191
 $1,428,716
 $1,020,698
 $1,116,336

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 Hedges
At October 1, 20173, 2021 and December 31, 2016,2020, the Company had derivative financial instruments outstanding to hedge anticipated transactions and certain asset and liability related cash flows. These contracts, which have maturities ranging to December 2019,2022, qualify as cash flow hedges under U.S. GAAP. ToFor 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. The Company has determined all hedges to be highly effective and as a result no material ineffectiveness has been recorded.the earnings effect of the hedged item.
Commodity Cash Flow Hedges
The Company hasCertain derivative contracts entered into certain derivative contracts to manage the cost of anticipated purchases of natural gas and aluminum.aluminum have been designated by the Company as hedges. At October 1, 2017,3, 2021, these contracts included natural gas swaps covering approximately 5.8 MMBTUs were outstanding.2.9 million MMBTUs. These contracts represent approximately 89%, 54%,66% and 35%21% of anticipated U.S.usage in North America for 2021 and Canadian2022, respectively. The Company also has certain natural gas hedges that it does not treat as Cash Flow Hedges. See Other Derivatives below for a discussion of these hedges. The Company has also designated swap contracts covering 904 metric tons of aluminum as hedges. These contracts represent approximately 53% of anticipated aluminum usage for the remainder of 2017, 2018 and 2019, respectively. Additionally, the Company had swap contracts covering 1,210 metric tons of aluminum, representing approximately 63% of anticipated usage for the remainder of 2017.2021. The fair values of the Company’s commodity cash flow hedges netted to a gain position of $7,530 at October 3, 2021 and a loss position of $(33)$(647) at October 1, 2017, and a gain position of $3,636 at December 31, 2016.2020. The amount of the lossgain included in Accumulated Other Comprehensive LossIncome at October 1, 2017, that is3, 2021 expected to be reclassified to the income statement during the next twelve months is $(24).$4,690.
23
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Foreign Currency Cash Flow Hedges
The Company has entered into forward contracts to hedge certain anticipated foreign currency denominated sales, purchases, and purchases forecastcapital spending expected to occur in 2017.2021 and 2022. The net positions of these contracts at October 1, 20173, 2021 were as follows (in thousands):
CurrencyActionQuantity
Colombian pesopurchase890,8545,000,669 
Mexican pesopurchase147,65084,193 
Canadian dollarPolish zlotypurchase13,56821,064 
British poundCzech korunapurchase7,24013,119 
Turkish liraEuropurchase3,60012,803 
Russian rubleCanadian dollarpurchase1,8803,368 
New Zealand dollarBritish poundsellpurchase(1701,697 )
Australian dollarTurkish lirasellpurchase(195633 )
Polish zlotysell(907)
Eurosell(4,101)

The fair value of these foreign currency cash flow hedges related to forecasted sales and purchases netted to loss positionsa gain position of $(2,158)$131 and $555 at October 1, 20173, 2021 and $(184) at December 31, 2016.2020, respectively. Gains of $131 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 October 1, 2017,3, 2021 and December 31, 2020, the net position of these contracts was $313$(525) and during$47, respectively. During the nine months ended October 1, 2017,3, 2021, gains from these hedges totaling $15$42 were reclassified from accumulated other comprehensive loss and included in the carrying value of the assets acquired. For all
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
(unaudited)

cash flow hedges, lossescapitalized expenditures. Losses of $(2,471)$(522) are expected to be reclassified from Accumulated Other Comprehensive Loss toaccumulated other comprehensive loss and included in the income statementcarrying value of the related fixed assets acquired during the next twelve months.
Net Investment Hedge
In January 2020, the Company entered into 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 risk management objective was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in foreign currencies. As a result of significant strengthening of the U.S. dollar and a reduction in the differential between U.S. and European interest rates, the fair market value of the swap position appreciated significantly during the first quarter of 2020. In March 2020, the Company terminated the swap agreement and received a net cash settlement of $14,480. The Company recorded this foreign currency translation gain in "Accumulated other comprehensive loss," net of a tax provision of $7,581.
Other Derivatives
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.
24
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The net currency positions of these contracts at October 1, 2017,3, 2021, were as follows (in thousands):
CurrencyActionQuantity
Colombian pesoIndonesian rupiahpurchase3,309,22730,699,411 
MexicanColombian pesopurchase304,16226,283,009 
Mexican pesopurchase336,655 
Canadian dollarpurchase18,8825,258 
In addition to the contracts designated as cash flow hedges described above, the Company has entered into other derivative contracts to manage the cost of anticipated purchases of natural gas. At October 3, 2021, these contracts consisted of natural gas swaps covering approximately 1.6 million MMBTUs and represent approximately 21% of anticipated usage in North America for 2022. The Company's designated and non-designated natural gas derivative contracts total approximately 4.5 million MMBTUs and represent approximately 66% and 42% of anticipated natural gas usage in North America for 2021 and 2022, respectively.
The fair value of the Company’s other derivatives position was in a gain position of $124$3,117 and $599 at October 3, 2021 and a loss position of $(696) at October 1, 2017 and December 31, 2016,2020, respectively.
The following table sets forth the location and fair values of the Company’s derivative instruments at October 1, 20173, 2021 and December 31, 2016: 
Description Balance Sheet Location October 1,
2017		 December 31,
2016
Derivatives designated as hedging instruments:      
Commodity Contracts Prepaid expenses $630
 $3,240
Commodity Contracts Other assets $80
 $527
Commodity Contracts Accrued expenses and other $(540) $(89)
Commodity Contracts Other liabilities $(203) $(42)
Foreign Exchange Contracts Prepaid expenses $81
 $761
       Foreign Exchange Contracts Accrued expenses and other $(2,552) $(946)
Derivatives not designated as hedging instruments:      
Foreign Exchange Contracts Prepaid expenses $397
 $194
Foreign Exchange Contracts Accrued expenses and other $(273) $(890)
2020:
DescriptionBalance Sheet LocationOctober 3, 2021December 31, 2020
Derivatives designated as hedging instruments:
Commodity ContractsPrepaid expenses$4,690 $867 
Commodity ContractsOther assets$2,840 $— 
Commodity ContractsAccrued expenses and other$— $(1,512)
Commodity ContractsOther liabilities$— $(2)
Foreign Exchange ContractsPrepaid expenses$333 $997 
Foreign Exchange ContractsAccrued expenses and other$(725)$(395)
Foreign Exchange ContractsOther liabilities$(2)$— 
Derivatives not designated as hedging instruments:
Commodity ContractsPrepaid expenses$— $484 
Commodity ContractsOther assets$2,861 $— 
Foreign Exchange ContractsPrepaid expenses$256 $140 
Foreign Exchange ContractsAccrued expenses and other$— $(25)
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.
Pursuant to the May 25, 2021 maturity of the Company's 1%, 150,000 euro-denominated debt discussed in Note 8, the Company entered into two forward contracts on April 7, 2021, to buy a total of 150,000 euros, with the risk management objective of managing 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 Company's Condensed Consolidated Statements of Income for the nine months ended October 3, 2021.
Pursuant to the bond tender discussed in Note 8, the Company entered into a reverse treasury lock agreement on April 28, 2021 with the intent 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. The loss is included in "Loss from the early extinguishment of debt" on the Company's Condensed Consolidated Statements of Income for the nine months ended October 3, 2021.
25
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The following tables set forth the effect of the Company's derivative instruments on financial performance for the three months ended October 1, 2017 and October 2, 2016:
Description 
Amount of Gain or
(Loss) Recognized
in OCI on
Derivatives
(Effective Portion)
 
Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
(Effective Portion)
 
Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
 
Location of Gain 
or (Loss)  Recognized in
Income on
Derivatives
(Ineffective Portion)
 
Amount of Gain 
or (Loss)
Recognized
in Income on
Derivatives (Ineffective 
Portion)
Derivatives in Cash Flow Hedging Relationships:      
Three months ended October 1, 2017        
Foreign Exchange Contracts$3,119
 Net sales $4,814
 Net sales $—
    Cost of sales $(2,766)    
Commodity Contracts$(694) Cost of sales $656
 Cost of sales $100
Three months ended October 2, 2016        
Foreign Exchange Contracts$130
 Net sales $(2,370) Net sales $—
    Cost of sales $907
    
Commodity Contracts$(1,110) Cost of sales $(541) Cost of sales $(54)
Description
Location of Gain or (Loss) Recognized in
Income Statement
Gain or (Loss)
Recognized
Derivatives not Designated as Hedging Instruments: 
Three months ended October 1, 2017  
Foreign Exchange ContractsCost of sales$—
 Selling, general and administrative$(3,172)
Three months ended October 2, 2016  
Foreign Exchange ContractsCost of sales$—
 Selling, general and administrative$(743)

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the ninethree months endedOctober 1, 20173, 2021 and October 2, 2016: September 27, 2020, 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:
DescriptionAmount 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:
Three months ended October 3, 2021
Foreign Exchange Contracts$(407)Net sales$937 
Cost of sales$(711)
Commodity Contracts$4,200 Cost of sales$2,051 
Three months ended September 27, 2020
Foreign Exchange Contracts$90 Net sales$(1,723)
Cost of sales$867 
Commodity Contracts$1,286 Cost of sales$(792)
DescriptionGain or (Loss)
Recognized		Location of Gain or (Loss) Recognized in
Income Statement
Derivatives not Designated as Hedging Instruments:
Three months ended October 3, 2021
Commodity Contracts$2,861 Cost of sales
Foreign Exchange Contracts$(675)Selling, general and administrative
Three months ended September 27, 2020
Commodity Contracts$(436)Cost of sales
Foreign Exchange Contracts$486 Selling, general and administrative

Three months ended October 3, 2021Three months ended September 27, 2020
DescriptionRevenueCost of
sales		RevenueCost of
sales
Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income$937 $1,340 $(1,723)$75 
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 loss into net income$937 $(711)$(1,723)$867 
Commodity contracts:
Amount of gain reclassified from accumulated other comprehensive loss into net income$— $2,051 $— $(792)




26
Description 
Amount of Gain or
(Loss) Recognized
in OCI on
Derivatives
(Effective Portion)
 
Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
(Effective Portion)
 
Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
 
Location of Gain 
or (Loss) 
Recognized in
Income on
Derivatives
(Ineffective Portion)
 
Amount of Gain
or (Loss) Recognized
in Income on
Derivatives
(Ineffective 
Portion)
Derivatives in Cash Flow Hedging Relationships:      
Nine months ended October 1, 2017        
Foreign Exchange Contracts $936
 Net sales $8,097
 Net sales $—
    Cost of sales $(4,808)    
Commodity Contracts $(1,957) Cost of sales $1,367
 Cost of sales $(100)
Nine months ended October 2, 2016        
Foreign Exchange Contracts $1,700
 Net sales $(5,217) Net sales $—
    Cost of sales $2,339
    
Commodity Contracts $406
 Cost of sales $(3,346) Cost of sales $(52)
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


Description
Location of Gain or (Loss) Recognized in
Income Statement
Gain or (Loss)
Recognized
Derivatives not Designated as Hedging Instruments: 
Nine months ended October 1, 2017  
Foreign Exchange ContractsCost of sales$—
 Selling, general and administrative$(2,074)
Nine months ended October 2, 2016  
Foreign Exchange ContractsCost of sales$—
 Selling, general and administrative$373
The following tables set forth the effect of the Company’s derivative instruments on financial performance for the nine months ended October 3, 2021 and September 27, 2020, 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:
DescriptionAmount 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:
Nine months ended October 3, 2021
Foreign Exchange Contracts$156 Net sales$2,766 
Cost of sales$(2,129)
Commodity Contracts$10,801 Cost of sales$2,626 
Nine months ended September 27, 2020
Foreign Exchange Contracts$(4,985)Net sales$(6,245)
Cost of sales$3,744 
Commodity Contracts$640 Cost of sales$(1,346)

DescriptionGain or (Loss)
Recognized		Location of Gain or (Loss) Recognized in
Income Statement
Derivatives not Designated as Hedging Instruments:
Nine months ended October 3, 2021
Commodity Contracts$3,295 Cost of sales
Foreign Exchange Contracts$(906)Selling, general and administrative
Nine months ended September 27, 2020
Commodity Contracts$(252)Cost of sales
Foreign Exchange Contracts$(3,565)Selling, general and administrative

Nine months ended October 3, 2021Nine months ended September 27, 2020
DescriptionRevenueCost of
sales		RevenueCost of
sales
Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income$2,766 $497 $— $2,398 
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 loss into net (loss)/income$2,766 $(2,129)$(6,245)$3,744 
Commodity contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive loss into net (loss)/income$— $2,626 $— $(1,346)



27
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

Note 10: 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. 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 table sets forth information regarding the Company’s financial assets and financial liabilities, excluding retirement and postretirement plan assets, measured at fair value on a recurring basis:
DescriptionOctober 3, 2021Assets measured
at NAV		Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$7,530 $— $— $7,530 $— 
Foreign exchange contracts$(394)$— $— $(394)$— 
Non-hedge derivatives, net:
Commodity contracts$2,861 $— $— $2,861 $— 
Foreign exchange contracts$256 $— $— $256 $— 
DescriptionDecember 31, 2020Assets measured
at NAV		Level 1Level 2Level 3
Hedge derivatives, net:
Commodity contracts$(647)$— $— $(647)$— 
Foreign exchange contracts$602 $— $— $602 $— 
Non-hedge derivatives, net:
Commodity contracts$484 $— $— $484 $— 
Foreign exchange contracts$115 $— $— $115 $— 

Description October 1,
2017		 Assets measured at NAVLevel 1 Level 2 Level 3
Hedge derivatives, net:         
Commodity contracts $(33) $—
$—
 $(33) $—
Foreign exchange contracts $(2,471) $—
$—
 $(2,471) $—
Non-hedge derivatives, net:         
Foreign exchange contracts $124
 $—
$—
 $124
 $—
Deferred compensation plan assets $255
 $—
$255
 $—
 $—
          
Description December 31,
2016		 Assets measured at NAVLevel 1 Level 2 Level 3
Hedge derivatives, net:         
Commodity contracts $3,636
 $—
$—
 $3,636
 $—
Foreign exchange contracts $(185) $—
$—
 $(185) $—
Non-hedge derivatives, net:         
Foreign exchange contracts $(696) $—
$—
 $(696) $—
Deferred compensation plan assets $349
 $—
$349
 $—
 $—

As discussed in Note 9, the Company uses derivatives to mitigate the effect of raw material and energy cost 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.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
(unaudited)

Certain deferred compensation plan liabilities are funded by 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 non-financial 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 three- and nine-monthnine-month periods ended October 1, 2017.3, 2021.
28
SONOCO PRODUCTS COMPANY

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


Note 11: Employee Benefit Plans
Retirement Plans and Retiree Health and Life Insurance Plans
The Company provides non-contributory defined benefit pension plans to certain of its employees in the United States, and certain of its employees in Mexico and Belgium. The Company also sponsors contributory defined benefit pension plans covering the majority of its employees in the United Kingdom, Canada, and the Netherlands. In addition, the Company 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, withare provided an annual contribution, called the Sonoco Retirement Contribution (SRC), to their participant accounts in the Sonoco Retirement and Savings Plan. The SRC is equal to 4% of the participant's eligible pay plus 4% of eligible pay in excess of the social security wage base. Also eligible for the SRC are former participants of the U.S. qualified defined benefit pension plan who elected to transfer out of that plan under a one-time option effective January 1, 2010.
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 will becomebecame eligible for SRC contributions effective January 1, 2019. In October 2021, the Company's Board of Directors approved a resolution authorizing amendments to the Sonoco Retirement and Savings Plan to eliminate the SRC contribution and increase the Company's match on elective contributions to the Plan from 50% of the first 4% of compensation contributed by participants to 100% of the first 6%. These amendments will be effective January 1, 2022.
The components of net periodic benefit cost include the following:
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Retirement Plans
Service cost$968 $881 $2,949 $2,966 
Interest cost2,287 12,785 22,051 38,015 
Expected return on plan assets(3,361)(12,427)(21,672)(37,234)
Amortization of prior service cost226 245 687 742 
Amortization of net actuarial loss1,600 7,136 14,849 21,270 
Effect of curtailment loss— — — 31 
Effect of settlement loss21 — 547,652 661 
Net periodic benefit cost$1,741 $8,620 $566,516 $26,451 
Retiree Health and Life Insurance Plans
Service cost$93 $89 $282 $265 
Interest cost49 84 149 249 
Expected return on plan assets(111)(92)(335)(275)
Amortization of prior service credit— (70)— (207)
Amortization of net actuarial gain(186)(208)(563)(620)
Net periodic benefit income$(155)$(197)$(467)$(588)
  Three Months Ended Nine Months Ended
  October 1,
2017		 October 2,
2016		 October 1,
2017		 October 2,
2016
Retirement Plans      
Service cost $4,626
 $4,938
 $13,835
 $14,760
Interest cost 13,716
 14,842
 42,085
 45,152
Expected return on plan assets (20,297) (21,201) (60,833) (64,633)
Amortization of prior service cost 228
 188
 683
 569
Amortization of net actuarial loss 9,625
 9,958
 29,585
 29,514
Effect of settlement loss 476
 —
 31,550
 —
Net periodic benefit cost $8,374
 $8,725
 $56,905
 $25,362
Retiree Health and Life Insurance Plans        
Service cost 70
 77
 234
 233
Interest cost 123
 120
 347
 364
Expected return on plan assets (408) (393) (1,228) (1,191)
Amortization of prior service credit (124) (124) (374) (376)
Amortization of net actuarial gain (189) (166) (569) (503)
Net periodic benefit income $(528) $(486) $(1,590) $(1,473)


The Company made aggregate contributions of $38,483$142,615 and $26,594$12,292 to its defined benefit retirement and retiree health and life insurance plans during the nine months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively. The Company expects to make additional aggregate contributions of approximately $55,000$6,500 to its defined benefit retirement and retiree health and life insurance plans over the remainder of 2017, which includes2021.
Plan Termination and Settlement
As disclosed in previous filings, the Company terminated the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan"), a $50,000 voluntary contribution to its U.S. qualifiedtax-qualified defined benefit pension plan, made on October 25, 2017.effective September 30, 2019. The Company settled the liabilities of the Inactive Plan in the second quarter of 2021 through a combination of lump-sum payments and the purchase of group
29
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


annuity contracts. In February 2017,order for the Inactive Plan to be fully funded upon final settlement, the Company initiated a program through which it offered certain terminated vested participants incontributed $133,000 to the U.S. qualified retirement plansInactive Plan during the opportunity to receive their benefits early as either a lump sum or an annuity. This population comprised approximately 15%second quarter of the projected benefit obligation of these plans. At the close of the election period, approximately 51% of the eligible participants elected to take the early payment. These payments were distributed from plan assets in May and June 2017. As a result of settling these obligations, the Company recognized a non-cash,2021. Non-cash, pre-tax settlement charge of $31,074charges totaling $547,291 were recognized in the second quarter of 2017.2021 as the lump sum payouts and annuity purchases were made.
Settlements and Curtailments
The Company recognized additional settlement charges of $361 and $661 during the nine months ended October 3, 2021 and September 27, 2020, respectively. These charges resulted from payments made to certain participants in the Company's non-union Canadian pension plan who elected a lump sum distribution option upon retirement. Additional settlement charges related to the Canadian pension plans may be recognized over the remainder of $4762021 as a result of ongoing lump-sum distributions and restructuring actions. In addition, curtailment charges totaling $31 related to the closure of a paper mill in Canada were recognized induring the third quarter of 2017 for settlements to certain plan participants who were eligible to select a lump sum payment option upon retirement.

nine months ended September 27, 2020.
Sonoco Retirement Contribution (SRC)
The SRC contributions, which isare funded annually in the first quarter, totaled $14,066$22,665 during the nine months ended October 1, 2017,3, 2021, and $13,352$22,503 during the nine months ended October 2, 2016.September 27, 2020. No additional SRC contributions are expected during the remainder of 2017.2021. The Company recognized expense related to the SRC of $3,239$5,456 and $3,682$5,589 for the quartersthree months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively, and $10,930$17,290 and $10,277$17,283 for the nine-month periodsnine months ended October 1, 20173, 2021 and October 2, 2016,September 27, 2020, respectively.


Note 12: Income Taxes
The Company’s effective tax rate for the three- and nine-month periods ending October 1, 2017, was 33.4% and 32.3%, respectively, and its effective rate for the three- and nine-month periods ending October 2, 2016, was 32.1% and 32.3%, respectively. The rates for the three- and nine-month periods of both years variedended October 3, 2021 were 2.3% and 37.0%, respectively, and its effective tax rates for the three- and nine-month periods ended September 27, 2020 were (0.8)% and 18.6%, respectively. The Company's effective tax rates vary from the U.S. statutory rate due primarily to a $30,000 net recognized benefit associated with the favorable effectamendment of certain international operations that are subjectthe Company's 2017 U.S. income tax return to report increased utilization of its foreign tax credits in the third quarter of 2021 and a $20,355 write-down of a deferred tax liability related to classifying the Company's European contract packaging business as "held for sale" in the third quarter of 2020. To a lesser extent the Company's effective tax rates generally lower thanvary from the U.S. rate. The 2017 year-to-date rate also varied from the statutory rate due to state taxes, taxes on operations in international jurisdictions with effective tax rates different than the Company's January 1,U.S. statutory rate, the release or build of reserves for uncertain tax positions and various other tax adjustments.
As previously disclosed, in February 2017 adoptionthe Company received a Notice of ASU 2016-09 regarding accounting for share-based compensation, which requires excessProposed Adjustment (“NOPA”) from the Internal Revenue Service (“IRS”) proposing adjustments to the 2012 and 2013 tax benefitsyears. In 2018, the Company filed a protest to be utilized as an offsetthe proposed deficiency and the matter was referred to tax expensethe Appeals Division of the IRS. In the second quarter of 2021, the Company paid $5,613 in taxes and was not requiredinterest to be applied retrospectively.settle the dispute.
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 U.S. federal, or non-U.S., income tax examinations by tax authorities for years before 2012. With respect to state and local income taxes, the Company is no longer subject to examination for years prior to 2012, with few exceptions. The Company is currently under audit by the Internal Revenue Service for the 2012 and 2013 tax years.2015.
The Company’s reserve for uncertain tax benefits has decreasedincreased by approximately $2,400$7,300 since December 31, 2016,2020 due primarily to the settlementrecording of a prior year's audit.reserve related to the benefit associated with the amendment of the Company's 2017 tax return to report increased utilization of its foreign tax credits, partially offset by the release of reserves related to the expiration of the statute of limitations for tax years 2012 and 2013 which were previously extended. The Company believes that it is reasonably possible that the amount reserved for unrecognized tax benefits at October 1, 2017 will increase3, 2021 could decrease by approximately $200$600 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 Company’s effective tax rate may fluctuate significantly on a quarterly basis. The Company has operations and pays taxes in many countries outside of the U.S. and taxes 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 the loss of those benefitssuch benefit 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 two revised draft NOPAs proposing the same adjustments and penalties as in the prior NOPAs. At the time the distribution was paid 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
30
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


Note 13: Leases
proposes to recharacterizeThe Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the distribution, the entire distribution would be characterized as a dividend. The incremental tax liabilitycertainty associated with the income adjustment proposed in the NOPA would be approximately $84,000, excluding interestexercise of various lease renewal, termination, and the previously referenced penalties. Should a final NOPA be issued, the Company intends to file a protest to the proposed deficiency with the IRS, which will cause the matter to be referred to the Appeals Division of the IRS. 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 resolvedpurchase options included in the Company's favor. Regardless of whetherlease contracts is at the matter is resolvedCompany's sole discretion. Most real estate leases, in particular, include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years. The Company's leases do not have any significant residual value guarantees or restrictive covenants.
As the implicit rate in the Company's favor, the final resolution of this matter could be expensive and time consuming to defend and/or settle. Whileleases is not readily determinable, the Company believescalculates 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 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 outcomeregion of the matter could haveCompany’s global operations. The Company further utilizes a material effectportfolio 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.
The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at October 3, 2021 and December 31, 2020:
ClassificationBalance Sheet LocationOctober 3, 2021December 31, 2020
Lease Assets
Operating lease assetsRight of Use Asset - Operating Leases$269,855 $296,020 
Finance lease assetsOther Assets47,154 36,267 
Total lease assets$317,009 $332,287 
Lease Liabilities
Current operating lease liabilitiesAccrued expenses and other$44,588 $52,138 
Current finance lease liabilitiesNotes payable and current portion of debt6,236 4,663 
Total current lease liabilities$50,824 $56,801 
Noncurrent operating lease liabilitiesNoncurrent Operating Lease Liabilities$236,590 $262,048 
Noncurrent finance lease liabilitiesLong-term Debt, Net of Current Portion45,101 33,280 
Total noncurrent lease liabilities$281,691 $295,328 
Total lease liabilities$332,515 $352,129 

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 assets recorded on its resultsthe balance sheet were determined based upon factors considered at the commencement date of operationsthe leases, 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.
31
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and financial condition.shares in thousands except per share data)
(unaudited)

The following table sets forth the components of the Company's total lease cost for the three- and nine- month periods ended October 3, 2021 and September 27, 2020:
Three Months EndedNine Months Ended
Lease CostOctober 3, 2021September 27, 2020October 3, 2021September 27, 2020
Operating lease cost(a)$11,623 $18,192 $36,720 $46,903 
Finance lease cost:
     Amortization of lease asset(a)1,476 1,061 4,133 5,999 
     Interest on lease liabilities(b)367 258 997 721 
Variable lease cost(a) (c)6,796 7,455 19,569 29,316 
Total lease cost$20,262 $26,966 $61,419 $82,939 

(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively.

(b) Included in interest expense.

(c) Also includes short term lease costs, which are deemed immaterial.


The following table sets forth certain lease-related information for the nine months ended October 3, 2021 and September 27, 2020:
Nine Months Ended
October 3, 2021September 27, 2020
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows used by operating leases$38,757 $43,858 
     Operating cash flows used by finance leases$997 $721 
     Financing cash flows used by finance leases$3,375 $6,440 
Noncash investing and financing activities:
     Leased assets obtained in exchange for new operating lease liabilities$12,230 $84,578 
     Leased assets obtained in exchange for new finance lease liabilities$7,071 $19,122 
     Modification to leased assets for increase/(decrease) in operating lease liabilities$12,059 $(3,977)
     Modification to leased assets for increase in finance lease liabilities$9,586 $19,194 
     Termination reclasses to decrease operating lease assets$(4,971)$(4,232)
     Termination reclasses to decrease operating lease liabilities$(5,278)$(4,611)
     Termination reclasses to decrease finance lease assets$(33)$(19,994)
     Termination reclasses to decrease finance lease liabilities$(40)$(20,121)
32
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)


Note 14: 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 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 Condensed Consolidated Statements of Income.
The Company has rebate agreements with certain customers. These rebates are recorded as reductions of revenue 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 Condensed Consolidated Balance Sheets.
Payment terms under the Company's sales arrangements are short term, 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 time period following the sale.
The following tables set forth the effects of contract assets and liabilities from contracts with customers. Contract assets and liabilities are reported in "Other receivables" and "Accrued expenses and other," respectively, on the Company's Condensed Consolidated Balance Sheets.
October 3, 2021December 31, 2020
Contract Assets$49,377 $48,390 
Contract Liabilities$(19,148)$(16,687)

Significant changes in the contract assets and liabilities balances during the nine months ended October 3, 2021 and the year ended December 31, 2020 were as follows:
October 3, 2021December 31, 2020
Contract
Asset		Contract
Liability		Contract
Asset		Contract
Liability
Beginning Balance$48,390 $(16,687)$56,364 $(17,047)
Revenue deferred or rebates accrued— (28,142)— (32,512)
Recognized as revenue5,110 9,189 
Rebates paid to customers— 20,571 — 23,683 
Increases due to rights to consideration for customer specific goods produced, but not billed during the period49,377 — 48,390 — 
Transferred to receivables from contract assets recognized at the beginning of the period(48,390)— (56,364)— 
Ending Balance$49,377 $(19,148)$48,390 $(16,687)

Contract assets and liabilities are generally short in duration given the nature of products produced by the Company. Contract assets represent 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 payments received in advance. For multi-year arrangements with pricing mechanisms, the Company will generally defer revenue during the first half of the arrangement and will release the
33
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

deferral over the back half of the contract term. The Company's reportable segments are aligned by product nature as disclosed in Note 15.
The following tables set forth information about revenue disaggregated by primary geographic regions for the three-month periods ended October 3, 2021 and September 27, 2020. The tables also include a reconciliation of disaggregated revenue with reportable segments.
Three months ended October 3, 2021Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$408,295 $370,659 $145,029 $923,983 
  Europe109,566 99,573 24,033 233,172 
  Canada31,612 24,187 — 55,799 
  Asia20,728 81,097 393 102,218 
  Other28,768 59,714 11,539 100,021 
Total$598,969 $635,230 $180,994 $1,415,193 
Three months ended September 27, 2020Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$387,658 $293,968 $166,878 $848,504 
  Europe96,698 78,780 100,418 275,896 
  Canada22,131 17,749 — 39,880 
  Asia19,710 61,463 147 81,320 
  Other20,011 38,409 8,294 66,714 
Total$546,208 $490,369 $275,737 $1,312,314 
34
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The following tables set forth information about revenue disaggregated by primary geographic regions for the nine-month periods ended October 3, 2021 and September 27, 2020. The tables also include a reconciliation of disaggregated revenue with reportable segments.
Nine months ended October 3, 2021Consumer
Packaging		Industrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$1,219,666 $1,042,249 $461,996 $2,723,911 
  Europe334,995 300,495 67,371 702,861 
  Canada87,948 69,218 — 157,166 
  Asia60,256 232,657 914 293,827 
  Other76,660 164,540 32,286 273,486 
Total$1,779,525 $1,809,159 $562,567 $4,151,251 
Nine months ended September 27, 2020Consumer PackagingIndustrial Paper PackagingAll OtherTotal
Primary Geographical Markets:
  United States$1,194,067 $863,514 $470,583 $2,528,164 
  Europe276,848 237,599 261,458 775,905 
  Canada74,708 64,322 — 139,030 
  Asia53,993 170,046 535 224,574 
  Other60,327 112,405 20,690 193,422 
Total$1,659,943 $1,447,886 $753,266 $3,861,095 

Note 13:15: Segment Reporting
The Company reportschanged its financial resultsoperating and reporting structure in fourJanuary 2021 and, as a result, realigned certain of its reportable segments:segments effective January 1, 2021. The revised structure consists of 2 reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as "All Other."
The Company's former Protective Solutions and Display and Packaging Papersegments have been eliminated and Industrial Converted Products,the underlying businesses and Protective Solutions.their results have been realigned into All Other or, in certain cases, subsumed into the remaining two segments.
The Consumer Packaging segment primarily serves prepared and fresh food markets along with other packaging for direct consumer products and 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; andpaper containers; metal and peelable membrane ends and closures. This segment also included blow-moldedclosures; thermoformed plastic bottlestrays and jars through November 7, 2016, when the Company completed the sale of its rigid plastics blow molding operations.containers; printed flexible packaging; and global brand artwork management.
The Display andIndustrial Paper Packaging segment, includes the following products and services: point-of-purchase displays; supply chain management services; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paperboard specialties, such as coasters and glass covers. 
Thepreviously called Paper and Industrial Converted Products, segment includes the following products: paperboardfiber-based tubes, cones, and cores; fiber-based construction tubestubes; fiber-based protective packaging and forms;components; 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 includesBusinesses grouped as All Other include healthcare, protective and retail security packaging and industrial plastic products. These businesses include the following products:products and services: thermoformed rigid plastic trays and devices; custom-engineered paperboard-based and expandedmolded foam protective packaging and components; temperature-assured packaging; injection molded and temperature-assured packaging.extruded containers, spools and parts; retail security packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities. 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.
35
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

The following table sets forth net sales, intersegment sales and operating profit for the Company’s reportable segments.segments and All Other. “Segment operating profit” is defined as the segment’s portion of “Income before interest and income taxes”“Operating profit” excluding restructuring charges,and asset impairment charges, acquisition-related costs, pension settlement charges,acquisition expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis of the financial performance of the business. General corporate expenses have been allocated as operating costs to each of the Company’s reportable segments. "Other, net" for the three-segments and nine-months ended October 1, 2017 includes pension settlement charges of $476 and $31,550, respectively. See note 11 for additional information.All Other. Prior period results have been recast to conform to current-year presentation.
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
(unaudited)

SEGMENT FINANCIAL INFORMATION
 
Three Months Ended
Nine Months Ended
 
October 1,
2017
October 2,
2016
October 1,
2017
October 2,
2016
Net sales:







Consumer Packaging
$565,788

$519,729

$1,569,231

$1,558,074
Display and Packaging
135,560

132,016

365,807

407,157
Paper and Industrial Converted Products
483,376

424,615

1,395,075

1,281,031
Protective Solutions
139,910

132,364

407,519

394,418
Consolidated
$1,324,634

$1,208,724

$3,737,632

$3,640,680
Intersegment sales:







Consumer Packaging
$2,173

$1,357

$4,749

$4,285
Display and Packaging
679

683

2,253

1,806
Paper and Industrial Converted Products
38,791

25,241

103,844

75,158
Protective Solutions
518

257

1,436

1,129
Consolidated
$42,161

$27,538

$112,282

$82,378
Income/(loss) before interest and income taxes:







Segment operating profit:







Consumer Packaging
$67,869

$63,761

$184,942

$186,135
Display and Packaging
1,965

5,153

6,592

13,464
Paper and Industrial Converted Products
42,154

33,239

110,390

104,018
Protective Solutions
11,272

12,580

33,085

38,826
Restructuring/Asset impairment charges
(511) (8,947) (12,519) (41,453)
Other, net
(2,667) (943) (41,665) (2,191)
Consolidated
$120,082

$104,843

$280,825

$298,799
 Three Months EndedNine Months Ended
 October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net sales:
Consumer Packaging$598,969 $546,208 $1,779,525 $1,659,943 
Industrial Paper Packaging635,230 490,369 1,809,159 1,447,886 
All Other180,994 275,737 562,567 753,266 
Consolidated$1,415,193 $1,312,314 $4,151,251 $3,861,095 
Intersegment sales:
Consumer Packaging$1,608 $919 $4,460 $3,179 
Industrial Paper Packaging27,975 24,528 82,571 73,538 
All Other2,318 1,814 7,483 5,970 
Consolidated$31,901 $27,261 $94,514 $82,687 
Operating profit:
Segment operating profit:
Consumer Packaging$60,918 $64,370 $196,341 $212,575 
Industrial Paper Packaging53,343 41,035 161,414 133,871 
All Other8,169 25,136 32,952 54,563 
Restructuring/Asset impairment charges(3,488)(24,149)(8,889)(59,633)
Other non-base income/(charges), net7,570 352 294 (802)
Consolidated$126,512 $106,744 $382,112 $340,574 




Note 14:16: 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.
Fox River
In January 2017, U.S. Paper Mills Corp. (U.S. Mills), a wholly owned subsidiary of the Company, obtained Court approval of a final settlement of cost recovery claims made by Appvion, Inc. for $3,334. The settlement was paid during the first quarter of 2017, and related legal and professional fees totaling $369 were paid during the first and second quarters of 2017. As a result of the settlement becoming final, the Company and U.S. Mills have resolved all pending or threatened legal proceedings related to the Fox River matter, as well as any such proceedings known to be contemplated by government authorities.
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$17,400 at the time of acquisition and an accrual in this amount was recorded on Tegrant’s opening balance sheet. SinceBased on favorable developments at the acquisition,site, the Company has spent a totalreduced its environmental reserve by $10,000 in the third quarter of $851 on remediation of the Spartanburg site. During previous years, the Company has increased its reserves for this site by a total of $1172019 in order to reflect its revised best estimate of what it is likely to pay in order to complete the remediation. Since the acquisition, the Company has spent a total of $1,786 on remediation of the Spartanburg site. At October 1, 20173, 2021 and December 31, 2016,2020, the Company's accrual for environmental contingencies related to the Spartanburg site totaled $16,666$5,614 and $16,821,$5,700, respectively.
36
SONOCO PRODUCTS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in thousands except per share data)
(unaudited)

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

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 October 3, 2021 and December 31, 2020, the Company's accrual for these other sites totaled $1,829 and $2,433, respectively.
Summary
As of October 1, 20173, 2021 and December 31, 2016,2020, the Company (and its subsidiaries) had accrued $20,539$7,443 and $24,515,$8,133, respectively, related to environmental contingencies. These accruals are included in “Accrued expenses and other” on the Company’s Condensed Consolidated Balance Sheets.
Other Legal Matters
In addition to those matters described above, the Company is subject to other various legal proceedings, claims, and litigation arising in the ordinary course of business. While the outcome of these matters could differ from management’s expectations, the Company does not believe the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company’s financial statements.



37





Report of Independent Registered Public Accounting Firm

To the ShareholdersBoard of Directors and DirectorsShareholders of Sonoco Products Company:Company,

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Sonoco Products Company and its subsidiaries (the “Company”) as of October 1, 2017,3, 2021, and the related condensed consolidated statements of income, and comprehensive income, and changes in total equity for the three-month and nine-month periods ended October 1, 20173, 2021 and October 2, 2016September 27, 2020, and the condensed consolidated statementstatements of cash flows for the nine-month periods ended October 1, 20173, 2021 and October 2, 2016. TheseSeptember 27, 2020, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements arefor them to be in conformity with accounting principles generally accepted in the responsibilityUnited States of the Company’s management.America.

We conducted our reviewhave previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, and the related consolidated statements of income, comprehensive income, changes in total equity and of cash flows for the year then ended (not presented herein), and in our report dated February 26, 2021, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the 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 review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of income, of comprehensive income, of changes in total equity and of cash flows for the year then ended (not presented herein), and in our report dated March 1, 2017, which included a paragraph describing a change in the manner of accounting for Debt Issuance Costs in the 2016 financial statements, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.




/s/ PricewaterhouseCoopers LLP

Charlotte, North Carolina
October 31, 2017November 2, 2021
38
SONOCO PRODUCTS COMPANY

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.


Statements included in this Quarterly Report on Form 10-Q that are not historical in nature, 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 “estimate,” “project,” “intend,” “expect,” “believe,” “consider,” “plan,” “strategy,” “opportunity,” “commitment,” "committed," “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 include, but are not limited to, statements regarding:

•availability and supply of raw materials, and offsetting high raw material costs, including the impact of potential changes in tariffs;
•potential impacts of the COVID-19 Coronavirus on business, operations and financial condition;
•improved productivity and cost containment;
•improving margins and leveraging strong cash flow and financial position;
•effects of acquisitions and dispositions;divestitures;
•realization of synergies resulting from acquisitions;
•costs, timing and effects of restructuring activities;
•adequacy and anticipated amounts and uses of cash flows;
•expected amounts of capital spending;
•refinancing and repayment of debt;
•financial and business strategies and the results expected of them;
•financial results for future periods;
•producing improvements in earnings;
•profitable sales growth and rates of growth;
•consumer and customer actions in connection with the COVID-19 pandemic;
•market leadership;
•research and development spending;
•expected impact and costs of resolution of legal proceedings;
•extent of, and adequacy of provisions for, environmental liabilities;
•commitments to reduce greenhouse gas emissions;
•sustainability commitments;
•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. The risks, uncertainties and assumptions include, without limitation:

•availability and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs and escalating trade wars, 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;
39
SONOCO PRODUCTS COMPANY
•impacts arising as a result of the COVID-19 Coronavirus global 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 of 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;
SONOCO PRODUCTS COMPANY
•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;
continued strength of our paperboard-based tubes and cores and composite can operations;
•ability to manage the mix of business to take advantage of growing markets while reducing cyclical effects of some of the Company'sCompany’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, and successfully integrate newly acquired businesses into the Company'sCompany’s operations;
•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 and interpretations 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'smanagement’s assessment of goodwill impairment;
•accuracy of assumptions underlying fair value measurements, accuracy of management'smanagement’s assessments of fair value and fluctuations in fair value;
•ability to maintain effective internal controls over financial reporting;
•liability for and anticipated costs of resolution of legal proceedings;
•liability for and anticipated costs of environmental remediation actions;
40
SONOCO PRODUCTS COMPANY
•effects of environmental laws and regulations;
•operational disruptions at our major facilities;
•failure or disruptions in our information technologies;
•failures 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;
•actions of domestic or foreign government agencies and changes in laws and regulations affecting the Company;Company and increased costs of compliance;
•international, national and local economic and market conditions and levels of unemployment; and
•economic disruptions resulting from terrorist activities and natural disasters.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 the Company's Annual Report on Form 10-K under Item 1A - "Risk1A-"Risk Factors" and throughout other sections of that 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 report 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. 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.

41
SONOCO PRODUCTS COMPANY



COMPANY OVERVIEW
Sonoco is a leading provider of consumer packaging, industrial products, protective packaging and packaging supply chain services, with approximately 324over 300 locations in 3334 countries.
As previously disclosed, Sonoco changed its operating and reporting structure in January 2021 and, as a result, realigned certain of its reportable segments effective January 1, 2021. The revised structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as "All Other." The Company's former Protective Solutions and Display and Packaging segments have been eliminated and the underlying businesses and their results have been grouped into All Other or, in certain cases, subsumed into the remaining two segments. Changes to the Consumer Packaging segment include moving the Plastics - Healthcare packaging and industrial plastics business units to All Other. The Industrial Paper Packaging segment, previously called Paper and Industrial Converted Products, remains unchanged except that it now includes the Company's fiber protective packaging business unit which was previously included in the Protective Solutions segment. All Other includes our healthcare and protective packaging businesses, including Plastics - Healthcare, Sonoco ThermoSafe, consumer and automotive molded foam, retail security packaging, and paper amenities. Prior to the divestiture of the Company's global display and packaging operations 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 were also included in All Other.
Sonoco competes in multiple product categories, with its operations organized and reported in four segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. Thethe majority of the Company’s revenues arearising from products and services sold to consumer and industrial products companies for use in the packaging of their products for sale or shipment. The Company also manufactures paperboard, primarily fromuncoated recycled materials,paperboard, for both internal use and open market sale. Each of the Company’s operating units has its own sales staff and maintains direct sales relationships with its customers.
COVID-19
Impact on Operating Results
Around the world, Sonoco is an essential provider of consumer, industrial and medical packaging. Sonoco associates are deemed “Essential Critical Infrastructure Workers” under the guidance of the U.S. Department of Homeland Security and have received similar designations by the vast majority of other governmental agencies in the 34 countries where the Company operates. Many areas around the world have largely reopened their economies and the Company has seen improved demand for many of its products and services. However, a resurgence of the virus could trigger the re-imposition of restrictions on business activity and/or have a negative effect on consumer behavior that alone, or together, could significantly hamper economic activity. Should this occur, management expects it will respond with appropriate changes to active production capacity and cost-management initiatives. An extended period of disruption to our served markets or global supply chains could materially and adversely affect our results of operations, access to sources of liquidity and overall financial condition. In addition, an extended global recession caused by a resurgence of the pandemic would have an adverse impact on the Company's operations and financial condition.
As previously reported, beginning in the first quarter of 2020 and through the course of the COVID-19 pandemic to date, the pandemic's impact on the Company's businesses has been mixed. Generally speaking, our consumer-related businesses benefited from higher demand for food packaging as large numbers of consumers chose to eat at home, while our industrial related businesses suffered from the pandemic-induced recession and a slow and halting recovery in many of its markets.
Overall sales run rates are expected to be flat or somewhat higher in the fourth quarter of 2021 compared to the third quarter of 2021. While operating profits are expected to continue to face challenges from raw material and non-material inflation and supply chain disruptions, overall the Company expects to benefit from improved price/cost in the fourth quarter. Although demand in the Consumer Packaging segment has declined from levels seen earlier in the pandemic, the Company expects the segment to continue benefiting in the fourth quarter of 2021 from elevated at-home eating trends driven by robust snacking, remote working, and consumers, particularly younger consumers, adopting new cooking habits. Demand for our global Industrial Paper Packaging products has recovered to pre-pandemic levels in most of our global markets and we have opportunities for new product growth, such as our fiber protective post business which is expanding into Poland, Turkey and Mexico. While several of our All Other businesses have been negatively impacted by supply chain interruptions, the Company expects these conditions to improve in the fourth quarter.



42
SONOCO PRODUCTS COMPANY


Financial Flexibility and Liquidity
Sonoco has a strong, investment-grade balance sheet and substantial liquidity available in the form of cash, cash equivalents and revolving credit facilities, as well as the ability to issue commercial paper and to access liquidity in the banking and debt capital markets.

Significant actions in the first nine months of 2021 affecting the Company's liquidity position included:
•On April 5, 2021, the Company received cash proceeds totaling $79.7 million from the sale of its U.S. display and packaging business.
•On May 10, 2021, the Company paid $150 million in connection with an accelerated share repurchase agreement to repurchase shares of its common stock.
•On May 25, 2021, the Company repurchased $63.2 million of its outstanding 5.75% notes, due November 2040, for a total cash cost of $82.0 million.
•On May 25, 2021, upon maturity, the Company paid $177.8 million to retire its 1% Euro loan.
•On June 30, 2021, the Company entered into a new five-year $750 million, unsecured revolving credit facility which replaced an existing $500 million facility. Consistent with prior facilities, the new revolving credit facility supports the Company's $500 million commercial paper program.
•On August 1, 2021, the Company repaid its $250 million, 4.375% debentures without penalty ahead of their November 2021 maturity.
Following these actions, at October 3, 2021, the Company had $160 million in cash on hand and committed capacity of $750 million under its revolving credit facility, of which $548 million was available for draw down net of $202 million of outstanding commercial paper balances. Scheduled debt maturities over the next twelve months total approximately $276 million, including outstanding commercial paper. The Company believes cash on hand and available credit, combined with expected net cash flows generated from operating and investing activities, will provide ample liquidity to cover these and other cash flow needs of the Company over the course of the next twelve months.

Health, Safety and Business Continuity
The health and safety of Sonoco’s associates, contractors, suppliers and the general public continue to be a top priority. Safety measures include mask requirements for non-vaccinated employees and all visitors, routinely cleaning high-touch surfaces, following social distancing protocols, prohibiting all non-critical business travel, and utilizing remote working arrangements where practical. In addition, Sonoco has proactively engaged local government health agencies and medical providers to provide access to COVID-19 vaccine opportunities when available under local regulations. Sonoco routinely provides emails and leadership communications to keep its associates up to date on Company and health authority information, guidelines, protocols and policies, including those set by the World Health Organization and the U.S. Centers for Disease Control and Prevention.

Our Global Task Force that was activated at the beginning of the pandemic continues to meet to monitor and adjust business continuity plans to ensure our operations are as prepared as possible to be able to continue producing and shipping products to our customers without disruption. Sonoco has a diverse global supply chain and to date has been able to overcome raw material or other supply disruptions as a result of the COVID-19 pandemic.
Third Quarter 20172021 Compared with Third Quarter 20162020
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
Measures calculated and presented in accordance with generally accepted accounting principles are referred to as GAAP financial measures. The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures in the Company’s Condensed Consolidated Statements of Income for each of the periods presented. These non-GAAP financial measures (referred to as “Base”) are the GAAP measures adjusted to exclude amounts (dependent upon the applicable period), including the associated tax effects, relating to restructuring charges,initiatives, asset impairment charges, non-operating pension costs/income, environmental reserve charges/releases, acquisition charges, specifically identified tax adjustments, pension settlement chargesand divestiture-related transaction costs, gains/losses from the divestiture of businesses, excess property
43
SONOCO PRODUCTS COMPANY
insurance recoveries, and certain other items, if any, including other income tax-related adjustments and/or events, the exclusion of which the Company believes improves the comparability and analysis of the underlying financial performance of the business. More information about the Company's use of Non-GAAPnon-GAAP financial measures is provided in the Company's Annual Report on Form 10-K for the year ended December 31, 20162020 under Item 7 - "Management's discussion and analysis of financial condition and results of operations," under the heading "Use of non-GAAP financial measures."
For the three months ended October 3, 2021
Dollars in thousands, except per share dataGAAP
Restructuring/Asset Impairments(1)
Other
Adjustments(1)
Base
Operating profit$126,512 $3,488 $(7,570)$122,430 
Non-operating pension costs525 — (525)— 
Interest expense, net14,219 — — 14,219 
Income before income taxes$111,768 $3,488 $(7,045)$108,211 
Provision for income taxes2,564 312 16,683 19,559 
Income before equity in earnings of affiliates$109,204 $3,176 $(23,728)$88,652 
Equity in earnings of affiliates, net of tax2,351 — — 2,351 
Net income$111,555 $3,176 $(23,728)$91,003 
Net loss attributable to noncontrolling interests(415)— — (415)
Net income attributable to Sonoco$111,140 $3,176 $(23,728)$90,588 
Per diluted common share*$1.12 $0.03 $(0.24)$0.91 
*Due to rounding individual items may not sum across
  For the three months ended October 1, 2017
Dollars in thousands, except per share data GAAP Restructuring/
Asset
Impairment		 
Other
Adjustments(1)
 Base
Income before interest and income taxes $120,082
 $511
 $2,667
 $123,260
Interest expense, net 13,647
 —
 —
 13,647
Income before income taxes 106,435
 511
 2,667
 109,613
Provision for income taxes 35,545
 445
 (1,080) 34,910
Income before equity in earnings of affiliates 70,890
 66
 3,747
 74,703
Equity in earnings of affiliates, net of tax 2,521
 —
 —
 2,521
Net income 73,411
 66
 3,747
 77,224
Net (income) attributable to noncontrolling interests (599) (21) —
 (620)
Net income attributable to Sonoco $72,812
 $45
 $3,747
 $76,604
Per diluted common share* $0.72
 $—
 $0.04
 $0.76
*Due to rounding individual items may not sum across      
(1)Consists primarily(1 ) See table in "Results of costsOperations - Overview" below for details related to acquisitions and potential acquisitions. Additionally, these amounts include the effectafter-tax impact of state tax rate changes on deferred taxes as well as reservesmajor components

For the three months ended September 27, 2020
Dollars in thousands, except per share dataGAAP
Restructuring/Asset Impairments(1)
Other
Adjustments(1)
Base
Operating profit$106,744 $24,149 $(352)$130,541 
Non-operating pension costs7,453 — (7,453)— 
Interest expense, net18,581 — — 18,581 
Income before income taxes$80,710 $24,149 $7,101 $111,960 
Provision for income taxes(649)5,668 21,990 27,009 
Income before equity in earnings of affiliates$81,359 $18,481 $(14,889)$84,951 
Equity in earnings of affiliates, net of tax1,939 — — 1,939 
Net income$83,298 $18,481 $(14,889)$86,890 
Net loss attributable to noncontrolling interests151 (9)— 142 
Net income attributable to Sonoco$83,449 $18,472 $(14,889)$87,032 
Per diluted common share*$0.82 $0.18 $(0.15)$0.86 
*Due to rounding individual items may not sum across
(1) See table in "Results of Operations - Overview" below for uncertain tax positions totaling a net lossdetails related to the after-tax impact of $2,362.major components









44
SONOCO PRODUCTS COMPANY

  For the three months ended October 2, 2016
Dollars in thousands, except per share data GAAP Restructuring/
Asset
Impairment		 
Other
Adjustments(1)
 Base
Income before interest and income taxes $104,843
 $8,947
 $943
 $114,733
Interest expense, net 12,437
 —
 —
 12,437
Income before income taxes 92,406
 8,947
 943
 102,296
Provision for income taxes 29,618
 2,097
 (357) 31,358
Income before equity in earnings of affiliates 62,788
 6,850
 1,300
 70,938
Equity in earnings of affiliates, net of tax 3,190
 —
 —
 3,190
Net income 65,978
 6,850
 1,300
 74,128
Net (income) attributable to noncontrolling interests (583) (34) —
 (617)
Net income attributable to Sonoco $65,395
 $6,816
 $1,300
 $73,511
Per diluted common share* $0.64
 $0.07
 $0.01
 $0.72
*Due to rounding individual items may not sum across      
(1) Consists primarily of costs related to acquisitions, potential acquisitions, and a small income tax reserve adjustment.

RESULTS OF OPERATIONS
The following discussion provides a review of results for the three months ended October 1, 20173, 2021 versus the three months ended October 2, 2016.September 27, 2020.
OVERVIEW
Net sales for the third quarter of 20172021 increased 9.6%7.8 percent to $1,325$1,415 million, compared with $1,209$1,312 million in the same period last year. The increase in sales was the result ofThis improvement reflects increases from volume/mix as well as higher selling prices, mostly implemented to offset inflation, a favorable year-over-year impact from foreign exchange, and additional sales from the effect on salesAugust 2020 acquisition of acquisitions, netCan Packaging. These positive factors were partially offset by the April 4, 2021 and November 30, 2020 divestitures of dispositions,the Company's U.S. display and the positive impact of foreign exchange. Sales price increases primarily reflect higher raw material costs which the Company was able to pass through to customers.packaging and European contract packaging businesses, respectively.

Net income attributable to Sonoco for the third quarter of 20172021 increased 11.3% to $72.8$111.1 million, $0.72or $1.12 per diluted share, compared to $65.4$83.4 million, $0.64or $0.82 per diluted share, reported for the same period of 2016. Current2020. Net income in the current quarter includes net income includes after-tax, non-base chargesincome totaling $3.8 million. These charges consist mostly of acquisition and acquisition-related charges as well as non-base tax charges related to tax rate changes and reserve adjustments. Results$20.6 million, while results for the third quarter of 2016 include2020 included net after-tax, restructuring and asset impairmentnon-base charges totaling $3.6 million. These non-base items consisted of $6.8 million and after-tax acquisition and non-base tax charges of $1.3 million. the following:

Three Months Ended
($ in millions)October 3, 2021September 27, 2020
Net recognized benefit on 2017 amended U.S. income tax return$(30.0)$— 
Tax impact of sale of European contract packaging business— (20.4)
Other non-base tax charges12.1 — 
Non-operating pension costs0.3 6.4 
Gain on sale of previously closed facilities(2.2)— 
All other net restructuring and asset impairment charges5.4 18.5 
All other net gains, including acquisition and divestiture-related costs(6.2)(0.9)
Total non-base (income)/charges, after tax$(20.6)$3.6 

Adjusted for these items, third-quarter baseBase net income attributable to Sonoco (base(Base earnings) for the third quarter of 2021 increased 4.2%4.1 percent to $76.6$90.6 million, $0.76or $0.91 per diluted share, from $73.5$87.0 million, $0.72or $0.86 per diluted share, in 2016.
The higher2020. This overall increase reflects a decrease in Base operating profit which was more than offset by a decrease in Base net interest expense, and a lower Base effective tax rate. Despite the 7.8 percent increase in net sales, third-quarter 2017 earnings were largely theBase operating profit was down 6.2 percent from last year's third quarter as a result of a positivenegative price/cost impact, particularly inrelationship and the Company's Paper and Industrial Converted Products segment, as third quarter selling prices to manydivestitures of the segment's customersCompany's U.S. display and packaging and European contract packaging businesses, net of earnings added from the acquisition of Can Packaging in August 2020. These net negative impacts were reset duringsomewhat offset by solid productivity gains and volume/mix improvements. The Base effective tax rate for the secondcurrent year’s quarter of 2017 when old corrugated containers (OCC) prices were higherwas lower than what they subsequently averaged during the third quarter of 2017. Strong manufacturing productivity in the Company's Consumer Packaging segment and lower restructuring and asset impairment charges also contributedprior year's due primarily to the overall increase in earnings overrelease of reserves for uncertain tax positions upon the previous year's third quarter. These positive factors were slightly offset by higher wageexpiration of the statute of limitations and other inflation.an increased benefit from tax credits.






SONOCO PRODUCTS COMPANY


OPERATING REVENUE
Net sales for the third quarter of 20172021 increased $116$103 million, or 7.8 percent, from the prior-year quarter.
The components of the sales change were:
($ in millions)
Volume/mix$43 
Selling prices$161 
Acquisitions and divestitures, net$(111)
Foreign currency translation and other, net$9 
Total sales increase$103 

45
 ($ in millions)
Volume/mix$(1)
Selling prices58
Acquisitions and Divestitures38
Foreign currency translation and other, net21
  
Total sales increase$116
  
SONOCO PRODUCTS COMPANY

COSTS AND EXPENSES
The Company's gross profit margin percentage declined to 18.9% this quarter compared to 19.5% in the prior-year quarter. The 60 basis point decline in gross profit margin was largely attributable to the effect on margin percentages from passing through higher material prices and other operating costs. The translation impact of a weaker dollar increased reported costCost of goods sold by approximately $13increased $102.2 million, compared toor 9.7 percent, in the third quarter of 2016. These negative impacts to2021 compared with the same period last year. The increase was driven primarily by material inflation and higher volumes which were partially offset by divestitures, net of acquisitions. Gross profit was $257.7 million for the three months ended October 3, 2021, which was $0.7 million higher than the prior-year period. However, gross profit margin percentageas a percent of sales decreased to 18.2 percent from 19.6 percent in the prior-year quarter as sales price increases were somewhat offset by manufacturingnot able to fully recover higher material and procurement productivity.other operating costs.
Selling,GAAP selling, general and administrative expenses ("SG&A") costs for the quarter increased $8.7$4.5 million, or 7.2%,3.5 percent, year over year, due primarilymitigated by a combination of mark-to-market gains on certain derivatives entered into to SG&A expenses incurred by the operations of acquired businesses, net of divested businesses, and wage inflation.
Third quarter restructuringmanage natural gas costs and assetlife insurance gains. Absent these gains, the increase in SG&A would have been approximately $10 million. This increase was largely driven by a higher, more-normal, level of management incentive expense compared to the prior year's quarter as well as increased spending on strategic information technology activities and general inflation.
In the third quarter of 2021, the Company finalized the working capital settlement related to the April 2021 sale of its U.S. display and packaging business. As a result of this settlement, together with the sale of a small plastics foods thermoforming operation, the Company recognized a total gain on divestiture of businesses in the third quarter of 2021 of $2.8 million. Additional information regarding divestitures is provided in Note 3 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Restructuring/Asset impairment charges totaled $0.5$3.5 million for the third quarter of 2021 compared with $8.9$24.1 million in the same period last year. The year-over-year decrease was the result of lower restructuring activity in the current year as well as gains of $2.8 million related to the third quarter 2021 sale of buildings at previously closed facilities. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
NetNon-operating pension costs were $6.9 million lower in the third quarter of 2021 compared to the same period last year due to the absence of related costs following the settlement of the liabilities of the Sonoco Pension Plan for Inactive Participants (the "Inactive Plan") in the second quarter of 2021. Additional information regarding non-operating pension costs is provided in Note 11 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
GAAP net interest expense for the third quarter increasedof 2021 decreased to $13.6$14.2 million, compared with $12.4$18.6 million during the third quarter of 2016. 2020, due primarily to lower average debt balances quarter over quarter.
The increase2021 third-quarter effective tax rates on GAAP and Base earnings were 2.3 percent and 18.1 percent, respectively, compared with negative 0.8 percent and 24.1 percent, respectively, in the prior year’s quarter. The 2021 GAAP rate was primarilyunusually low largely due to higher average borrowingsa $30.0 million net recognized benefit associated with the amendment of the Company’s 2017 U.S. income tax return which resulted in an increased utilization of its foreign tax credits. In the current-year quarter stemming from acquisition financing.
Thesame period of 2020, the negative effective tax rate on GAAP and base earnings inwas due to a $20.4 million write-down of a deferred tax liability related to the thirdsale of the Company’s European contract packaging business. The Base tax rate for the current year’s quarter of 2017 was 33.4% and 31.8%, respectively, compared with 32.1% and 30.7%, respectively, for last year's quarter. The 2016 GAAP and base tax rates were both positively affected by favorable discrete tax adjustments, including a benefit fromlower due primarily to the release of reserves for uncertain tax positions whileupon the current-year rates reflectexpiration of the negative impactsstatute of lesslimitations and an increased benefit from the manufacturer’s deduction and a higher overall state tax rate. credits.

REPORTABLE SEGMENTS
The Company changed its operating and reporting structure in January 2021 and, as a result, realigned certain reportable segments effective January 1, 2021. The revised structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as "All Other." Additional information regarding segment realignment is provided in Note 15 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
46
SONOCO PRODUCTS COMPANY
The following table recaps net sales attributable to each of the Company’s segments for the third quarters of 20172021 and 20162020 ($ in thousands):
Three Months Ended
October 3, 2021September 27, 2020%
 Change
Net sales:
Consumer Packaging$598,969 $546,208 9.7 %
Industrial Paper Packaging635,230 490,369 29.5 %
All Other180,994 275,737 (34.4)%
Consolidated$1,415,193 $1,312,314 7.8 %

  Three Months Ended
  October 1,
2017		 October 2,
2016		 % Change
Net sales:      
Consumer Packaging $565,788
 $519,729
 8.9%
Display and Packaging 135,560
 132,016
 2.7%
Paper and Industrial Converted Products 483,376
 424,615
 13.8%
Protective Solutions 139,910
 132,364
 5.7%
Consolidated $1,324,634
 $1,208,724
 9.6%
SONOCO PRODUCTS COMPANY

Consolidated operating profits, also referred to as “Income before interest and income taxes” on the Company’s Condensed Consolidated Statements of Income, are comprised of the following ($ in thousands): 
  Three Months Ended
  October 1,
2017		 October 2,
2016		 % Change
Income/(loss) before interest and income taxes:      
Segment operating profit:      
Consumer Packaging $67,869
 $63,761
 6.4 %
Display and Packaging 1,965
 5,153
 (61.9)%
Paper and Industrial Converted Products 42,154
 33,239
 26.8 %
Protective Solutions 11,272
 12,580
 (10.4)%
Restructuring/Asset impairment charges (511) (8,947) 

Other, net (2,667) (943) 

Consolidated $120,082
 $104,843
 14.5 %
The following table recaps restructuring/asset impairment chargesoperating profit attributable to each of the Company’s segments during the third quarters of 20172021 and 20162020 ($ in thousands):
Three Months Ended
October 3, 2021September 27, 2020%
Change
Operating profit:
Segment operating profit:
Consumer Packaging$60,918 $64,370 (5.4)%
Industrial Paper Packaging53,343 41,035 30.0 %
All Other8,169 25,136 (67.5)%
Restructuring/Asset impairment charges(3,488)(24,149)
Other non-base income, net7,570 352 
Consolidated$126,512 $106,744 18.5 %
  Three Months Ended
  October 1,
2017		 October 2,
2016
Restructuring/Asset impairment charges:    
Consumer Packaging $(1,111) $2,857
Display and Packaging (2) 997
Paper and Industrial Converted Products 993
 4,976
Protective Solutions 621
 127
Corporate 10
 (10)
Total $511
 $8,947

Segment results viewed by Company management to evaluate segment performance do not include restructuring charges or income, asset impairment charges, acquisition-relatedacquisition and divestiture-related costs, environmental reserve charges interest expense, income taxes,or releases, or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is a non-GAAP measure and is defined as the segment’s portion of “Income before interest and income taxes”“operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments.

The following table recaps restructuring/asset impairment (income)/charges attributable to each of the Company’s segments during the third quarter of 2021 and 2020 ($ in thousands):
Three Months Ended
October 3, 2021September 27, 2020
Restructuring/Asset impairment (income)/charges:
Consumer Packaging$2,734 $16,498 
Industrial Paper Packaging(1,888)6,990 
All Other555 762 
Corporate2,087 (101)
Consolidated$3,488 $24,149 
Consumer Packaging
The ConsumerSonoco’s Consumer Packaging segment primarily serves prepared and fresh food markets along with other packaging for direct consumer products and 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; andpaper containers; metal and peelable membrane ends and closures. This segment also included blow-moldedclosures; thermoformed plastic bottlestrays and jars through November 7, 2016, when the Company completed the sale of its rigid plastics blow molding operations.containers; printed flexible packaging; and global brand artwork management.
Segment sales increased 8.9% compared to the prior-year quarter due to acquisitions, net of divestitures, higher selling prices and the positive impact of foreign exchange which more than offset modestly lower volume/mix.
47
Segment operating profit grew 6.4% compared to the prior-year quarter due to strong improvement in manufacturing productivity and a positive price/cost relationship. These positive factors were partially offset by lower volume in metal ends and composite cans in North America and flexible packaging.






SONOCO PRODUCTS COMPANY

Segment sales increased 9.7 percent compared to the prior year's quarter due to higher selling prices, mostly implemented to help offset inflation, sales added from the prior-year Can Packaging acquisition and a positive mix of business. Overall, segment volume/mix improved about 1 percent during the quarter as solid gains in flexible packaging sales were offset by modest declines in the segment's other businesses. Flexible packaging's volume/mix improvement was driven by strong snack food market sales as well as a rebound in confectionery markets. Global rigid paper container's volume/mix declined slightly in the third quarter as North American food packaging volumes continued to normalize to pre-pandemic levels. In the plastics - food business, increased volume/mix for containers in prepared foods was more than offset by declines in fresh food packaging.
DisplaySegment operating profit declined 5.4 percent compared to the prior year's quarter as a negative price/cost relationship stemming from both raw material and non-material inflation was only partially offset by strong productivity improvements. As a result, segment operating margin declined to 10.2 percent in the quarter from 11.8 percent in the 2020 period.
Assuming consumers continue to revert towards pre-COVID-19 eating habits and traveling patterns, the Company expects there will be a mixed impact on this segment over the next few quarters with lower demand for packaged food and household goods by stay-at-home consumers being partially offset by a year-over-year increase in convenience and travel-related product categories. Despite demand in certain categories continuing to run at higher than pre-pandemic levels, overall segment sales volume is expected to decline seasonally in the fourth quarter. In addition, higher resin and other costs are expected to drive continued price/cost pressure on operating profit.
Industrial Paper Packaging
The Display andIndustrial Paper Packaging segment includes the following products: fiber-based packaging tubes, cones, and cores; fiber-based construction tubes; fiber-based protective packaging and components; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, corrugating medium, recovered paper and material recycling services.
Segment sales increased 29.5 percent from the prior year's quarter largely due to higher selling prices implemented to offset raw material and non-material inflation, while volume/mix improved by approximately 5 percent. Global tube and core volume/mix increased by approximately 7 percent as demand returned to pre-pandemic levels. In addition, global paper volume/mix improved approximately 3 percent as both internal converting and trade markets saw increased demand over the prior-year period.
Segment operating profit increased 30.0 percent from the prior year's quarter, primarily driven by positive volume/mix and related productivity gains. Segment operating margin was unchanged at 8.4 percent.
Assuming elements of the economy hit particularly hard by the COVID-19 pandemic continue to recover, over the next few quarters the Company expects to see both sequential and year-over-year volume increases in many of our paper and industrial converted products markets. Overall, the businesses in this segment were able to recover escalating costs in the third quarter. While average recycled fiber prices are expected to be slightly higher in the fourth quarter than in the third quarter, the Company expects recycled fiber prices to trend down in the fourth quarter. Partly due to this trend, the segment is expected to be able to recover these and other costs through contractual pass-through arrangements or non-contract price adjustments. As a result, the Company expects the segment to benefit in the fourth quarter from a modestly positive price/cost relationship.
All Other
Businesses grouped as All Other include healthcare, protective and retail security packaging and industrial plastic products. These businesses include the following products and services: designing, manufacturing,
assembling, packingthermoformed rigid plastic trays and distributing temporary, semi-permanentdevices; custom-engineered molded foam protective packaging and permanent point-of-purchase displays; supply chain management services, including contract packing, fulfillmentcomponents; temperature-assured packaging; injection molded and scalable service centers;extruded containers, spools and parts; retail security packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities, such as coastersamenities. Reported in All Other, the Company sold its global display and glass covers.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 comprised the Company's point-of-purchase displays, fulfillment, and contract packaging operations.
Sales for the quarter were up 2.7% compared to last year’s quarter due primarily to the positive impact of foreign exchange.
Segment operating profit decreased $3.2 million, or 61.9%,All Other declined 34.4 percent from the prior year's quarter due primarily to higher operating costs associated with the ramp up of operations at a new domestic retail packaging fulfillment center.
Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes and cores; fiber-based construction tubes and forms; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper and material recycling services.
Reported segment sales increased approximately 13.8% for the quarter due to higher selling prices implemented to recover higher raw material costs, the positive impact of foreign exchange,the global display and improvedpackaging divestitures. Excluding the impact of the divestitures, volume/mix of business. The higher third-quarter selling prices were the result of contract pricing resets tied to the market price for OCCincreased sales by approximately 8 percent, driven by strong gains in industrial plastics and temperature-assured packaging, which was significantly higher this year compared to when prices were set for last year's third quarter.
Operating profit increased 26.8% due to a positive price/cost relationship, improved volume in international tubes and cores and global paper operations, and gains from manufacturing productivity. Resultsmore than offset lower demand in the Company's corrugating medium operations improved over the prior-year quarter due to higher selling pricesretail security and stronger demand. Although the Company's corrugating medium operation showed significant improvement quarter over quarter, it continues to under perform long-term expectations. This operation, which consists of only one machine, has been and continues to be under pressure due to market supply in North America exceeding demand. This has resulted in generally lower prices and reduced volume for our corrugating medium operation. Management is continuing to seek both near and long-term solutions including, but not limited to, modified run schedules, targeted cost reductions, strategic partnerships, and potential closure of the operation.healthcare packaging units.
Protective Solutions
The Protective Solutions segment includes the following products: custom-engineered, paperboard-based and expanded foam protective packaging and components; and temperature-assured packaging.
Segment sales for the quarter were up 5.7% year over year driven by sales from acquisitions, higher selling prices, and the positive impact of foreign exchange.
Operating profits decreased 10.4%All Other operating profit declined 67.5 percent from the prior-yearprior year's quarter due primarily to lower volume in automotive componentsthe impact of the global display and the related unfavorable impact on manufacturing productivity.packaging divestitures along with a negative price/cost relationship stemming mostly from rising resin prices.
48
SONOCO PRODUCTS COMPANY

Operating margin declined to 4.5 percent in the quarter from 9.1 percent in 2020 largely due to unrecovered cost increases.

With the April 4, 2021 sale of the Company's U.S. display and packaging business and the November 2020 sale of the Company's European contract packaging business, the Company has completely exited its global display and packaging business. These divestitures will continue to negatively impact year-over-year comparisons of operating results through the first quarter of 2022.
The Company expects the temperature-assured business to continue producing solid results in the remainder of 2021, with operating profit exceeding the prior year, largely driven by sales of packaging critical for pharmaceutical transport, including flu and COVID-19 vaccines. The businesses that serve automotive and appliance markets are expected to continue to rebound from prior-year levels, which were significantly depressed by the COVID-19 pandemic. However, this demand rebound is expected to be somewhat restricted by supply chain issues. Finally, the Company's plastics business serving the healthcare industry is expected to show improved fourth-quarter results year over year as its served markets return to a more normalized demand for elective surgeries. However, results for the Company's industrial plastics operations, which benefited in the third quarter from both a COVID rebound and normal seasonal strength, are expected to decline sequentially in the fourth quarter due to seasonality and price/cost headwinds, but still exceed prior-year COVID-depressed results.

Nine Months Ended October 1, 20173, 2021 Compared with Nine Months Ended October 2, 2016September 27, 2020
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
The following tables reconcile the Company'sCompany’s non-GAAP financial measures to their most directly comparable GAAP financial measures in the Company'sCompany’s Condensed Consolidated Statements of Income for each of the periods presented.
For the nine months ended October 3, 2021
Dollars in thousands, except per share dataGAAP
Restructuring/Asset Impairments(1)
Other
Adjustments(1)
Base
Operating profit$382,112 $8,889 $(294)$390,707 
Non-operating pension costs562,818 — (562,818)— 
Interest expense, net46,744 — 2,165 48,909 
Loss from the early extinguishment of debt20,184 — (20,184)— 
(Loss)/income before income taxes$(247,634)$8,889 $580,543 $341,798 
(Benefit from)/Provision for income taxes(91,542)2,653 169,255 80,366 
(Loss)/income before equity in earnings of affiliates$(156,092)$6,236 $411,288 $261,432 
Equity in earnings of affiliates, net of tax5,701 5,701 
Net (loss)/income$(150,391)$6,236 $411,288 $267,133 
Net loss attributable to noncontrolling interests(243)(243)
Net (loss)/income attributable to Sonoco$(150,634)$6,236 $411,288 $266,890 
Diluted Weighted average common shares outstanding(2):
100,039 468 100,507 
Per diluted common share*$(1.51)$0.06 $4.09 $2.66 
*Due to rounding individual items may not sum across
  For the nine months ended October 1, 2017
Dollars in thousands, except per share data GAAP Restructuring/
Asset
Impairment		 
Other
Adjustments(1)
 Base
Income before interest and income taxes $280,825
 $12,519
 $41,665
 $335,009
Interest expense, net 38,497
 —
 —
 38,497
Income before income taxes 242,328
 12,519
 41,665
 296,512
Provision for income taxes 78,251
 4,081
 11,422
 93,754
Income before equity in earnings of affiliates 164,077
 8,438
 30,243
 202,758
Equity in earnings of affiliates, net of tax 7,320
 —
 —
 7,320
Net income 171,397
 8,438
 30,243
 210,078
Net (income) attributable to noncontrolling interests (1,727) (35) —
 (1,762)
Net income attributable to Sonoco $169,670
 $8,403
 $30,243
 $208,316
Per diluted common share* $1.68
 $0.08
 $0.30
 $2.07
*Due to rounding individual items may not sum across      
(1 )Includes pension settlement charges See table in "Results of $31,550, costs related to acquisitions and potential acquisitions, and certain other costs, partially offset by insurance settlement gains. Also includes net tax charges totaling $2,229 primarilyOperations - Overview" below for details related to the settlementafter-tax impact of major components.
(2 )Due to the magnitude of certain expenses considered by management to be non-base and included in Other Adjustments. the Company reported a tax audit in Canada and the effect of state tax rate changes on deferred taxes as well as reserves for uncertain tax positions totalingyear-to-date GAAP Net Loss Attributable to Sonoco. In instances where a company has a net loss, of $2,263. These amounts are partially offset by a tax benefit fromincluding potential common shares in the final settlementdenominator of a prior-year business disposition.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 Diluted Weighted Average Common Shares Outstanding being the same. However, the Company also presents Base Net Income Attributable to Sonoco, which excludes the net non-base items. In order to maintain consistency and comparability of Base Diluted EPS, 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.

49
  For the nine months ended October 2, 2016
Dollars in thousands, except per share data GAAP Restructuring/
Asset
Impairment		 
Other
Adjustments(1)
 Base
Income before interest and income taxes $298,799
 $41,453
 $2,191
 $342,443
Interest expense, net 39,768
 —
 —
 39,768
Income before income taxes 259,031
 41,453
 2,191
 302,675
Provision for income taxes 83,602
 10,442
 (17) 94,027
Income before equity in earnings of affiliates 175,429
 31,011
 2,208
 208,648
Equity in earnings of affiliates, net of tax 7,457
 —
 —
 7,457
Net income 182,886
 31,011
 2,208
 216,105
Net (income) attributable to noncontrolling interests (1,325) (78) —
 (1,403)
Net income attributable to Sonoco $181,561
 $30,933
 $2,208
 $214,702
Per diluted common share* $1.78
 $0.30
 $0.02
 $2.11
*Due to rounding individual items may not sum across      
(1) Consists primarily of costs related to acquisitions and potential acquisitions.












SONOCO PRODUCTS COMPANY

For the nine months ended September 27, 2020
Dollars in thousands, except per share dataGAAP
Restructuring/Asset Impairments(1)
Other
Adjustments(1)
Base
Operating profit$340,574 $59,633 $802 $401,009 
Non-operating pension costs22,632 — (22,632)— 
Interest expense, net53,311 — — 53,311 
Income before income taxes$264,631 $59,633 $23,434 $347,698 
Provision for income taxes49,337 15,021 24,673 89,031 
Income before equity in earnings of affiliates$215,294 $44,612 $(1,239)$258,667 
Equity in earnings of affiliates, net of tax3,230 — — 3,230 
Net income$218,524 $44,612 $(1,239)$261,897 
Net loss attributable to noncontrolling interests581 (26)— 555 
Net income attributable to Sonoco$219,105 $44,586 $(1,239)$262,452 
Per diluted common share*$2.17 $0.44 $(0.01)$2.59 
*Due to rounding individual items may not sum across
(1) See table in "Results of Operations - Overview" below for details related to the after-tax impact of major components.

RESULTS OF OPERATIONS
The following discussion provides a review of results for the nine months ended October 1, 2017 versus3, 2021 compared with the nine months ended October 2, 2016.September 27, 2020.
OVERVIEW
Net sales for the first nine months of 2017 were $3,7382021 increased 7.5 percent to $4,151 million a 2.7% increase from the $3,641, compared with $3,861 million reported in the same period last year. The modest sales growth wasincrease reflects volume/mix benefits stemming from the result ofpandemic recovery, higher selling prices mostly implemented to recover rising raw material and other operating costs, and a positive impact from foreign currency translation. These benefits were somewhat offset by the net impact of acquisitions, net of divestitures. These positive factors were partially offset by lower volume/mixthe global display and packaging divestitures, less additions from the loss of contract packaging business in Mexico and Brazil.Can Packagingacquisition.


Net (loss)/income attributable to Sonoco for the first nine months of 20172021 decreased 6.5% to $169.7$(150.6) million, $1.68or $(1.51) per diluted share, compared to $181.6$219.1 million, $1.78or $2.17 per diluted share, reported for the same period of 2016. Current period2020. GAAP net loss for the first nine months of 2021 includes after-tax, non-base charges totaling $417.5 million. GAAP net income includes after-tax restructuring and asset impairment charges of $8.4 million, after-tax pension settlement charges of $19.5 million, and other after-tax, non-base items netting to a charge of $10.7 million. These other items primarily consist of charges for acquisition-related costs, the settlement of a tax audit in Canada and changes in deferred tax amounts, partially offset by insurance settlement gains and a favorable tax adjustment related to a prior-year disposition. Results for the third quarterfirst nine months of 2016 include after-tax restructuring and asset impairment2020 includes non-base charges totaling $43.3 million. The major components of $30.9 million, and after-tax acquisition-related costs of $2.2 million. these non-base amounts are shown below:
Nine Months Ended
 ($ in millions)October 3, 2021September 27, 2020
Non-operating pension settlement charges$406.5 $— 
Net recognized benefit on 2017 amended U.S. income tax return(30.0)— 
Tax impact of sale of European contract packaging business— (20.4)
Loss on early extinguishment of debt15.0 — 
Other non-base tax charges11.9 
Other non-operating pension costs11.8 17.8 
Gain on sale of previously closed facilities(7.2)— 
Euro derivative gain related to Euro loan repayment(3.3)— 
Refund of foreign VAT and applicable interest(3.1)— 
All other net restructuring and asset impairment charges13.4 44.6 
Acquisition and divestiture-related costs9.5 2.4 
All other net gains(7.0)(1.1)
Total non-base charges, after tax$417.5 $43.3 

50
SONOCO PRODUCTS COMPANY
Adjusted for these items, base net income attributableBase earnings for the nine-month period ending October 3, 2021 increased 1.7 percent to Sonoco (base earnings) decreased 3.0% to $208.3$266.9 million, $2.07or $2.66 per diluted share, from $262.5 million, or $2.59 per diluted share, in the first nine monthssame period in 2020.
The increase in Base earnings of 2017 down$4.4 million is largely attributable to a lower Base effective tax rate and lower Base net interest expense which more than compensated for a decline in Base Operating Profit. The decline in Base Operating Profit was driven by an overall negative price/cost impact and the loss of operating profit from $214.7 million, $2.11 per diluted share, in 2016.
The lower earnings in the first nine months of 2017 were the result of volume declines and unfavorable product mix, particularly in global rigid paper containers and retail packaging and fulfillment. The divestituredivestitures of the Company's rigid plastic blowmolding operations in November 2016 also contributed toglobal display and packaging businesses, net of the lower year-over-year earningsacquisition of Can Packaging. The negative impacts in the first nine months of 2017. These negative impacts2021 period were partially offset by a positive year-to-date price/cost relationship compared tovolume/mix increases, which were aided by the prior-year as third-quarter selling price resets allowed the Company to fully recover the margin impact of higher OCC costs on a year-to-date basis. Productivity improvementsCOVID-19 pandemic recovery, and lower management incentive costs also benefited year-over-year earnings.productivity gains.
OPERATING REVENUE
Net sales for the first nine months of 20172021 increased $97$290 million from the same period in 2016. 2020.
The components of the sales change were:
($ in millions)
Volume/mix$181 
Selling prices300 
Acquisitions and divestitures, net(248)
Foreign currency translation and other, net57 
Total sales increase$290 
 ($ in millions)
Volume/mix$(51)
Selling prices141
Acquisitions and Divestitures19
Foreign currency translation and other, net(12)
  
Total sales increase$97
  
In order to enhance the meaningfulness of reported changes in volume/mix, a $20.9 million reduction in packaging center sales resulting from changes in the level of activity, primarily from the previously reported losses of contract packaging business in Mexico and Brazil, is classified above as "other" due to the low/inconsistent correlation that typically exists between changes in revenue and operating profit in certain packaging center operations.


COSTS AND EXPENSES
TheCost of goods sold increased $263.5 million, or 8.5 percent, while the Company's gross profit margin percentage declined slightly to 18.9% 19.2 percent for the first nine months of 2021, compared to 19.8%20.0 percent in the prior-year period. The 90 basis point declineincrease in gross profit margin was largely attributable to volume declines in Global Rigid Containers and Flexible Packaging. The translation impact of a stronger dollar lowered reported cost of goods sold was the result of an increase in volume as well as inflation in the cost of certain raw materials and other operating expenses. Gross profit margin declined due to the negative price/cost relationship resulting from the year-to-date increase in old corrugated containers costs, resin prices, and other operating cost inflation. The negative price/cost impact was partially offset by approximately $5productivity improvements.
GAAP SG&A costs for the first nine months of 2021 increased $33.2 million, or 9.0 percent, year over year. The year-over-year increase was largely driven by a higher, more-normal, level of management incentive expense compared to the same periodprior year's quarter, higher acquisition and divestiture transaction costs, as well as higher medical costs as employees returned to normalized levels of 2016.
Inhealthcare benefit utilization after the nine months ended October 1, 2017 selling, generalprior year's pandemic-induced suspension of routine care and administrative ("SG&A") costs increased $31.2 million or 8.2%, from the nine months ended October 2, 2016. This increase was driven by the previously mentioned pension settlement charges totaling $31.6 million, before-tax. Additionally, legalother elective procedures. Higher property insurance expense and professional fees related to acquisitions and potential acquisitions, SG&A expenses incurred by the operations of acquired businesses, net of divested businesses, and
SONOCO PRODUCTS COMPANY

higher wages allspending on strategic information technology activities also contributed to the increase in SG&A costs year over year.increase. These items were partially offset by fixed cost reductions, including lower management incentive costs.current-year gains on hedges entered into to mitigate foreign currency risk related to the repayment of a Euro-denominated loan, mark-to-market gains on certain derivatives entered into to manage natural gas price exposure, life insurance gains, and a foreign VAT refund.
InRestructuring costs and asset impairment charges net to $8.9 million in the first nine months of 2017, restructuring costs and asset impairment charges totaled $12.5 million2021, compared with $41.5$59.6 million of net charges in the same period last year. The year-over-year decrease was driven by lower year-over-year restructuring activity and gains recorded in 2021 for the sale of buildings at previously closed facilities. Additional information regarding restructuring and asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
NetNon-operating pension costs increased $540.2 million year over year due to the $547.3 million non-cash settlement charge recognized in the second quarter of 2021 upon settling the liabilities associated with the Sonoco Pension Plan for Inactive Participants. Additional information regarding pension settlement charges is provided in Note 11 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Additionally, in the second quarter of 2021 the Company executed a cash tender offer in which it retired a portion of its 5.75% notes due November 2040, recognizing a loss on early extinguishment of debt totaling $20.2 million. See Note 8 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.
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SONOCO PRODUCTS COMPANY
GAAP net interest expense for the first nine months ended October 1, 2017of 2021 decreased to $38.5$46.7 million, comparedcompared with $39.8$53.3 million during the same periodfirst nine months of 2016.2020. The decrease was primarily due to lower averagedebt balances and additional interest rates applicableincome related to debt and an increase in interest income.a foreign VAT refund.
The effective tax rate on the GAAP loss and baseBase earnings in the first nine months of 20172021 was 32.3%37.0 percent and 31.6%,23.5 percent, respectively, compared with 32.3%18.6 percent and 31.1%,25.6 percent for GAAP and Base earnings, respectively, in the prior-year period. The higher effective tax rate on the GAAP loss in 2021 was primarily due to the $30.0 million net recognized benefit associated with the previously mentioned amendment of the Company's 2017 U.S. income tax return. The effective tax rate on Base earnings for the first nine months of 2021 was lower than the same period last year. The GAAP and base tax rates were both affected by favorable 2016 discrete tax adjustments including a benefit fromyear primarily due to the settlementrelease of a contested statereserve for uncertain tax audit. The current year rates benefitted from the adoption of FASB Accounting Standards Update 2016-9 regarding accounting for share-based compensation which requires excess tax benefits on settlements of share-based compensation to be recognized within the income statement.  The Company adopted ASU 2016-09 effective January 1, 2017 using the prospective method.positions.

REPORTABLE SEGMENTS
The following table recaps net sales for the first nine months of 2017 and 2016 ($ in thousands):
  Nine Months Ended
  October 1,
2017		 October 2,
2016		 % Change
Net sales:      
Consumer Packaging $1,569,231
 $1,558,074
 0.7 %
Display and Packaging 365,807
 407,157
 (10.2)%
Paper and Industrial Converted Products 1,395,075
 1,281,031
 8.9 %
Protective Solutions 407,519
 394,418
 3.3 %
Consolidated $3,737,632
 $3,640,680
 2.7 %
Consolidated operating profits, also referred to as “Income before interest and income taxes” on the Company’s Condensed Consolidated Statements of Income, are comprised of the following ($ in thousands): 
  Nine Months Ended
  October 1,
2017		 October 2,
2016		 % Change
Income/(loss) before interest and income taxes:      
Segment operating profit:      
Consumer Packaging $184,942
 $186,135
 (0.6)%
Display and Packaging 6,592
 13,464
 (51.0)%
Paper and Industrial Converted Products 110,390
 104,018
 6.1 %
Protective Solutions 33,085
 38,826
 (14.8)%
Restructuring/Asset impairment charges (12,519) (41,453) 

Other, net (41,665) (2,191)  
Consolidated $280,825
 $298,799
 (6.0)%
SONOCO PRODUCTS COMPANY

The following table recaps restructuring/asset impairment charges attributable to each of the Company’sCompany's segments during the first nine months of 20172021 and 20162020 ($ in thousands):
Nine Months Ended
October 3, 2021September 27, 2020% Change
Net sales:
Consumer Packaging$1,779,525 $1,659,943 7.2 %
Industrial Paper Packaging1,809,159 1,447,886 25.0 %
All Other562,567 753,266 (25.3)%
Consolidated$4,151,251 $3,861,095 7.5 %
  Nine Months Ended
  October 1,
2017		 October 2,
2016
Restructuring/Asset impairment charges:    
Consumer Packaging $3,049
 $9,442
Display and Packaging 721
 6,464
Paper and Industrial Converted Products 5,801
 23,497
Protective Solutions 2,475
 621
Corporate 473
 1,429
Total $12,519
 $41,453

The following table recaps operating profits attributable to each of the Company's segments during the first nine months of 2021 and 2020 ($ in thousands):
Nine Months Ended
October 3, 2021September 27, 2020% Change
Operating profit:
Segment operating profit:
Consumer Packaging$196,341 $212,575 (7.6)%
Industrial Paper Packaging161,414 133,871 20.6 %
All Other32,952 54,563 (39.6)%
Restructuring/Asset impairment charges(8,889)(59,633)
Other non-base charges, net294 (802)
Consolidated$382,112 $340,574 12.2 %

Segment results viewed by Company management to evaluate segment performance do not include restructuring charges and income, asset impairment charges, acquisition-relatedacquisition and divestiture-related charges, pension settlement charges, interest expense, income taxes, or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is a non-GAAP measure and is defined as the segment’s portion of “Income before interest and income taxes”“operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments.
Consumer Packaging
Year
52
SONOCO PRODUCTS COMPANY
The following table recaps restructuring/asset impairment (income)/charges attributable to date segment sales increased 0.7% fromeach of the prior year due to the net impact of businesses acquired and sold, and higher sales prices. The positive factors were mostly offset by lower volume in composite cans in Europe and metal ends in North America and the negative impact of foreign currency translation from a stronger U.S. dollar year over year.
Segment operating profit decreased 0.6% year over year due to lower volumes and negative mix and the net impact of businesses acquired and sold. In addition, results were negatively impacted by higher labor, maintenance, and other operating expenses.These negative factors were partially offset by productivity gains and a favorable price/cost relationship.

Display and Packaging
Reported sales forCompany’s segments during the first nine months of 20172021 and 2020 ($ in thousands):
Nine Months Ended
October 3, 2021September 27, 2020
Restructuring/Asset impairment charges:
Consumer Packaging$6,150 $20,707 
Industrial Paper Packaging(4,827)30,189 
All Other5,474 6,727 
Corporate2,092 2,010 
Consolidated$8,889 $59,633 
Consumer Packaging
Segment sales increased 7.2 percent year to date compared to the prior-year period driven by increased selling prices, largely implemented to recover cost inflation, sales added by the acquisition of Can Packaging, a modest increase in volume, and a positive impact from foreign currency translation.
Year-to-date segment operating profit decreased 7.6 percent driven by a negative price/cost impact as businesses in the segment were not able to completely pass along rapidly rising material and other costs. Additionally, rising wage and other benefit costs offset productivity gains in the first nine months of 2021. As a result, segment operating profit margin decreased 177 basis points to 11.0 percent.
Industrial Paper Packaging
Segment sales increased 25.0 percent year to date versus the prior-year period due to increased selling prices, largely implemented to recover increased raw material and other operating costs, a positive volume/mix impact driven by a global rebound in demand, and a positive impact from foreign currency translation.
Segment operating profit increased 20.6 percent from the prior-year period driven by broad increases in volume/mix and strong productivity improvements. These gains were offset by a negative price/cost relationship largely due to a year-to-date increase in recycled fiber costs that could not be fully recovered through selling price adjustments. As a result, segment operating margins were down 10.2% compared32 basis points to last year’s period8.9 percent.
All Other
Sales for All Other declined 25.3 percent year to date due primarily to the previously disclosed lossglobal display and packaging divestitures. Exclusive of the Company’s contract packaging businesssales from those businesses in Mexicothe prior year, volume/mix for businesses grouped in All Other improved approximately 13 percent, driven primarily by demand improvements in several businesses, most notably our molded-foam, plastics industrial, and Brazil. Lower volumes in our domestic displays and retail security packaging businesses also negatively impacted year-over-year sales. These declines were partially offset by the positive effect of foreign exchange rates.temperature-assured businesses.
SegmentAll Other operating profit decreased $6.9 million, or 51.0%, from the prior year's first nine monthsdeclined 39.6 percent year to date due to lower volume/mix in domesticthe impact of the global display and retail packaging and higher operating costs associated with the ramp up of operations at a new domestic retail packaging fulfillment center. These negative factors were partially offset by improved fixed-cost productivity.
Paper and Industrial Converted Products
Segment sales increased 8.9% as higher selling prices due to contract pricing resets and announced price increases, both driven by increased raw material costs, more than offset the impacts of the divestiture of a paperboard mill in France, volume declines, and foreign currency translation.
Operating profit increased 6.1% largely due to a positive year-over-year price/cost relationship driven by a current year third-quarter decline in OCC prices following selling price resets that occurred at the end of the second quarter of 2017 when old corrugated containers (OCC) prices were higher. As a result, the Company has recovered all of the negative profit impact caused by OCC cost increases during the first six months of 2017. Manufacturing productivity improvements were essentially offset by higher labor, maintenance, and other operating expenses.
The Company's corrugating medium operation continues to under perform long-term expectations. This operation, which consists of only one machine, has been and continues to be under pressure due to market supply in North America exceeding demand. This has resulted in lower prices and reduced volume for our corrugating medium operation.
SONOCO PRODUCTS COMPANY

Management is continuing to seek both near and long-term solutions including, but not limited to, modified run schedules, targeted cost reductions, strategic partnerships, and potential closure of the operation.
Protective Solutions
Segment sales were up 3.3% year over year as sales from acquisitions and higher selling prices were only partially offset by unfavorable changes in volume/mix.
Operating profits decreased 14.8% on unfavorable changes in volume/mix, declines in manufacturing productivity,divestitures and a negative price/cost relationship.relationship stemming from higher raw material costs. These were partially offset by fixed-costpositive volume/mix and productivity improvements. Segment operating margin declined to 5.9 percent year to date from 7.2 percent in 2020.

With the April 4, 2021 sale of the Company's U.S. display and packaging business and the November 2020 sale of the Company's European contract packaging business, the Company has completely exited its global display and packaging business. These divestitures will negatively impact year-over-year comparisons of operating results through the first quarter of 2022.






53
SONOCO PRODUCTS COMPANY
OTHER ITEMS
Critical Accounting Policies and Estimates
Income taxes
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 $18.0 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. 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 NOPA would be approximately $84.0 million, excluding interest and the previously referenced penalties. Should a final NOPA be issued, the Company intends to file a protest to the proposed deficiency with the IRS, which will cause the matter to be referred to the Appeals Division of the IRS. 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.
Pension and postretirement benefit plans
In February 2017, the Company initiated a program through which it offered certain terminated vested participants in the Sonoco Pension Plan for Inactive Participants, a qualified retirement plan in the United States, the opportunity to receive their benefits early as either a lump sum or an annuity. The terminated vested population comprised approximately 15% of the projected benefit obligation of this plan. At the close of the election period, approximately 51% of the eligible participants elected to take the early payment. These payments were distributed from plan assets in May and June 2017. As a result of settling these obligations, the Company recognized a non-cash pre-tax settlement charge of approximately $31.1 million in the second quarter of 2017. Additional settlement charges of $0.5 million were recognized in the third quarter of 2017 for settlements to certain plan participants who were eligible to select a lump sum payment option upon retirement.





SONOCO PRODUCTS COMPANY

Goodwill impairment evaluation
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's goodwillunit exceeds the implied fair value of that goodwill,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.
The Company completed its most recent annual goodwill impairment testing during the third quarter of 2017.2021. 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 price and market capitalization movement, current-year operating performance as compared to prior projections, business strategy changes, and significant customer wins and losses. The quantitative tests, considered factors such asdescribed further below, relied on the current yearoutlook of reporting unit management for future operating performance as compared to prior projectionsresults and took into consideration, among other things, the expected impact of the COVID-19 pandemic on future operations, specific business unit risk, the countries in which the reporting units operate, and implied fair values frombased on comparable trading and transaction multiples.
When performing a quantitative analysis, the Company estimates the fair value of its reporting units it does so using a discounted cash flow model based on projections of future years’ operating results and associated cash flows, together withflows. The Company's assessments reflected a number of significant management assumptions and estimates including the Company's forecast of sales growth, contribution margins, selling, general and administrative expenses, and discount rates, which are validated by observed comparable trading and transaction multiples. 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, including significant assumptions and estimates related to, among other things: sales volumes and prices, new business, profit margins, income taxes, capital expenditures and changes in working capital requirements and, where applicable, improved operating margins.results. Projected future cash flows are discounted to present value using a discount rate that management believes is appropriate for the reporting unit.
The Company’s assessments, whether qualitative or quantitative, incorporate management’s expectations for the future, including forecasted growth rates and/or margin improvements. Therefore, should there be changes in the relevant facts and circumstances and/or expectations, management’s assessmentconclusions 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 does not consider any of itsconsiders the assumptions used to be either aggressive or conservative, but rather its best estimates across a range of possible outcomes based on available evidence at the time of the assessment. Other than in Display and Packaging,Plastics - Healthcare, which is 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 9-1510-20 of the Company's 20162020 Annual Report on Form 10-K.

Although no reporting units failed the annual impairment test or the testing performed as a result of the segment realignment noted above, in management’s opinion, the reporting units havinggoodwill of the greatest risk of a significant future impairment if actual results fall short of expectations are Display and Packaging, and Paper and Industrial Converted ProductsPlastics - Europe.
Display and Packaging
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 updated goodwill impairment analysis reflects expectations for moderate sales growth and improved percentage profit margins based largely on the expected successful ramp up of operations at the Company’s new battery packaging facility. In addition, the analysis reflects expected cash flow improvements from future productivity initiatives and increased capacity. A large portion of expected sales in thisHealthcare reporting unit is concentratedat risk of impairment in two customers andthe near term if the reporting unit's 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 with either one of these customers is lost, or in other projected synergies and productivity gains are not realized, a goodwill impairment charge could be incurred. Total goodwill associated with this reporting unit was approximately $203 million at October 1, 2017. Based onfactors such as the valuationdiscount rate.
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SONOCO PRODUCTS COMPANY

work performed forAlthough beginning to benefit from the economic recovery, the results of the Plastics – Healthcare reporting unit have been negatively impacted by end-market weakness due to the COVID-19 pandemic. In addition, the unit is facing near-term headwinds from higher raw material and other cost increases. Assuming COVID-19 infection rates continue to decline, management expects market demand will improve over the coming year and that selling price increases and/or cost reductions, including restructuring actions and investments in production efficiency projects, will mitigate the impacts of recent raw material and other cost inflation. However, should it become apparent that the ongoing post-COVID-19 recovery is likely to be significantly weaker, delayed, or prolonged compared to management’s current year'sexpectations, significant negative price/cost relationships will persist over the long-term, or profit margins do not improve as expected, goodwill impairment charges may be possible in the future. Total goodwill associated with the Plastics – Healthcare reporting unit was approximately $64 million at October 3, 2021. Based on the most-recent annual impairment test, the estimated fair value of Display and Packagingthe Plastics – Healthcare reporting unit exceeded its carrying value by approximately 37%.
Paper and Industrial Converted Products - Europe
Paper and Industrial Converted Products - Europe manufactures paperboard tubes and cores, fiber-based construction tubes and forms and recycled paperboard. In recent years the Eurozone has faced persistent high unemployment, spillover effects of geo-political conflicts in Eastern Europe and the Middle East, and uncertainties over the United Kingdom’s exit negotiations with the European Union. Despite these issues, the economy experienced steady year over year growth in the last couple of years and the Company expects the momentum to continue in the near future. This outlook is supported by accommodative monetary policy, recovery in manufacturing and export activities, and lower inflation related to energy price declines. The growth is expected to slow down slightly in the outer years as the European Central Bank gradually tightens its monetary policies. In addition, the reporting unit has experienced a significant increase in raw material costs this year which it has not yet been able to fully offset through higher selling prices. Despite the challenges, management believes the reporting unit should be able to grow at or above the Eurozone’s projected GDP growth rates and continue to mitigate the impact of these factors. However, if economic conditions were to deteriorate and management was unable to fully mitigate the impacts, or be unable to consistently recover additional significant cost increases or otherwise achieve expected sales volumes and profit margins, a goodwill impairment charge could be incurred. Total goodwill associated with this reporting unit was approximately $93 million at October 1, 2017. Based on the valuation work performed for the current year test, the estimated fair value of Paper and Industrial Converted Products - Europe exceeded its carrying value by approximately 29%13.3%.
Sensitivity Analysis
In its 20172021 annual goodwill impairment analysis, projected future cash flows for the Plastics - Healthcare reporting unit were discounted at 10.2%8.3%. Based on the discounted cash flow model and 8.5% for Display and Packaging and Paper and Industrial Converted Products - Europe, respectively. Holdingholding other valuation assumptions constant, Display and Packaging projected operating profits across all future periods would have to be reduced approximately 23%13.0%, or the discount rate increased to 12.7%9.3%, in order for the estimated fair value of the reporting unit to fall below the reporting unit’s carrying value.
Pension Plan Termination
As disclosed in previous filings, the Company terminated the Inactive Plan, a tax-qualified defined benefit plan, effective September 30, 2019. The corresponding percentagesCompany settled the liabilities of the Inactive Plan in the second quarter of 2021 through a combination of lump-sum payments and purchases of group annuity contracts. In order for Paperthe Inactive Plan to be fully funded upon final settlement, the Company made contributions totaling $133.0 million during the second quarter of 2021. The Company realized a cash tax benefit of approximately $38 million in 2020 from the anticipated contributions to the Inactive Plan. Non-cash, pre-tax settlement charges totaling $547.3 million were recognized in the second quarter of 2021 as the lump sum payouts were made and Industrial Converted Products - Europe are 19% and 10.4%, respectively.group annuity contracts were purchased.


Financial Position, Liquidity and Capital Resources
CashOperating cash flows provided by operations totaled $282.1$220.1 million in the nine months ended October 1, 20173, 2021, compared with $348.7$489.5 million during the same period last year, a declinedecrease of $66.6$269.4 million. The decrease reflects higher year-over-year decrease in net income of $11.5 million was offset by an increase in year-to-date net pension and post-retirement plan expenses and contributions of $19.5 million. However, changes$130.5 million, primarily the result of fully funding the Inactive Plan as part of settling the plan's liabilities in tax accounts consumed $30.0the second quarter of 2021. Additionally, net working capital used $58.8 million more cash in the first nine months of 20172021 compared to 2016.the same period last year. This increased consumptionuse was partially driven by the settlement of outstanding taxes payable at the end of 2016 related to the disposal of the Company's blow molded plastics business. Asset impairment charges/losses on the dispositions of assets was $19.6 million less of a benefitinflation in the current periodyear and a more pronounced increase in business activity in the third quarter of 2021 as compared to 2016. The benefitlast year's third quarter. The Company continues to actively manage all components of net working capital in 2016 included non-cash losses relatedan effort to dispositions of a paper millminimize the impact on cash utilization.
Changes in France and retail packaging business in Puerto Rico, along with other previously announced restructuring actions and a goodwill impairment of the Company’s industrial converted products business in Brazil.
Inventories consumed $15.0 million in the first nine months of 2017 compared with $11.3 million consumed in the first nine months of 2016. Trade accounts payableaccrued expenses provided $29.3$10.4 million of operating cash duringflow in the nine months ended October 1, 2017 while consuming $7.73, 2021 compared with $40.9 million in the same period last year. AlthoughThe lower provision of cash in the current year is primarily due to the deferral of certain FICA remittances in the prior year pursuant to the CARES Act and the payment of a portion of those previously deferred remittances in the third quarter of 2021. Income taxes payable, deferred taxes, and other income tax items consumed $165.7 million more cash in the first nine months of both 2016 and 2017 saw increased rates2021 than the first nine months of business activity following seasonal year-end slow downs, there were higher levelsthe prior year mostly related to the non-cash reduction of deferred payments at December 31, 2015 than at December 31, 2016. As a result, more cash wasincome tax expense of $140.8 million recorded in relation to the previously disclosed final settlement of the Inactive Plan's pension liabilities.
Cash used in 2016investing activities was $50.9 million in the nine months ended October 3, 2021, compared with $157.1 million in the same period last year, a lower year-over-year use of cash of $106.3 million. Proceeds from the sale of businesses added $91.6 million of cash in the first nine months of 2021 as the Company received cash from the sale of its U.S. display and packaging business, the sale of a small plastics foods thermoforming operation in North Carolina, and the release of cash from escrow from the November 2020 sale of its European contract packaging business. Acquisition spending was $46.1 million lower year over year. Acquisition activity in the nine months ended October 3, 2021 totaled $3.2 million and reflects the Company's acquisitions of two small international businesses in its Industrial Paper Packaging segment and the final working capital settlement for the 2020 acquisition of Can Packaging. This activity was less than the net $49.3 million spent in the first nine months of 2020, primarily for the purchase of Can Packaging. Proceeds from the sale of assets provided $10.5 million in the nine months ended October 3, 2021, compared to settle prior-year payables$8.2 million in the same period last year. The proceeds in both years stemmed from the sale of buildings and equipment associated with previously closed facilities. Capital spending during the first nine months of 2021 was $156.6 million, $39.9 million higher than wasthe same period last year. The increase is attributable to spending on "Project Horizon," a $115
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SONOCO PRODUCTS COMPANY
million project to transform the corrugated medium paper machine in Hartsville, South Carolina, into a low-cost, state-of-the-art uncoated recycled paperboard machine and to optimize materials handling systems and storage facilities. Total spending on this project is expected to be approximately $75 million in 2021. Capital spending for the remainder of 2021 is expected to be approximately $90 million, bringing total capital spending in 2021 to approximately $250 million, compared to $194.1 million in 2020. Other net investing proceeds, primarily insurance proceeds, were $6.2 million higher year over year.
Financing activities used in 2017. This difference was a primary contributor to the $21.6 million year-over-year improvement in cash provided by trade accounts payable.
Increases in accrued expenses provided $1.2$563.2 million of cash in the nine months ended October 1, 20173, 2021, while providing $16.4they provided $311.4 million in the same period last year, primarily due to lower year-over-year accruals for management incentives, restructuring activities, payroll, payroll-related taxes and withholdings. Also reflected in the current year accrued expense reduction is a $3.3 million payment for the final settlement of environmental claims related to Fox River. Changes in prepaid expenses and other assets and liabilities used $22.0 million of additional cash in 2017 compared to 2016, largely attributable to a current year increase in miscellaneous prepaid expenses and the collection of miscellaneous receivables
SONOCO PRODUCTS COMPANY

in the first nine months of 2016 that were outstanding at the end of 2015. Similar levels of miscellaneous receivable items were not outstanding at the end of 2016.
Cash used in investing activities was $522.6 million in the nine months ended October 1, 2017, compared with $165.2 million in the same period last year. The $357.4 million increase in the net use of cash reflects the 2017 acquisition of Packaging Holdings and Clear Lam for $383.4 million and capital spending increased $2.7 million year over year. Capital spending for the remainder of 2017 is expected to total approximately $45 million.
Cash provided by financing activities totaled $218.3 million in the nine months ended October 1, 2017, $422.6 million more than the $204.3 million use of cash in the same period last year. Outstandingyear, a year-over-year difference of $874.6 million. In the prior year, net proceeds from the issuance of debt was $1,426.1provided cash of $428.2 million at October 1, 2017 compared with $1,052.7 million at December 31, 2016. Net debt borrowings provided $338.1 million of cash duringreflecting actions initiated by the Company in the first nine months ended October 1, 2017. This activity included proceeds from a $250.0 million term loan which were usedof 2020 to repaymitigate liquidity risks due to uncertainty regarding the $150.0 million term loan entered intopotential impacts of the COVID-19 pandemic on March 13, 2017,credit markets, banks and the remaining $100.0global economy. The year-over-year change in net debt proceeds/repayments decreased cash by $670.6 million was used to partially fund the Clear Lam acquisition. There was also a $98.0 million increase in borrowings from commercial paper year over year. In the prior-year period,The first nine months of 2021 reflect net debt repayments used $38.6of $242.5 million, including the repayments of cash.the Company's 4.375% bonds, 9.2% bonds, euro-denominated bonds, and a partial tender of its 5.75% bonds, partially offset by additional commercial paper borrowings. The debt tender resulted in additional cash costs of $20.1 million, primarily premiums paid to participating bondholders. The year-over-year decrease in outstanding checks of $19.3 million resulted primarily from the timing of the last accounts payable check runs in December 2020 and December 2019. The Company paid cash dividends of $114.4$134.6 million during the nine months ended October 1, 2017,3, 2021, an increase of $4.5$5.2 million over the same period last year. Cash used to repurchase the Company's common stock was lower$152.3 million higher year over year by $59.1 million as throughout 2016 the Company was engaged in a $100 million stock buyback program that was concluded by the endresult of the year.
On July 20, 2017, the Company entered into a Credit Agreement in connection with a new $750 million bank credit facility which replaced the credit facility entered into on October 2, 2014, and reflected substantially the same terms and conditions. Includedshare repurchases completed under an accelerated share repurchase agreement executed in the new facility are a $500 million five-year revolving credit facility and a $250 million five-year term loan. The Company is continuing to explore strategic acquisition opportunities which may result in the additional usesecond quarter of cash. Given the nature of acquisitions, the timing and amounts of such utilization are not predictable. The Company expects that acquisitions requiring funding in excess of cash on hand would be financed using available borrowing capacity.2021.
Cash and cash equivalents totaled $247.9totaled $160.0 million and $257.2$564.8 million at October 1, 20173, 2021 and December 31, 2016,2020, respectively. Of these totals, approximately $222$141.5 million and $175$170.8 million, respectively, were held outside of the United States by the Company’s foreign subsidiaries. CashCash held outside of the United States is available to meet local liquidity needs, or for capital expenditures, acquisitions, and other offshore growth opportunities. Under current law, cash repatriated toReflecting the United States is subject to federal income taxes, less applicable foreign tax credits. Becausefinancing actions described above, the Company has ample domestic liquidity throughfrom a combination of on-goingcash on hand, generation of operating cash flow, and access to bank and capital markets borrowings, itborrowings. The Company has generally considered its offshore cash balancesforeign unremitted earnings to be indefinitely invested outside the United States and the Company currently has no plans to repatriate any of thesesuch earnings, other than excess cash balances. balances that can be repatriated at minimal tax cost. Accordingly, as of October 1, 2017, the Company is not providing for any deferred tax liabilitytaxes on the foreign earnings associated with these balances. However, if any such balances were to be repatriated, additional income tax payments could result.amounts for financial reporting purposes. Computation of the potential deferred tax liability associated with unremitted earnings deemedconsidered to be indefinitely reinvested is not practicable.
The Company uses a notional pooling arrangement with an international bank to help manage global liquidity requirements. Under this pooling arrangement, the Company and its participating subsidiaries may maintain either a cash deposit or borrowing positionsposition 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 the bankit 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.
During the nine months ended October 1, 2017,3, 2021, the Company reported a net increasedecrease in cash and cash equivalents of $12.9$10.8 milliondue to currency translation adjustments resulting from a weakerstronger U.S. dollar relative to certainmost foreign currencies, most notablycurrencies.
On April 28, 2021, the Canadian dollar, Euro,Company commenced a cash tender offer to purchase up to $300 million of the $600 million outstanding principal amount of its 5.75% notes due November 2040. Upon expiration of the tender on May 25, 2021, the Company repurchased $63.2 million of its outstanding 5.75% notes for a total cash cost of $82.0 million.
On June 30, 2021, the Company entered into a new five-year $750 million, unsecured revolving credit facility which replaced an existing credit facility entered into on July 20, 2017, and Mexican peso.reflects substantially the same terms and conditions. Consistent with prior facilities, the new revolving credit facility supports the Company's $500 million commercial paper program. The revolving credit facility is with a syndicate of banks and is committed through June 2026. If circumstances were to prevent the Company from issuing commercial paper, it has the contractual right to draw funds on the underlying revolving credit facility.
On August 1, 2021, the Company repaid its $250 million, 4.375% debentures without penalty ahead of their November 2021 maturity. Also on August 1, 2021, the Company repaid its $4 million, 9.2% debentures upon their maturity.
At October 3, 2021, the Company had scheduled debt maturities of approximately $276 million over the next twelve months, including $202 million of outstanding commercial paper balances. Also at October 3, 2021, the Company had $160 million in cash and cash equivalents on hand and $750 million in committed capacity under its revolving credit
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facility, of which $548 million was available for draw down net of outstanding commercial paper balances. The Company believes these amounts, combined with expected net cash flows generated from operating and investing activities, will provide ample liquidity to cover these debt maturities and other cash flow needs of the Company over the course of the next twelve months.
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 in the agreements. As of October 1, 2017,3, 2021, the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.
The Company continually explores strategic acquisition opportunities which may result in the use of cash. Given the nature of the acquisition process, the timing and amounts of such expenditures are not always predictable. The Company expects that any acquisitions requiring funding in excess of cash on hand would be financed using available borrowing capacity.
On April 4, 2021, the Company completed the sale of its U.S. display and packaging business to makeHood Container Corporation for net cash proceeds totaling $79.7 million. The proceeds from the sale were received on April 5, 2021. During the quarter ended October 3, 2021, the Company finalized the working capital settlement related to this sale. The settlement resulted in additional cash proceeds of $2.0 million. The proceeds were used for general corporate purposes.
On April 20, 2021, the Company's Board of Directors authorized the repurchase of the Company's common stock in an aggregate amount of up to $350 million. The new authorization replaced the previous authorization dated February 10, 2016. Under the authorization, which has no expiration date, the Company may choose to purchase shares in the open market from individual holders through privately negotiated transactions, an accelerated share repurchase program, a combination of these methods, or otherwise. The timing and amount of the repurchases, if any, will depend upon several factors, including market and business conditions and the nature of other investment opportunities. Common stock repurchases, including with respect to any share repurchase program, may be limited, suspended or discontinued at any time without prior notice.
On May 6, 2021, the Company repurchased 53.5 thousand shares for $3.6 million from a private stockholder based upon the average 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 shares of common stock. In exchange for an upfront payment of $150 million, which was funded using available cash on hand, the financial institution delivered approximately 1.8 million of initial shares to the Company. These initial shares represented 80% of the expected number of shares to be repurchased during the repurchase period based upon the closing stock price on May 10, 2021 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 (the "Settlement Price").

In July 2021, pursuant to the ASR Agreement, the financial institution elected to fully accelerate settlement of the share repurchase agreement. Accordingly, 504.7 thousand additional shares were transferred to the Company based upon an overall effective Settlement Price of $66.47 and were retired.
As discussed in "Other Items - Pension Plan Termination," the Inactive Plan was terminated effective September 30, 2019. The Company settled the liabilities under the Inactive Plan during the second quarter of 2021 through a combination of lump-sum payments and annuity purchases, making additional contributions to the Inactive Plan totaling approximately $133 million during the second quarter of 2021 in order to be fully funded at the time the liabilities were settled.
The Company anticipates making additional contributions to its other pension and postretirement plans of approximately $55approximately $6.5 million during the remainder of 2017,2021, which includes a voluntary contributionwould result in total contributions to its U.S. qualified defined benefit pension planthese plans of $50 million made on October 25, 2017. Contributions to its pension and postretirement plans are
SONOCO PRODUCTS COMPANY

expected to total approximately $107$39 million in 2017.2021. Future funding requirements beyond the current year will vary depending largely on actual investment returns, future actuarial assumptions, and legislative actions.
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Fair Value Measurements, Foreign Exchange Exposure and Risk Management
Certain assets and liabilities are reported in the Company’s financial statements at fair value, the fluctuation of which can impact the Company’s financial position and results of operations. Items reported by the Company at fair value on a recurring basis include derivative contracts and pension and deferred compensation related assets. The valuation of the vast majority of these items is based either on quoted prices in active and accessible markets or on other observable inputs.
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 operations are located throughout the world, and the Company generally sells in the same countries where it produces with both revenue and costs transacted in the local currency. The Company monitors these exposures and may use traditional currency swaps and forward exchange contracts to hedge 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.
PriorDue to July 1, 2015,the highly inflationary economy in Venezuela, the Company used Venezuela's official exchange rateconsiders the U.S. dollar to reportbe the results of its operations in Venezuela. As a result of significant inflationary increases, and to avoid distortion of its consolidated results from translationfunctional currency of its Venezuelan operations and uses the Company concluded that it was an appropriate time to begin translating its Venezuelan operations at an alternativeofficial exchange rate. Accordingly, effective July 1, 2015,rate when remeasuring the Company began translating its Venezuelan operatingfinancial results and all monetary assets and liabilitiesof those operations. Economic conditions in Venezuela usinghave worsened considerably over the alternative rate known aspast several years and there is no indication that conditions are due to improve in the SIMADI rate (replacedforeseeable future. Further deterioration could result in 2016 by the DICOM rate).recognition of an impairment charge or a deconsolidation of the subsidiary. At October 1, 2017,3, 2021, the carrying value of the Company's net investment in its Venezuelan operations was approximately $2.3$2.0 million. In addition, at October 1, 2017,3, 2021, the Company's Accumulated Other Comprehensive Loss included a cumulative translation loss of $3.8 million related to its Venezuelan operations which would need to be reclassified to net income in the event of a complete exit of the business or a deconsolidation of thesethe Venezuelan operations.
At October 1, 2017,The Company has operations in the United Kingdom and elsewhere in Europe that had the potential to be impacted by the exit of the U.K. from the European Union (Brexit) at the end of January 2020 and the new E.U.-U.K. Trade and Cooperation Agreement which went into effect December 31, 2020. Our U.K. operations developed contingency plans regarding potential customs clearance issues, tariffs and other uncertainties resulting from Brexit and the new agreement with the European Union. Although it is difficult to predict all of the possible future impacts to our supply chain or in our customers' downstream markets, the operational impacts subsequent to Brexit have been minor. The Company has evaluated the future potential operational impacts and uncertainties of Brexit and continues to believe 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 the Company had commodity contracts outstanding to fixproduces in the costU.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. Sales in our U.K. operations totaled approximately $127 million for the full year 2020 and approximately $106 million in the first nine months of a portion of anticipated raw materials and natural gas purchases. 2021.
The total net fair market value of these instruments was $0.0 million and a favorable position of $3.6 million at at October 1, 2017 and December 31, 2016, respectively. Natural gas and aluminum hedge contracts covering an equivalent of 5.8 MMBTUs and 1,210 metric tons, respectively, were outstanding at October 1, 2017. Additionally, the Company had variousroutinely enters into derivative currency contracts outstanding to fix the exchange rate on certain anticipated foreign currency cash flows. The total market value of these instruments was a net unfavorable position of $(2.5)$0.4 million at October 1, 2017, compared with3, 2021 and a net unfavorablefavorable position of $(0.2)$0.6 million at December 31, 2016.2020. These contracts qualify as cash flow hedges and mature within twelve months of their respective reporting dates.
have maturities ranging to July 2022. In addition, at October 1, 2017,3, 2021, the Company had various currency contracts outstanding to fix the exchange rate on certain foreign currency assets and liabilities. Although placed as an economic hedge, the Company does not apply hedge accounting to these contracts. Thecontracts, the fair value of which was not material at October 3, 2021 and December 31, 2020.
The Company routinely enters into derivative commodity contracts to fix the cost of a portion of anticipated raw materials and energy-related purchases. The total net fair market value of these currency contractsinstruments was a net favorable position of $0.1$10.4 million at October 1, 20173, 2021 and a netan unfavorable position of $(0.7)$0.2 million at December 31, 2016.2020. Natural gas and aluminum hedge contracts covering an equivalent of 4.5 million MMBTUs and 904 metric tons, respectively, were outstanding at October 3, 2021. These contracts, some of which are designated as cash flow hedges, have maturities ranging to December 2022.
The Company's 1%, 150 million euro-denominated debt matured on May 25, 2021. On April 7, 2021, the Company entered into two forward contracts to buy a total of 150 million euros. The risk management objective of the forward contracts was 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
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included in "Selling, general and administrative expenses" on the Company's Condensed Consolidated Statements of Income for the three and nine months ended October 3, 2021.
At October 1, 2017,3, 2021, the U.S. dollar had weakenedstrengthened against most of the functional currencies of the Company's foreign operations compared to December 31, 2016,2020, resulting in a net translation gain of $86.8 million being recorded in accumulated other comprehensive loss duringfor the nine months ended October 1, 2017.3, 2021 of $57.3 million being recorded in "Accumulated other comprehensive loss."
Restructuring and Impairment
Information regarding restructuring charges and restructuring-related asset impairment charges is provided in Note 5 to the Company’s Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Form 10-Q.
New Accounting Pronouncements
Information regarding new accounting pronouncements is provided in Note 2 to the Company’s Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Form 10-Q.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk.
Information about the Company’s exposure to market risk is discussed under Part I, Item 2 in this report and was disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016,2020, which was filed with the Securities and Exchange Commission on March 1, 2017.February 26, 2021. There have been no other material quantitative or qualitative changes in market risk exposure since the date of that filing. 

Item 4.Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision, and with the participation, of our management, including our Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, ("the Exchange Act") of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, our CEO and CFO concluded that such controls and procedures, as of October 1, 2017,3, 2021, the end of the period covered by this Quarterly Report on Form 10-Q, were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the 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 disclosure.
Changes in Internal Control Over Financial Reporting
ThereIn response to the COVID-19 pandemic, we have required certain employees, some of whom are involved in the operation of our internal controls over financial reporting, to work from home. Despite this change, there have been no changes in the Company’s internal control over financial reporting occurring during the three monthsquarter ended October 1, 2017,3, 2021, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize any impact it may have on their design and operating effectiveness.

SONOCO PRODUCTS COMPANY


PART II. OTHER INFORMATION
Item 1.Legal Proceedings.
Information with respect to legal proceedings and other exposures appears in Part I - Item 3 - “Legal Proceedings” and Part II - Item 8 - “Financial Statements and Supplementary Data” (Note 1416 - “Commitments and Contingencies”) in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016,2020, and in Part I - Item 1 - “Financial Statements” (Note 1316 - “Commitments and Contingencies”) of this report.
Environmental Matters
The Company has been named as a potentially responsible party (PRP) at several environmentally contaminated sites not owned by the Company. All of the sites are also the responsibility of other parties. The Company's liability, if any, is shared with such other parties, but the Company's share has not been finally determined in most cases. In some cases, the Company has cost-sharing arrangements with other PRPs with respect to a particular site. Such agreements relate to the sharing of legal defense costs or cleanup costs, or both. The Company has assumed, for purposes of estimating amounts to be accrued, that the other parties to such cost-sharing agreements will perform as agreed. It appears that final resolution of some of the sites is years away, and actual costs to be incurred for these environmental 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 at October 1, 2017,3, 2021, cannot be determined. As of October 1, 20173, 2021 and December 31, 2016,2020, the Company had accrued $20.5$7.4 million and $24.5$8.1 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, when warranted, makes appropriate adjustments.

Fox River
In January 2017, U.S. Paper Mills Corp. (U.S. Mills), a wholly owned subsidiary of the Company, obtained Court approval of a final settlement of cost recovery claims made by Appvion, Inc. for $3.3 million. The settlement was paid during the first quarter of 2017. Legal and professional fees relating to the settlement, totaling $0.4 million, were paid during the first and second quarters of 2017. As a result of the settlement becoming final, the Company and U.S. Mills have resolved all pending or threatened legal proceedings related to the Fox River matter, as well as any such proceedings known to be contemplated by government authorities.


Other legal matters
Additional information regarding legal proceedings is provided inin Note 1416 to the CondensedCondensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. 
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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
ISSUER PURCHASES OF EQUITY SECURITIES 
Period
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
   Programs1
Maximum
Number or Approximate Dollar Value of Shares
that May Yet be
Purchased under the
Plans or Programs1
7/5/21 - 8/8/21504,739 2$66.47 2504,739 2$196,385,005 
8/9/21 - 9/5/21— $— — $196,385,005 
9/6/21 - 10/3/21— $— — $196,385,005 
Total504,739 $66.47 504,739 $196,385,005 
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
7/03/17 - 8/06/17 238
 $51.77
 —
 2,969,611
8/07/17 - 9/03/17 58
 $47.67
 —
 2,969,611
9/04/17 - 10/01/17 889
 $48.88
 —
 2,969,611
Total 1,185
 $49.40
 —
 2,969,611
1A total of 1,185 common shares were repurchased in the third quarter of 2017 related to shares withheld to satisfy employee tax withholding obligations in association with certain share-based compensation awards. These shares were not repurchased as part of a publicly announced plan or program.
2
On February 10, 2016,April 20, 2021, the Company's Board of Directors authorized the repurchase of the Company's common stock in an aggregate amount of up to 5,000,000$350.0 million. As of October 3, 2021, a total of $196.4 million remains available under this authorization.
2
On May 10, 2021, the Company entered into an accelerated share repurchase agreement ("ASR Agreement") with a financial institution to repurchase shares of the Company's common stock. A totalIn exchange for an upfront payment of 2,030,389$150.0 million, the financial institution delivered 1,751,825 of initial shares were repurchased under this authorization during 2016 at a costto the Company. These initial shares represented 80% of $100.0 million. Nothe expected number of shares wereto be repurchased during the nine-monthrepurchase period ended October 1, 2017.based upon the closing stock price on May 10, 2021 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 (the "Settlement Price"). In July 2021, pursuant to the ASR Agreement, the financial institution elected to fully accelerate settlement of the share repurchase agreement. Accordingly, a total504,739 additional shares were transferred to the Company based upon an overall effective Settlement Price of 2,969,611 shares remain available for repurchase at October 1, 2017.$66.47 and were retired.



 

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SONOCO PRODUCTS COMPANY
Item 6.Exhibits.
Exhibit Index
Item 6.Exhibits.
Exhibit Index
10.13.1
3.2
10.210.1
10.2
15.15
31.31
32.32
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
101.101.SCHThe following materials from Sonoco Products Company’s Quarterly Report on Form 10-Q for the quarter ended October 1, 2017, formattedXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at October 1, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Income for the three and nine months ended October 1, 2017 and October 2, 2016, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 1, 2017 and October 2, 2016, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended October 1, 2017 and October 2, 2016, and (v) Notes to Condensed Consolidated Financial Statements.Exhibit 101)
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SONOCO PRODUCTS COMPANY

SIGNATURE
Pursuant to the requirements 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.
SONOCO PRODUCTS COMPANY
(Registrant)
Date:November 12, 2021By:/s/ Julie C. Albrecht
Julie C. Albrecht
Vice President and Chief Financial Officer
(principal financial officer)
SONOCO PRODUCTS COMPANY
(Registrant)
Date:October 31, 2017By:/s/ Barry L. Saunders
Barry L. Saunders
Senior Vice President and Chief Financial Officer
(principal financial officer)
/s/ James W. Kirkland
James W. Kirkland
Corporate Controller
(principal accounting officer)


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