You are on page 1of 98

A new vision

leads to
fresh thinking
2017 Sonoco Annual Report

about the cover

A new vision
leads to
fresh thinking
2017 Sonoco Annual Report

As we strive toward our new 20/20 Vision we are actively pursuing fresh thinking when
it comes to how we operate our business, how we go to market and where we see new
opportunities for growth. The world is changing rapidly and we need to change with it
to remain relevant. We have to look at our business with fresh eyes, and evaluate what
it is we bring to our customers to help them achieve success. Key will be continually
evaluating and optimizing our portfolio to match consumer and industry trends which
are driving markets. This means a significant focus on packaging for fresh and natural
products which are found in the fast-growing perimeter of the store. It means examining
our customer and product mix to ensure we are delivering the right kind of value.
It means greater utilization of actionable data to drive decision making. And it means
investing in areas which offer the greatest opportunity for a return on capital.

Forward-looking Statements
Statements included in this Report 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. Additional information about “forward-looking
statements” is available on page 3 of the enclosed Form 10-K.

Pursuant to the requirements of Regulation G, the Company has
provided definitions of non-GAAP measures discussed in this
report along with reconciliations of those measures to the most
closely related GAAP measure on page 19 of the enclosed Form
10-K and on the Company’s website at sonoco.com.

S O N O C O 2 0 17 A N N U A L R E P O R T

Comparative Highlights

financial highlights
Dollars and shares in thousands except per share data. Years ended December 31.

2017 2016
Net sales $5,036,650
$5,036,650 $4,782,877
Gross profit1 949,390
949,390 937,426
Net income attributable to Sonoco 175,345
175,345 286,434
Total assets 4,557,721
4,557,721 3,923,203
Return on net assets2 6.3%
6.3% 10.6%
Return on total equity 10.5%
10.5% 18.3%
Diluted earnings per share:
GAAP net income 1.74
1.74 2.81
Base earnings3 2.79
2.79 2.72
Ending common stock market price 53.14
53.14 52.70
Number of employees 21,000
21,000 20,000
Number of common shareholder accounts 64,000
64,000 117,000
1 Gross profit: Net sales minus cost of sales
2Return on net assets: Net income plus after-tax net interest, divided by the net of average total assets, minus
average cash, minus average current liabilities, plus average short-term debt
3 Net income adjusted for certain items further detailed on page 19 of the Form 10-K

Net Sales Net Income Attributable to Sonoco GAAP Earnings per Diluted Share
billions of dollars millions of dollars dollars

4.86 5.02 4.96 5.04 2.81
4.78 286.4
250.1 2.44
225.9 2.19
209.8 2.03
175.3 1.74
2017

2017
2016
2013

2014

2016
2013

2014
2016
2015

2013

2014
2017

2015

2017
2015

2017

Table of Contents
1 Financial Highlights
2 Sonoco at a Glance
4 Grow and Optimize
5 Letter to Shareholders
9 Fresh Thinking
12 A World of Opportunity
13 People, Culture and Values
14 Board of Directors
16 Corporate Officers
Form 10-K
17 Shareholder Return Comparison
18 Selected Eleven-year Financial Data
20 Investor Information
21 General Information
S O N O C O 2 0 17 A N N U A L R E P O R T 1

retail packaging. custom packaging. snacks and nuts. lidding films. Markets confection. automotive. hard-baked fragrances. aluminum. including fiber and plastic caulk/adhesive tubes. serving many of the world’s best-known brands in some 85 nations. snacks and nuts. thermoformed plastic cups. steel and blister packaging. frozen and refrigerated foods Consumer Packaging Net Sales Display and Packaging Net Sales billions of dollars millions of dollars 2. beverages. Founded in 1899. personal care. peelable membrane easy-open closures for composite and primary package filling. food. toys goods. trays and bowls. Consumer Packaging Display and Packaging Products and Services Products and Services Round composite cans. Sonoco is a global provider of a variety of consumer packaging. pet treats.000 employees working in approximately 300 operations in 33 countries. medical/pharmaceutical. confection. processed foods. modified atmosphere packaging. Markets rotogravure cylinder engraving. shaped rigid paperboard containers. pet treats. global brand management Electronics.12 1.12 2. office supplies. Point-of-purchase displays. supply chain management. printed flexible packaging.96 639 667 606 520 508 2017 2017 2016 2016 2013 2014 2013 2014 2015 2015 2017 2017 Consumer Packaging Operating Profit Display and Packaging Operating Profit millions of dollars millions of dollars 241 251 15 232 201 187 11 11 9 3 2017 2017 2016 2013 2014 2016 2013 2014 2015 2017 2015 2017 2 S O N O C O 2 0 17 A N N U A L R E P O R T .04 2. cosmetics and Fresh and natural foods.89 1. With annualized net sales of more than $5 billion. the Company has 21. industrial products. metal cans. paperboard specialties injection-molded containers. home and garden. powdered beverages. fulfillment. high-barrier films. protective sonoco at a glance packaging and displays and packaging supply chain services. coffee.

plastics. sonoco at a glance Paper and Industrial Protective Solutions Converted Products Products and Services Products and Services Recycled paperboard. paper mills. specialty grades. automotive.86 1.87 526 539 485 506 1.69 471 2017 2017 2016 2013 2014 2015 2017 2016 2013 2014 2015 2017 Paper and Industrial Converted Products Protective Solutions Operating Profit Operating Profit millions of dollars millions of dollars 162 52 154 138 124 46 130 40 42 34 2017 2017 2016 2016 2013 2014 2013 2014 2015 2015 2017 2017 S O N O C O 2 0 17 A N N U A L R E P O R T 3 . reels. Custom-engineered. tape and label. tubeboard. medical/pharmaceutical. construction. light. linerboard. office furnishings. home goods. shipping and storage. distribution recycling. chipboard. wire and cable Paper and Industrial Converted Products Protective Solutions Net Sales Net Sales billions of dollars millions of dollars 1. collection.90 1. corrugated foam protective packaging and components. temp- medium. frozen and refrigerated foods. paperboard tubes and erature-assured packaging solutions cores. molded plugs. home Markets goods. paper.73 1. textiles. film. glass and other recyclable materials Appliances and electronics. processing and recycling of old corrugated containers. Markets metal. boxboard. promotional and palletized Converted paperboard. paperboard-based and expanded weight corestock.

grow and optimize Mission: Become the acknowledged leader in high-quality. Maximize Cash Flow nesses in emerging markets and Deployment • Optimize the portfolio • Working capital management • Optimize capital investments • Grow dividends Financial Priorities • Acquisitions • Target average annual double-digit total return • Share repurchases to shareholders • Sales of $6 to $8 billion – Organic volume growth above packaging industry average • Base EBITDA margin to 16% People • Talented • Return on invested capital in top quartile of packaging industry – RONAE = 11% to 12% • Engaged • Aligned • Maintain investment grade credit rating 4 S O N O C O 2 0 17 A N N U A L R E P O R T . productivity and quality • Share/Profit optimization – Leverage automation and robotics to reduce unit cost to produce – Create the optimal structure to serve Operational Excellence the correct customers • Productivity • Reduce unit cost to produce (Sonoco Performance System) Business Priorities • Maximize sustainable cash flow from • Optimal supply chain operations • Grow our consumer packaging and protective solutions businesses and our industrial busi. innovative. value-creating packaging solutions that “Satisfy the Customer” Guiding Principle Key Focus Areas Be a GREAT company for our stakeholders through an unwavering belief that “People Build Safety Create a zero-injury Businesses” by doing the right thing environment Differentiating Capabilities Customer Satisfaction • Innovation • Value-creating solutions – Capture consumer and market insights to drive creativity • On time and to specification • Voice of Customer – Leverage i6® and “Commercial Excellence” to create growth and capture value – Embrace our material diversity to create the best solutions Grow and Optimize • Operational Excellence • Insights • Innovation – Utilize SPS to optimize efficiency.

4 million or $2.81 per diluted share in dividends. During 2017. up approximately $254 million impacted by a net after-tax benefit S O N O C O 2 0 17 A N N U A L R E P O R T 5 . while promoting the freshness and safety of their products. Our focus on Better Packaging. primarily through higher with $286. totaling $106.9 $5. Sonoco provided a 3.05 per diluted share.S. Chief Operating Officer and and protective packaging businesses achieve CEO-elect.4 million. Creating better packaging for our customers helps communicate their brand promise.3% due to higher selling earnings). turing/asset impairment charges. Sales grew 5. net of divestitures. which compares favorably Tax Cuts and Jobs Act. compared to shareholders in 2017.3 million or $1. Over the past five years. and Jack Sanders. restruc- to a 101% return by the S&P 400 Mid-Cap Index. acquisitions. GAAP net income attributable to Sonoco was In addition.5 million in cash $175.1%. Earnings in 2017 reflect net after-tax charges returned approximately $927 million to share. partially offset 2017 Results by insurance settlement gains. and provides for investments into our communities—creating a better life for all. helped our diversified mix of consumer. This in turn provides opportunities for our employees and improved returns for our shareholders. This improvement occurred despite prices implemented to recover rising material volatile raw material costs and flat to negative costs. Better Life. President and Chief Executive Officer improved top-line and bottom-line results in 2017.04 billion.9% total charges. 33. while our five-year total the implementation of the U. protective packaging customers. consisting of pension settlement chases. We believe this statement captures why we have been successful over the past 118 years and why we will be successful into the future. or $1.3 1 YEAR 3 YEAR 5 YEAR 2017 consolidated net sales were a record Net income in 2016 was positively 2017 3.1 return has been 109. Better Life. and the growth from many of our largest consumer and positive impact of foreign exchange. 109. Sonoco has 2016. and acquisition costs. to our shareholders Sonoco’s purpose is Better Packaging.74 per diluted share. industrial Rob Tiede. tax charges related to Total Shareholder Return percent return to shareholders. holders in the form of dividends and share repur. Executive Vice President. including record net sales. gross profits and base net income attributable to Sonoco (base from 2016. we returned $159.

2017 2016 2013 2014 2015 2017 Display and Packaging segment sales declined 2. The improvement in operating profit markets are was driven by a favorable price/cost relationship changing. partially offset by restructuring costs.5 million. Benefit plan contributions net of benefit plan compared with 19.72 2.6 million growing approximately 4%. particularly in Europe. Base Earnings per Diluted Share to our shareholders dollars 2. and as we were able to successfully navigate dramatic technology is movements in recovered paper prices.4 million decline in $277. The improving by 60 basis points to 8.21 decreased primarily due to volume declines in our transportation components business and associated productivity losses. cost relationship and total productivity.3% and operating profit fell to $2. a decline of $49.6 million. GAAP net income related to the gain on last year’s Gross profit was a record $949. which focuses on growing Protective Solutions sales grew 2. Our 20/20 Vision In our Paper and Industrial Converted Products The world is segment. and a positive course for the next three years. operating costs associated with the ramp up of asset impairment.2 million or $2. however.6% in 2016. The decrease in operating disposal of the Company’s blowmolding plastics profit was largely due to inefficiencies and higher operations.4 mil- Base earnings for 2017 were $281.8%. primarily due to a positive price/ pre-buying of certain raw materials. Cash generated from operations was $349.79 2. through new products. To help set our volume gains.7 million in 2016.72 per diluted share in 2016. Improved changing. and blowmolding sale as well as cash taxes paid on the gross profit as a percentage of sales was 18.8 million. compared with primarily due to the $110. As a result. down of $9. Base earnings expenses increased $28.79 per diluted share.3 million.8%.4 million. while we are going to remain a leader.6 million. while operating customers—including adding new capabilities margin declined to 7. margin remained at a solid 11. accrued expenses and other assets and liabilities Sales and operating profit in our Consumer consumed more cash in 2017. productivity gains and a positive relationship between selling prices and costs. grew 19%. Additionally. and new operating profit declined 18%. we established mix of business contributed to operating margin what we are calling our 20/20 Vision. while operating and $153.4%. gain. ditures and cash dividends were $183.2 million consisting of the gain from the from $14. The increase free cash flow was $12.8 million lion. new markets.3%. Operating profit serving the fast-growing Perimeter of the Store.8%.1 million. in 2017. and foreign income tax losses. respectively. compared with in operating profit was largely driven by strong $65. and market conditions resulted in a strong turnaround we need to continue to evolve as a company if of our corrugating medium operations. miscellaneous changes in prepaid expenses. foundation of our 20/20 Vision is our Grow and Optimize strategy. 6 S O N O C O 2 0 17 A N N U A L R E P O R T . Net capital expen- Packaging segment reached record levels. sales grew 10% and operating profit changing. acquisition-related expense production at a new pack center in Atlanta.41 2. Working capital before interest and taxes for 2017 increased 3% consumed $5 million more cash in 2017 due to to $450 million. This decline was or $2.51 2.

a leader in thermoformed of the store strategy. we’re also sales) from approximately 13. the production of multibarrier flexible and and consolidating industrial acquisitions. taxes. protective packaging. we hub for innovation and research to address are implementing a new commercial excellence challenges in fresh food packaging and initiative called “Realizing our Value.” where we distribution.2% of sales to investing in cutting-edge technology to extend 16% over the next three years. Emerging Markets. thermoforming films. we are optimizing our structure and better utilizing technology to drive down the cost of our back office functions. Emerging Opportunities Key to our growth strategy is aligning our businesses with markets and trends poised for 2017 2016 2013 2014 2015 2017 gains. and and optimizing our businesses through new on emerging trends in the supermarket. Equally important to our 20/20 Vision is improving produce and food service packaging. depreciation and amortization over net In addition to these growth markets. Inc. we expect to containers for fresh produce. In addition.. Inc. We will also continue implementation of the Sonoco Performance System and accelerate the use of automation in our operations to lower our unit cost to produce and better serve our customers. We believe we can do this by producing greater-than-industry-average growth In March 2017. Finally. and we’ve been Looking out over the next three years. atmosphere packaging. Sonoco acquired Peninsula of about 2% through innovation and our perimeter Packaging. We believe taking the shelf life of fresh foods. cheeses. for $219 million.Gross Profit to our shareholders millions of dollars 908 929 937 949 862 Emerging Trends. an innovator in thermoformed plastics. current EBITDA margin (earnings before interest. including modified particularly in emerging markets. In addition. we completed the $165 million acquisition focused growth targets of flexible packaging. dairy products. S O N O C O 2 0 17 A N N U A L R E P O R T 7 . As we look to the future. we expect to invest significantly in our domestic paper mill system over the next three years to improve efficiency and cash flow generation. You can read more about Sonoco’s are working to better capture the value of our move to serve the perimeter of the store and products and services through focused price Sonoco FRESH on pages 9 and 13. acquire $1 billion to $1.. One processes and new systems which improve of the biggest consumer trends is emerging productivity to help lower our costs.5 billion in revenue in our In July. our 20/20 thoughtfully reconfiguring our business to Vision targets annual revenue growth to more capitalize on this shift. on the Perimeter of the Store due to increasing demand for fresh foods. Specifically. which opens up new markets serving meats. of Clear Lam Packaging. That is why we have a holistic business optimization approach to serve partnered with Clemson University on Sonoco the right customers with the right cost structure FRESH. this includes capitalizing on emerging market growth. management. than $6 billion. which will establish a multi-disciplinary will help drive this improvement.

we believe global economic to spur organic growth and helped build our indicators remain strong and U. driven innovation As we enter 2018. 37 of Industrial and Consumer we are also working with our businesses should produce more customers to help make the center consistent earnings. and optimizing our results through It has been an honor to serve this remarkable process improvement. greater rewards once again.6 year of base earnings 152. trays for our customers’ fresh and processed I will be retiring after having the privilege of foods. beginning April Africa to serve existing and new customers in 2. Rob ran packaging operations for public prospects. We believe this performance M.9 159. and for entrusting us with your Dividends and Stock Repurchases millions of dollars target would mark investment. our Grow and Optimize strategy to obtain our by capturing growth through new product 20/20 Vision. I believe Rob is ready to in operating and free cash flow. We expect to lead Sonoco forward and continue to implement further Grow and Optimize our business in 2018. we expect to continue serving as your President and CEO for the past expanding composite can production capability five years. improved of the store the center of attention returns and. tax cuts. we are targeting a 15% having just served as chairman of the Flexible improvement in base earnings and strong gains Packaging Association. Thailand and South ninth CEO in our 118-year history. The Board has elected Rob Tiede. 2017 Sales by Operating Segment to our shareholders percent of sales Consumer Packaging 42 Display and Packaging 10 Protective Paper and Solutions Industrial 11 Converted As we grow on the perimeter. particularly with the our associates—and well known in our industry.1 145.S. which should put them in a more and private companies and is well regarded by confident spending mood. 253. approximately $15 million to $20 million in 2018 to begin producing thermoformed bowls and But the real key to 2018 and beyond is leadership. new U. greater market penetration and acquisitions.1 the fifth consecutive 216. Before joining appear to be more upbeat about job and income Sonoco. consumers capabilities through acquisitions. Additionally. 2018 dividends stock repurchases manageable mix 8 S O N O C O 2 0 17 A N N U A L R E P O R T . development. For example.S. 2018.  our Consumer growth strategy since joining the Company in 2004 and has turned around A Foundation for Growth underperforming businesses. standardization and active organization for the past 30 years. and I want to cost management. to become Sonoco’s the next few years into Brazil. Rob has played an integral role in driving these growing markets. of course. we expect to invest for our shareholders. Overall.5 growth. our into emerging markets. including expansion over Chief Operating Officer. express special thanks for your support over my Achieving our 2018 tenure as CEO. Jack Sanders illustrates that over President and Chief Executive Officer 2017 2016 2013 2014 2015 2017 the long-term a March 5.

based in the Chicago area. dollar growth on the perimeter is 2. often the perimeter of the supermarket. And we plan to achieve incremental growth with existing customers through strategic cross selling—for instance. and they have a strong product line in produce and food service packaging.1 times greater than other areas of the store. we can Sonoco’s 20/20 Vision is focused on now provide an integrated solution for value- adjusting our business and portfolio to adding. We’re positioning Sonoco to grow as this seg- ment grows. with a growing demand for fresh foods. thoughtfully reconfiguring our portfolio to become a leader in this space. and Clear Lam. We also see real opportunity for bringing additional technology to fresh produce packaging. According to IRI. apple packaging and applesauce packaging for growers. this involved two acquisitions: Peninsula Packaging.Fresh thinking fresh thinking leads to opportunities for growth Our acquisition of Peninsula Packaging establishes us as a market leader in fresh produce packaging. S O N O C O 2 0 17 A N N U A L R E P O R T 9 . opening up new markets such as meats and cheeses. Because Clear Lam blows its own multilayer barrier films. Meanwhile. In 2017. Clear Lam also serves the dairy market. especially in the area of portion control. based in California. especially when it helps extend freshness and shelf life. high-barrier packaging for products meet consumers where they’re going—which is like yogurt and condiments. our acquisition of Clear Lam adds modified atmosphere packaging capabilities to our portfolio. or veggie snack packs that include dip cups and flexible lidding.

Meanwhile. a recent the bag or carton traditionally used for Sonoco study found that 82% of consumers microwaveable packaging. while offering consumers the convenience of cooking the Spirals directly in the packaging. ™ produce industry faces is labor. Sonoco’s harvested by hand because of the delicacy 10 S O N O C O 2 0 17 A N N U A L R E P O R T . It can act As the fresh produce segment grows. fresh thinking while also making rinsing easy for consumers. ventilated packaging improves freshness. is the first of its kind—a flexible. as well. The PrimaPak system. while replacing snacking trend grows with it. produced by a joint venture that includes Sonoco. shoppers are looking to easily integrate more veggies into their meals. Thought leadership in fresh produce extends beyond the packaging phase of the supply The key is to make fresh snacking convenient— chain. Crops like 3-packs of fun. One of the greatest challenges the which Dole has done with Dole GO Berries! . the fresh as a bowl for consumers. When B&G Foods developed its new Green Giant Veggie Spirals™ —frozen noodles made from 100% vegetables without sauces or seasonings—they worked with Sonoco to package the Spirals in a microwavable PrimaPak® package that provides the protection needed to keep the Spirals fresh. reclosable package made from a roll of film. snack on fresh fruits and vegetables 3 or more times each week. and was awarded Best New Packaging as part of the Produce Innovation Awards at United Fresh 2017. stackable. In fact. rinse and go convenience. snack-sized containers that strawberries have traditionally been offer snap.

Meanwhile. portion control and on-the-go. consumers want increased access to fresh food. And Pacific Coast Producers is launching multiple products canned in the TruVue® can with several leading retailers. capabilities. honoring our collaboration with McCall Farms. Sonoco has sumer portfolio to meet partnered with Florida-based the evolving needs of the robotics company Harvest marketplace and support our CROO to develop packaging ambitious growth strategy. trust and transparency by allowing shoppers to view the product before consuming it or serving it to their children. By integrating the packaging process with the picking process for these automated harvesters. costs rise for growers. with new products. Meanwhile. and there’s within. The TruVue can received the Gamma a growing risk of food waste due to produce Innovation Award for packaging this year. that supports a fully automatic. distribution. while seamlessly inte- grating into Tree Top’s production process. The ClearGuard pouch’s high-barrier structure protects the product throughout filling. Tree Top apple sauce is now available in Sonoco’s ClearGuard® clear barrier pouches—promoting safety. fully fresh thinking autonomous harvester that can pick eight acres of strawberries in a single day. These changes lay the In response to these groundwork for our con- important trends. But as the labor shine a spotlight on the freshness of the fruit market declines. we can remain a valued partner in the produce industry. even as the industry itself dramatically evolves. like Wegman’s. S O N O C O 2 0 17 A N N U A L R E P O R T 11 . while maintaining low costs and 2017 was a year of growth for Sonoco— gaining packaging that promotes resealability. spoiling in the fields before being picked. we’re extending freshness cues into the center of the store with important advancements in clarity and quality. H-E-B and Hyvee—creating retail displays on the perimeter of these supermarkets to of the fruit and the need for discernment in leverage the TruVue can’s transparency and picking only the ripe berries. customers and markets. retail and consumer usage.

We’re continue to improve performance and the producing and exporting 80 shipping containers overall optimization of our footprint.S. Expanding our a world of opportunity business by expanding our world view To further meet this growing demand in Asia. which will allow us to produce up to continued improvement in our corrugating 400 million units annually. where we expect to begin construction on a dedicated line in 2019. in the right markets with volume. 12 S O N O C O 2 0 17 A N N U A L R E P O R T . We’ve brought a third plant online in investment in our industrial operations to Malaysia. we have committed significant capital there. has traditionally been In 2017 we focused on optimization efforts our strongest market. We continue to see steady performance in our industrial and converted products around the world. for many years. giving us five operational lines. Looking ahead to continues to grow in popularity with consumers 2018. This strategy led to Poland. we hold small positions Composite cans are a in emerging markets and see opportunities large part of our for growth in these areas.S. right customers. and improved manu- growth in China and Southeast Asia as snacking facturing productivity. We’re also optimistic about the potential for growth in the Middle East. as well as South Africa. where we are projecting the need for a dedicated can line by 2020. and we recently added two lines in the right products. While we have a strong presence in Europe. in our industrial businesses. And while the U. making sure tunity for growth globally. between $60 million and $70 million in our domestic paper operations to improve efficiencies and throughput. including China business and have been and Southeast Asia. we’re exploring adding snack lines in Thailand and further expanding in China. Over each month to new markets throughout Asia and the next three years we expect to invest the Middle East. volume gains in international tubes and cores and global We’re also very optimistic about continued paper operations. In fact. our snack-can we were organized around serving the volume in Europe now roughly equals our U. we see real oppor. medium operations.

people. S O N O C O 2 0 17 A N N U A L R E P O R T 13 . Financial Soundness. the National Guard and reserves. which will develop new technologies and new forms of packaging to optimize the fresh food Our Commitment to Education lifecycle. Each year. culture and values Collaboration inspires the cultivation of fresh packaging ideas The Packaging Industry’s Most Admired Sonoco was selected for Fortune’s World’s Most Admired Companies and named first in the packaging sector. veteran recruiting. joining other well-known organizations including Kellogg. programs.725 million. and helps brands Honoring All Who Serve and retailers extend sales opportunities and Sonoco was named one of 82 “Best for Vets” eliminate food waste. we ranked first in nearly every category —including Innovation. In addition. Department of Labor. Modifying packaging Company.8 billion of that loss—while feeding policies and accommodations for members of more people and reducing waste to landfills. Sonoco is sponsoring a new research partnership Fortune’s World’s Most Admired Companies with Clemson University: the Sonoco FRESH list is the definitive report card on corporate (Food Research Excellence for Safety and Health) reputations.6 billion due AT&T. veteran recover $1. Best for Vets rankings evaluate design to extend shelf life by even one day can companies’ cultures. Quality of Products/Services and Global Competitiveness. with 69% of the funds supporting education programs. initiative. “Optimizing fresh food packaging to extend standards with the U. Use of Corporate Assets. Macy’s Inc. The 5-year sponsorship has a total value In 2017.” Jack Sanders has company to register national apprenticeship said.5 million in 45 nonprofit agencies and of Packaging Design and Graphics at Clemson. Hilton. and The Boeing to food spoilage at retail.” companies by Military Times. we invested approximately of $2. and is an extension of the partnership that created the Sonoco Institute $2.S. shelf life and maintain quality makes fresh produce more accessible to communities. Sonoco “Sonoco is committed to using packaging to tackle was the first South Carolina-headquartered the challenges fresh brands face. Among industry peers. Social Responsibility. Long-term Investment Value. the food industry loses $15.

Formerly Chief and member of the Executive Compensation. Ohio. Gosiger. Served on the Board since 2004. since December 2017. 68 Responsibility committees. Served on the Board since 2011. lubrication systems and chain). Elected to the Board in 2015. DeLoach Cockrell Davies Guillemot Haley Kyle 14 S O N O C O 2 0 17 A N N U A L R E P O R T . Inc. Member of the Executive committee. Transmissions Group 2013-14. (privately owned across the Asia/Pacific region) since 2005. board of directors Harris E. Member of the Audit. motors. 2000-02. Kyle. and Operating Officer of Bearings and Power Corporate Governance and Nominating committees.. Paris. Member of the Audit and Employee and Public Harry A. 58 Executive Chairman since March 2013. 56 enterprise with a wide range of businesses and assets Chief Executive Officer. Served on the Board since Formerly served as a managing partner. 2013. Executive Compensation. Managing Director of Pacific Tiger Group Limited (a Hong Kong-based privately held investment John R.. Dr. since 1998. Formerly Dean of the McColl School President and Chief Executive Officer of The Timken of Business at Queens University of Charlotte Company (a manufacturer of bearings. Boulogne-Billancourt. and Financial Policy committees. Haley. Chair of the Financial Policy committees. Dayton. Cockrell. from 2013-16. Financial Policy committee and member of the Employee and Public Responsibility committee. since 2014. Ohio. Formerly chief operating Chief Executive Officer 2005-10. Gosiger. Formerly Group Chief Executive Officer of Elior Group Chairman of the Board and Chief Executive Officer (catering and support services industry). France. of the Employee and Public Responsibility committee North Canton. 73 Philippe Guillemot. Pamela L. Chair gearboxes. since 2002. DeLoach Jr. Member of the Executive Compensation and 2001-10. President and France. 61 President of Queens University of Charlotte. since 2010. Charlotte. Davies. 2010-13 and Chairman of the Board. 52 N.C. Board member since 2017. Served on the Board officer of Alcatel-Lucent SA. Formerly distributor of computer-controlled machine tools and an investment committee member of Asian factory automation systems). transmissions. Richard G. Inc. Infrastructure Fund.

President and President. 1996-2008. S. Charlotte. (ITW) (a Fortune 200 global of Lowe’s 1996-2000. 64 Formerly “of Counsel” with Ogletree Deakins LLC President and Sonoco’s eighth Chief Executive (law firm) in Greenville. 71 Taught accounting at Harvard Business School in Managing partner of Falfurrias Capital Partners the full-time MBA program 2012-14. McGarvie.. Executive Vice President of Automotive OEM of Executive Vice President and Chief Financial Officer Illinois Tool Works. 55 Technology of Lowe’s Companies. Jack Sanders. Formerly Executive Vice President of Welding 2010-14. and Executive committees. Ill. most recently as consulting services and leadership seminars) from Chief Financial Officer. 61 Marc D. Served on the Board since 2006. S. Served on the Board since 2001. Commission 1981-83. McGarvie Micali Nagarajan Oken Sanders Whiddon S O N O C O 2 0 17 A N N U A L R E P O R T 15 . 70 member of the Audit. Lead Director since since 2012. Inc. since 2008.. Logistics and Sundaram Nagarajan. diversified industrial manufacturer of value-added Chair of the Audit committee and member of the consumables and specialty equipment with related Corporate Governance and Nominating. and Employee and Public Responsibility committees. February 2012. board of directors Blythe J. Boston.C. and Financial Policy committees. LLC (private equity firm). Chairman and Officer. Elected to the Board in 2014. and Financial Policy committees.. Chair of the Executive Compensation committee and James M. of Azalea Capital. Partners. Elected to the Board in 2015. 65 Executive. Executive service businesses) Glenview. Inc. LLC (an advisory firm offering tailor-made America Corporation 1989-2006. Executive Officer of Leadership for International Formerly held executive officer positions at Bank of Finance. Member of the Executive committee. since 2014. LLC (private equity firm) in Greenville. Michelin North America. 2008-11. 2000-03. Corporate Governance and Member and limited partner of Azalea Fund III Nominating. serving since April 2013. and Financial Retired. Financial Policy. a fellow with the Securities and Exchange the Audit.C.. 2005-13.C. Executive Compensation. Served as Chief (private equity firm). since 2006. Micali. Oken. M. Mass. Inc. Member of 1976-89. Executive Vice President. Chief Operating Officer 2010-13. partner at Price Waterhouse 2003-12. and Azalea Fund IV since 2014. N. Whiddon. Served on the Board Served on the Board since 2003. Chair of the Corporate Governance and Nominating committee and member of the Thomas E. Member of the Audit. Compensation. Formerly Advisory Director of Berkshire Policy committees.

Global Tubes Rigid Paper and Closures and Paper and Officer 2011-15. 56   Other Corporate Officers corporate officers M. Rigid Paper N. Executive Vice President Sonoco in 1985. and Services. Financial Officer since 2015. Tubes and Cores. Kevin Mahoney. Previously Vice and Canada since 2015. Schrum. Allan McLeland. Global Flexibles Counsel and Secretary since 2016. Joined Sonoco Sonoco in 1984. Affairs 2005-09. 2018. Industrial Converted Products. 2017. 62 James A. Rob Tiede. 64   Senior Vice President. Saunders. Joined Sonoco in 1989. Joined Sonoco in 1985. President. Human Resources. Paper/ Julie Albrecht. Joined Sonoco in 2015. From left.A. Previously Vice President. Joined Staff Vice President. Previously Vice President. Global Consumer Packaging Senior Vice President. 2018 John M. Joined Corporation. U. Joined Sonoco in 1987. 56 President. Howard Coker. EMEA. EMEA. Mahoney. Arthur. Previously Staff Vice President. Joined Sonoco in 2004. Previously Corporate Attorney 2015-16. Corporate Vice President. Previously Group Vice President. Corporate Vice President. Global Vice President and Chief Financial Previously Vice President. R. Jack Sanders. Previously Vice Reels 2015-17. Joined Sonoco December 2017. Vicki B. Investor Relations and Corporate Affairs since Retiring April 1. Fuller. 59   Paper and Industrial Converted Treasurer for Esterline Technologies President-elect and CEO-elect since Products. Marketing and Innovation 2017. Plastic Packaging Allan H./Canada and Corporate Vice President. 51   Marcy J. Harrell III. 62 Corporate Vice President. General Investor Relations and Corporate Vice President. Previously Group Vice President. Joined Sonoco in in 2006. Finance and Investor Relations and Robert C. Rigid Paper Barry L. 49 Senior Vice President. Asia. Industrial 2010-11. in 2017. Roger P. Joined Sonoco in 2005. Previously since 2013. Howard Coker. Asia.S. Puechl. Australia and New Zealand 2015-17. John Florence. Carriers International since January 2017. 2015-17. Global Tubes and Cores 2000-11. 58   Vice President.S. Previously Senior Vice Kevin P. 55   Adam Wood. 62 Joined Sonoco in 1985. McLeland. 56 and Protective Solutions since January Corporate Vice President. Treasurer/ since 2013. and Cores 2015. Previously Australia and New Zealand since 2015. Rodger Fuller. Roger Schrum. Jack Sanders. Florence. Global Resources since 2011. Robert L. 1993. Americas 2015-17. Barry Saunders 16 S O N O C O 2 0 17 A N N U A L R E P O R T . Thompson. Display and Packaging since January Assistant CFO. Previously Vice President. Corporate Planning President. Retiring April 2. and Chief Operating Officer since January 2017. Joined Sonoco in 2003. Vicki Arthur. Operations 2015. Executive Committee Rodger D. Paper and Industrial Containers and Paper/Engineered Senior Vice President and Chief Converted Products. 50 President and Chief Executive Officer Engineered Carriers U. 2011-13. Protective Solutions 2013-17. Human Vice President. Protective Solutions and Planning since 2011. 39   2009. 59   Senior Vice President. Tiede.

” “accelerated filer.405 of this chapter) is not contained herein. smaller reporting company. Second St. which was the last business day of the registrant’s most recently completed second fiscal quarter. . and will not be contained. As of February 16.025. to the best of registrant’s knowledge. Registrant does not (and did not at July 2. every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232. Yes È No ‘ Indicate by check mark whether the registrant has submitted electronically and posted to its corporate Web site. Yes ‘ No È The aggregate market value of voting common stock held by nonaffiliates of the registrant (based on the New York Stock Exchange clos- ing price) on July 2. See the definitions of “large accelerated filer. or an emerging growth company.S. and (2) has been subject to such filing requirements for the past 90 days.487. Employer Identification of South Carolina No. Yes È No ‘ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229. Hartsville.611. 2017. 2018. Yes ‘ No È 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). 2017) have any non-voting common stock outstanding. Yes È No ‘ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Documents Incorporated by Reference Portions of the Proxy Statement for the annual meeting of shareholders to be held on April 18.108. ‘ Indicate by check mark whether the registrant is a large accelerated filer. there were 99. 20549 FORM 10-K È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31. D. SC 29550 Telephone: 843/383-7000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registered No par value common stock New York Stock Exchange. which statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. 001-11261 SONOCO PRODUCTS COMPANY Incorporated under the laws I. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington. in definitive proxy or information statements incorporated by refer- ence in Part III of this Form 10-K or any amendment to this Form 10-K. was $5. Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘ Emerging growth company ‘ If an emerging growth company. 57-0248420 1 N.R.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer. are incorporated by reference in Part III.362 shares of no par value common stock outstanding. 2017 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. indicate by check mark if the registrant has elected not to use the extended transition period for comply- ing with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. if any. an accelerated filer.” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 2018. as defined in Rule 405 of the Securities Act.C. a non-accelerated filer. ‘ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Market for Registrant’s Common Equity. Properties 16 Item 3. Executive Officers and Corporate Governance 37 Item 11. Certain Relationships and Related Transactions. Unresolved Staff Comments 16 Item 2. Page TABLE OF CONTENTS Part I Item 1. Legal Proceedings 16 Item 4. Directors. Executive Compensation 37 Item 12. Related Stockholder Matters and Issuer Purchases of Equity Securities 17 Item 6. Other Information 36 Part III Item 10. Principal Accountant Fees and Services 38 Part IV Item 15. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 36 Item 9A. Financial Statements and Supplementary Data 35 Item 9. Risk Factors 9 Item 1B. Form 10-K Summary 39 2 SONOCO 2017 ANNUAL REPORT | FORM 10-K . Quantitative and Qualitative Disclosures about Market Risk 35 Item 8. and Director Independence 38 Item 14. Controls and Procedures 36 Item 9B. Mine Safety Disclosures 16 Part II Item 5. Exhibits and Financial Statement Schedules 39 Item 16. Selected Financial Data 18 Item 7. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 37 Item 13. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18 Item 7A. Business 5 Item 1A.

” “future. customer and supplier consolidation. uncertainties and assumptions that fluctuations in fair value. benefit plans. ‰ ability to attract and retain talented and qualified employees. and a reputation for quality. ‰ ability to maintain innovative technological market leadership ‰ costs. In addition. and adequacy of provisions for. ‰ consumer demand for products and changing consumer pref- sentatives may from time to time make other oral or written erences. our customers and suppliers in liabilities. tions of long-term rates of return. ‰ refinancing and repayment of debt.” “goal. realization of deferred tax ‰ effects of our indebtedness on our cash flow and business assets. goals and objectives assessment of goodwill impairment. ‰ expected amounts of capital spending.” or the negative thereof. ‰ continued strength of our paperboard-based tubes and cores ‰ improved productivity and cost containment. discussions as to ‰ accuracy of assumptions underlying projections related to guidance and other estimates. the levels needed to meet growth targets. valuation of plan assets.” “may. perceived opportunities. plans. and offsetting high raw ‰ ability to improve margins and leverage cash flows and finan- material costs. estimates and projections about our industry. tified as “forward-looking statements” for purposes of the safe ‰ work stoppages due to labor disputes. fair values of plan assets. nouncements. ‰ producing improvements in earnings. ‰ ability to profitably maintain and grow existing domestic and ‰ financial strategies and the results expected of them. ‰ accuracy of assumptions underlying fair value measurements. ‰ goodwill impairment charges and fair values of reporting units. are intended to be. but are not limited to. actions. long-term rates of return ‰ accuracy of assumptions underlying projections of benefit plan on plan assets. international business and market share. timing and effects of restructuring activities.” “plan. ‰ fluctuations in obligations and earnings of pension and post- ‰ anticipated contributions to pension and postretirement retirement benefit plans. cial position.” “believe.” Words ‰ ability to be the low-cost global leader in customer-preferred such as “estimate. the Company and its repre.” packaging solutions within targeted segments. as amended. ‰ ability to manage the mix of business to take advantage of cial position. The risks. identify forward-looking statements. contain or “potential. ‰ ability to identify and successfully close suitable acquisitions at ‰ profitable sales growth and rates of growth. ‰ continued payment of dividends.” “expect. ‰ adequacy of income tax provisions. and maintain positive price/cost relationships. concerning our future financial and operating performance. and composite can operations.” “can. introduction and sales. regu- ations. manage- lations. harbor provided by Section 21E of the Securities Exchange Act ‰ success of new product development. ‰ planned stock repurchases.” “guidance. and successfully ‰ market leadership. statements regarding: ing in segments with concentration of sales volume. ‰ expected impact and costs of resolution of legal proceedings. and tax laws. and projec- ‰ expected impact of implementation of new accounting pro. ‰ availability and pricing of raw materials. Company’s existing businesses on operating results. Therefore. ment’s beliefs and certain assumptions made by management.” ‰ ability to maintain or increase productivity levels.” “forecast. Forward-looking state. without limitation: proceedings. SONOCO 2017 ANNUAL REPORT | FORM 10-K 3 .” “strategy.” changes in competitors’ pricing for products. and projected benefit obligations and payments. and accuracy of management’s expectations. needed amounts and on reasonable terms. ‰ fluctuations in interest rates and our borrowing costs. including the impact of potential changes in tariffs. actual results may differ ‰ ability to maintain effective internal controls over financial materially from those expressed or forecasted in such forward- reporting. includ- ments include. “consider. ness.S. and “outlook. statements that are also “forward-looking statements. ‰ future asset impairment charges and fair values of assets. goodwill impairment testing. outcomes of uncertain tax issues and tax rates. and are hereby iden. and the Company’s ability to pass raw material. ‰ improving margins and leveraging strong cash flow and finan. ‰ cost of employee and retiree medical. ‰ adequacy and anticipated amounts and uses of cash flows. insurance benefits. timing and results of restructuring activities. beliefs. ‰ realization of synergies resulting from acquisitions. not historical in nature. ‰ foreign currency exchange rate fluctuations. Such forward-looking statements are based on current expect- ‰ changes in U. and similar expressions reduce costs. environmental ‰ availability of credit to us. without limitation. activities.” “project. ‰ plans with respect to repatriation of off-shore earnings. ‰ ability to negotiate or retain contracts with customers.” “will. looking statements. “would. managers and executives. strategies. of 1934. These statements are not guarantees of future performance and accuracy of management’s assessments of fair value and are subject to certain risks.” “opportunity.” “might.” “anticipate. ‰ the costs.” “aspires.” “re-envision. ‰ extent of. ‰ costs of labor.” ‰ competitive pressures. and ‰ resolution of income tax contingencies.” “assume. interest rate and commodity price risk and the effectiveness of related hedges. iffs. integrate newly acquired businesses into the Company’s oper- ‰ research and development spending. interpretations and implementation thereof. and foreign tax rates. “target. growing markets while reducing cyclical effects of some of the ‰ effects of acquisitions and dispositions. are difficult to predict. ‰ ability to expand geographically and win profitable new busi- ‰ financial results for future periods. ations. energy and ‰ effects of environmental laws and regulations. uncertainties and assumptions ‰ liability for and anticipated costs of resolution of legal include.” “commitment.” “objective. including new product development. including the impact of potential changes in tar. SONOCO PRODUCTS COMPANY Forward-looking statements transportation price increases and surcharges through to cus- Statements included in this Annual Report on Form 10-K that are tomers or otherwise manage these commodity pricing risks.” “could. energy and trans- ‰ liability for and anticipated costs of environmental remediation portation. obligations and payments.” industry overcapacity. health and life ‰ creation of long-term value and returns for shareholders. ‰ accuracy in valuation of deferred tax assets. Such information includes.” “intend. ‰ availability and supply of raw materials.

and poses only. subjects. Item 1A—“Risk Factors” and throughout other sections of that ‰ failures of third party transportation providers to deliver our report and in other reports filed with the Securities and products to our customers or to deliver raw materials to us. vided in the Company’s Annual Report on Form 10-K under ‰ failure or disruptions in our information technologies. ‰ substantially lower than normal crop yields. whether as a result of new concerns about products packaged in our containers. and about new or additional risks. In light of these various risks. Stock Exchange Listing Standards. the forward-looking events dis- ‰ loss of consumer or investor confidence. ‰ changes in laws and regulations relating to packaging for food The Company undertakes no obligation to publicly update or products and foods packaged therein. ‰ actions of domestic or foreign government agencies and other changes in laws and regulations affecting the Company References to our website address and increased costs of compliance. national and local economic and market con. cussed in this Annual Report on Form 10-K might not occur. or to fulfill specific disclosure requirements of the ‰ economic disruptions resulting from terrorist activities and Securities and Exchange Commission’s rules or the New York natural disasters. Exchange Commission. You are. References to our website address and domain names through- ‰ international. ‰ operational disruptions at our major facilities. Exchange Commission on Forms 10-K. and do not. uncertainties and assumptions sites by reference into this Annual Report on Form 10-K. uncertainties and ‰ changing climate. however. out this Annual Report on Form 10-K are for informational pur- ditions and levels of unemployment. that may cause actual results to differ materially from those expressed or forecasted in forward-looking statements is pro- 4 SONOCO 2017 ANNUAL REPORT | FORM 10-K . in our future filings with the Securities and gas effects. uncertainties and assumptions. information. climate change regulations and greenhouse assumptions. or chem. ‰ ability to protect our intellectual property rights. future events or otherwise. icals or substances used in raw materials or in the manufacturing advised to review any further disclosures we make on related process. These references are not intended to. incorporate the contents of our web- More information about the risks. 10-Q and 8-K. other actions and public revise forward-looking statements.

2017. sauces. Sonoco had the capacity to manufacture approximately 1. desserts. bowls. collection. services and markets of the Paper and Industrial Round composite cans. South Carolina. nuts. baby packaging. shipping and storage. tape rigid plastic trays. Company. closures for composite and entrees. old corrugated containers. adver- utions. pasta. The Products and Services Markets products. corrugating medium. cups and duce. 2017. mills. 2017. 35% and 35% of the Compa- Company. heat sealing equipment. Information about the Company’s reportable segments age filling. condiments. poultry. processed foods. Business Display and Packaging (a) General development of business – The Display and Packaging segment accounted for approx- The Company is a South Carolina corporation founded in imately 10%. However. primary pack. fresh-baked goods. coffee. services and markets of the Display and a provider of packaging services. cheeses. Display and Packaging. completed the sale of its rigid plastics blow molding operations. fresh boxboard. over-the-counter drugs. frozen concentrate. with 298 locations in 33 and Packaging segment are as follows: countries. PART I Item 1. The products. 43% and 43% of the Company’s consolidated net fiber-based packaging. 2016 and 2015. metal. containers. respectively. sporting verted Products. hosiery. In 2017. representing approximately 22% of consolidated net sales in the This segment included blow-molded plastic bottles and jars year ended December 31. SONOCO 2017 ANNUAL REPORT | FORM 10-K 5 . steel and peel. including care. fiber and plas. This group comprised 23% and 21% of consolidated net sales in 2016 and 2015. spools and dairy. Sonoco’s paper The Consumer Packaging segment accounted for approx. the Company 21% of consolidated net sales in 2016 and 2015. spiral winders. The operations in this segment consist of 80 plants This vertical integration strategy is supported by 19 paper mills throughout the world. high-barrier flexible pet food. respectively. frozen lightweight corestock. Converted paperboard products. rotogravure cylinder engraving. linerboard. tubes and cores. crackers. Converted Products segment are as follows: shaped rigid paperboard hard-baked goods. and other recyclable lidding films. and the remainder is sold to third parties. Products and Services Markets tic caulk/adhesive tubes. manufacturing and distribution parts. global brand management.7 million tons of recycled paperboard. food. In 2017. chipboard. injection molded seafood. tubeboard. film. aging films. and Protective Sol. beverages. thermoformed fruit. Item 8 of this Annual Report on Form 10-K. soup. 2017. 2017. This segment serves its mar- Consumer Packaging kets through 164 plants on five continents. custom packaging. flowable products. vegetables. specialties (c) Narrative description of business – Paper and Industrial Converted Products Products and Services – The following discussion outlines the The Paper and Industrial Converted Products segment principal products produced and services provided by the accounted for approximately 37%. construction. joint ventures and restructuring activities is provided in Notes 3 Products and Services Markets and 4 to the Consolidated Financial Statements included in Point-of-purchase displays. dispositions. 2016. cialty grades. metal. aluminum. In 2017. Poland. respectively. glass atmosphere packaging. The operations in this segment consist of 24 plants Products Company (“the Company” or “Sonoco”). molded municipal. paperboard and label. paper metal cans. plastics. customers’ containers. candy. The products. fulfillment. Mexico manufacturer of industrial and consumer packaging products and Brazil. 2016 and 2015. Sonoco uses approximately 62% of the sales in the years ended December 31. reels. powdered and liquid beverages. Sonoco’s tubes and cores products were the Company’s largest revenue-producing group of products. Paper and Industrial Con. paperboard included in Item 8 of this Annual Report on Form 10-K. dips. meats. operations provide the primary raw material for the Company’s imately 42%. materials ble packaging. This group comprised 22% and for most of 2016. Snacks. gum. hospitality industry. candy. toys. processing and recycling of facilities and forming plastic pack. printed flexi. Information about the Company’s acquisitions. services and markets of the with 28 paper machines and 24 recycling facilities throughout Consumer Packaging segment are as follows: the world. segments – Consumer Packaging. residential. office supplies. retail electronics. insulators. modified paper. on November 7. spe. 2016 and 2015. Automotive. paper it manufactures. cookies. in 1899 as the Southern Novelty sales in the years ended December 31. cosmetics. The name was subsequently changed to Sonoco respectively. supply chain tising is provided in Note 16 to the Consolidated Financial Statements management. representing approximately 22% of consolidated net sales in the year ended December 31. textiles. Sonoco is a around the world including the United States. medical. fragrances. plugs. salads. fresh-cut pro. 11% and 12% of the Company’s consolidated net Hartsville. beverage able membrane easy-open refrigerated dough. ny’s consolidated net sales in the years ended December 31. The Company reports its financial results in four reportable thermoformed blisters and home and garden. powdered infant formula. Sonoco’s rigid packaging – paper-based products – was the Company’s second largest revenue-producing group of products and services. goods. (b) Financial information about segments – printed backer cards. respectively. Recycled paperboard. personal care. wire and cable.

including the acquisition of Clear advantages. Inc.5 million in 2016 and $22. Raw materials are purchased from a number regularly bid for new and continuing business. Company also believes that its technological leadership. broad range of new and next generation product developments SmartSeal®.. All of shipped to the customer as needed. any significant degree. representing approximately 4% of the sentative or team of specialists to handle that customer’s needs. medical devices. and 10% of the Company’s consolidated net Display and Packaging segments normally report slightly higher sales in the years ended December 31. as needed. to be management. was not material. of each seg- assured fitness equipment. the amount of back- points between their North American business units and their log orders at December 31. changes to alternative forms of packaging. Sonopost® and UltraSeal®. who demand high-quality. the Paper and Industrial Converted Products appropriate. patents Research and Development – Company-sponsored expire after about 20 years.sonoco. services and markets of the Pro. the Consumer Packaging seg- packaging and compo. patents from outside companies and universities. customer availability of raw materials to be adequate to meet its needs. which include paper. Protective Solutions Seasonality – The Company’s operations are not seasonal to The Protective Solutions segment accounted for approx. U. concentration of credit. 11%. Expansion of the Company’s product lines and Lam and Packaging Holdings. 2017. Some patents have been productivity improvements and other cost-reduction initiatives licensed to other manufacturers. (SDI). 2017. food. ceuticals and food. 22% and 29%. Product Distribution – Each of the Company’s operating units Sales to the Company’s largest customer represented has its own sales staff. 2016 and 2015. Consumer Packaging segment have customer service centers Backlog – Most customer orders are manufactured with a located in Hartsville. and wire and cable. competitive markets. compared with the first half. 2017. and the repricing of Patents. Consumer electronics. the five largest customers in the Paper and Industrial expanded foam protective temperature-sensitive pharma. film. SDI to do business.0 million in 2017. 2017. across flexible packaging. inventions and product and process innovations are generated The Company manufactures and sells many of its products by Sonoco’s development. marketing and product development assistance shipped during 2018. prod. Inc. 2017. automo- paperboard-based and tive. The Company is constantly focused on ments and license agreements. Divisional sales personnel also provide sales pany expects all backlog orders at December 31. when respectively. segment continued to invest in efforts to design and develop 6 SONOCO 2017 ANNUAL REPORT | FORM 10-K . domain names are licensed to outside companies where During 2017. we and plastic resins. and maintains direct sales relationships approximately 4% of consolidated revenues in 2017. South Carolina. Losses and/or of outside sources. Trademarks and Related Contracts – Most business. Converted Products segment. paperboard. approximately 7%. and vertical integration are competitive acquisitions over the past year. expenses were not material in any of these periods. including global presence is driven by the rapidly changing needs of its Peninsula Packaging LLC. These patents are managed globally major customers. The Company considers the supply and awards of business from our largest customers. marketing and engineering staffs. service marks. Sonotube®. This with its customers. The Company. globally. respectively. steel. The Com- customers. The Company’s next largest customer that interact directly with customers. 2017. SPC Resources. The products.com and www. heating and ment and the Protective Solutions segment accounted for nents. promotional ment’s net sales. wherever they choose Company’s subsidiary. Additionally. Trademarks and powdered infant formula cans for emerging global markets. construction. trade secrets. packaging. 2015. although the Consumer Packaging and imately 11%. Products and Services Markets Dependence on Customers – On an aggregate basis during Custom-engineered. to compete effectively.S. sales and operating profits in the second half of the year. Most of Sonoco’s products projects in Sonoco’s Consumer Packaging segment include a are marketed worldwide under trademarks such as Sonoco®. appliances. Sonoco also licenses a few utilizing the latest in technology. product distribution is directly from the Competition – The Company sells its products in highly manufacturing plant to the customer. its people and its products. Patents 1923. including development of FlexValve™ integrated venting www. It is important to be a low-cost producer in order globally manages patents. uct is warehoused in a mutually advantageous location to be chemical. A second $21. tective Solutions segment are as follows: Working Capital Practices – The Company is not required to carry any significant amounts of inventory to meet customer requirements or to assure itself continuous allotment of goods. copy. confidentiality agree. aluminum demand. The dependence on a few customers in the packaging and palletized distribution Display and Packaging segment is more significant. temperature. Sealclick®. can have a significant effect on our operating results. considers its ability to serve its customers worldwide in a have been granted on many inventions created by Sonoco staff timely and consistent manner a competitive advantage. the Company often assigns a single repre. Therefore. by a Sonoco intellectual capital management team through the environmentally compatible packaging.com provide information technology for flexible coffee packaging and PureShield™ about Sonoco. but in some cases.sonotube. air conditioning. which are the main contact lead time of three weeks or less. state-of-the-art. having operated internationally since and are important to the Company’s internal growth. Inc. Customer-sponsored research and development globally manages Sonoco’s trademarks. The in the United States and in many other countries. Sonoco Development. For those customers that buy from more than concentration of sales volume resulted in a corresponding one business unit. Because we operate in highly competitive markets.1 million in intellectual capital subsidiary of Sonoco. $22. and patents on new innovations research and development expenses totaled approximately replace many of the abandoned or expired patents. The Paper and Industrial comprised approximately 3% of the Company’s consolidated Converted Products segment and certain operations within the revenues for the year ended December 31. as the five largest customers in this segment accounted for approximately 53% of that segment’s sales. Significant rights and Internet domain names. office furnishings. rigid plastic and composite pack- Sonoco’s registered web domain names such as aging. these markets are influenced by the overall rate of economic Raw Materials – The principal raw materials used by the activity and their behavior is principally driven by supply and Company are recovered paper. patents and trade secrets were acquired as part of several reputation for quality. textile. Typically. and subsidiaries. Company’s consolidated trade accounts receivable at Some of the units have service staff at the manufacturing facility December 31.

able. Mr. Florence is the son-in-law of Harris E. Corporate Planning since February 2011. and proxy materials pursuant to Section 14 of Management’s Discussion and Analysis of Financial Condition the 1934 Act. Global Rigid Paper & Closures 2015. Australia and New Zealand 2015-2017. (d) Financial information about geographic areas – Financial information about geographic areas is provided in Note 16 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Mahoney 62 Senior Vice President. Haley. Vicki B.) President and Chief Executive Officer since April 2013. EMEA. Coker is the brother-in-law of John R.sonoco. Form 8-K. our Executive Chairman. Joined Sonoco in 1985. Paper & Industrial Converted Products.sec. Tiede 59 President and CEO-elect. and other information regarding issuers that file Statements included in Item 8 of this Annual Report on electronically with the SEC. Previously Vice President. Protective Solutions. Sonoco also makes its filings avail- Form 10-K. Rigid Paper Containers and Paper/Engineered Carriers International since January 2017.” and in Note 14 to the Consolidated Financial statements. Robert C. 2013-2015. N. 2018. www. Global Rigid Paper & Closures 2011-2013. and in the Executive officers of the registrant – Name Age Position and Business Experience for the Past Five Years Executive Committee M. Pre- viously Vice President. Executive Vice President. cussion and Analysis of Financial Condition and Results of formance characteristics of the Company’s tubes and cores in Operations under the caption “Risk Management” of this the construction. its on developing new temperature-assurance packaging solutions quarterly reports on Form 10-Q.new products for the paper industry and for the film and textiles information about market risk in Item 7 – Management’s Dis- industries. Mr. Jr. Global Protective Solutions 2013-2017. as Number of Employees – Sonoco had approximately 21. Previously an attorney at Haynsworth Sinkler Boyd. Group Vice President. Global Flexible & Packaging Services 2009-2013. Joined Sonoco in 1984. 2005-2015.gov. Joined Sonoco in 2004. Joined Sonoco in 1987.S. through its website. Vice President. Global Rigid Paper & Closures and Paper & Industrial Converted Products. Previously Corporate Attorney 2015-2016. Global Corporate Customers 2008-2012. Executive Vice President and Chief Operating Officer since January 2017. Florence 39 Corporate Vice President. Corporate Planning 2000-2011. and amendments to those reports filed or furnished Compliance with Environmental Laws – Information regarding pursuant to Section 13(a) of the Securities Exchange Act of 1934 compliance with environmental laws is provided in Item 7 – (the “1934 Act”). Howard Coker 55 Senior Vice President. 2018. Protective Sol- utions & Reels 2015—2017. DeLoach. Global Primary Materials Group 2015. Asia. Global Consumer Packaging & Services. 2017. Previously Group Vice President. Group Vice President. Joined Sonoco in 1985. Fuller 56 Senior Vice President. free of charge. 2012-2013. Industrial 2008-2010. Global Consumer Packaging and Services 2013-2015. In addition. Executive Vice President.A. The SEC maintains a site on the Internet. General Counsel and Secretary since November 2016. Jack Sanders 64 (Retiring effective April 2. effective April 2. Paper & Industrial Converting N. Rodger D./Canada and Dis- play & Packaging since 2017. emphasis was also placed on delivering improved productivity via materials developments and key converting process (e) Available information – improvements. Vice President. proxy and information Management. Research and development projects in the The Company electronically files with the Securities and Company’s Protective Solutions segment were primarily focused Exchange Commission (SEC) its annual reports on Form 10-K. Paper/Engineered Carriers U. Kevin P. Technology Annual Report on Form 10-K. P. Joined Sonoco in 1987. Vice Presi- dent. that contains reports. Joined Sonoco in 2015.A. Global Rigid Plas- tics & Corporate Customers 2011-2013. Previously President and Chief Operating Officer December 2010-March 2013. and Results of Operations under the caption “Risk www. Vice President. Previously Senior Vice President. John M.A. material with the SEC. Vice President. Consumer January-December 2010. one of Sonoco’s directors. R.. Plastic Packaging and Protective Solutions since January 2017. its periodic reports on for the pharmaceuticals and clinical trials market.com. Senior Vice President. Previously Group Vice Presi- dent. Americas 2015-2017. Global Rigid Paper & Plastics 2013-2015. efforts were focused on enhancing per. Vice President. Vice President. tape and paper packaging areas. Arthur 59 Senior Vice President. SONOCO 2017 ANNUAL REPORT | FORM 10-K 7 .000 soon as reasonably practical after the electronic filing of such employees worldwide as of December 31.

Marcy J. Previously Vice President. Pre- viously Staff Vice President. Industrial 2010-2011. Global Tubes & Cores February-December 2015. Corporate Controller and Chief Accounting Officer 2008-2011. 2012-2015.A. Joined Sonoco in 2003. Joined Sonoco in 2005. 8 SONOCO 2017 ANNUAL REPORT | FORM 10-K . Vice President. 2015-2017. Rigid Paper N. Industrial Converting Division N. Thompson 56 Vice President. Division VP/GM. Joined Sonoco in 1989. Vice Presi- dent. Tubes & Cores. Puechl 62 Vice President. Roger P. Global Flexibles since January 2011. Albrecht 50 Corporate Vice President. Adam Wood 49 Vice President. Schrum 62 Corporate Vice President. 2011-2013. Joined Sonoco in 1986. Joined Sonoco in 1985. Sonoco Recycling 2009-2011. Vice President. Aus- tralia and New Zealand since December 2015. and Canada since December 2015. Previously Vice President. Robert L. 2010-2012. Previously Vice Presi- dent. EMEA.S. Finance and Investor Relations & Treasurer for Esterline Tech- nologies Corporation. 2012-2015. Industrial Europe 2014-2015. Industrial Europe 2011- 2014. Vice President. Barry L. Treasurer/Assistant CFO. Paper & Industrial Converted Products. Human Resources since January 2011. Finance Director. Global Tubes & Cores Operations February- December 2015. Tubes & Cores N. James A. Previously Vice President. Pre- viously Vice President and Chief Financial Officer 2011-2015. Marketing and Innovation since July 2013. Harrell III 56 Vice President. Customer Service Aircraft Systems for United Technologies. Joined Sonoco in 2006. McLeland 51 Corporate Vice President.A. Asia. Division Vice President & General Manager. Previously Vice Presi- dent. Name Age Position and Business Experience for the Past Five Years Allan H. Previously Staff Vice President. Joined Sonoco in 1993. Investor Relations & Corporate Affairs 2005-2009. Human Resources. Investor Relations & Corporate Affairs since February 2009. Global Plastics 2010-2011. Other Corporate Officers Julie C.A. U. Joined Sonoco in 2017. Saunders 58 Senior Vice President and Chief Financial Officer since May 2015.

S. in perceptions related to the Euro could adversely affect the value the United States. legal and economic instability. cial results. civil unrest.Item 1A. Euro would likely have more broad-reaching effects than only to ‰ hyperinflation and currency devaluation. and price/mix and lower profit margins. and any investment in fines. and in our public ‰ our interpretation of our rights and responsibilities under local announcements. in our other filings sidiaries. affect our business. ‰ loss or non-renewal of treaties between foreign governments leading to declines in consumer and business confidence and and the U. markets and instability of the Euro could adversely We have operations throughout North and South America.S. duties. and result in loss of business. with 298 facilities in 33 countries. the difficulties of the United ‰ difficulties in staffing and managing international operations. penalties. Our international operations subject us to various risks that could adversely affect our business Global economic conditions. shrinking middle class incomes. and we long-term stability of the Euro and the future of the Euro as a expect to continue to expand our international operations in the single currency given the diverse economic and political future. on the economy. Australia and Asia. taxes on remittances and other payments by non-U. language and cultural differences between per- and currency fluctuations are likely to continue to put pressure sonnel in different areas of the world.S. the general economy improves and unemployment declines. and customs. damage to our reputation. statutory accounting requirements.S. financial condition or results of Europe. etc. Risk factors ‰ possible limitations on conversion of foreign currencies into We are subject to risks and uncertainties that could adversely dollars or payment of dividends and other payments by non-U. Weakened global economic con. VAT and similar below. Current global economic challenges. unanticipated tors of which we are currently aware. taxes or government royalties. at historic lows for a number of years and the likelihood of their ‰ foreign governments’ restrictive trade policies. including ‰ national and regional labor strikes. In addition. ‰ geographic. Although these are the most significant risk fac. differing legal environments and operate replacing the Euro with its own currency) and market other additional risks that may not exist. ‰ compliance with and changes in applicable foreign laws. These factors could also cause our actual results to including the imposition or increase of withholding and other materially differ from the results contemplated by forward. including with respect to products of our When such conditions exist. affect us. and customers. earnings or operations. our business. As evidenced in recent foreign investment and the Foreign Corrupt Practices Act. decrease or multi-national customers. ‰ non-tariff barriers. spending. affect- results. dollar revenue and income from out limitation: operations. Additional risk factors not cur. with the Securities and Exchange Commission. ‰ difficulties in enforcement of contractual obligations and Although our business is diversified across various markets intellectual property rights. In operations. and/or other liabilities related to our securities. beginning a return to historic norms appears to be increasing as import/export and other trade compliance regulations. which may affect our ability to meet customer demands. disruptions in the credit operations and financial results. or other attributes relating to our non-U. in evaluating us. annual revenue in 2017 for our SONOCO 2017 ANNUAL REPORT | FORM 10-K 9 . could responsibilities or protect our rights.S. rities. Although instability of the rency exchange controls. tax deductions. or be as significant. they are not the only risk operational restrictions and/or other consequences as a result of factors to which we are subject. Management of global operations is extremely complex. and distributors may have difficulty getting our products to ‰ difficulty in collecting international accounts receivable and market. our customers. licenses and permits. finan- ‰ foreign currency exchange rate fluctuations and foreign cur. as well as other factors described elsewhere in this report taxes. war. catastrophic events. business operations and financial results. approximately 35% of consolidated sales came from Additionally. interest rates have been ‰ differences in local business practices. and include. and otherwise negatively affect our business. with restructuring activities. cial condition or results of operations. social. a material adverse effect on us. and in our other filings with the Securities and Exchange Com. also adversely affect our business operations and financial ‰ changes in tax laws. potentially longer payment cycles. ‰ product boycotts. years. Potential neg- and operations in foreign countries are subject to local statutory ative developments (such as a Eurozone country in which we and regulatory requirements. consolidated financial condition. or inaction. sub- looking statements we make in this report.S. or the interpretation of such laws.. or that we currently deem immaterial. affect our business. with. the Company’s actions. general economic downturns in the United States and rights of foreign unions and work councils. because of the nature of our products and serv. Such an increase in rates would put additional pressure on ‰ compliance with U. 2017. ‰ high social benefit costs for labor. taken to perform our rently known to us. acts of terrorism. and widespread outbreaks of infectious diseases. customers may delay. and costs associated globally can adversely affect our business operations and finan. there has been concern regarding the overall operations and sales outside of the United States. euro-denominated economies. circumstances in individual Eurozone countries. ‰ the potential for nationalization or expropriation of our enter- ditions may also result in unfavorable changes in our product prises or facilities without appropriate compensation. and on us. laws. and may also delay payment or fail to ‰ increased costs of maintaining international manufacturing pay us altogether. and the trading price of our secu. including more expansive ices. ing taxable income. translated amounts of U. All of these factors may have ‰ political. Suppliers may have difficulty filling our orders facilities and undertaking international marketing programs. including those affecting trade and consumers and the economy in general. suppliers and distributors. reduce the amount of our our business operations and financial results. States and other countries in dealing with their rising debt levels. may prove to be incorrect or unsupportable resulting in mission. tightening of credit availability and/or financial difficulties. operations and cash flows. results of subsidiaries. These additional risks may adversely affect of our Euro-denominated assets. You should consider the risk factors described statutory and regulatory rules for sales taxes. cancel purchases from us. non-compliance. Changes in domestic and global economic ‰ inconsistent product regulation or policy changes by foreign conditions may have a negative impact on our agencies or governments.

governments and persons. determines subject to significant price increases as the result of changes in which E. Our European Union could adversely affect us. governments. While we train Similarly. sanctioned countries. them at reasonable cost. use commodity futures or swaps in an totaled $103 million.U. ery of our raw materials. on our ability to pass on cost In 2016. performance depends. including government addition. gave the notice that the impact by improving productivity. Although the Brexit overall supply and demand and the impacts of legislation and decision could have broad-reaching effects beyond just in the regulatory action. in a timely manner could harm our reputation. ition candidates that meet our criteria.U. If we affect our ability to supply products to our customers.K. if our distributors fail to obtain appropriate import. in turn. weather conditions and natural disasters. and we We are subject to governmental export and import could suffer adverse effects to net income and cash flow should control laws and regulations in certain jurisdictions we be unable to either offset or pass higher energy costs where we do business that could subject us to through to our customers in a timely manner or at all. A prohibited shipment manufacture our products in response to customer demand. such adjustments may not occur customers. itself. Such dis- fail to comply with export licensing. or be sufficient to prevent a materially adverse depend on any agreements the U. shift in the enforce. negatively impact tries. or at all.K. energy and other price increases or We have made numerous acquisitions in recent years. able to improve productivity or realize sufficient savings from nently. stantial civil or criminal penalties. the U. Most of the raw materials we use are purchased from candidates or complete acquisitions on acceptable terms and third parties. our sales and profitability are dependent believes will provide meaningful opportunities for growth. Brexit could cause dis. we may also be materi. on the availability and cost of raw materials. Prices and availability of these raw materials investment and acquisition strategies to ours. we may not be E. products we manufacture and/or distribute. In Some of our manufacturing operations require the use of addition. steel. resource availability. and in 2017.K. ruptions could have a material adverse effect on our business nomic sanctions or other laws. $515 million. Brexit could lead to legal uncertainty and potentially substantial amounts of electricity and natural gas. if any of these providers were to fail to deliver raw our employees to comply with these regulations. 10 SONOCO 2017 ANNUAL REPORT | FORM 10-K . and shortages may reduce our net income.K. fines. eco. Although many of our commences the formal Brexit process. services. makes to retain access to effect on net income and cash flow. and. and. and financial results. conditions. The effects of Brexit will quickly enough. How- ever. the U. Supply shortages or disruptions in our supply chains could Certain of our products are subject to export control laws affect our ability to obtain timely delivery of materials. markets either during a transitional period or more perma. portation provider to deliver raw materials or finished products ment or scope of existing regulations. Any limitation on our ability to export or sell our products could materially adversely affect our busi. busi. for acquisitions may intensify. may be restricted. In addition. products internationally. could decrease our ability to export or sell our our financial condition and results of operations. long-term contracts and non-contractual pricing arrangements ruptions to and create uncertainty surrounding our U. and the possible loss of export or import privileges. candidates. incarceration for responsible employees and We depend on third parties for transportation managers. Increases in costs can have an The vote by the United Kingdom to leave the adverse effect on our business and financial results. change tax benefits or liabilities in these or other jurisdictions. equip- and regulations and may be exported only with an export ment and supplies from our suppliers. we might be unable to replace reputational harm. We forecast and monitor energy usage. persons or technologies targeted by such our customer relationships and have a material adverse effect on regulations. Any change in export or import regulations. If any of or loss of sales opportunities. laws to replace or replicate. our third-party transportation providers were to fail to deliver the Furthermore. we cannot guarantee success in these efforts. we could be subject to sub. including economic sanctions against us. liability or impair our ability to compete in these markets. attempt to reduce the impact of energy price increases. businesses where the Euro is the functional currency totaled transportation costs. including affecting relationships with existing and future increased raw material costs. and competition are subject to substantial fluctuations that are beyond our con. penalties. our potential for growth rency and commodity price fluctuations. expect to actively seek new acquisitions that management As a manufacturer. we prohibit the shipment of certain products to embargoed or might be unable to sell those products at full value. businesses alone from time to time.K. export control laws and economic sanctions goods that we manufacture or distribute in a timely manner.) increases to our customers by raising selling prices and/or offset (referred to as Brexit). annual revenue in 2017 for our U. The measures could potentially disrupt the markets we our cost reduction initiatives to offset the impact of increased serve and the tax jurisdictions in which we operate and adversely costs. we might be unable to guarantee that a violation will not occur. cur. which are highly regulated. Furthermore. civil and criminal sanctions and cease doing business with us. Any failure of a third-party trans- economic sanctions or related legislation. In could have negative consequences. U. which could limit our potential for growth. political unrest and instability.K. If we are unable to identify acquis- trol due to factors such as changing economic conditions. adversely license or through an applicable export license exception. labor and other However. Raw materials. or change in the coun. a significant portion of the Obtaining the necessary export license for a particular sale may goods we manufacture and raw materials we use are trans- be time consuming and expensive and could result in the delay ported by railroad or trucks.K. We may not be able to identify suitable acquisition ness. Principal examples are recovered paper. voted to leave the European Union (E. which may be divergent national laws and regulations as the U. We rely primarily on third parties for transportation of the export or re-export licenses or permits. In particular. in part. we may not be able to identify suitable acquisition inputs. and other factors impacting sup- ply and demand pressures.U. if any of these third parties were to cease operations or investigations. Other companies in our industries have similar aluminum and resin. suppliers and employees. with customers permit limited price adjustments to reflect nesses. as well as for deliv- ally adversely affected through reputational harm and penalties. we cannot materials to us in a timely manner. customs regulations.

or renewal of business with less favorable terms can have a sig- cial and disclosure controls). joint ventures and stra. ‰ potential loss of major customers and suppliers. We face intense competition. without limitation. could be adversely affected. operating results. Accordingly. profitability or productivity. and structure to serve our customers and to respond to changes stantial amount of capital in acquisitions. financial condition and sales and net income. we have invested a sub. claims for to meet quality. restructuring and ness both in the United States and internationally. sell non-core assets in the foreseeable future. our finan- Other risks and challenges associated with acquisitions cial position and results of operations could be adversely include. and failure to compete ‰ diversion of management’s attention. and expenses ment of assets. Furthermore. such as our failure limited to third party liability and other tort claims. of effective competition. As a result. customer changes to alternative forms of packaging. competitiveness and profitability. many of our during due diligence review of acquisition targets. or the assessment of the relevant facts and circumstances was inaccurate or changes. The loss of business from our larger ‰ difficulties in integration of departments. Like us. or tax liabilities. We are continuously seeking the most cost-effective means As noted in the risk factor above.We may encounter difficulties in integrating We may encounter difficulties restructuring acquisitions. without limitation: affected. divestiture costs have been. and otherwise restructure operations in an effort to improve cost itions and strategic investments that are significant to our busi. nificant adverse effect on our operating results. the potential assumption of reduction in the volume of products produced and sold. could exacerbate any such loss. we have. and our results of operations and financial condition adverse impact on our sales and profitability. we segment’s sales and. depending on the magnitude of the loss. if they materialize. and in some cases. tracts themselves often do not require a specific level of health and safety liabilities. they become subject to liabilities or legal claims. or result in a risks. and acquisitions may involve significant cash result in significant financial charges for the write-off or impair- expenditures. and they all. consolidation of our larger While management believes that acquisitions will improve suppliers has resulted in increased pricing pressures from our our competitiveness and profitability. books and records. tech. pricing. and suppliers of raw materials are consolidating. environmental. ‰ inaccurate estimates of fair value in accounting for acquisitions We sell our products in highly competitive markets. responsive. at the end of the contract term. we may majority of our master customer contracts are long-term. the magnitude of which Acquired businesses may not achieve the expected levels of could vary significantly from year to year depending on the revenue. controls (including internal finan. our results of operations and financial condition. and the challenges no guarantee that any such activities will achieve our goals. and many of ‰ potential failure to identify material problems and liabilities our customers have been acquired. These liabilities. may become subject to liabilities and legal claims. Each of our segments has large customers. many of our larger customers have acquired compa- dures and policies. effectively can have an adverse effect on our ‰ disruptions to our ongoing businesses. low-cost producer is a key component ‰ difficulties in assimilation and retention of employees. and are expected to be. although no are not adequately covered by insurance or an enforceable one customer accounted for more than 10% of our net sales in indemnity or similar agreement from a creditworthy counter. customers. nies with similar or complementary product lines. the loss of any of our major customers. and the con- breach of contract. increased pricing pressures. if we cannot successfully manage the associated risks. or at we become subject to any of these liabilities or claims. controls. a reduction party. and the loss of any of these could have a significant adverse effect on the In connection with acquisitions or divestitures. ‰ difficulties in maintaining uniform standards. There is unanticipated liabilities and contingencies. There is no assurance that existing customer rela- regulatory or other legal compliance issues. or otherwise perform as scope of such activities. proce. ‰ challenges associated with operating in new geographic Continuing consolidation of our customer base and regions. in our markets. Furthermore. the projected results. or a reduction in its noncash impairment charge of any related goodwill would be production requirements. Similarly. including goodwill and other intangible assets. nesses. our financial condition and operating results. ‰ demands on management related to increase in size of our businesses and additional responsibilities of management. procedures. including. purchasing. we may be responsible for significant out-of-pocket in their purchasing levels or an adverse change in the terms of expenditures. Although a In connection with any acquisitions or divestitures. employment-related claims. could have a significant required. disrupt our ordinary operations. debt incurrence. close higher-cost facilities. component of our operating costs. and are tegic investments and we expect that we will continue to do so likely to again. If tionships will be renewed at the same level of production. For more information on SONOCO 2017 ANNUAL REPORT | FORM 10-K 11 . conditions or damage. This consolidation ‰ potential failure to obtain sufficient indemnification rights to of customers and suppliers has increased the concentration of fully offset possible liabilities associated with acquired busi. such activities may divert the attention of dition and operating results. a recurring joint ventures and strategic investments involve numerous risks. which could have an adverse impact on operations or closing or disposing of facilities. suppliers may intensify pricing pressure. or volume requirements. Further consolidation of customers and suppliers that acquisitions will be successful or accretive to earnings. We are continually evaluating acquis. operating losses. and being a reduce future reported earnings. from time to time. which could larly bid for new and continuing business. 2017 or 2016. no assurance can be given suppliers. Additionally. nologies. systems. If could intensify pricing pressure and reduce our net sales and actual performance in an acquisition falls significantly short of operating results. Acquisitions. permitting. We regu- and amortization of acquired intangible assets. including but not are terminable under certain circumstances. it is possible that a The loss of a key customer. high-quality. and of effectively integrating acquired businesses. could have a supply agreements with these customers could reduce our net material adverse effect on our business. Continued consolidation of our customers results of operations. Divestitures and restructuring may also expected. Acquisitions also involve special management. and policies. that could have a material adverse effect on our financial con. our business with our largest customers.

We may not be able to develop new products Additionally. health and safety. approximately $20. the outcome of which cannot be erages applicable to our customers. because the extent of potential environmental damage. and adversely Because our supply chain is complex. we are subject to a variety of risks that For many of our businesses. provincial. con. that and legal compliance risks in our areas of operation around the require substantial. Such changes to our products Item1(c). Accordingly. and health. or was. the levels of insurance we maintain may expect to make additional expenditures in the future. tion risk with our customers and other stakeholders if we are unable sufficiently to verify the origins of all such minerals used We are subject to costs and liabilities related to in our products. including changes in consumer response to constantly changing consumer demands and preferences driven by various health-related concerns and per- preferences. is usually difficult to assess reviewed or investigated by regulators and other governmental and may only be ascertained over a long period of time. ages. to ucts. foreign and local environmental Product liability claims and other legal proceedings requirements. environmental and social concerns and cost of materials used in the manufacture of some of our prod- perceptions. However. storage and disposal of a variety of substances. In accordance with fines. among other factors. safety.3 million was reserved any significant judgment or claim is not fully insured or for environmental liabilities. Any such claims. as well as mandated remediation programs. result in a the United States and in each of the countries in which we do material reduction in the operating results of one or more of our business regarding the environment. We have made not be able to maintain such insurance at acceptable premium expenditures to comply with environmental regulations and cost levels. However. addi. Our failure. standards may require significant expenditures of time and Many of our products come into contact with the food and other resources. and some of the pro- We must comply with extensive laws. management’s attention and resources. health and safety. of these potential claims. and in some instances. used or operated. and corporate social responsibility issues are adversely affect operating results. and costs relating to the damage of natural resources. or the failure of our customers. our products must and compliance risks will continue to exist and legal proceed- comply with various laws and regulations for food and bev. state. but ters. results of operations and financial products as they comply with such changes and/or require us to condition. availability and venience. We are also subject to a variety of legal proceedings penalties. processes intended to ensure that the design and manufacture erally increase our costs of operations. handling. our business. including the Comprehensive Environmental could adversely affect our operations and financial Response. financial condition and results of operations.” could include modifications to the coatings and compounds we use. fines and actual liability in such cases may end up being substantially penalties or the assertion of private litigation claims and dam- higher than the currently reserved amount. global and diverse nature of our operations means that legal nection with those products. unplanned capital globe. ings and other contingencies. contaminated by us or a third party at vari. lost not all. If December 31. employee resources. Sales of our products and services depend heavily ceptions. 12 SONOCO 2017 ANNUAL REPORT | FORM 10-K . potential and affect our competitive position. will arise from time to time that could regulations could negatively impact customers’ demand for our adversely affect our business. if applicable. Federal. Simply responding to actual or threatened litigation or tional charges could be incurred that would have a material government investigations of our compliance with regulatory adverse effect on our operating results and financial position. new product development and timely demand for our products. however. and corporate social responsibility. environmental. As of not be adequate to fully cover any and all losses or liabilities. Such reserves are established when indemnified against. see make changes to our products. Compliance with these laws and we cannot predict the amount of additional capital expenditures regulations can require significant expenditures of financial and or operating expenses that could be necessary for compliance. While we believe that we have adopted beverages packaged within. could be expenditures. and performance. While we have built extensive operational climate change are significant factors in our business and gen. Compensation and Liability Act (CERCLA). Accordingly. in the future. In addition. particularly those relating to air. organic growth depends on could influence consumer behavior and negatively impact product innovation. owned. possibly resulting in the incurrence of additional costs. Disclosure regulations relating to the use of “conflict miner- Consumer preferences for products and packaging formats are als” sourced from the Democratic Republic of the Congo and constantly changing based on. gence. on the volume of sales made by our customers to consumers. because many of our products are used to pack- acceptable to the market. “Dependence on Customers. Changes in such laws and predicted with certainty. cost. and corporate Changes to laws and regulations dealing with environmental. any such changes are uncertain. and may incur in the future. sumer preferences in a timely manner may hinder our growth processes or sources of supply as a result of such due diligence. concentration of sales volume in our reportable segments. we maintain insurance against some. our authorities. and therefore we are subject to appropriate risk management and compliance programs. age consumer goods. operational process failures that could result in potential prod- ous sites that we now. 2017. We also incur costs associated with supply chain due dili- develop new or better products in response to changing con. and the We and the industries in which we operate are at times being extent of our liability for the damage. time consuming and expensive to defend and could divert We have incurred in the past. the risks and liabilities related to health and safety matters in con. rules and regulations in posals. it could have a material adverse impact on it is considered probable that we have some liability. adjoining countries could affect the sourcing. potential changes to products. and parties’ products. regulatory or environmental claims and associated Legal proceedings may result in the imposition of fines or litigation. whether with or without merit. penalties and legal costs relating to environmental mat. and operating units. and. might. if adopted. We may be found to of our products meet rigorous quality standards. we may property values and toxic tort claims. which could lead to enforcement actions. or previously. uct. we may also face reputa- affect our business and results of operations. customary practice. directly or indirectly. social responsibility laws and regulations that could health and safety. there can be have environmental liability for the costs of remediating soil or no assurance that we or our customers will not experience water that is. We produce products and provide services related to other discharge. soil and water quality. made or proposed with some frequency.

as a result of operating forms of credit. Although we were sub. The ‰ requiring us to dedicate a significant portion of our cash flow difference between defined benefit plan obligations and assets from operations to payments on our indebtedness. A downgrade in time. which consist primar- ily of common collective trusts.Changes in pension plan assets or liabilities may indebtedness could have a significant impact on us. foreign currency fluctuations and exposes us to counterparty risk position of assets. which ing increased operating needs. but not limited to: We sponsor various defined benefit plans worldwide. While we will have to effect any new financing in compliance with the agreements governing our then existing indebtedness. In addition. our customers dollar.8 billion as of December 31. if these obligations were adversely affect our consolidated operating results. and our pension expense may increase. regulatory. assets extended time. our business and execute our plans. acquisitions and capital expenditures. performance of these assets does not meet our assumptions. Our manufacturing. on reasonable terms. it would significantly affect our ability to operate and liabilities. In addition. including. Although we monitor our exposures and. as well as constrain our future We have $1. may not be able to obtain changes in our debt levels and or debt structure may impact our necessary credit or. or reacting to. Unseasonably cool weather can temporarily SONOCO 2017 ANNUAL REPORT | FORM 10-K 13 . Among other factors. the related risks we face could increase. costs. to their former local engage in certain business activities that would otherwise be in currencies. or threaten to revert. changes in those rates will either increase or ucts and services or satisfy their existing obligations. Our credit ratings are important to our ability to issue dollars. supported operating performance or financial condition. the availability and cost of sup- conditions. Currency exchange rate fluctuations may reduce vented from issuing commercial paper. reducing the amount of our cash flow available to fund working odic benefit costs and the ongoing funding requirements of the capital. therefore. increase our vulnerability to economic the demand for our products. and limit or restrict our business plies and materials and our ability to obtain financing at reason- activities. tinued viability as a single European currency. mutual funds. able costs. a portion of our consolidated net sales. and approximately $1. Our ability to generate cash flow is subject to We manufacture packaging products for beverages and general economic. this does not insulate us completely from respect to the maintenance of financial ratios and the dis. However. from time to time a sig- nificant portion of our cash flow may need to be used to service Adverse weather and climate changes may result in our indebtedness. of approximately $1. financial. are denominated in currencies other than the U. The most restrictive covenant currently of nonperformance. have a negative impact on our results of operations and cash ‰ restricting us from making strategic acquisitions or exploiting flows. and to fund any result- these plans. or We are continually evaluating and pursuing acquisition discount rates decline. transaction and other losses that can unpredictably and obligations under the facility. including the ability to dollars based on their respective exchange rates. may use forward currency contracts to hedge certain fore- our credit rating could increase our cost of borrowing. we have the contractual operating results and shareholders’ equity. casted currency transactions or foreign currency denominated Certain of our debt agreements impose restrictions with assets and liabilities. In our consolidated financial statements. Depending on obtain credit. 2017. 2017. and for other plans. including flow. thereby (the funded status of the plans) significantly affects the net peri. legislative. However. euro-denominated assets could be significantly our best long-term interests. these plans hold a total of business opportunities. ‰ limiting our flexibility in planning for. the underfunding of the plans may opportunities and may incur additional indebtedness to finance increase and we may have to contribute additional funds to any such acquisitions. credit rating and costs to borrow. dollar.S. As noted previously in these Risk Factors. our business. as we did in 2017. from time to commercial paper at favorable rates of interest. common stocks We may incur additional debt in the future. ongoing concerns about the stability of the euro and its con- stantially above these minimum levels at December 31. and ‰ increasing our vulnerability to general adverse economic and have an aggregate projected benefit obligation for these plans industry conditions. As of December 31. devalued.S. which and debt securities and also include alternative investments could increase the risks associated with our such as interests in real estate funds and hedge funds. equity. change in the economic environment. a dislocation or dissolution of the euro could cause significant volatility and disruption in the global Our indebtedness could adversely affect our cash economy. may not be available for use in lower sales. if so. we translate the may experience liquidity problems as a result of a negative local currency financial results of our foreign operations into U. We also financial flexibility in the event of a deterioration in our financial operate a $350 million commercial paper program. there are also and a minimum level of net worth. 2017.5 billion in assets funding a portion of the ‰ limiting our ability to borrow additional funds. by a $500 million credit facility of an equal amount committed by a syndicate of eight banks until July 2022.0 billion of fixed-rate debt outstanding. or our customers. If individual coun- these restrictive covenants could adversely affect our ability to tries were to revert. requires us to maintain a minimum level of interest coverage. the direction. We. foods as as well as products used in construction and industrial and other factors that may be beyond our control. right to draw funds directly on the underlying bank credit facility. which could adversely impact our business. Our report- not met. competitive.S. lower-than-expected actual investment returns could sub. If we were pre. decrease operating results and balances as reported in U. we may be forced to seek more costly or cumbersome ing currency is the U. In addition to interest payments. and. Should such credit be unavailable for an globally. changes in stantially increase our future plan funding requirements and our business and our industry. changes in discount rates and general corporate purposes. Fluctuations in currency exchange rates can cause trans- We believe that the lenders have the ability to meet their lation. As new debt is added to our could adversely affect operating results and shareholders’ current debt levels. reduce operating results and shareholders’ equity.S. projected benefit obligations of the plans. that could limit their ability to purchase our prod. If the leverage.

and programming and/or user errors that differences reverse or our ability to carry back any losses created could lead to the compromising of sensitive. our expiration of such deferred tax assets. confidential or personal data deductible for tax purposes. could have a material adverse effect on our results of oper. and adversely affect our results of operations. disruption or shutdown due to power outages. We have established valuation or information that is subject to privacy and security laws. confidential or by the deduction of these temporary differences. As a result of this testing. The experience and industry contacts of our management team and other key personnel significantly benefit We rely on our information technology and its us. catastrophic events. 2017. changes in our business strategy. develop and retain talented employees. Our ability to use these facilities and systems and those of our customers and third-party deferred tax assets depends in part upon our having future service providers may be vulnerable to security breaches. vendor and other and experience of certain key technical employees. However. and circumstances existing at the time. state and local. if we Information system damages. managers and employees is critical to the level of construction and industrial activity and also impact our success. In addition.S. and to interact with customers. state and At December 31. nificant write down were required. and audits by federal. consolidated financial condition or risk of a significant future impairment charge if actual results fall results of our operations. and many foreign tax laws and regu- frequently when evidence of potential impairment exists.S. in the position of taxing authorities regarding their application. computer affected by a number of factors. or more federal. We expect to personal data or information. taxable income during the periods in which these temporary placed or lost data. our business. or if there were a sig- tional disruptions. adjustments to intangible assets and a write down would negatively our estimates for the potential outcome of any impact operating results and shareholders’ equity. shutdowns or were unable to generate sufficient future taxable income in the compromises could result in production downtimes and opera. and other accruals not yet tain and have access to sensitive. administration or interpretation. employee and retiree benefit items. and foreign tax laws. we have in the past recognized goodwill impairment charges. technology systems may be susceptible to damage. and certain foreign jurisdictions. changes in the We have a significant amount of goodwill and other mix of our U. and we use these assessments to determine the adequacy of our provision for income taxes and other tax-related accounts. operating loss carryforwards. or the failure to attract and We rely on the successful and uninterrupted functioning of develop talented new executives. be required to increase our valuation allowances against our pensatory payments. telecommunications We have deferred tax assets. loss of customers and nificant change in the time period within which the underlying business opportunities. confidential or personal data or information. or any change make estimates that require judgment. vendors and employ. regulatory fines. could require higher taxing jurisdictions or away from lower taxing jurisdictions us to record an impairment charge for goodwill. results of operations. tax issues based on our assessment of relevant risks and facts holders’ equity. which could may also have an adverse effect on our financial condition and lead to decreased assets and reduced net income. The lations. hardware failures. net- works. taxes we pay can change materially as a result of changes in U. uncertain tax issues. our systems. among other factors. and we need expertise like theirs to carry out our business failure or disruption could disrupt our operations. If a sig. We are As a large multinational corporation. and we rely on various tech. cyber attacks. and malicious or acci. user errors. store and report information about our and failure to ensure effective transfer of knowledge and business. could have a material adverse and we have identified two reporting units that currently are at effect on our business. viruses. realize these assets over an extended period. reputational damage. and foreign earnings. employee. capital loss carryforwards. Although we believe we adequately pro- 14 SONOCO 2017 ANNUAL REPORT | FORM 10-K . the efficiency of our manufacturing operations. unauthorized access. Future changes in the cost of capital. U. risks by employing a number of measures. regu. failures during the process Full realization of our deferred tax assets may be of upgrading or replacing software. and other costs. Effective and various business functions. Such disruptions Our ability to attract. nologies to process. Despite our efforts to protect that we believe is more likely than not to be realized prior to such sensitive. and services remain potentially vulnerable to Our annual effective tax rate and the amount of advanced and persistent threats. required to evaluate our goodwill amounts annually. These estimates are highly judgmental. smooth transitions involving key officers and employees could ees around the world. As with all large systems. legal liability. reimbursement or com.6 billion. The loss of data.S. poor weather conditions can temporarily impact executives. allowances to reduce those deferred tax assets to an amount lations and customer controls. we are subject to U. strategies and plans. short of expectations. is important to ations. dental destruction of information or functionality. we could or intervention. Our ability to attract. Due to widely varying tax rates in the taxing jurisdictions expected cash flows.S. the charge could have a We make estimates of the potential outcome of uncertain material adverse effect on our operating results and share. penalties temporary differences became taxable or deductible. which would increase our effective tax rate material adverse effect on our business. and applicable to our business. including U.S. all of which are complex and subject to varying inter- impairment test requires us to analyze a number of factors and pretations. succession planning is also important to our long-term success. intangible assets was approximately $1. managers and employees. We also main. any of which could have a deferred tax assets. We also rely on the specialized knowledge compromise customer. a change in income generation to external market conditions. including executives and other key managers. our information technologies to securely manage operations could have a materially adverse effect on our business. products. reduce demand for certain beverages packaged in our contain. and foreign failures. develop and retain talented ers. mis. the carrying value of our goodwill and foreign tax authorities. Changes in these laws or regulations. disruptions. these key officers and employees. Although we attempt to mitigate these results of operations. financial position and which could have a material adverse effect on our reported results of operations. our information hinder our strategic planning and execution. transaction errors.

management of a company with one or more parties third parties suggesting that we may be infringing on their who may or may not have the same goals. maintaining effec- Our ability to compete effectively depends. If we fail to maintain the ogy. rather than for our cease making or selling certain products. We may not prevail in any such liti. The use of our intellectual property by someone else without our authorization could Several of our operations are conducted by joint reduce or eliminate certain of our competitive advantages. consolidated financial condition or results of our oper. Our inability to take unilateral action that we believe is SONOCO 2017 ANNUAL REPORT | FORM 10-K 15 . and will continue to require. it could have a material adverse effect on our busi. increase our compliance costs. associated with protecting our intellectual property rights could Several of our operations are conducted through joint ven- also adversely impact our business. rights as fully as do laws in the U. and our deferred could harm our business. aspects of our products. supplemented or amended from time to time. time-consuming and could be required to make an adjustment to income for the requires significant management attention. and subsequent repayment. As number of patents on our products. the IRS Act. budget others’ proprietary rights. on our tiveness of our internal control over financial reporting is made ability to protect and maintain the proprietary nature of our more challenging by the fact that we have over 160 subsidiaries owned and licensed intellectual property. or the loss of. If any tax authorities were to success. nificantly more resources.S.S. businesses and acquire other businesses. and we own. as required by Section 404 of the Sarbanes-Oxley financial statements included in Item 8 of this Form 10-K. future results may include favorable or unfavorable protect our patents. know-how and other unpatented proprietary technol. as well as non-disclosure agreements. in name rights used in connection with the packaging. we are from time to time subject to claims from instances. we may not be able to obtain property. Failure to matters. the final resolution of such matter could be Effective internal controls are necessary to provide reliable expensive and time consuming to defend and/or settle. The costs benefit. Additionally. effectiveness of our internal controls. The integration of acquired busi- nesses into our internal control over financial reporting has Challenges to. cluded that our internal controls over financial reporting were or have licenses to use. 2017 annually. we may not be able to accurately of any of our transactions. trademarks and other intellectual property adjustments to estimated tax liabilities. management has con- methods of use and/or methods of manufacturing. resolved in our favor. process of maintaining and adapting our internal controls and company note in 2012 and 2013. in some In addition. If the IRS were to prevail. could result in financial statements that do not accurately reflect out our authorization. copyright and trade secret laws of the U. We own a large and joint ventures in 33 countries around the world. We are required to assess the tax asset and liability balances. We need to maintain our processes and systems and adapt has previously notified us that it disagrees with our character. In joint ventures. our financial condition. In addition. our intellectual required. Future financial reports and to assist in the effective prevention of fraud. strategies. Operating a business as a joint venture often Intellectual property litigation. fied. it gation. In certain cases. which could result in sub. Furthermore. changes in tax law could significantly impact our provision for Any inability to provide reliable financial reports or prevent fraud income taxes. solidated financial condition or results of operations. accounting and be necessary to protect our trade secrets or proprietary making decisions. which could have a material adverse effect on our ness. or resources as we do. and may be required to fully challenge the tax treatment or characterization of any of our restate previously published financial information. transactions. exclusive benefit. obtain licenses or be operated for the benefit of all co-owners. described in Item 9A of this Form 10-K. our internal controls which could have a material adverse effect on our results of will become increasingly complex and we may require sig- operations and financial condition. However. civil or criminal penalties or liti- countries. tures. marketing the future. our joint venture partners technology or for us to defend against claimed infringement of must agree in order for the applicable joint venture to take cer- the rights of others and to determine the scope and validity of tain actions. joint ventures are intended to ment. we share ownership and. approvals. as such standards are modi- property and proprietary information by relying on the patent. If we were held liable for infringe. borrowing money and granting liens on joint venture gation. These If we fail to continue to maintain effective internal taxing authorities may disagree with the positions we have taken control over financial reporting at a reasonable or intend to take regarding the tax treatment or characterization assurance level. We also rely on trade cause management to change its current conclusion as to the secrets. them as our business grows and changes.vide for any reasonably foreseeable outcome related to these any necessary licenses on reasonable terms or at all. priorities intellectual property rights. In general. all of the material trademark and trade effective as of December 31. This continuous ization of a distribution. our income tax returns are subject to regular examination by domestic and foreign tax authorities. the amount of taxes payable. requires additional organizational formalities as well as time- stantial cost to us and divert the attention of management. regardless of whether any such challenge is the trading prices of our securities. which may cause our rights may have a material adverse effect on our business. We attempt to protect and restrict access to our intellectual adequacy of our internal controls. material weaknesses will not be identified that would and distribution of our major products. the sale of assets. including acquisitions. 2017. and other subject to regulatory scrutiny. con- effective tax rate to fluctuate significantly. many of the countries in which we operate material adverse effect on our operations. significant time and property rights could have an adverse impact on our resources from our management and other personnel and will ability to compete effectively. we could be required to pay damages. investor confidence in our business and ations. or breach a non-disclosure agreement entered into viously published financial information. There is no assurance that. As we grow our affected years and pay a significant amount of additional taxes. of an inter. may consuming procedures for sharing information. In addition. and if we are unsuccessful. we could be trademark. report our financial results. we complying with Section 404 is expensive. which could have a with us. ventures that we cannot operate solely for our cause us to lose sales or otherwise harm our business. independently develop similar tech. in part. investor confidence in do not have intellectual property laws that protect proprietary our business and the trading prices of our securities. operations. failure to maintain adequate internal controls may be possible for a third party to obtain our information with. Furthermore. effectiveness of our internal control over financial reporting As further discussed in Note 13 to our December 31. and we may be required to restate pre- nologies.

As a result of this settlement becoming encounter an unforeseen material operational disruption in one final. respectively. The settlement was paid during the first quarter of 2017. but the Company’s share has not been finally determined in most cases. the Company and U. (U.S. claims made by Appvion. and related legal and Material disruptions in our business operations professional fees totaling $0. South Carolina.4 million were paid during the could negatively affect our financial results. Such a disruption could occur as a well as any such proceedings known to be contemplated by result of any number of events including but not limited to a governmental authorities. the Company had performance of the joint venture and the return on our invest. Item 3. The Company’s liability. the duration of the disruption. our relationship may be priate reserves for environmental matters as additional adversely affected. The Company has assumed. In some cases. becomes bankrupt or is otherwise unable to meet its commit. transportation fail- ures affecting the supply and shipment of materials. accrued $20. All of the sites are also the responsi- bility of other parties. the Company has cost-sharing agreements with other PRPs relating to the sharing of legal defense costs and cleanup costs for a particular site. established reserves and no additional expense was required to ruption at our facilities.3 million. Mine safety disclosures materials or energy. in our best interests may have an adverse effect on the financial As of December 31. Legal proceedings The Company has been named as a potentially responsible party (PRP) at several environmentally contaminated sites not owned by the Company. Inc. which could negatively impact production threatened legal proceedings related to the Fox River matter. is shared with such other parties. There are 90 owned and 60 leased facilities used by operations in the Paper and Industrial Con- verted Products segment. covered by our existing insurance policies or may be subject to certain deductibles. course of 2017.5 million. Mills). obtained Court approval of a final settlement of cost recovery ments. 2017 and 2016. Paper Mills economic interest. 7 owned and 17 leased facilities used by operations in the Display and Packaging segment. Item 1B. Mills have resolved all pending or of our major facilities. if any. U. we may be required on a legal or practical basis or both. and 10 owned and 26 leased facilities used by the Protective Solutions segment. severe weather conditions and disruptions Additional information regarding legal proceedings is pro- in utility services. our ability to shift business to another facility or find alternative sources of Item 4. for accrual purposes. reevaluates the assumptions used in determining the appro- ture. 34 owned and 46 leased facilities used by operations in the Consumer Packaging segment.S. we may nonetheless from time to time be recognized in 2017. that the other parties to these cost-sharing agreements will perform as agreed.S. in January 2017. Final resolution of some of the sites is years away.3 million and $24. we believe our relationship with our environmental contingencies. related to ment. Item 2. Any losses due to these events may not be Not applicable. Europe. In addition. the ultimate cost to the Company with respect to such sites. as and our financial results. cannot be determined. labor stoppages. All payments were made against previously Although we take measures to minimize the risks of dis. a wholly owned subsidiary of the Company. These types of disruptions could materially vided in Note 14 to the Consolidated Financial Statements of adversely affect our earnings to varying degrees depending this Annual Report on Form 10-K. disruptions Other legal matters at our suppliers. beyond what has been accrued as of December 31. The Company periodically co-owners is an important factor to the success of the joint ven. Unresolved staff comments There are no unresolved written comments from the SEC staff regarding the Company’s periodic or current 1934 Act reports. the most significant foreign geographic region in which the Company operates. so that we do ments when warranted. In joint ventures. Fox River settlement to accept liability for obligations of a joint venture beyond our As previously disclosed. Finally. and if a co-owner changes. 16 SONOCO 2017 ANNUAL REPORT | FORM 10-K . and actual costs to be incurred for these matters in future periods is likely to vary from current estimates because of the inherent uncertainties in evaluating environmental exposures. 2017. including in cases where our co-owner Corp. the benefits from a successful information becomes available and makes appropriate adjust- joint venture are shared among the co-owners. for $3. Accord- ingly. major equipment failure. not receive all the benefits from our successful joint ventures. Properties The Company’s corporate offices are owned and operated in Hartsville. fire. upon the facility. has 57 manufacturing locations.

748 $52.000 share. Fourth Quarter $55.47 $49.10 $0.969.13 $45.969.761 $54.66 $0. PART II Item 5.98 — 2. 2017.611 11/06/17 – 12/03/17 667 $51. During 2016. the Board of Directors authorized the repurchase of up to 5. High Low Cash Dividends related stockholder matters and issuer purchases 2017 of equity securities First Quarter $55. Accordingly.08 $36.00 $49. a total of 2.611 1 A total of 6. there were approximately 64.37 York Stock Exchange.37 common share: The Company made the following purchases of its securities during the fourth quarter of 2017: Issuer purchases of equity securities (c) Total Number of (d) Maximum Shares Purchased Number of Shares as Part of Publicly that May Yet be (a) Total Number of (b) Average Price Announced Plans or Purchased under the Period Shares Purchased1 Paid per Share Programs2 Plans or Programs2 10/02/17 – 11/05/17 4.56 $0. Third Quarter $53. Information required by Item 201(d) of Regu. Second Quarter $50.969.90 — 2. 2017.37 terly period within the last two years as reported on the New Third Quarter $53. The following table indicates the high and low First Quarter $49.87 $0.611 shares remain available for repurchase under this authorization. 2 On February 10.389 shares were repurchased under this author- ization at a cost of $100 million.611 12/04/17 – 12/31/17 1.46 — 2. a total of 2.39 lation S-K can be found in Part III.40 — 2.39 December 31.02 $0.000 shares of the Company’s common stock.77 $47.58 $51.57 $49.969.39 holder accounts.37 The Company’s common stock is traded on the New York Stock Exchange under the stock symbol “SON. No shares were repurchased during 2017. SONOCO 2017 ANNUAL REPORT | FORM 10-K 17 .39 $0.50 $0.748 common shares were repurchased in the fourth quarter of 2017 related to shares withheld to satisfy employee tax withholding obligations in association with the exercise of certain share-based compensation awards.320 $52.969.030. at December 31.77 $50. These shares were not repurchased as part of a publicly announced plan or program. The Company did not make any unregistered sales of its securities during 2017.35 sales prices of the Company’s common stock for each full quar. as well as cash dividends declared per Fourth Quarter $55.611 Total 6. 2016. Item 12 of this Annual Report 2016 on Form 10-K.000.10 $0.” As of Second Quarter $54. Market for registrant’s common equity.

685 4.7 1.257 Total equity 1.37 1.187) Income before income taxes 314.847 1.447.112.83 $ 2. plant and equipment. industrial and ply and/or service consumer product companies have tended to protective packaging products and provider of packaging serv. Paper and Industrial Converted Prod.23 Weighted average common shares outstanding: Basic 100.920 Total assets 4.730.531.270 1.056 Total debt 1.021.637 22. Item 6.203 4. the Company serves two broad end-use markets.706.680 939.923. Over the next three to four years.322 Long-term debt 1.452 4. the Company focuses on three major areas: Generally.835 211.873 1.020. certain product and service financial condition and results of operations groups are tied more directly to durable goods. value-creating packaging sol- United States. Financially. 5% in Canada and 11% in other utions within targeted customer market segments.060.016. improving margins and leverag- consumer and industrial.277 327. the Company’s goal is to be the acknowledged graphically.367 1.329 1.184 Restructuring/Asset impairment charges 38.557.05 Diluted 1.81 2. net 1. the Company’s objective is to deliver average Display and Packaging.220 54.6 Total debt to total capital1 45.140 59. meet that target.013.698 1. approximately 65% of sales were generated in the leader in high-quality. Consumer Packaging.351.186.038 Gain on disposition of business — (104. ations are reported in four segments.345 $ 286.292) — — — Interest expense 57. particularly in tubes.6 1.102) (1. and Protective Solutions.03 Cash dividends 1.170 56. can exhibit ing the Company’s strong cash flow and financial position.147 Financial Position Net working capital $ 563.721 3.19 2.707 292.107 Net (income) attributable to noncontrolling interests (2.5 1. innovative.419 42.706 3.029) Net income 177.607 1.017 1.75 $ 2. regions. driving profitable sales growth. Geo. on a relative basis.375) (2. automobiles and construction.369 $5.237 101.994 $4. amortization (EBITDA) margins of 16% per year.44 2. however. different economic characteristics from each other.913 Interest income (4. Item 7.447) (488) (919) (1.758 93.709 Provision for income taxes 146. service industrial markets.624 226.27 1.475) (2. such as appli- General overview ances.036 1.554 441. depreciation and lines. cores and composite containers.036.883 50. which.960 974.589 164.052.21 $ 2.503.414 99. The selected statement of income data and balance sheet data are derived from the Company’s Consolidated Financial Statements. Although achieving these goals could 18 SONOCO 2017 ANNUAL REPORT | FORM 10-K . be. Years ended December 31 (Dollars and shares in thousands except per share data) 2017 2016 2015 2014 2013 Operating Results Net sales $5.944 100.749) (3.215 102.105 Property.782 102.916 $ 209. To ucts.6% 40.738 108.657 Cost of sales and operating expenses 4.002 1.172 103.631 87.248 Actual common shares outstanding at December 31 99. annual double-digit total returns to shareholders over time.487.434 $ 250.235) (10.482 102.188 4.128.447 287.616.3% 1 Calculated as total debt divided by the sum of total debt and total equity.705 1.852 101.245.825 Per common share Net income attributable to Sonoco: Basic $ 1. The businesses that sup- Sonoco is a leading manufacturer of consumer.482) (11.861.169.377 1.015.782.3% 36.650 $4.46 $ 2.4% 42.392 103. the Company aspires to The Company is a market-share leader in many of its product achieve base earnings before interest.877 $4. return on net assets employed to 11% or more.060 1.282) Net income attributable to Sonoco $ 175. subject to the Demand for the Company’s products and services is primarily impacts of potential acquisitions (see “Use of Non-GAAP finan- driven by the overall level of consumer consumption of cial measures” below).946 325.666 $ 546.4 1. Selected financial data The following table sets forth the Company’s selected consolidated financial information for the past five years.630.288.4% 45.148.631 Equity in earnings of affiliates.613) (2.792 25.093 101. and increase Competition in most of the Company’s businesses is intense. more recession resistant than those that ices with 298 locations in 33 countries.881 250.743 1.577 Diluted 100.603 102. taxes.54 1. The Company’s oper.136 $ 225.74 2.596 $ 498.193 100.862 $ 461.152 $ 384.964.554.886) (12. The information presented below should be read together with Management’s Discussion and Analysis of Financial Condition and Results of Oper- ations included in Item 7 of this Annual Report on Form 10-K and the Company’s historical Consolidated Financial Statements and the Notes thereto included in Item 8 of this Annual Report on Form 10-K. 19% in Europe.967.104 4.532. period to period. Management’s discussion and analysis of non-durable goods. net of tax (9.932 4.416) (9.049 Current ratio 1.193.973 55. Operationally.46 1.

and lower management incentives were only Sonoco management does not. “base earnings. These non-GAAP financial reviewing a non-GAAP financial measure.1 percent. of management and each business unit against plan/forecast all while Protective Solutions struggled with decreased volumes. indirect spend management. Sonoco Packaging segments. These comparability and analysis of the underlying financial perform. estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and Use of non-GAAP financial measures termination benefits in the countries in which the restructuring To assess and communicate the financial performance of the actions occur. Tax Cuts and Jobs differently. SONOCO 2017 ANNUAL REPORT | FORM 10-K 19 . Company. the calculations of these non-GAAP Act (Tax Act).8%. nor an alternative for. the prior year gain from differently. increased cost of sales non-GAAP financial measures to provide users information to disproportionately to sales. GAAP financial results. measures conforming Despite low growth rates in many of the Company’s served to generally accepted accounting principles and may be differ. posting year-over-year improvements in addition. these non-GAAP measures are not based on any our Paper and Industrial Converted Products and Consumer comprehensive set of accounting rules or principles. and higher labor. er’s performance by the Board of Directors.prove to be difficult. including charges are a recurring item as Sonoco’s restructuring programs new product development and expansion in emerging interna. the way up through the evaluation of the Chief Executive Offic. or as a substitute for.2 million. specifically in automotive components.8% compared to 19.8 million. changes in the mix of busi- prepared in accordance with GAAP.” described above.5 million. consider these non-GAAP financial measures tenance and other operating costs. The Company uses the tective Solutions and Display and Packaging segments fell short of non-GAAP “base” performance measures presented herein for expectations in 2017 as both posted year-over-year declines in internal planning and forecasting purposes. related to the sale of the Company’s rigid plastics blow ment regarding the nature and classification of events and cir. consolidated gross profit evaluate Sonoco’s operating results in a manner similar to how margin for 2017 declined to 18. after tax. manufacturing productivity ing earnings guidance to the investing community. Although these net benefits in isolation from. Georgia. excess property timing and magnitude of which management is unable to reli- insurance recoveries. gains due to the likely occurrence of one or more of the following.6% in 2016. Base earnings. Display and Packaging experienced significant ongoing operations. to evaluate its operating profit. certain financial performance measures that are not in pages 22 and 23 in conjunction with management’s discussion conformity with generally accepted accounting principles and analysis of the Company’s results of operations. nor does it suggest that partially offset by declines in volume/mix. fied using the term “base. readers are encour- measures reflect the Company’s GAAP operating results aged to review the related reconciliation to fully understand how adjusted to remove amounts.3 million net tax financial results of other companies that present similar costs charge related to the enactment of the U. usually require several years to fully implement and the Com- tional markets. but it 19. or continues to provide all information required by GAAP. and a $51. efficiency. strategic acquisitions. Current year Net Income Attributable to Sonoco (GAAP tations associated with the use of such measures are that they earnings) declined $111. Whenever (“non-GAAP” financial measures). including the associated tax it differs from the related GAAP measure. materials. as more fully results of the business to review both GAAP information which described within this Item under “Use of Non-GAAP financial includes all of the items impacting financial results and the measures” and reconciled within this Item under non-GAAP measures that exclude certain elements. in our be as useful if an investor or other user is limited to reviewing Consumer Packaging segment. restructuring costs and restructuring-related income tax-related adjustments and/or events. Prior year results included a $49. including other or other assets. In addition. these gains from a positive overall price/cost relationship (the relation- same non-GAAP measures are used in determining incentive ship of the change in sales prices to the change in costs of compensation for the entire management team and in provid. the Company believes it will be successful Restructuring and restructuring-related asset impairment by focusing on the following: organic sales growth. The performance of our Pro- only GAAP financial measures. Reconciliations are effects.1 million. items could have a significant impact on the Company’s future ance of the business. which exclude the pre- cumstances that the investor may find material and view viously mentioned current year charges. improvements. and margin enhancement pany is continually seeking to take actions that could enhance its through more effective customer relationship management. To compensate for these limitations. management evaluates business performance. pension settlement charges. certain ably forecast: possible gains or losses on the sale of businesses income tax events and other items. acquisition-related costs. In improved results in 2017. as “Reconciliations of GAAP to Non-GAAP financial measures. the exclusion of impairment charges. year over year.3 million gain. and to evaluate the ultimate performance startup costs related to a new pack center near Atlanta. and the tax effect which management believes improves the period-to-period of these items and/or other income tax-related events. environmental charges.” The Company’s base financial performance measures are not 2017 overview and 2018 outlook in accordance with. acquisition-related costs.0 million. The do not reflect all period costs included in operating expenses decline was primarily driven by pension settlement charges in and may not reflect financial results that are comparable to 2017 totaling $20. energy and freight). markets and volatile raw material costs. asset impairment not provided for non-GAAP measures related to future years charges. measures are based on subjective determinations of manage. as well as believes that it is useful in understanding and analyzing the certain other items of income and expense. as well as higher raw material costs. improved $4. As a result. management the sale of the rigid plastics blow molding operations.S. Sonoco management uses. year over year. or 38. supply chain and back levels of restructuring activity and the inherent imprecision in the office support processes. Sonoco reported ent from non-GAAP measures used by other companies. On a company-wide basis. Sonoco presents these ness. molding operations. Although recurring. both internally and Reconciliations of GAAP to base results are presented on externally. the or losses from the disposition of businesses. year-over-year. Furthermore. or 1. or 4. financial information increased gross profit year over year. if any. these charges are subject to sig- organizational design. main- investors should.6%. Operating profit improved $24. The adjusted non-GAAP results are identi.1 percent.” for example. in the Paper and Industrial Con- believes that evaluating its ongoing operating results may not verted Products segment and $10. after-tax. and nificant fluctuations from period to period due to the varying improved manufacturing productivity. relating to restructuring initiatives. Material limi.

This antici- Pension and postretirement benefit expenses for the year pated decrease is primarily due to greater expected returns on were approximately $33. The Company does not provide projected GAAP earnings ments. manu. transaction with a combination of cash and borrowings. productivity efforts will be focused on Display and Packaging. The increase in ces from funding 2017 acquisitions. Final consideration will be subject to an 20 SONOCO 2017 ANNUAL REPORT | FORM 10-K . offset by the impact of lower discount rates on plan liabilities.5 million. the majority of which fall within its Consumer ment. expectations. aided by the tinued volatility in key raw material prices could make pricing for timing and magnitude of certain raw material cost changes their recovery more challenging. and Protective Solutions of Clear Lam Packaging. quali. Absent any additional borrowings in 2018 from acquisition The effective tax rate on GAAP earnings was 9. Plastics and operations. Inc. the likelihood of con- price/cost relationship in many of its businesses. price/cost would be positive. plan assets due to a higher asset base. Although manu. 2017.S. An offsetting factor could be the expense. Protective Packaging and which would increase the reported earnings of our foreign recycling were partially offset by gains in Paper. and subsidiaries. $580 million in 2018. flexibles and protective packaging. The modest increase in the base 27% in 2018 compared with 31. over-year decline is driven by the enactment of the Tax Act.3 million at imately $38. and the income further information about this new accounting standard.1% in 2017. partially improve modestly over 2017 levels. improving manufacturing productivity and using the markets from five manufacturing facilities. tax effects of these items and/or other income tax-related The Company generated $349. In large part. partially The Company completed two acquisitions during 2017 at a offset by lower year-over-year income tax payments. The anticipated year- effective tax rate was due to less benefit from the U. systematic approach to operational excellence. The Company’s future GAAP financial results. net of cash acquired. and the translation impact of a weaker dollar. On March 14. Management expects overall volume in 2018 to increase setting the earnings impact of lower than expected volume. On July 24. as well as from other domestic tax adjust.8 million. a key area of focus will be on ramp- increase by around 2%. In addition.S. expected to more than offset the projected increases in labor facturing productivity improvements for the year fell short of and other costs. See Note 2 to the Consolidated Financial Statements for impairment charges. and that overall productivity would Georgia. the Company projects total benefit plan expense to be offset inflation in labor and other costs. management’s focus will be on driving synergies a wide range of whole fresh fruits.2 million at the end of 2017. Total con- payments and purchases of annuities for certain plan partic. net interest expense is expected to increase approx- points higher than the prior year while the rate on base earnings imately $3 million driven by higher average annual debt balan- was 0. accelerating organic prepared salad mixes.7 million in 2016. from operations is expected to be between $560 and the Company completed the acquisition of Packaging Holdings. The aggregate unfunded position of the Company’s pension and postretirement plans are expected to be approx- various defined benefit plans decreased from $447. Key expectations for 2017 were that overall volumes would organic growth. the Company completed the acquisition Packaging. management is projec- decrease was largely driven by the strong market performance ting overall margins for both gross profit and base EBIT to of plan assets and contributions to the plans in 2017. with volumes in Protective Solutions and ing up production and improving operating efficiency at the Display and Packaging expected to increase at higher rates. Company’s new contract packaging services center near Atlanta. to $355. the timing and magnitude of which we are unable to reliably in treatment of the excess tax benefit from share-based forecast: possible gains or losses on the sale of businesses or compensation resulting from the adoption of ASU 2016-09 in other assets. Inc. Partially offsetting this driven primarily by settlement charges related to lump sum favorable impact is the effect of lower discount rates. the approximately 2%. as well as baked goods in retail super- growth. approximately $8 million lower in 2018 than in 2017. restructuring costs and restructuring-related 2017.000 three-year term loan. could create other costs. Off.0 million net segments and emerging markets that are expected to help drive of cash acquired.2 million higher in 2017 than 2016. our material costs. Manufacturing productivity is together with procurement productivity gains. The Company financed the itions primarily aimed at its targeted growth areas of thermo. Although the Company has projected that Company was able to achieve a stronger than expected positive overall price/cost will be positive in 2018. the positive impact of acquisitions net of dis. Display and Packaging. Acquisitions and dispositions fied defined benefit pension plan in the fourth quarter of 2017 Acquisitions and timing of payments and collection of receivables. positions. Reported sales were up 5. The acquisition of Pack- consolidating industrial opportunities primarily in emerging aging Holdings is expected to add approximately $190 million markets. partially offset by greater benefit from distribution of results due to the likely occurrence of one or more of the follow- earnings between high. This In consideration of the above factors. Expected cost increases in raw materials. These items could have a significant impact on the ations during 2017. The Company has identified a number of targeted of annual sales in the Company’s Consumer Packaging seg- growth projects. (“Clear Lam”) for $165. except for increases in pension and post-retirement pressure on reported earnings. majority of the year-over-year decrease is attributable to a $50 million voluntary contribution to the Company’s U. events. including four in the Company’s strong financial position to make strategic acquis. along with select ing a $150.3% from a reducing our operations’ unit-cost-to-produce through the con- combination of higher selling prices in response to higher raw tinued internal roll out of the Sonoco Performance System. facturer’s deduction. includ- forming. compared with $398. net of cash acquired.5 percentage points higher than in 2016. 2017. for $218.4 million in cash from oper. tributions in 2018 to the Company’s domestic and international ipants. related to the businesses acquired in 2017. Volume was essentially flat overall as modest declines realization of forecasted declines in the value of the US dollar in Global Rigid Paper Containers.and low-tax jurisdictions and the change ing. including Peninsula Packaging LLC (“Packaging Holdings”). Outlook Packaging Holdings manufactures thermoformed packaging for In 2018. the end of 2016.8 million. The consolidated effective the GAAP effective tax rate was driven by net charges related to tax rate on base earnings is expected to be between 26% and the enactment of the Tax Act. particularly be strong enough to offset the expected inflation in labor and tinplate steel and old corrugated containers (OCC). acquisition-related costs. pre-cut fruits and produce. the results of our fixed cost productivity and cost Excluding the non-recurring settlement charges recognized management efforts were better than expected and partially in 2017.3 percentage activity. Cash flow cost of $383. United States and one in Mexico.

641) The Company completed two acquisitions during 2015 at an Impact of noncontrolling aggregate cost of $21.6 million.K. nificantly from year to year depending upon the scope and non-contingent deferred cash consideration of $2. As such.e.1 million. the Company acquired the and five tubes and cores plants – three in the United States. Founded in 1957.419 $ 42. Alabama.637 tissues/wipes).e. and health and personal care (i. bird seed. and completed the ciated fees. of which $17. for approx. the Company announced the closure of an including cash of $15. 2016.122 24. and temperature-assurance packaging. rationalization efforts in its Reels division. heat-sealed chocolate packaging.0 million. the Company completed the sale of During 2016. including flexible packaging. On June 24. which is expected to be com.903 markets in Brazil with approximately 230 employees. The Company rigid plastics. the Company recognized second anniversary of the acquisition. PPI specializes in short-run. severance charges throughout 2017 related to the elimination of approximately 255 positions in conjunction with the Company’s Dispositions ongoing organizational effectiveness efforts. The acquisition of Clear Lam is expected to add entity’s operations and financial results.831 26. a pri. and one in Switzerland. restructuring costs have been licenses. China. The Company also began manufacturing Company recognized a gain on the disposition. custom. SONOCO 2017 ANNUAL REPORT | FORM 10-K 21 . LLC and Amcor Packaging Canada.646 $ — $ — ized flexible packaging for consumer brands in markets includ. Asset impairment charges Inc.1 million was paid in September 2017. the service center in Brazil. a privately held Hickory.229 products (i.6 million. On September 21.795 30. (“PPI”). recorded in 2017 included a $17. and Nanjing.adjustment for working capital. changes in its markets.7 million. thermoformed in Elk Grove Village. On November 1. of $104. net of cash acquired. dry food. The Company imately $280 million. 2015. tubes and cores plants—one in the United States. trademarks. Laminar Medica (“Laminar”). seafood).2 million. and assumed debt of expanded foam protective packaging plant in the United States $2. Clear Lam manu. The Company completed four acquisitions during 2016 at a cost of $88.520) (22. The amount of these costs can vary sig- $6. further information about acquisition and disposition activities. quarter of 2017 recognized as a result of the Company’s deci- tingent purchase liability of $1. the Company announced the closure of four its rigid plastics blow molding operations to Amcor Rigid Plas. confection (i. was acquired on September 19. 2016. impairment charges $ 38. In addition. net of tax (71) (161) (93) in cash. Year Ended December 31 pleted the acquisition in its Consumer Packaging segment of 2017 2016 2015 Plastic Packaging Inc. pharmaceutical and tobacco net of tax $ 25. The contingent liability sion to shut down its #9 boiler in the Hartsville. serves the confectionery. 2017 Actions $ 14.e. During 2017. in Hartselle. approximately $140 million of annual sales in the Company’s See Note 3 to the Consolidated Financial Statements for Consumer Packaging segment. On April 1. Graffo asset impairment charges. the Restructuring and asset impairment charges Company completed an acquisition in its Paper and Industrial Due to its geographic footprint (298 locations in 33 countries) Converted Products segment of a small tube and core business and the cost-competitive nature of its businesses. Also in the Pro.8 million.3 million. and pro- retailers and other industrial manufacturers. NC-based flexible packaging company for $67.. the Company continued to the U. Illinois. upon the manufacturing complex. In addition.0 million. Inc. contingent consideration valued at $1. In conjunction with the sale.e. This sale financed a portion of the transaction with $100 million in did not notably affect operating margin percentages for the borrowings from a $250 million five-year term loan with the Company’s Consumer Packaging segment.883 $ 50. 2016 for $17.8 million charge in the fourth ition was $2. The decision to sell a variety of products for consumer packaged goods companies. The Company’s rigid plastics blow sales of a paper mill in France and a retail security packaging molding operations included seven manufacturing facilities in plant in Puerto Rico.6 million. On August 30.8 million and a con. asset impairment charges on the Company’s net income for the vately held specialty medical products company based in the periods presented (dollars in thousands): U. Canada.0 million. one high-density wood plug business from Smith Family Companies. with a focus on vide resources to further enhance. and Canada with approximately 850 employees realign its cost structure. Total con- sideration paid for Graffo was approximately $18. baked goods. and manufacturing rights from AAR and are expected to be a recurring component of the Compa- Corporation.017 7. the Company com.0 million consisting of a current cash payment of $3. frozen foods. one in Ecuador. On November 7. with the Company receiving net cash closed a packaging services center in Mexico and a fulfillment proceeds of $271. and one in China. net of cash acquired. It has production facilities growth businesses. the Company’s targeted structures used for perishable foods. resulting in the elimination of approx- producing containers serving the personal care and food and imately 180 positions.4 million was paid interests. diapers. beverage markets.2 million. expected to negatively impact the 2017 year-over-year sales factures high barrier flexible and forming films used to package comparison by approximately $175 million. the is constantly seeking the most cost-effective means and struc- Company completed the acquisition in its Protective Solutions ture to serve its customers and to respond to fundamental segment of the temperature-controlled cargo container assets. the Company acquired a 67% control- ling interest in Graffo Paranaense de Embalagens S/A Total impact of restructuring/ (“Graffo”). 2016. dairy. Income tax benefit (13. Total consideration for the acquis. a flexible packaging business located in Brazil. nor did it represent remaining purchase price funded from available short-term a strategic shift for the Company having a major effect on the credit facilities. including cash of $1. one in tics USA. in Belgium. South Carolina payment of $1.3 million.064) (7.408 promotions.961 4. nutraceuticals. litter). the blow molding operations was made to focus on. net of asso.930 — ing: food products (i. 2016 Actions 1. net of cash Exit costs: acquired.9 million in cash. seasonal Asset impairments: 20. hard and soft Total restructuring/asset candy).. pet 2015 and Earlier Actions 1. and location of the restructuring activities. Total consideration for this business was ny’s operating costs.S.9 million.202 $27. The following table recaps the impact of restructuring and tective Solutions segment. The disposition of these operations is pleted by the end of the first quarter of 2018. 2015. 2016.284 $35. the Company in Australia for $0.

79 (1) Consists of the following: pension settlement charges of $32.557) $278. the Company announced the closure of six announced restructuring actions. and one in the United Kingdom.834 Less: Net (income) attributable to noncontrolling interests.745 — — — 52.241 after tax).102) (71) — — (2.345 $25. Tax Cuts and Jobs Act. net of tax (2.203 net tax loss due primarily to changes in rates and valuation allowances for foreign entities.299 $38.557 Income before income taxes $441.284 $ 9. and other net tax charges totaling $492.341 after tax).605 $273.74 $ 0.569 $(103. The Company regularly evaluates its cost structure. Reconciliations of GAAP to non-GAAP financial measures The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures for each of the years presented: For the year ended December 31.277 $42.926 Interest expense.245 Provision for income taxes 146.554 $38. junction with the Company’s organizational effectiveness efforts. end of 2018. and the sale of a portion of its metal ends and ing actions are likely to be undertaken.03 $ (0.355 $ 9. and other charges totaling $82 ($59 after tax). $1.569 $(103.419 $13. one in Germany.6 million in connection with previously impairment charges.363 $3.71 $ 2.482 $397. the majority of these charges will be incurred and paid by the one in Russia. net 52.520 1.235 — — — 11. net of tax 11. except per share data GAAP Impairment Costs Adjustments (1) Base Income before interest and income taxes $367.123) 123.557) $277.360) $436. For the year ended December 31.186 $281.482 — — 581 10. a recycling period to period due to the varying levels of restructuring activ- business.360) $385.369 Provision for income taxes 164.834 $42. and additional restructur- United States.990 Interest expense.599 Equity in earnings of affiliates. countries in which the Company operates. $850 increase ($522 after tax) in reserves for Fox River environmental claims.803) 117.933 related to a one-time transition tax on certain accumulated foreign earnings offset by approximately $25.447) (161) — — (1.631 7.10 $ 0. net of tax (1.355 $ 9.147 $ (47.35 $ 0.770 Income before equity in earnings of affiliates $276.965 $25.482 $449.557) $267. Restructuring actions also impairment charges are subject to significant fluctuations from included the closures of a tubes and cores plant.25 $ 0.064 3.226 Per diluted common share $ 2.949 $ 71.292 ($49.883 $4.173) Net income attributable to Sonoco $175. one in Canada.147 $ (47.419 $13.761 ($20.202 $3. partially offset by insurance settlement gains.841 (40.949 $ 70.790 $ 30.063 Net income $177.434 $35.235 Net income $287.874 Equity in earnings of affiliates. See Note 4 to the Consolidated Financial Statements for The Company expects to recognize future additional costs further information about restructuring activities and asset totaling approximately $3.745 Income before income taxes $314.883 $4. the Company also recognized asset impairment nize the impairment of assets and the wide variety of costs and charges related to the planned sale of a paper mill in France and taxes associated with severance and termination benefits in the eliminated approximately 235 positions worldwide in con.668 related to an increase in net deferred tax assets. The Company believes that rigid paper facilities—two in the United States.186 $283.608) Net income attributable to Sonoco $286. Restructuring and asset closures business in the United States. and a printed backer card facility in the United States.422 (55.557 — — — 51.949 $ 71.81 $ 0. 22 SONOCO 2017 ANNUAL REPORT | FORM 10-K .764 Per diluted common share $ 1.S.790 $ 30. tax charges of approximately $76. both of which are related to implementation of the U.937 Less: Net (income) attributable to noncontrolling interests.447 $25.881 $35.589 13.47) $ 2. ity and the inherent imprecision in the estimates used to recog- During 2015. net of tax 9. 2017 Restructuring/ Acquisition Asset Related Other Dollars and shares in thousands.371 Income before equity in earnings of affiliates $167.646 $35.72 (2) Consists of the following: gain from the sale of the rigid plastics blow molding operations totaling $104. net 51. 2016 Restructuring/ Acquisition Asset Related Other Dollars and shares in thousands.363 $3. During 2015.147 $ (47. except per share data GAAP Impairment Costs Adjustments(2) Base Income before interest and income taxes $492. the closure of a production line at a thermoforming plant in the including its manufacturing capacity.

026) $246. compared with $277. 2015 Restructuring/ Acquisition Asset Related Other Dollars and shares in thousands.74 per diluted share) in 2017.663 $(22. Current-year earnings reflect net after-tax charges totaling $106. Tax Cuts and Jobs Act (Tax Act). asset impairment charges.79 per diluted sales resulting from changes in the level of activity is classified share). While the full-year average OCC price was due to the Tax Act resulted in a decrease to the Company’s up year over year. was negatively affected by the tax impact rigid plastics blow molding operations.S.946 $50. and other charges totaling $976 ($741 after tax). higher overhead and other operating changes in the underlying raw materials costs. net 69 Net income in 2016 was positively impacted by a net Foreign currency translation and other. in the fourth quarter of 2017 the Company margin swings.2 million consisting of the gain from the Total sales increase $254 disposal of the Company’s rigid plastics blow molding oper- ations. In 2017.22) $ 2. a $20.654 $(23. partially offset by restructuring costs.026) $256. Results of operations – 2017 versus 2016 Consolidated net sales for 2017 were $5. For the most part.996 $1.738 22.134 Income before equity in earnings of affiliates $240.624 $27. prices during the year were volatile with peri- recorded amount of deferred tax liabilities. ods of sharp increases and decreases resulting in significant Consequently. typically exists between changes in revenue and changes in operating profit in our packaging center operations. ($ in millions) consisting of pension settlement charges.543 ($19.44 $ 0.380 after tax).344 after tax). increase from 2016.2 million ($2.996 $1.136 $27.9 million comparable year-over-year sales.S. net of tax (488) (93) — — (581) Net income attributable to Sonoco $250. net 22 after-tax benefit of $9. the impact was mostly offset charge to record the Tax Act’s one-time transition tax on certain by sales decreases of $191 million related to dispositions. compared with the sales change were: $286.8 million ($2.637 $1.7 million decrease to its net deferred tax liabilities overall positive price cost relationship.6% in 2016.6%.966 Provision for income taxes 87.188 ($1. and the effective tax rate on base earnings was which saw an average increase of more than 50% year over year.0 billion. the accumulated foreign earnings. Dollar. the Company was able to achieve an recorded a $25. The 2016 GAAP tax rate. For the year ended December 31.51 (3) Consists of the following: gain from the release of reserves related to the partial settlement of the Fox River environmental claims totaling $32.026) $257. the Netherlands. net of tax 10.416 — — — 10. foreign exchange of the disposal of the Company’s rigid plastics blow molding rate changes increased year-over-year sales as almost all of the operations. The effective tax rate on base earnings was essentially foreign currencies in which the Company conducts business flat year over year. and the United Kingdom totaling $9. which was most significant of which was the 2016 sale of the Company’s also higher than normal. particularly in Rigid price changes for the Company’s products were driven by Paper North America. 31. Canada.544 $50.598 Income before income taxes $327.1%. Tax Cuts and Jobs Act.663 $(22.27 $ 0. Finally.4 million. mainly resins.280) $357. compared with 30. These Selling price 182 charges were partially offset by insurance settlement gains.02 $ (0.637 $1.280) $412.564 Interest expense. strengthened slightly in relation to the U. the Company’s primary raw materials saw increases in their The effective tax rate on GAAP earnings was 46. The components of $175.3%.654 $(23. and acquisition-related expenses. legal and financial professional expenses associated with the Company’s investigation of financial misstatements in Mexico totaling $7.563. and foreign income tax In order to enhance the meaningfulness of reported changes losses related to rate adjustments.832 Equity in earnings of affiliates. compared market prices. Sales volume/mix was essentially flat as organic volume Both GAAP and base earnings in 2017 benefitted from a growth and a favorable change in product mix in a number of positive price/cost relationship. tax charges related to Volume/mix $ (19) the 2017 U. However.598 — — — 54. were partially offset by negative volume/mix.72 per diluted share) in above as “other” due to the low/inconsistent correlation that 2016. Acquisitions and divestitures. a Net income attributable to Sonoco (GAAP earnings) was $254 million.7 million reduction in packaging center Base earnings in 2017 were $281. net 54. most directly affected the Consumer tion of the Company’s lower estimated future effective tax rate Packaging segment. Applica- materials. and unfavorable changes in foreign currency translation.416 Net income $250.81 per diluted share) in 2016.903 $1. in volume/mix. The unusually high GAAP This increase most directly affected the Paper and Industrial effective tax rate in the current year reflects the currently recog- Converted Products segment while the increase in other raw nized effects of the U.928 after tax).667 Per diluted common share $ 2. many of costs.248 Less: Net (income)/loss attributable to noncontrolling interests. or 5.641 9 746 111.3% in 2016.4 million ($2. except per share data GAAP Impairment Costs Adjustments(3) Base Income before interest and income taxes $382. While the Company’s with a corresponding decrease to GAAP income tax expense. S. especially. This 2017 and 2016 acquisitions added more than $259 million to decrease in expense was more than offset by a $76.099 ($4. additional expenses related to executive life insurance policies totaling $2. acquisition-related expenses.208 $27.654 $(23. SONOCO 2017 ANNUAL REPORT | FORM 10-K 23 . restructuring/asset impairment charges. These favorable factors containers and automotive components. old corrugated containers (OCC) with 37.3 million ($1. income tax gains from the release of valuation allowances against net deferred tax assets in Spain. productivity improvements and our businesses mostly offset volume declines in rigid paper lower management incentive expense. net of deferred assets.

an unfavorable mix of sales and loan entered into in conjunction with the 2014 acquisition of higher labor and other costs resulted in gross profit margins Weidenhammer Packaging Group. In February 2017.5 basis points above the London Interbank businesses and the impact of foreign currency translation.3% of sales in 2017 compared to 10. The Segment operating profits 250. and in May 2016 used tional volume from acquired businesses. specifically identified tax adjustments. Display and Packaging. The Company reports its financial results in four reportable pared with $45. up 4. Based on the pricing grid in the Credit Agreement and the els. See Note 12 to the Consolidated Financial State.9 4.3 $492. all of which were charged to expense. Despite the positive price/cost relationship and modest settle the remaining $150 million balance of a variable rate term productivity improvements.4)% cost of sales and 25% in selling.9 million in 2017 and 2016.8 (83. (charges)/income. The settlement charges are reflected in Display and Packaging 2.6) 201.00% fixed rate Euro 150 million loan to nesses.3)% new $750 million bank credit facility with a syndicate of eight banks replacing its then-existing credit facility entered into on October 2. and certain other GAAP Earnings before interest and income taxes (EBIT) were items.8 (25. ments of Income. or 6. were $21 million in 2017 and $22. the and amortization 98. asset impairment charges.5)% Selling.1 3.2 million in 2017 to a total of $78.5 million in 2016.9 $240. net (30.8 million in 2017. charges.7 million for the year ended Trade sales $2. Consolidated Financial Statements. reportable segments. loan.5 14.1% in 2016.8 billion.9% December 31.1% increase was due primarily to higher average debt levels as the Depreciation. depletion Company used debt to fund acquisitions.5)% 10.4%.4) (42. In addition. The current year increase in selling.9) (10. the Company settled its $75. acquisition-related charges. Inc. Absent these items. International sales were $1. ($ in millions) 2017 2016 % Change Net interest expense totaled $52.5 129. Accordingly.3 million in 2016.5 (18. the borrowing has an all-in most of the increase driven by growth in the Company’s industrial drawn margin of 112. general and administrative Acquisition-related costs (13. Protective Solutions 42. and account for Paper and Industrial virtually all of the year-over-year increase in pension and post.3%. 5. 2017.5 million. and Protective Solutions. General corporate expenses. general and administrative expenses. $13. uate segment performance do not include restructuring acquisition-related costs increased $9. general and administrative expenses increased Consolidated operating $37. also referred to as “Income retirement plans through either a single.S. related to terminated vested participants in the U. asset impairment charges.9 88.4 (129.3% in 2016. The items. Borrowings under the Credit Agreement are pre-payable at any time at the discretion of the Company Costs and expenses/margins and the term loan has annual amortization payments totaling Cost of sales was up $241. Aggregate pension and postretirement plan expenses Reportable segments increased $33. Paper initiated a program to settle a portion of its pension liability and Industrial Converted Products. com. lump-sum payment or before interest and income taxes” on the Consolidated State- the purchase of an annuity. or 7. up 6.3% Company entered into a Credit Agreement in connection with a Capital spending 63.5) 103. acquisition- contributed to the declines in both GAAP EBIT and Base EBIT. The largest improves comparability and analysis.1)% selling.2 million prior year primarily due to raw material price increases and addi.4 (26. are comprised of the following: the Company successfully settled approximately 47% of the projected benefit obligation of the terminated vested plan par. the Company segments – Consumer Packaging.8% expenses. 2014. declining to 18.7 19. Converted Products 154. the July 24. and were 10.1 51. ($ in millions) 2017 2016 % Change ticipants. compared with $51.6 million in 2016. 2017. Additional information regarding restructuring See Note 16 to the Company’s Consolidated Financial State- actions and impairments is provided in Note 4 to the Company’s ments for more information on reportable segments. from the $12. the Segment operating profit Company recognized non-cash settlement charges totaling Consumer Packaging $250. Consumer Packaging Management expects research and development spending to remain at a similar level in 2018. qualified Consolidated operating profits.2 million from last year to charges. On July 20. acquisition of Packaging Holdings.123. net of disposed busi. During the course of the program. 2017 acquisition year revolving credit facility and a $250 million five-year term of Clear Lam Packaging. 2017 conditions. the exclusion of which the Company believes 7. with the exception of year-over-year decrease in gross profit margin discussed above restructuring charges. As a result of these and other smaller settlements.9% from 2017 lev.9% of sales in 2017 compared to 9.9 4.3 billion. net interest expense and income taxes.5 million.5 $2.8% of sales compared to profits $367. and the full year impact of the 24 SONOCO 2017 ANNUAL REPORT | FORM 10-K .1% $32. Research and development costs.6% of sales in 2016.4 million and $42.9 11. Base EBIT of “Income before interest and income taxes” excluding those declined to 8.6% in the prior year.6 86.1% from 2017 with Company’s current credit ratings. have Restructuring and restructuring-related asset impairment been allocated as operating costs to each of the Company’s charges totaled $38. the term contributor to this decline was the 2016 gain on the sale of the “segment operating profits” is defined as the segment’s portion Company’s rigid plastics blow molding business.043. general and admin- gains or losses from the sale of businesses.3)% retirement plan expenses are reflected in the Company’s Restructuring/Asset Consolidated Statements of Income with approximately 75% in impairment charges (38.1% retirement plan expenses. gen- eral and administrative expenses is largely attributable to the Segment results viewed by Company management to eval- previously mentioned pension settlements.8) (4. In June 2016. selling. pension settlement istrative expenses were essentially flat year over year.9 240.8 million. The remainder of pension and post. Offered Rate (LIBOR). proceeds from a new 1. respectively.625% debentures upon their maturity.8% in 2017 from 19. Total domestic sales were $3.8 million in 2017. related charges. and reflecting substantially the same terms and Sales increased year over year due to the March 14. Included in the new facility are a $500 million five.7 million. if any. Other non-operational ments for further information on employee benefit plans.

2 $520. depletion and over year and operating profit margins of 11. Changes in foreign exchange rates had little impact on reported sales in the segment. and is optimistic that over time the center will be able to achieve Segment operating profit decreased year over year due to efficiency and cost levels in line with expectations. and were up in Europe due to the pass somewhat exceeded the benefit of acquisitions largely due to through of higher material costs in that market. The increase in Although conditions improved for the corrugating medium domestic trade sales resulted from increased volume at our new operation in 2017. ($ in millions) 2017 2016 % Change Segment operating profit increased year over year. prices in most of the segment’s businesses.9 11. a customer resulting in the transition of the operation of certain facilities in Mexico and Brazil back to the customer during the Protective Solutions first half of 2016. The increase in segment operating prof- its was largely driven by solid gains in manufacturing pro.0% Atlanta. or both.4% ductivity and the positive impact of the relationship between selling prices and costs. mostly in Europe and Sonoco Reels. or 10. or 5.1 16. volume declines in global composite cans and flexible pack. These benefits were partially offset by On average.1 51.8%. were mostly offset by volume declines customer development project in North America coupled with in Rigid Paper Containers North America and Europe as well as expansion of manufacturing capabilities in Europe. Georgia. or good- Company’s rigid plastic blow molding operations.2 million. Significant capital spending in the segment included the Puerto Rico. from 2016.3)% a positive price/cost relationship as the Company was able to Segment operating profits 2. acquired in the second half of 2016. down 1. up 6.7 2. The decrease in international sales reflects the modification of several paper machines in North America.9%. while interna.1% Segment operating profits increased by $10.7 0. An inability to volume declines and associated productivity losses. Operating profit was also benefited Capital spending 23. depletion and resulted in a strong turnaround in the Company’s corrugating amortization 17. productivity gains.5 14. market costs for recovered paper in the U.2 $1. depletion and inefficiencies and higher than expected operating costs asso. Improved market conditions Depreciation. Company’s exit from a packaging center fulfillment contract with numerous productivity projects.866. Higher than anticipated production requirements.4% to the U. These meaningfully improve the operating results of this pack center. These favorable factors were partially offset or 1. year sales due to the November 2016 disposition of the may result in charges for long-term asset impairment. were higher year over year resulting in higher average selling aging as well as inflation. and/or improve results of other operations of the reporting unit. driven by Trade sales $508.S. July 2016 sale of our retail security packaging facility in Juncos. driven largely by raw Capital spending in the segment was driven by a significant material price increases. to $739 million. and IT investments. the Company continues lower volume in retail security packaging and the impact of the to evaluate strategic alternatives for this operation.5 10.1% by increases in volume and positive changes in the mix of prod- ucts sold. Higher selling will impairment. mostly in automotive components. expansion of manufacturing capabilities in Europe in rigid paper particularly US and Canadian Tubes and Cores and Recycling. were due to a combination of market share gains and regional ductivity projects and expansion of manufacturing capabilities in expansion. Segment operating profits 154.8 24.4 (2.November 1. 2016 acquisition of Plastic Packaging Inc. to $259 million. decreased $15 million. increases were substantially offset by the reduction in year-over. from 2016.9% ciated with the ramp up of production at the new pack center in Capital spending 19. to $1. and the Company’s outlook for the operation retail packaging fulfillment center in Atlanta. Total domestic sales in the segment Display and Packaging increased $103 million. Foreign currency translation added approx- imately $5 million to segment trade sales year over year due to a Paper and Industrial Converted Products weaker U.6%. Capital spending 61.8% were amortization 74. while international trade sales by wage and other fixed cost inflation. Domestic sales were approximately $1.3)% The decrease in segment operating profit was largely due to Depreciation. and modest Domestic trade sales in the segment increased $3. Total volume/ timing.2% $13 million. At were also higher in Brazil and the Andean region.9 74.5 129.8 $525. and volume increases in US and Canadian Paper North America primarily in flexible packaging and plastics.693. Material purchasing and logistics sav.8 7.4%. exceeded the new facility’s capability to operate efficiently with the installed Sales increased year over year due to the acquisitions of equipment and a relatively inexperienced workforce that has Laminar Medica and AAR Corporation. Selling prices ings were key drivers of the positive price/cost relationship.1%.5 107. Operating profits 42.6 1.3%.1% unchanged from 2016. the negative impact of divestitures to overall inflation. dollar year over year. or 10. dollar.0 12.5 (18.9 2.7 19.S. containers. Flexible Packaging. prices in all of the segment’s domestic businesses.2% medium operation in 2017.461 million. Higher sales prices were pany is working to resolve these and other operational issues offset by volume declines. The Com.0 million year Depreciation. to $249 million. ($ in millions) 2017 2016 % Change tional sales were approximately $663 million. which Capital spending in the segment included numerous pro. and were mostly offset by volume declines in other businesses. amortization 26. offset by is for continued improvement in 2018.9 48.S. each of which was also incurred a higher than expected turnover rate.128 million while interna- tional sales increased $70 million. mix gains were modest in the segment as gains in Europe.4 60. primarily due an operating profit level.1)% favorably navigate dramatic movements in Old Corrugated Containers (OCC) market prices. This decline in sales was somewhat offset by the positive impact of approximately $10 million from foreign ($ in millions) 2017 2016 % Change currency translation as a result of a stronger Polish zloty relative Trade sales $538. primarily in response to multiple hurricanes. or $93 million. or Trade sales $1. A negative SONOCO 2017 ANNUAL REPORT | FORM 10-K 25 .8 (83.

7 million in the incremental costs of obtaining other costs also negatively impacted profits year over year. primarily attributable to certain businesses versus $11.7 million use of cash in 2016.7 million.3 million lower year over year. Non-cash share-based a year-over-year change of $12. performance against targeted performance metrics over the over-year change of $2.9 million in 2015.4 million decline in GAAP Net Income reflects the More cash was consumed by working capital changes in 2016 non-recurrence of last year’s gain on the sale of the Company’s compared with the prior year.3 million $7.7 million in 2016 and Capital spending in the segment included significant $452. reflecting assumptions about actual change in the net deferred tax liability balances also contributed performance against targeted performance metrics over the to the net provision of cash and resulted largely from variances vesting period of the awards. Cash paid for income taxes Domestic sales were $426 million in 2017 down $10 million. The increases in business activity in the latter part of 2016 compared with the year-end accounts receivable balances over the respective prior same period in 2015.5 million pretax.9 million was primarily driven by the final vesting period of the awards.7 million in 2015. including the recording of a liability for tax.7 million. France which was sold in early 2016.1 million. Net losses on disposition of assets settlement of Fox River-related environmental claims in January totaled $14.4 million greater in 2016 compared with the partially offset by a reduction in the Company’s net deferred tax previous year.6 million use of cash in 2017 based awards increased. While the seasonal slowdown at the end of 2016 was greater rent year net income also reflects higher pension and than in 2015. a lower year-over-year provision of accounts payable balances consumed approximately $39 million $6. due largely to the prior year of collections from certain customers. Non-cash share-based com. price/cost relationship and increases in labor.2 million in 2016 compared with a net gain of 2017 and lower management incentive accruals. customer development projects to support our temperature.3 million. The year-over-year change of $27. Non-cash Company’s net assets in Venezuela as the Company moved asset impairment charges were $12. extensions and isolated payment collection timing issues at the over-year decrease in operating cash flows of $28.1 million of additional cash The change was driven by the loss on the disposition of a in 2017 compared to 2016. a year-over-year change of $19. liquidity and capital resources rigid plastics blow molding operations. Changes as expenses recognized in association with our performance- in accrued expenses reflect a $14. $37. The change in trade accounts rigid plastics blow molding operations of $108. changes in terms and recognition of a foreign exchange remeasurement loss on the sales mix by customer. the receivable consumed $29. reflecting assumptions about actual compared with a $11. activities was $45.9 million. driven by $16. cash impact of which was reported as an investing activity. $19. fixed assets related to the Company’s paperboard mill in facturing complex. a higher year-over-year use of in 2016.1 million greater in 2017 compared with the pre.0 million was driven reimbursements related to the relocation of a facility. The year-over-year increase is attributable to the U.8 million lower year over year as ily from the overpayment of estimated taxes due to passage of expenses recognized in association with our performance-based new tax rules late in the year. the proceeds of which Cash flow are reported as investing cash flows. ending trade accounts receivable increased more postretirement expenses and increased pension and in 2016 than in 2015. due largely to current-year payment term postretirement cash contributions resulting in a combined year.0 million in 2017 compared with $14. The net benefit from increased $33.9 million higher year over from translating these operations at the country’s official rate to year.5 million of cash in Working capital consumed $5.0 million related to the timing of costs and associated in 2015.3 million in 2015. Accrued expenses used differences related to certain non-income tax payments. Cur. The combined changes in accounts receivable and $12.8 million lower year over year due primarily to the or 2%.8 million. and a net by increases in reserves related to restructuring actions 26 SONOCO 2017 ANNUAL REPORT | FORM 10-K . 2016 net income includes a pre-tax gain of $108. primarily attributable to pre-buying of certain raw upcoming price increases. The $110.7 million from the November 2016 sale of the Company’s Financial position. The change in accounts payable materials at the end of 2017 in anticipation of upcoming price provided $5. these reserves in 2015 of $32. 2016.3 million. Although 2016 net income increased year over year by assured packaging business. overhead and change of $5.3 million. Net losses on disposition of assets in pension payments. This decline was primarily due to the lower level of of cash from operations in both 2017 and 2016.1 million of cash in 2017 cash of $8. a year-over-year decrease of $49.7 million in 2016.9 million increase in the changes in deferred income tax and income tax payable balan. other assets and liabilities used $37.6 million. deferred taxes in foreign jurisdictions. $11. Lower year-over-year pen- Operating activities sion and postretirement expenses together with higher pension Cash flow from operations totaled $349. or 26%. end of 2016.0 million in timing paperboard mill in France in 2016.6 million. a higher year-over-year use of cash pre-buying raw materials at the end of 2016 in anticipation of of $4.S.4 million due to a $0. compared with reductions in vious year.4 million in 2017 and and postretirement cash contributions resulted in a combined $398. net operating losses and totaled $2. The increase was due primarily to the use of liabilities which were reduced as a result of the decrease in the available prepaid taxes to offset current year tax liabilities in federal tax rate from 35% to 21%.6 million in 2015. which was determined to have been ren.9 million after Tax Cuts and Jobs Act. the use of U. a year-over-year decrease of $54. The year-over-year variance in the awards decreased.9 million.2 million in 2016.6 million of cash in 2016 compared with increases. International sales increased to $113 million payment in 2016 of taxes arising from the gain on the sale of the up $23 million.S. due largely to the fourth quarter 2017 impairment of a an alternative exchange rate and the prior year impairment of power generating facility at the Company’s Hartsville manu. contracts with certain customers. year-over-year decrease in operating cash flow of $22.7 million in 2016 compared with a provision of $15. Changes in $5. ment of claims related to Fox River. and changes in selling prices. Changes in inventory used $16. Schweighouse-sur-Moder.5 million in 2016. The increase in international sales was rigid plastics blow molding operations.0 million more cash in 2017 than 2016 versus $2. Changes in inventory used $11. Cash flow from operations totaled $398. contrasted with 2015 when there was a use of cash primar- pensation expenses were $5.3 million more cash year over year. reserves being recorded in 2016 in anticipation of final settle- ces was $25. The year. dered obsolete by the Company’s new biomass facility and The non-cash impact of changes in environmental reserves which is now scheduled for closure. Non-cash asset impairment charges were years were due to a combination of factors including the timing $17. Operating cash flows provided by changes in tax-related the new transition tax on certain accumulated foreign earnings. driven by the loss on compensation expenses were $10. driven by prior-year acquisitions. from 2016. was $37.0 million higher year over year the disposition of a paperboard mill in France in 2016.

The balances also reflect Euro 150 million of $220 million in 2018. compared with $256.1 million in 2016. $1. value added taxes.625% debentures upon their maturity on $2.0 $1. net borrowings of $355. acquired 2.8 million from the shares of the Company’s common stock.0% to 2015 primarily related to approximately $29. a decrease of $5. net debt repayments used $271. resulting in a $67. $203.3 46. the Company recognized a transition tax of $76. fixed-rate assignable loan agreement.128.4 million at December 31.7 39. These balances reflect paper operation in France. Capital spending was $186.7 million of cash in 2016 to repurchase 2. 2017: Payments Due In ($ in millions) Total 2018 2019-2020 2021-2022 Beyond 2022 Uncertain Debt obligations $1.7 million in 2017. Outstanding debt was November 2016 sale of the Company’s rigid plastics blow mold.9 million on certain accumulated foreign earnings in order to comply with the U.2015. and customer reimbursable costs. partially offset by cash the incremental debt incurred to fund the acquisition of paid for the disposal of a paper operation in France. 2016. This increase was driven primarily by the investing activities is a decrease in proceeds from the sale of use of $106.7 million in 2016. The lower year-over-year to repay the remaining balance of the $150 million term loan use of cash is primarily due to a net $239.0 $ 32. $1.5 — Transition tax under Tax Act2 76.3 million for the repayment of 2017.9 million in 2015. including $75.02 per share increase in the quarterly dividend 2015. 2016.1 $17. Proceeds in 2016 included Packaging Group. which is based on the best information available to the Company at the present time.8 — Operating leases 186. is payable in installments over a period of 8 years. In 2015.1 million in 2016.7 million in 2016. 2 In December 2017.1 — Income tax contingencies3 17.4 million in 2016.7 $816.3 million in 2015.3 $ 33.7 million at December 31. rent assets and current liabilities was largely attributable to the acquisitions completed in 2017 and higher level of working Financing activities capital and short-term debt at the end of 2017 compared to the Net cash provided by financing activities totaled end of 2016.1 million in 2017 compared to Cash used by investing activities was $565.3 $159.1 million received $146.9 million to four acquisitions in 2016 versus two in 2015.8 — Total contractual obligations5 $2.4 $ 68.2 12. 2017 compared with at driven by higher year-over-year receipts of cash related to $1. net of cash acquired.447.4 million in 2016 compared to $138. a decrease of the Company’s 5.0 million shares of the Company’s common stock at a ations.447.6 million.1 million in 2016.3 million at December 31. The Company including the impact of the payment in December 2016 of taxes completed a share repurchase program in 2016 through which it arising from the gain on the sale of the blow molding oper.6 at December 31.338. The increase in both cur- compared with $192. ciated with acquisition activity in 2017. Packaging Holdings and Clear Lam for a total of $383. an increased provision of cash of $518. long-term debt obligations.564 million at December 31.0% to $153. The greater year-over-year quarterly dividend payment approved by the Board of Directors use of cash is due in part to the Company’s 2017 acquisitions of in April 2017.1 $ 608.5 $376.9 million higher year over year repayments of debt totaling $65. Cash dividends increased 6. Proceeds from the sale of assets in net repayments of $65. was payment approved by the Board of Directors in April 2016.1 million of additional cash in 2016 compared to 2015.885. compared with net Cash paid for taxes was $29.0 Purchase obligations4 289. No shares were repurchased under this program in 2017. SONOCO 2017 ANNUAL REPORT | FORM 10-K 27 . as well as financing fees on the backstop line of credit. 2017 from 1. Proceeds in 2016 included $271. $146. Activity in 2016 $1.4 million to $1.7 million of cash as the Company paid down a portion of rigid plastics blow molding operations. This Contractual obligations The following table summarizes contractual obligations at December 31.2 million higher year-over-year as the Company completed Current assets increased year over year by $214. $71.8 79. Proceeds in Weidenhammer.7 million in 2016.7 million. partially offset by cash paid for the disposal of a $1.0 — — — — 17. The liability for this tax. Acquisition spending.6 million whereas the cash paid for acquisitions in 2015 was decrease in the Company’s current ratio to 1.4 130. borrowings in May 2016.8 million from the November 2016 sale of the Company’s $114.2 649. Capital spending is expected to total approximately June 15. Outstanding debt was vided $15.2 million during 2017.implemented during 2016 and the timing of payments for other increase was driven primarily by increased borrowings asso- accrued expenses. compared with a use of $315.2 million. 2016. 2016 compared with at ing operations.8 $ 46. 2016. Capital spending was $188.4 92.2 million assets. These balances reflect rebates.3 118. Changes in other assets and liabilities pro. and current liabilities included the acquisition of Plastic Packaging Inc.3 million.9 $ — Interest payments1 868.6 million.0 million in 2015.1 million during the 12 months ending 2017 were $5.4 0. an increased use of Also contributing to the year-over-year change in cash used by cash of $59.7 $337.000 million.9 6. 2017.2 46. from the sale of two metal ends and closures plants in February reflecting a $0.3 12.9 million. for increased by $197.052. which were used in part compared with $179. Tax Cuts and Jobs Act (“Tax Act”). significantly lower.4 million in 2015.0% Cash used in investing activities was $3.0 1 Includes interest payments on outstanding fixed-rate. 2016.2 million in 2017.0 $646. cost of $100 million throughout the year.9 $ 39.02 per share increase in the compared with $3.7 million at December 31.052. compared with $186.9 million in December 31.S. under an unsecured.3 million. Net cash used by financing activities totaled $315. 1.7 at December 31.4 million increase in used to fund the October 2014 acquisition of Weidenhammer proceeds from the sale of assets. Cash dividends Investing activities increased 5. reflecting a $0. five-year.7 million in whereas acquisition spending in 2016 was lower at $88.

3 Due to the nature of this obligation, the Company is unable to estimate the timing of the cash outflows. Includes gross unrecog-
nized tax benefits of $17.1, plus accrued interest associated with the unrecognized tax benefit of $2.2, adjusted for the deferred
tax benefit associated with the future deduction of unrecognized tax benefits and the accrued interest of $1.5 and $0.8,
respectively.
4 Includes only long-term contractual commitments. (Does not include short-term obligations for the purchase of goods and serv-
ices used in the ordinary course of business.)
5 Excludes potential cash funding requirements of the Company’s retirement plans and retiree health and life insurance plans.

Capital resources security interest in the cash deposits, and has the right to offset
The Company’s cash balances are held in numerous loca- the cash deposits against the borrowings, the bank provides the
tions throughout the world. At December 31, 2017 and 2016, Company and its participating subsidiaries favorable interest
approximately $238.4 million and $174.7 million, respectively, of terms on both.
the Company’s reported cash and cash equivalents balances of Acquisitions and internal investments are key elements of the
$254.9 million and $257.2 million, respectively, were held outside Company’s growth strategy. The Company believes that cash on
of the United States by its foreign subsidiaries. Cash held out- hand, cash generated from operations and borrowing capacity
side of the United States is available to meet local liquidity will enable it to support this strategy. Although the Company
needs, or for capital expenditures, acquisitions, and other off- believes that it has excess borrowing capacity beyond its current
shore growth opportunities. Under prior law, cash repatriated to lines, there can be no assurance that such financing would be
the U.S. was subject to federal income taxes, less applicable available or, if so, at terms that are acceptable to the Company.
foreign tax credits. As the Company enjoys ample domestic liq- The net underfunded position of the Company’s various U.S
uidity through a combination of operating cash flow generation and international defined benefit pension and postretirement
and access to bank and capital markets borrowings, we have plans was approximately $332 million at the end of 2017. During
considered our offshore cash balances to be indefinitely 2017, the Company contributed approximately $109 million to
invested outside the United States and had no plans to repa- its benefit plans. The Company anticipates that benefit plan
triate these cash balances. However, due to changes in U.S. tax contributions in 2018 will total approximately $38 million. Future
laws as part of the enactment of the Tax Cuts and Jobs Act, funding requirements will depend largely on actual investment
beginning in 2018 cash repatriated will generally not be subject returns and future actuarial assumptions. Participation in the U.S.
to federal income taxes; accordingly, the Company is consider- qualified defined benefit pension plan is frozen for salaried and
ing opportunities to repatriate cash balances. The Company will non-union hourly U.S. employees hired on or after January 1,
finalize its analysis during 2018 and, as provided for in SAB 118, 2004. In February 2009, the plan was further amended to freeze
will make any necessary adjustments in the financial statements service credit earned effective December 31, 2018. This change
of future periods within the provided time frame, including a is expected to moderately reduce the volatility of long-term
determination of our intentions with respect to undistributed funding exposure and expenses.
earnings of international subsidiaries. Total equity increased $175 million during 2017 as net
Under Internal Revenue Service rules, U.S. corporations may income of $177 million and other comprehensive income total-
borrow funds from foreign subsidiaries for up to 30 days without ing $146 million were partially offset by dividend payments of
unfavorable tax consequences. The Company has utilized these $155 million, stock-based compensation of $13 million and share
rules at various times in prior years to temporarily access off- repurchases of $6 million. The primary components of other
shore cash in lieu of issuing commercial paper. The Company comprehensive gain were a $89 million translation gain from the
did not access any offshore cash under these rules in 2017. impact of a weaker U.S. dollar on the Company’s foreign
However, depending on its immediate offshore cash needs, the investments which were partially offset by additional actuarial
Company may choose to access such funds again in the future gains totaling $60 million, net of tax, in the Company’s various
as allowed under the rules. defined benefit plans resulting primarily from lower year-over-
On July 20, 2017, the Company entered into a Credit Agree- year discount rates. Total equity increased $21.8 million during
ment in connection with a new $750 million bank credit facility 2016 as net income of $287.9 million was partially offset by other
with a syndicate of eight banks replacing an existing credit comprehensive losses totaling $34.9 million, dividend payments
facility entered into on October 2, 2014, and reflecting sub- of $147.7 million, and share repurchases of $106.7 million. The
stantially the same terms and conditions. The Company oper- primary components of other comprehensive loss were a
ates a $350 million commercial paper program, supported by a $32.4 million translation loss from the impact of a stronger U.S.
$500 million five-year revolving credit facility. If circumstances dollar on the Company’s foreign investments and an increase in
were to prevent the Company from issuing commercial paper, it actuarial losses totaling $9.6 million, net of tax, in the Company’s
has the contractual right to draw funds directly on the under- various defined benefit plans resulting primarily from lower year-
lying revolving bank credit facility. over-year discount rates.
The Company’s total debt at December 31, 2017, was On February 10, 2016, the Company’s Board of Directors
$1,447 million, a year-over-year increase of $395 million driven authorized the repurchase of up to 5 million shares of the
primarily by the $250 million term loan used to finance the Clear Company’s common stock. During 2016, a total of 2.03 million
Lam and Packaging Holdings acquisitions and the increase in shares were repurchased under this authorization at a cost of
commercial paper. The Company had $124 million of commer- $100 million. No shares were repurchased under this author-
cial paper outstanding at December 31, 2017 and none at ization during 2017. Accordingly, at December 31, 2017, a total
December 31, 2016. of 2.97 million shares remain available for repurchase under this
The Company uses a notional pooling arrangement with an authorization.
international bank to help manage global liquidity requirements. Although the ultimate determination of whether to pay divi-
Under this pooling arrangement, the Company and its dends is within the sole discretion of the Board of Directors, the
participating subsidiaries may maintain either a cash deposit or Company plans to increase dividends as earnings grow. Divi-
borrowing position through local currency accounts with the dends per common share were $1.54 in 2017, $1.46 in 2016 and
bank, so long as the aggregate position of the global pool is a $1.37 in 2015. On February 14, 2018, the Company declared a
notionally calculated net cash deposit. Because it maintains a regular quarterly dividend of $0.39 per common share payable

28 SONOCO 2017 ANNUAL REPORT | FORM 10-K

on March 9, 2018, to shareholders of record on February 28, In addition, the Company may, from time to time, use tradi-
2018. tional, unleveraged interest-rate swaps to manage its mix of
fixed and variable rate debt and to control its exposure to inter-
Off-balance sheet arrangements est rate movements within select ranges.
The Company had no material off-balance sheet arrange- At December 31, 2017, the Company had derivative con-
ments at December 31, 2017. tracts outstanding to hedge the price on a portion of antici-
pated commodity and energy purchases as well as to hedge
Risk management certain foreign exchange risks for various periods through
As a result of operating globally, the Company is exposed to December 2019. These contracts included swaps to hedge the
changes in foreign exchange rates. The exposure is well diversi- purchase price of approximately 7.5 million MMBTUs of natural
fied, as the Company’s facilities are spread throughout the gas in the U.S. and Canada representing approximately 76.2%
world, and the Company generally sells in the same countries and 35.5% of anticipated natural gas usage for 2018 and 2019.
where it produces. The Company monitors these exposures and Additionally, the Company had swap contracts covering 1796
may use traditional currency swaps and forward exchange con- metric tons of aluminum representing approximately 24% of
tracts to hedge a portion of forecasted transactions that are anticipated usage for 2018. The aluminum hedges relate to
denominated in foreign currencies, foreign currency assets and fixed-price customer contracts. At December 31, 2017, the
liabilities or net investment in foreign subsidiaries. The Compa- Company had a number of foreign currency contracts in place
ny’s foreign operations are exposed to political and cultural for both designated and undesignated hedges of either antici-
risks, but the risks are mitigated by diversification and the rela- pated foreign currency denominated transactions or existing
tive stability of the countries in which the Company has sig- financial assets and liabilities. At December 31, 2017, the total
nificant operations. notional amount of these contracts, in U.S. dollar terms, was
Prior to July 1, 2015, the Company used Venezuela’s official $189 million, of which $58 million related to the Canadian dollar,
exchange rate to report the results of its operations in Ven- $50 million to the Mexican peso, $50 million to the Polish Zloty
ezuela. As a result of significant inflationary increases, and to and $31 million to all other currencies.
avoid distortion of its consolidated results from translation of its The total fair market value of the Company’s derivatives was
Venezuelan operations, the Company concluded that it was a net unfavorable position of $1.3 million at December 31, 2017,
appropriate to begin translating its Venezuelan operations using and a net favorable position of $2.8 million at December 31,
an alternative exchange rate. Accordingly, effective July 1, 2015, 2016. Derivatives are marked to fair value using published mar-
the Company began translating its Venezuelan operations, and ket prices, if available, or using estimated values based on cur-
all monetary assets and liabilities in Venezuela, using the alter- rent price quotes and a discounted cash flow model. See Note 9
native rate known as the SIMADI rate (replaced in 2016 by the to the Consolidated Financial Statements for more information
DICOM rate). This resulted in a foreign exchange remeasure- on financial instruments.
ment loss on net monetary assets. In addition, the use of the The Company is subject to various federal, state and local
significantly higher SIMADI rate resulted in the need to recog- environmental laws and regulations concerning, among other
nize impairment charges against inventories and certain long- matters, solid waste disposal, wastewater effluent and air emis-
term nonmonetary assets as the U.S. dollar value of projected sions. Although the costs of compliance have not been sig-
future cash flows from these assets was no longer sufficient to nificant due to the nature of the materials and processes used in
recover their U.S. dollar carrying values. The combined manufacturing operations, such laws also make generators of
$12.1 million impact of the impairment charges and hazardous wastes and their legal successors financially respon-
remeasurement loss, on both a before and after-tax basis, was sible for the cleanup of sites contaminated by those wastes. The
recognized in the third quarter of 2015. As a result of the con- Company has been named a potentially responsible party at
tinued devaluation of the Venezuelan Bolivar in 2017, the several environmentally contaminated sites. These regulatory
Company recognized additional impairment charges and actions and a small number of private party lawsuits are believed
remeasurement losses in 2017 totaling $0.8 million. At to represent the Company’s largest potential environmental
December 31, 2017, the carrying value of the Company’s net liabilities. The Company has accrued $20.3 million at
investment in its Venezuelan operations was approximately December 31, 2017, compared with $24.5 million at
$1.8 million. In addition, at December 31, 2017, the Company’s December 31, 2016, with respect to these sites. See
Accumulated Other Comprehensive Loss included a cumulative “Environmental Charges,” Item 3 – Legal Proceedings and Note
translation adjustment loss of $3.8 million related to its Ven- 14 to the Consolidated Financial Statements for more
ezuela operations which would need to be reclassified to net information on environmental matters.
income in the event of a complete exit of the business or a
decision to deconsolidate. Results of operations – 2016 versus 2015
The Company is a purchaser of various raw material inputs Consolidated net sales for 2016 were $4.8 billion, a
such as recovered paper, energy, steel, aluminum and plastic $181 million, or 3.7%, decrease from 2015. The components of
resin. The Company generally does not engage in significant the sales change were:
hedging activities for these purchases, other than for energy
and, from time to time, aluminum, because there is usually a ($ in millions)
high correlation between the primary input costs and the ulti-
mate selling price of its products. Inputs are generally purchased Volume/mix $ 6
at market or at fixed prices that are established with individual Selling price (25)
suppliers as part of the purchase process for quantities Acquisitions and divestitures, net (25)
expected to be consumed in the ordinary course of business. Foreign currency translation and other, net (137)
On occasion, where the correlation between selling price and Total sales decrease $(181)
input price is less direct, the Company may enter into derivative
contracts such as futures or swaps to manage the effect of price
fluctuations. In order to enhance the meaningfulness of reported changes
in volume/mix, a $63.7 million reduction in packaging center

SONOCO 2017 ANNUAL REPORT | FORM 10-K 29

sales resulting from changes in the level of activity, primarily have been a decrease of $15.6 million. The year-over-year
from the previously reported loss of contract packaging busi- decrease reflects lower pension expense, a reduction in costs
ness in Irapuato, Mexico, is classified above as “other” due to related to the Company’s domestic self-insured employee
the low/inconsistent correlation that typically exists between group medical plan, lower legal and professional fees, reduc-
changes in revenue and changes in operating profit in our tions from the sale of the Company’s rigid plastics blow molding
packaging center operations. operations, and the favorable effect of foreign currency trans-
Sales volume/mix was essentially flat as organic volume lation from a stronger U.S. dollar. These favorable factors were
growth and a favorable change in product mix in a number of partially offset by increases in 2016 incentive-based compensa-
our businesses offset volume declines in rigid paper containers. tion and general inflation.
For the most part, price changes for the Company’s products GAAP Earnings before interest and income taxes (EBIT) were
were driven by changes in the underlying raw materials costs. In 10.3% of sales in 2016 compared to 7.7% in 2015, The largest
2016, many of the Company’s primary raw materials saw contributor to this increase was the 2016 gain on the sale of the
decreases in their market prices; however, old corrugated con- Company’s rigid plastics blow molding business. Base EBIT was
tainers (OCC) saw a moderate increase year over year. This 9.1% of sales in 2016 compared to 8.3% in 2015, in line with the
increase most directly affected the Paper and Industrial Con- year-over-year increase in gross profit margin discussed above
verted Products segment while the decrease in other raw which contributed to the improvements in both GAAP EBIT and
materials, mainly resins, most directly affected the Consumer Base EBIT.
Packaging segment. While the Company’s 2016 and 2015 Restructuring and restructuring related asset impairment
acquisitions added more than $20 million to comparable year- charges totaled $42.9 million and $50.6 million in 2016 and 2015,
over-year sales, the impact was more than offset by comparable respectively. Additional information regarding restructuring
sales decreases related to dispositions, the most significant of actions and impairments is provided in Note 4 to the Company’s
which was the 2016 sale of the Company’s rigid plastics blow Consolidated Financial Statements.
molding operations. Finally, foreign exchange rate changes Research and development costs, all of which were charged
decreased sales year-over-year as almost all of the foreign cur- to expense, were $22.5 million in 2016 and $22.1 million in 2015.
rencies in which the Company conducts business weakened in Management expects research and development spending to
relation to the U.S. Dollar. remain at a similar level in 2017.
Total domestic sales were $3.1 billion, down 3.1% from 2015 Net interest expense totaled $51.6 million for the year ended
levels. International sales were $1.7 billion, down 4.6% from 2015 December 31, 2016, compared with $54.6 million in 2015. The
with most of the decrease driven by the impact of foreign cur- decrease was due primarily to lower average debt levels as the
rency translation. Additionally, sales in Mexico were lower due to Company settled its $75.2 million 5.625% debentures upon their
the loss of contract packaging business in Irapuato, Mexico. maturity in June 2016, and in May 2016 used proceeds from a
new 1.00% fixed rate Euro 150 million loan to settle the remain-
Costs and expenses/margins ing $150 million balance of a variable rate term loan entered into
Cost of sales was down $189.5 million in 2016, or 4.7%, from in conjunction with the 2014 acquisition of Weidenhammer
the prior year primarily as a result of foreign currency translation, Packaging Group.
certain raw material price declines, disposed businesses, lower
pension expense and productivity improvements, somewhat Reportable segments
offset by the impact of acquisitions. Partially offsetting these The Company reports its financial results in four reportable
benefits were an unfavorable mix of sales and higher labor and segments – Consumer Packaging, Display and Packaging, Paper
other costs. Overall, the Company was able to achieve a positive and Industrial Converted Products, and Protective Solutions.
price cost relationship, aided by certain raw material price Consolidated operating profits, also referred to as “Income
declines in some businesses and procurement productivity before interest and income taxes” on the Consolidated State-
gains. As a result, gross profit margins improved to 19.6% in ments of Income, are comprised of the following:
2016 from 18.7% in the prior year. ($ in millions) 2016 2015 % Change
Aggregate pension and postretirement plan expenses
decreased $12.0 million in 2016 to a total of $45.3 million, Segment operating profit
Consumer Packaging $240.9 $231.6 4.0%
compared with $57.3 million in 2015. The decrease was primarily
Display and Packaging 14.8 10.9 35.7%
the result of the Company’s previously disclosed change in its
Paper and Industrial
method to estimate service and interest cost components of net Converted Products 129.7 124.1 4.5%
periodic benefit cost. On January 1, 2016 the Company began Protective Solutions 51.5 46.0 12.0%
using a full yield curve approach to estimate these costs as Restructuring/Asset
opposed to the previous method that used a single weighted- impairment charges (42.9) (50.6) (15.3)%
average discount rate. Approximately 75% of pension and post- Acquisition-related costs (4.6) (1.7) 174.7%
retirement plan expenses are reflected in cost of sales and 25% Other non-operational gains,
in selling, general and administrative expenses. See Note 12 to net 103.4 22.3 363.9%
the Consolidated Financial Statements for further information Consolidated operating
on employee benefit plans. profits $492.8 $382.5 28.8%
Selling, general and administrative expenses increased
$9.8 million, or 2.0%, and were 10.6% of sales compared to
10.0% of sales in 2015. In 2015, selling, general and admin- Consumer Packaging
istrative expenses included a $32.5 million gain from the release
($ in millions) 2016 2015 % Change
of environmental reserves upon the partial settlement of the Fox
River environmental claim, and included expenses totaling Trade sales $2,043.1 $2,122.6 (3.7)%
approximately $7.1 million for legal and professional fees Segment operating profits 240.9 231.6 4.0%
related to the financial misstatements at our Irapuato, Mexico, Depreciation, depletion
and amortization 88.9 96.2 (7.6)%
packaging center. Absent these items, the year-over-year
Capital spending 86.4 76.0 13.7%
change in selling, general and administrative expenses would

30 SONOCO 2017 ANNUAL REPORT | FORM 10-K

Trade sales in the segment were reduced by approx. or 21. depletion over-year impact of these dispositions more than offset the and amortization 74.8% from June 2016 and a domestic high-density wood plug business 10.6 0. volume declines in global composite cans.8 million. Additionally. the segment’s operating our retail security packaging facility in Juncos. Dollar strengthened against the local currencies in imately $27 million year over year as a result of foreign currency virtually every international market where the segment operates. Partially offsetting amortization 16.8% single corrugating medium machine which continued to strug- gle as market supply depressed sales price and forced a larger Domestic trade sales in the segment decreased portion of output to be sold in less-profitable foreign markets. In $12. Excluding corrugating medium. to $1. to $246 million. The profit would have increased $21. or 1.S.1)% February 2015 sold a portion of its metal ends and closures Segment operating profits 129.0%. amortization 24. Puerto Rico. Material purchas.0% translation and inflation of labor and other costs along with Operating profits 51.and off-shore both flexible packaging and plastics. On average market costs for largely driven by a positive price/cost relationship and solid recovered paper in the U.8 10.9 15. to $274 million. The increase in segment operating profits was acquired in September 2015. lower selling prices and reduced volume. down 5. or 5.7%. businesses with the exception of corrugating medium.729. Total domestic sales in the segment decreased $18 million. the divestiture of the 2015. The which also had a negative impact on productivity.6% these gains were price cost declines driven by the Company’s Capital spending 11.9 5.9 35. translation due to a stronger U.5% business. ($ in millions) 2016 2015 % Change or 2.S. volume decreased on our one corru- Display and Packaging gating medium machine due to general market softening.693. dollar. These ($ in millions) 2016 2015 % Change gains were partially offset by the impact of foreign currency Trade sales $525. Total almost completely offset by acquisitions at an operating profit volume/mix was effectively flat in the segment despite gains in level.5 46. Capital spending 12.8 (2. Organic volume growth in flexible packaging and plastics somewhat offset volume declines in global compo- site cans. depletion and Capital spending in the segment included numerous pro. a small tubes and cores business in Australia acquired in over year and operating profit margins increased to 11. applications in the oil and gas industry.6)% additional sales from the acquisition of Plastic Packaging Inc. Company’s paperboard mill in Schweighouse-sur-Moder. Additionally. from 2015. Depreciation. or 17.6%.7 124. consisting of two facilities in Canton.2 million year-over-year reduction in product line profit- retail security packaging and the impact of the July 2016 sale of ability.0 (18. resulted in a decrease in domestic trade sales resulted from lower volume in $16. ing and logistics savings were key drivers of the positive price/ primarily due to overall inflation.0% volume declines in retail security packaging. The Company’s sold its rigid ($ in millions) 2016 2015 % Change plastic blow molding operations in November 2016 and in Trade sales $1. while international sales were approximately $675 million.9% in 2015. translation as a result of a weaker Mexican peso and Polish zloty relative to the U. to $668 million.8%.6%. Trade sales $520. on Capital spending 60. In addition.8 23.8 million. and expansion of manu. depletion and mentioned acquisitions and divestitures. and lower fixed costs.1)% November 1. while international trade corrugating medium.368 million. 2016.9 $505.025 million while international sales decreased $18 million. and were up in Europe due to cost relationship. dollar also lowered sales year over year. were higher year over year resulting gains in fixed cost productivity.5 $1.9 4. These benefits were partially in higher average selling prices in all of the segment’s domestic offset by inflation. Volume decreased segment included numerous productivity projects and in our reels business on lower volumes in nail-wood reels and expansion of manufacturing capabilities in North America in lower demand for steel reels used in both on. Ohio. prices were slightly higher in Brazil and the Andean region.S.7 (2. a positive price cost 2016 from packaging center fulfillment contract with a customer. driven by decrease in international sales reflects the Company’s exit in solid gains in manufacturing productivity. from foreign currency translation. The year.6 5. up 0. or $1 million. Domestic sales were resulting in a $31 million year-over-year decrease in sales due to approximately $1. sales decreased $73 million. recovery facility operating agreement coupled with some loss of market share. The U. Depreciation.S. France was only partially offset by sales from acquired busi- Segment operating profits increased by $9.0%. The Company transitioned the operation of the facility back to Significant capital spending in the segment included the the customer during the first half of 2016.6 74.0 12.7 (18. the neg.7 16.4% ductivity and customer development projects in North America. or $81 million.4 $606.3 million year nesses.7 76. Volume also declined in facturing capabilities in Europe in rigid paper and plastic our recycling business primarily due to a 2015 action to exit a containers. Sales decreased year over year due to decreased sales prices Paper and Industrial Converted Products driven by decreases in resins and other raw material costs cou- pled with a number of dispositions. Selling and the impact of foreign currency translation. The previously mentioned divestitures were the pass through of higher material costs in that market. Europe and Latin America which were due to a combination of Significant capital spending in the Consumer Packaging market share gains and regional expansion.7% total productivity.5 10.2)% SONOCO 2017 ANNUAL REPORT | FORM 10-K 31 . Protective Solutions The increase in segment operating profit was driven by a positive price/cost relationship and total productivity. Adding to this were gains from the previously Depreciation.1 4. modification of several paper machines in North America and ative impact of approximately $18 million from foreign currency numerous productivity projects.1)% Segment operating profit increased year over year driven by Segment operating profits 14.2%. relationship.1 (14.

Company stock price and market basis. in the case of assets the Company reduced by the negative impact of foreign currency translation. the Notes to the Consolidated Financial Statements included in improved operating margins. changes in price/cost Financial Statements. business strategy changes. Sales increased year over year due to higher volume in is calculated as the excess of the asset’s carrying value over its temperature-assured packaging. The quantitative tests tion. capital expenditures and changes The Company believes the accounting policies discussed in in working capital requirements and. there is no specific singular event or single change in circum- 32 SONOCO 2017 ANNUAL REPORT | FORM 10-K . or when it commits to sell the asset. share-based compensa.S. but value of that asset group. The prepara. The Company’s reporting units are one level below its of the financial statements and the reported amounts of rev. if applicable. The Company’s projections incorporate as well as in the Notes to the Consolidated Financial State.S. where such estimates. an asset impairment charge is recog. including forecasted growth rates and/or profitability measures. The Company’s model discounts projected future accounting policies are discussed in Management’s Discussion cash flows. The Company completed its most recent annual goodwill erally accepted in the United States (U. as determined in accordance with ASC enues and expenses during the reporting period. generally represented by the discounted future cash components and paper-based protective packaging. The impact of cash flows. gins and asset life. discounted to present value using a discount rate appropriate standing the results of its operations. as estimated proceeds less costs to sell. The qualitative evaluations considered factors such as the evaluates these estimates and assumptions on an ongoing macroeconomic environment. partially flows from that asset or.6%. fixed cost leverage. the Company performed an assessment of each requires management to make estimates and assumptions that reporting unit using either a qualitative evaluation or a quantita- affect the reported amounts of assets and liabilities at the date tive test. fair values that Domestic sales were $436 million in 2016 up $14 million. whether qualitative or quantita- judgments and estimates used in the preparation of the tive. including values of long-lived. restructuring. Company’s Consolidated Financial Statements. The amount of an impairment charge. definite-lived intangible ity or improvement in general economic conditions. If the sum of the such impairment would likely be the result of adverse changes in undiscounted expected future cash flows from a long-lived asset more than one assumption. represents those policies that involve the more significant The Company’s assessments. management has concluded that any exist. In addition. Impairment of goodwill Critical accounting policies and estimates In accordance with ASC 350. Key assumptions and estimates used in the cash flow based on available evidence at the time of the assessment. together with comparable trading and transaction and any associated risks related to estimates. Therefore. productivity gains. impairment testing during the third quarter of 2017. GAAP).2%. assumptions and results. intangible and other circumstances and/or expectations. goodwill. assumptions and multiples. expectations for volume growth with existing customers and nition of impairment expense in the Company’s Consolidated customer retention. clusion regarding impairment. residual growth rate. pension and considered factors such as current year operating performance other postretirement benefits. evaluates for sale. changes in $90 million up $6 million. ductivity and customer development projects. the Company assesses its Management’s discussion and analysis of the Company’s goodwill for impairment annually and from time to time when financial condition and results of operations are based upon the warranted by the facts and circumstances surrounding individual Company’s Consolidated Financial Statements. sales growth. operating segments. where applicable. International sales increased more modestly to estimates used to evaluate impairment. profit margins. product expansion. should there be changes in the relevant facts and Impairment of long-lived. new business. or 7. expected changes in future contingencies and litigation. among other things: sales volumes and prices. GAAP purposes. ment’s projections related to revenue growth and/or margin tial impairment can result in adjustments affecting the carrying improvements are based on a combination of factors. profit mar. For testing tion of financial statements in conformity with U. and sig- bad debts. capitalization movement. plant and equipment). been prepared in accordance with accounting principles gen. management’s assessment assets regarding goodwill impairment may change as well. which is discussed below. Manage- Assumptions and estimates used in the evaluation of poten. if any. under the circumstances. Other than in Display and Packaging. The Company 350. The results of these estimates may When the Company estimates the fair value of its reporting form the basis of the carrying value of certain assets and units. income taxes. environmental liabilities. incorporate management’s expectations for the future. intangible and other assets and the recog. model generally include price levels. However. and as compared to prior projections. forecasted over a ten-year period. including but not limited to those related to inventories. intangible assets. with an estimated and Analysis of Financial Condition and Results of Operations. The Company evaluates its long-lived relationships. Projected future cash flows are Item 8 of this Annual Report on Form 10-K are critical to under. rather its best estimates across a range of possible outcomes nized. expected financial results. and implied fair values from com- based on historical and other factors believed to be reasonable parable trading and transaction multiples. The following discussion for the reporting unit. from 2015. The Segment operating profit increased year over year due to a Company takes into consideration historical data and experi- positive price/cost relationship and higher volume which were ence together with all other relevant information available when partially offset by increases in labor. nificant customer wins and losses. Management does not consider any or definite-lived intangible asset group is less than the carrying of its assumptions to be either aggressive or conservative. it does so using a discounted cash flow model based on liabilities and may not be readily apparent from other sources. Estimates and assumptions are operating performance. management’s estimates of the most-likely expected future ments. including significant assumptions and estimates related accounting policies affect the Company’s reported and to. which have reporting units or the Company as a whole. the assumptions and estimates may result in a different con- Capital spending in the segment included numerous pro. income taxes. derivatives. could be realized in actual transactions may differ from the 3. projections of future years’ operating results and associated Actual results could differ from those estimates. estimating the fair values of its assets. and stabil- assets (property. assets and other assets (including notes receivable and equity In considering the level of uncertainty regarding the potential investments) for impairment whenever indicators of impairment for goodwill impairment. molded foam automotive fair value. overhead and other costs.

which requires a reduction of the carrying amounts of tiatives and increased capacity within this new center and else. profit margins based largely on the expected successful ramp The corresponding percentages for Paper and Industrial Con- up of operations at the Company’s new battery packaging verted Products – Europe are 19% and 10. The valuation of deferred tax assets assessment made at December 31. Taxes. the analysis reflects The Company follows ASC 740. spillover benefit has been recognized in the financial statements. Display and Packaging projected operating profits across approximately 37% compared to 64% in the prior year’s annual all future periods would have to be reduced approximately 23%. manu. largest amount of tax benefit with a greater than 50% likelihood Paper and Industrial Converted Products – Europe manu. the Company considered whether any due to a variety of internal and external factors impacting pro. 2017. and results to date have been well below projections December 31. and Packaging and Paper and Industrial Converted Products – ment test performed in the third quarter. the estimated fair Europe. This reporting unit experienced a significant position. the Company has recorded the to forecasts would likely result in an impairment charge.4%. 2017 it was more likely on our financial condition and results of operations. impact of these factors. packs and distributes temporary. no tax Eurozone has faced persistent high unemployment. ing unit should be able to grow at or above the Eurozone’s Although no reporting units failed the testing noted above. including printed backer cards. projected packaging. Changes in our current estimates. semi. Georgia. compared with 55% in the prior supply chain management services. or be unable to consistently recover additional sig- Industrial Converted Products – Europe. Operations at this facility began in During the time subsequent to the annual evaluation. of being realized upon ultimate settlement with a taxing author- factures paperboard tubes and cores. the reporting units having the great. in order for the esti- ations for moderate sales growth and improved percentage mated fair value to fall below the reporting unit’s carrying value. Holding other valuation assumptions con- value of Display and Packaging exceeded its carrying value by stant. and lower inflation related to energy price management’s opinion. The unit’s goodwill impairment analysis reflects expect. and at mid-2017. the Notice of Proposed Adjustment (“NOPA”) from the Internal economy experienced steady year over year growth in the last Revenue Service (IRS) in February 2017 proposing an adjustment couple of years and the Company expects the momentum to to income for the 2013 tax year based on the IRS’s SONOCO 2017 ANNUAL REPORT | FORM 10-K 33 . or other expenses that have been recognized for financial reporting projected synergies and productivity gains are not realized. A large portion of expected sales in on the available evidence. dle East. and uncertainties over the United Kingdom’s exit As previously disclosed. assembles. However. events and/or changes in circumstances had resulted in the like- duction efficiencies and operating costs. It is management’s opinion that no such events continued in the fourth quarter.stances management has identified that it believes could continue in the near future. provides value by approximately 29%. or the discount rate increased to 12. a goodwill impairment charge and $95 million. The Company is working to have occurred. Management pass through significant raw material cost increases. Based on the valuation work performed dur- The Display and Packaging reporting unit designs. future cash flows were discounted at 10. Our accounting packaging center. 2017. facility in Atlanta. Industrial Converted Products – Europe exceeded its carrying permanent and permanent point-of-purchase displays. could be incurred. respectively. In recent years the positions not meeting the more-likely-than-not standard. For those tubes and forms and recycled paperboard.5% for Display ters and heat sealing equipment. the Company received a draft negotiations with the European Union. the fair value of the Display and Packaging for deferred tax consequences represents our best estimate of reporting unit has continued to decline from the time of the those future events. ing the third quarter. believes the report- Report on Form 10-K. a general deterioration in competitive monetary policies. These operational lihood that the goodwill of any of its reporting units may have issues and the resulting poor results relative to projections have been impaired. requires judgment in assessing the likely future tax con- eration to the current under-performance of the reporting unit sequences of events that have been recognized in our financial largely driven by the previously mentioned issues at the new statements or tax returns and future profitability. In export activities. where applicable. introduction of a superior technology. Accounting for Income expected cash flow improvements from future productivity ini. This outlook is supported by reasonably result in a change to expected future results in any of accommodative monetary policy. at December 31. if economic conditions were est risk of a significant future impairment if actual results fall to deteriorate and management were unable to fully mitigate short of expectations are Display and Packaging. nificant cost increases or otherwise fail to achieve expected sales ciated with these reporting units was approximately $203 million volumes and profit margins. and Paper and the impacts. thermoformed blis. an inability to to fully offset through higher selling prices. and manufactures retail For the annual analyses performed during 2017. ciated interest has also been recognized. respectively. fiber-based construction ity having full knowledge of all relevant information. significant increase in raw material costs during 2017 which it was not able unexpected changes in customer preferences. and other expects this negative price/cost relationship to improve going such items as identified in “Item 1A. Based on an occur in future periods. fulfillment and scalable service centers. recovery in manufacturing and its reporting units sufficient to result in goodwill impairment. the estimated fair value of Paper and factures. than not that goodwill had been impaired. could have a material impact in a conclusion that as of December 31. but for which the corresponding tax deductions will goodwill impairment charge could be incurred. in management’s For those tax positions where it is more likely than not that a opinion continued under-performance in future quarters relative tax benefit will be sustained. including contract packing. resolve these issues and continues to be optimistic that over time the center will be able to achieve efficiency and cost levels Income taxes in line with expectations. due to annual impairment test. Despite these issues. respectively. a purposes. year. Asso- effects of geo-political conflicts in Eastern Europe and the Mid. In addition. The growth is expected to slow down slightly in the more likely be the result of changes to some combination of the outer years as the European Central Bank gradually tightens its factors identified above. Risk Factors” of this Annual forward and despite the challenges noted. Total goodwill asso. Based on the annual impair. Although this assessment did not result unanticipated events or otherwise.0% and 8. test. projected GDP growth rates and continue to mitigate the in management’s opinion. it is more likely than not such assets this reporting unit is concentrated in two customers and if the will not be realized. 2017. which gave consid. deferred tax assets by recording a valuation allowance if.7%. Deferred tax assets generally represent business with either one of these customers is lost. a change of such magnitude would declines. based where in the reporting unit.

Cumulative net actuarial losses were approximately $616 million at December 31. the Company recorded total pension and post- expensive and time consuming to defend and/or settle.S. settlement charges.S. retirement and retiree health and life insurance proposes to recharacterize the distribution. Inputs to the course of 2013.70% for the retiree health Company’s previously reported income tax provision for the and life insurance plan. On November 20. As the IRS gation for U. of these and other smaller settlements. The Company strongly believes the position discount rates of 4. and that the non-qualified retirement plans. average remaining life expectancy of the plan’s inactive partic- tingent stock units where the ultimate number of units are per. formance based. and are primarily the result Stock-based compensation plans of low discount rates.S. The Company successfully settled approximately 47% of fluctuations from period to period in the amount of share-based the PBO for the terminated vested plan participants. On changes to these assumptions and methodologies. and 3. and the subsequent repayment of the note over the grant date fair value of its stock appreciation rights. the entire dis. of the plan’s participants are inactive. in determining the dend to the extent of earnings and profits.32% to 4.S. ologies used to calculate estimated fair value of share-based tion. GAAP are amortized over the average of stock appreciation rights.55%. recharacterization of a distribution of an intercompany note The Company uses an option-pricing model to determine made in 2012.99% for the active and inactive of the IRS with regard to this matter is inconsistent with appli.87%. excluding interest health and life insurance plan. the performance measures plans through either a single. respectively. an expected long-term rate of return on year in question is appropriate. plan. qualified retirement ures defined in the plans. it was characterized as a divi. the tributions vary from year to year depending on various factors. as well as an Information Document Request (“IDR”) compensation per share.00% and 6. and rates of compensation and the previously referenced penalties.6 million. including a voluntary in the period the assessments are made or resolved or when $50 million contribution to its U.75% for the active and inactive quali- assurance that this matter will be resolved in the Company’s fied retirement plans. The incremental and inactive qualified retirement plans. As a result. assumptions used at December 31.3 million during 2016. the Company received two revised draft materially impact fair value determinations. the Company received a draft NOPA proposing Management routinely assesses the assumptions and method- penalties of $18 million associated with the IRS’s recharacteriza. the Company made contributions to its Additionally. respectively.3 million possibility that an adverse outcome of the matter could have a at a weighted-average discount rate of 3. 3. there can be no plan assets of 7. In 2017. with the remainder as projected benefit obligation and the accumulated benefit obli- a tax free return of basis and taxable capital gain. which are discussed in more detail below. or almost all.8 million in 2017. plans include: discount rates of 3. the Company benefit liabilities and costs that are measured using actuarial received a Revenue Agents Report (“RAR”) that included the valuations. 2018. the Company made contributions to its pension favorable or unfavorable adjustments to estimated tax liabilities and postretirement plans of $108. increases ranging from 3. the Company initiated a program to settle expense associated with these performance-based awards are a portion of the projected benefit obligation (PBO) relating to based on estimates regarding future performance using meas. The key time of the distribution in 2012. prised approximately 15% of the beginning of year PBO of these ment of these performance measures may result in significant plans. the jurisdictions in which earnings or deductions pension and postretirement plans totaling $46. as if it were a cash distribution made in 2013. While retirement benefit expenses of approximately $78. active qualified retirement statutes of limitations on potential assessments expire. and accordingly has reflects $82.28% to 4. est rates. eventual resolution of these matters could have a different the most significant being the market value of assets and inter- impact on the effective rate than currently reflected or expected. future results may include During 2017.5 million. Actuarial losses/gains outside of the 10% The Company utilizes share-based compensation in the form corridor defined by U. 3. On November 14. Circumstances may change and addi- requesting the Company’s analysis of why such penalties should tional data may become available over time that results in not apply. there is still a average assumed rate of 6. Certain awards are in the form of con. The amount of share-based compensation In February 2017. The Company believes it has plan assets at an average assumed rate of 6. which will cause the matter to be referred to the Appeals retirement and retiree health and life insurance plans include: Division of the IRS. NOPAs proposing the same adjustments and penalties as in the prior NOPAs. In March 2017.8 million of pension dition. At the can have a significant effect on the calculated amounts. ipants if all.34%. The actuarial valuations employ key assumptions that same adjustments and penalties as in the prior NOPAs. which could October 5. lump-sum payment or the pur- consisted of Earnings per Share and Return on Net Assets chase of an annuity. 2017. The expense material effect on its results of operations and financial con. the model include a number of subjective assumptions.49% for the active tribution would be characterized as a dividend. IRS.8 million of expected returns on plan assets at an not provided additional reserve for tax uncertainty.97% for the cable tax laws and existing Treasury regulations. qualified retirement plans.2 million at a weighted-average discount rate of 3. However. 2017. recognized in 2017 also includes $32. The terminated vested population com- Employed. Con- are realized may differ from current estimates. Company’s favor. Changes in estimates regarding the future achieve. the Company recog- solidated Financial Statements.3% and interest cost of $56. As a result compensation expense reflected in the Company’s Con. and rates of compensation favor. nized non-cash settlement charges of $32. related to these matters.8% and interest cost adequately provided for any reasonably foreseeable outcome of $60. 2017. However. The Company responded to this IDR in April 2017. 2017.7 million. respectively. restricted stock units and other remaining service life of the plan’s active participants or the share-based awards. The 2017 amount with respect to this distribution is correct. 2017. The estimate for the potential outcome of any uncertain tax The 2016 amount reflects $87. In the prior year.36% for the retiree the RAR would be approximately $89 million. the final resolution of this matter could be During 2017. On January 22. terminated vested participants in the U. Regardless of whether the matter is resolved in the increases ranging from 3. The key assumptions the Company filed a protest to the proposed deficiency with the used to determine 2017 net periodic benefit cost for U.50% for tax liability associated with the income adjustment proposed in the non-qualified retirement plans.29% and 3. and 3.0 million of expected returns on issue is highly judgmental.69% and 3.02%. All 34 SONOCO 2017 ANNUAL REPORT | FORM 10-K . the Company believes that the amount of tax originally paid compared with $45. the Company received Pension and postretirement benefit plans two final NOPAs proposing the same adjustments and penalties The Company has significant pension and postretirement as in the prior NOPAs.S.

S. The “Our international operations subject us to various risks that rate of compensation increase assumption is generally based on could adversely affect our business operations and financial salary and incentive compensation increases. “Risk Management” in Item 7 – Management’s Dis- and trending down to an ultimate rate of 4. is the effect of lower discount rates on year-over-year benefit See Note 12 to the Consolidated Financial Statements for plan expense. growth in medical costs in excess of the overall inflation level. It provides for real Data. Annual Excluding the non-recurring settlement charges recognized Percentage Projected Benefit Expense in 2017.5% represents the Company’s best Operations. with the expected rate of return selected Item 7A. additional information on the Company’s pension and The Company adjusts its discount rates at the end of each postretirement plans. assumptions and estimates may affect the carrying value through F-32 of this report.75% for post-age 65 participants Factors. plans as of December 31.S.to 15-year period. The expected rate of return assumption is derived by tak- Information regarding recent accounting pronouncements is ing into consideration the targeted plan asset allocation. Consolidated Financial Statements are provided on pages F-1 ments. These judg. active qualified retirement plan in the on assets -. Quantitative and qualitative disclosures about market risk from a best estimate range within the total range of projected Information regarding market risk is provided in this Annual results. A key assumption results” and “Currency exchange rate fluctuations may reduce for the U. Other assumptions and estimates impacting the projected liabilities of these plans include inflation. the Company projects total benefit plan expense to be Assumption Point Obligation Higher/ approximately $8 million lower in 2018 than in 2017. participant withdrawal Item 8. The Company does not expect to recognize any addi- tional settlement charges in 2018. The Company periodically re-balances its plan asset Report on Form 10-K under the following items and captions: portfolio in order to maintain the targeted allocation levels.S. retiree health and life insurance plan is a medical operating results and shareholders’ equity” in Item 1A-Risk cost trend rate beginning at 6.7 $2.9 market performance in 2017 and the $50 million voluntary con. SONOCO 2017 ANNUAL REPORT | FORM 10-K 35 .5% in 2026. The ($ in millions) Change Higher/(Lower) (Lower) decrease is primarily due to greater expected returns on plan assets due to a higher asset base resulting from the strong Discount rate -.settlement payments were funded from plan assets and did not The sensitivity to changes in the critical assumptions for the require the Company to make any additional cash contributions Company’s U.25 pts $46. and in Note 9 to the Consolidated Financial State- estimate of the long-term average annual medical cost increase ments in Item 8 – Financial Statements and Supplementary over the duration of the plan’s liabilities. management. The Company annually data reevaluates assumptions used in projecting the pension and The Consolidated Financial Statements and Notes to the postretirement liabilities and associated expense. Financial statements and supplementary and mortality rates and retirement ages. pro- provided in Note 2 to the Consolidated Financial Statements jected future returns by asset class and active investment included in Item 8 of this Annual Report on Form 10-K. is as follows: in 2017. Partially offsetting this favorable impact. Expected return tribution made to the U.25 pts N/A $2. A third-party asset return model was used to develop an expected range of returns on plan investments over a 12.6 fourth quarter of 2017. Consolidated Financial Statements. The cussion and Analysis of Financial Condition and Results of ultimate trend rate of 4. Selected quarterly financial data is of pension and postretirement plan net assets and liabilities and provided in Note 18 to the Consolidated Financial Statements pension and postretirement plan expenses in the Company’s included in this Annual Report on Form 10-K. 2017. fiscal year based on yield curves of high-quality debt instruments over durations that match the expected benefit payouts of each Recent accounting pronouncements plan.

based on cri. management has excluded Packaging Item 15(a)(2) (collectively referred to as the “consolidated finan. We have served as the Company’s auditor since 1967.S. ended December 31. and performing procedures that respond to those February 28. Our audit of internal control over financial reporting included obtaining an Opinions on the financial statements and internal understanding of internal control over financial reporting. accurately and fairly reflect the transactions Financial Reporting appearing under Item 9A. whether due to Charlotte. 2017. whether due to error or fraud. federal securities laws and the applicable rules and prevention or timely detection of unauthorized acquisition. internal control over finan- of the PCAOB. of the conformity with accounting principles generally accepted in the related consolidated financial statement amounts as of and for United States of America. Definition and limitations of internal control over teria established in Internal Control—Integrated Framework financial reporting (2013) issued by the COSO. Also. procedures that (i) pertain to the maintenance of records that. 2017. including the related notes and As described in Management’s Report on Internal Control financial statement schedule listed in the index appearing under over Financial Reporting. Holdings Inc. respectively. solidated financial statements. in all material respects. for maintaining effective internal erally accepted accounting principles. 2017 and 2016. (ii) provide rea- is to express opinions on the Company’s consolidated financial sonable assurance that transactions are recorded as necessary statements and on the Company’s internal control over financial to permit preparation of financial statements in accordance with reporting based on our audits. comprehensive income. Also in our opinion. based internal control over financial reporting as of December 31. We are a public accounting firm generally accepted accounting principles. (“Clear Lam”) from its assessment of control over financial reporting as of December 31. as well as evaluating the overall Sonoco Products Company presentation of the consolidated financial statements. and whether effective because of changes in conditions. and for its assessment of the control over financial reporting includes those policies and effectiveness of internal control over financial reporting.3%. business combination during 2017. and the related consolidated included performing such other procedures as we considered statements of income. material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstate- ment of the consolidated financial statements. and that receipts and registered with the Public Company Accounting Oversight expenditures of the company are being made only in accord- Board (United States) (“PCAOB”) and are required to be ance with authorizations of management and directors of the independent with respect to the Company in accordance with company. and subsidiaries (“Packaging Holdings”) and Clear cial statements”). maintained. Our audits also December 31. Our audits also included evaluating the accounting principles used and significant esti- F1 SONOCO 2017 ANNUAL REPORT | FORM 10-K .1% and 4. 2017 on criteria established in Internal Control—Integrated Frame. We have also excluded nizations of the Treadway Commission (COSO). control over financial reporting assessing the risk that a material weakness exists. use. North Carolina error or fraud. We conducted our audits in accordance with the standards Because of its inherent limitations. 2018 risks. cial statements for external purposes in accordance with gen- solidated financial statements. effect on the financial statements. revenues excluded from management’s assessment and our and the results of their operations and their cash flows for each audit of internal control over financial reporting collectively of the three years in the period ended December 31. effective internal control over financial reporting as of December 31. form the audits to obtain reasonable assurance about whether projections of any evaluation of effectiveness to future periods the consolidated financial statements are free of material mis. the consolidated financial statements referred control over financial reporting. 2017 in represent approximately 4. Packaging Holdings and Clear Lam from our audit of internal In our opinion. the Company the year ended December 31. cial reporting may not prevent or detect misstatements. Those standards require that we plan and per. evi- dence regarding the amounts and disclosures in the con. changes in total necessary in the circumstances. in all material respects.REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and shareholders of mates made by management. and (iii) provide reasonable assurance regarding the U. 2017. Packaging Holdings and Clear to above present fairly. the financial Lam are wholly-owned subsidiaries whose total assets and total position of the Company as of December 31. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding Basis for opinions the reliability of financial reporting and the preparation of finan- The Company’s management is responsible for these con. 2017 and 2016. and testing We have audited the accompanying consolidated balance and evaluating the design and operating effectiveness of sheets of Sonoco Products Company and its subsidiaries as of internal control based on the assessed risk. because they were acquired by the Company in a purchase work (2013) issued by the Committee of Sponsoring Orga. regulations of the Securities and Exchange Commission and the or disposition of the company’s assets that could have a material PCAOB. are subject to the risk that controls may become inadequate statement. on a test basis. or that the degree of com- internal control over financial reporting was maintained in all pliance with the policies or procedures may deteriorate. 2017. Inc. Our responsibility and dispositions of the assets of the company. We also have audited the Company’s internal Lam Packaging. Such procedures included examining. We believe that our audits pro- equity and cash flows for each of the three years in the period vide a reasonable basis for our opinions. A company’s internal control over financial reporting. in included in Management’s Report on Internal Control over reasonable detail.

092.303 Accrued wages and other compensation 66. Net 1.849 49.721 $3.707.295 224.446 Materials and supplies 277.875 1.380) Retained earnings 2.698 Pension and Other Postretirement Benefits 355.204 127.348.553 Inventories Finished and in process 196.764 1.045 Accrued taxes 8.092 Commitments and Contingencies Sonoco Shareholders’ Equity Serial preferred stock.958 Long-term Deferred Income Taxes 62.175 Capital in excess of stated value 330.241.288.018 205.485 155. no par value Authorized 30.912 $ 257.532.017 Goodwill 1.036.115 Total Assets $4.693 Notes payable and current portion of long-term debt 159.215 Other Intangible Assets. net of allowances of $9.203 The Notes beginning on page F-6 are an integral part of these financial statements.979 18.187 447.226 Trade accounts receivable.831 Accrued expenses and other 217.616 Long-term Debt 1.561 43.429 38.272) (738.175 7.053 42.913 in 2017 and $10.942.411 Other receivables 64.884 in 2016 725.636 1.193 shares issued and outstanding at December 31.554.130 Other Assets 189.563.002 1. Net 331.309 $ 477.377 1. SONOCO 2017 ANNUAL REPORT | FORM 10-K F2 .169. 2017 and 2016.020.060.859 245.513 Total Sonoco Shareholders’ Equity 1.705 Total Liabilities and Equity $4.050 Accumulated other comprehensive loss (666.060 1.327 32.557.970 802.006 1.066 1.721 $3.251 625.730.768 Property.157 321.414 and 99.923.994 22. no par value Authorized 300.923.368 Prepaid expenses 44.347 Total Equity 1.000 shares 99.339 Deferred Income Taxes 74. respectively 7.557.203 Liabilities and Equity Current Liabilities Payable to suppliers $ 548.744 999. 2017 and 2016 Common shares. Plant and Equipment.753 Other Liabilities 110.073 59.358 Noncontrolling Interests 22.337 68. Consolidated Balance Sheets Sonoco Products Company (Dollars and shares in thousands) At December 31 2017 2016 Assets Current Assets Cash and cash equivalents $ 254.000 shares 0 shares issued and outstanding as of December 31.

891) (97.392 Per common share Net income attributable to Sonoco: Basic $ 1.034.646 240. general and administrative expenses 543.208 Equity in earnings of affiliates.74 $ 2. net of tax 59.554 441.580) 7.834 382.37 Consolidated Statements of Comprehensive Income Sonoco Products Company (Dollars in thousands) Years ended December 31 2017 2016 2015 Net income $177.946 Provision for income taxes 146. net of tax (2.46 Diluted $ 1.235 10.447) (488) Other comprehensive loss/(income) attributable to noncontrolling interests (1.292 — Income before interest and income taxes 367.482 Assuming exercise of awards 615 689 910 Diluted 100.782.447 287.369 Cost of sales 4.220 54.624 Net (income) attributable to noncontrolling interests (2.093 101.260 3.44 Cash dividends $ 1.877 $4.170 56.419 42. net — 104.405) (129.54 $ 1.237 101.102) (1. net of tax 9.087.899 252.587 $ 156.964.345 $ 286.105) (956) 4.631 87.447) (488) Net income attributable to Sonoco $ 175.990 152.375 Income before income taxes 314.650 $4.672 506.299 492.108 (32.102) (1.482 11.637 Gain on disposition of business.624 Other comprehensive income/(loss): Foreign currency translation adjustments 89.422 Selling.81 $ 2.782 102.692 $250.475 2.036.83 $ 2.824 Net (income) attributable to noncontrolling interests (2.589 164.454 The Notes beginning on page F-6 are an integral part of these financial statements.924 (9.434 $ 250.852 101.447 $287.800) Comprehensive income/(loss) 323.042 Change in derivative financial instruments. Consolidated Statements of Income Sonoco Products Company (Dollars and shares in thousands except per share data) Years ended December 31 2017 2016 2015 Net sales $5.277 327.881 $ 250.136 Weighted average common shares outstanding: Basic 100.091 810 Other comprehensive income/(loss) 146.241 Restructuring/Asset impairment charges 38.75 $ 2.845.451 4.965 276.426 929. F3 SONOCO 2017 ANNUAL REPORT | FORM 10-K .947 Gross profit 949.881 250.652) Changes in defined benefit plans.46 $ 1.452 (34.577) 31.544 Interest expense 57.613 2.001 496.973 Interest income 4.883 50.118 Comprehensive income/(loss) attributable to Sonoco $320.738 Income before equity in earnings of affiliates 167.416 Net income 177.390 937.

580) Other comprehensive income 146.434 1.554.460 $(702.652 Net income 250.942.560) December 31.003 1.452 145.036.157 $(666.730.534) (4.577) (9.682) (4.175 321.800) (93.922 December 31.091 Shares repurchased (7.042 Derivative financial instruments1 810 810 Other comprehensive loss (97.773) Issuance of stock awards 1.803.091 514 6.380) 1.257 9.851) $1. 2015 $1.050 (738.347 Net income 177.102 Other comprehensive income/(loss): Translation gain 89.488 Impact of new accounting pronouncements — 318 (73.636 Shares repurchased (6.891 $15.272) $2.200) Issuance of stock awards 6.239) 72.175 $ 330.289 December 31.347 1.577) Derivative financial instruments1 7.847 100.118) Dividends (139.179) (106.922 7.847) 956 Dividends (147.091 7.773) (154.924 59.748) (147.105 Dividends (154.118) Defined benefit plan adjustment1 31. Consolidated Statements of Changes in Total Equity Sonoco Products Company Capital in Accumulated Excess of Other Non- (Dollars and shares in Total Common Shares Stated Comprehensive Retained controlling thousands) Equity Outstanding Amount Value Loss Earnings Interests January 1.193 7.175 $ 396.200) (139.335) (120) (6.257 Non-controlling interest from acquisition 7.108 88. SONOCO 2017 ANNUAL REPORT | FORM 10-K F4 .335) Stock-based compensation 13.136 488 Other comprehensive income/(loss): Translation loss (129.868) (173) (7. 2016 $1.361) 956 Defined benefit plan adjustment1 (9.739) Stock-based compensation 19.503.748) Issuance of stock awards 4.447 Other comprehensive income/(loss): Translation gain/(loss) (32.827 $19.739) (2.532.924 Derivative financial instruments1 (2.603 $7.060 99.345 2.980 $(608.944 Net income 287.705 99.652) (125.289 19.447 175.994 1 net of tax The Notes beginning on page F-6 are an integral part of these financial statements.868) Stock-based compensation 9.881 286.580) (2.891) (35.040 Shares repurchased (106.105 Defined benefit plan adjustment1 59.921 Non-controlling interest from acquisition (2.175 $ 404.944 $7.040 428 4.873 100.513 22.560) (2.006 $22. 2017 $1.091 Other comprehensive income/(loss) (34.405) (33. 2015 $1.624 250.488 13.692.533) $1.414 $7.042 31.636 341 1.

049) 4.271 280.373 32.606) (11.182 Principal repayment of debt (217. depletion and amortization 217.922 The Notes beginning on page F-6 are an integral part of these financial statements.624 Adjustments to reconcile net income to net cash provided by operating activities Asset impairment 20.168 Cash and cash equivalents at end of year $ 254.436) — Proceeds from the sale of assets 5.737) Change in assets and liabilities.869) Cash Flows from Financing Activities Proceeds from issuance of debt 448.625 205.719) Gain on disposition of business — (108.679 452.654 3.131 Gain/(Loss) on disposition of assets.792 21. Consolidated Statements of Cash Flows Sonoco Products Company (Dollars in thousands) Years ended December 31 2017 2016 2015 Cash Flows from Operating Activities Net income $ 177.118) Fox River environmental reserves — (1.170 $ 53.913 (17.511 241.398) Inventories (16.364) (138.434 Supplemental Cash Flow Disclosures Interest paid.335) (106.699) — Pension and postretirement plan expense 78.349 Prepaid expenses (110) 5.308 Pension and postretirement plan contributions (108. net 2.530 Investment in affiliates and other 1.739) (7.314) 74.235) (10.257 Equity in earnings of affiliates (9.622 Shares acquired (6.237 (315.122 24.182 213.777 $ 104.324 Net cash provided/(used) by financing activities 203.687 294 (2. net of effects from acquisitions.967 10.043) (1.226 $ 182.913) (186.408 Depreciation. plant and equipment (188.295) Cost of acquisitions.067) (11.161 Loss/(Gain) on adjustment of Fox River environmental reserves — 850 (32. dispositions and foreign currency adjustments Trade accounts receivable (43.716) (36.411 $ 57.518 (163) (684) Cash dividends – common (153.967) 9.561 (Decrease)/Increase in Cash and Cash Equivalents (2.515) (2.695) (3.142) (179.226 182.632) (17.180 21.680) (3. F5 SONOCO 2017 ANNUAL REPORT | FORM 10-K .900) Net increase in commercial paper borrowings 124.281 57.039 14. net of amounts capitalized $ 57.868) Shares issued — — 1.017 7.125 (6.226 5.434 161.672) (15.962 $ 134.416) Cash dividends from affiliated companies 6.289 9.305) (182.358 398.231 8.299 Income taxes payable and other income tax items 70.725) (88.591 (3. net of refunds $ 96.601 Excess tax benefit of share-based compensation — (2.657) Net cash used by investing activities (565.266 Cash and cash equivalents at beginning of year 257.567) Payable to suppliers 4.978) Net cash provided by operating activities 349.032) Excess tax benefit of share-based compensation — 2.447 $ 287.912 $ 257.551 Income taxes paid.356) Effects of Exchange Rate Changes on Cash 10.695 3.335) Other assets and liabilities (27.482) (11.173 (5.741) (192.320) (306.447) Cash paid for disposition of assets — (8.696) (256.009) Tax effect of share-based compensation exercises — 2.622) Net (decrease)/increase in deferred taxes (20.000 — — Net increase/(decrease) in outstanding checks 7.154 (5.742) 15.506 45.771 (5.766) Accrued expenses (14.881 $ 250.773) (44.930 Cash Flows from Investing Activities Purchase of property.180 68.579) (46.137) (146.488 19. net of cash acquired (383.550 12.553) 2.543) Share-based compensation expense 13.

Cascades Sonoco. Summary of significant accounting policies Accounts receivable and allowance for doubtful accounts Basis of presentation The Company’s trade accounts receivable are non-interest The Consolidated Financial Statements include the accounts bearing and are recorded at the invoiced amounts. arrangement exists. value. Inc. If assets become impaired as America (U. The remaining SONOCO 2017 ANNUAL REPORT | FORM 10-K F6 .100 in 2015 are cost method as the Company does not exercise significant included in “Selling. Research and development costs are charged to expense as ny’s 19. approximately 4% of the Company’s net sales in 2017. such as provisions for estimates of sales returns and with an original maturity to the Company of generally three allowances. approximately 7% and 6% of consolidated Conitex Sonoco Holding BVI Ltd. which approximates market. GAAP) requires management to make estimates a result of a restructuring action. A number of liabilities at the date of the financial statements and the significant estimates and assumptions are involved in the reported amounts of revenues and expenses during the report. but in trade account receivable is in question. respectively. Shipping and handling expenses are included in “Cost of sales. the sales price to the customer is fixed or determi. Balance Sheets and totaled $107. first-out (LIFO) method is used for the valu- The Company has rebate agreements with certain custom. estimated fair values reflected in the Company’s Consolidated ship pass to the customer. operations in its Consolidated Financial Statements. 4% in Entity December 31. delivery has occurred or services have been rendered. Estimates and assumptions Restructuring and asset impairment The preparation of financial statements in conformity with Costs associated with exit or disposal activities are recog- accounting principles generally accepted in the United States of nized when the liability is incurred. the Company’s Consolidated Statements of Income. 2017. Actual results could differ from those estimates. Income ments are made as needed to ensure that the account properly applicable to these equity investments is reflected in “Equity in reflects the Company’s best estimate of uncollectible trade earnings of affiliates. Ownership Interest respectively. The last-in. The allow- of Sonoco Products Company and its majority-owned sub.19% ownership in a small paper recycling busi.5% ownership in a small tubes and cores business in incurred and include salaries and other directly related Chile and its 12. The Company’s next largest customer comprised Percentage at approximately 3% of the Company’s net sales in 2017. Cash and cash equivalents nable and when collectibility is reasonably assured. expenses. Cash equivalents are recorded revenue policy and. experience and all available information at the time the esti- mates are made. determination of fair value. $22.0% Many of the Company’s customers sponsor and actively Cascades Conversion. LLC 40. respectively. ance for doubtful accounts represents the Company’s best sidiaries (the “Company” or “Sonoco”) after elimination of estimate of the amount of probable credit losses in existing intercompany accounts and transactions. The allowance for which the Company is not the primary beneficiary. 2017 and 2016. 2017 and 2016. the Company has agreed to partic- Showa Products Company Ltd. These rebates are recorded as reductions of sales and are metal. Research and development Also included in the investment totals above is the Compa.S. and when persuasive evidence of an Financial Statements. Account balances are charged off against of Income. are doubtful accounts is monitored on a regular basis and adjust- accounted for by the equity method of accounting.722 and $106.0% ipate. each customer agreement. 5% in Affiliated companies over which the Company exercised a 2016 and 6% in 2015. therefore. however. if applicable. 30. Provisions are made to the allowance for Investments in affiliated companies in which the Company doubtful accounts at such time that collection of all or part of a shares control over the financial and operating decisions. The aggregate carrying value of equity investments is the allowance for doubtful accounts when the Company reported in “Other Assets” in the Company’s Consolidated determines that the receivable will not be recovered.0% in a limited number of cases. less estimated costs to sell. Accordingly. Receivables from this customer accounted for approximately 4% and 3% of the Company’s total trade accounts receivable at December 31.” and Inventories freight charged to customers is included in “Net sales” in the Inventories are stated at the lower of cost or net realizable Company’s Consolidated Statements of Income. 20.0% 2016. These investments are accounted for under the imately $21. primarily ers. internally manufactured paper and paper purchased from accrued using sales data and rebate percentages specific to third parties. are required in the application of the Company’s months or less when purchased. at December 31. 2017 2016 and 4% in 2015.956 at Sales to one of the Company’s customers accounted for December 31. ation of certain of the Company’s domestic inventories.500 in 2016 and $22. general and administrative expenses” in influence over them. Research and development costs totaling approx- ness in Finland. Certain Cash equivalents are composed of highly liquid investments judgments. 2017 and 2016. 50.0% annual sales were settled under these arrangements in 2017 and Weidenhammer New Packaging. RTS Packaging JVCO 35. included: Consumer Packaging segments. respectively. are included in the results of at cost.000 in 2017. Accrued customer rebates are The LIFO method of accounting was used to determine the included in “Accrued expenses and other” in the Company’s carrying costs of approximately 14% and 19% of total inventories Consolidated Balance Sheets. accounts receivable. Inc. the assets are written down to and assumptions that affect the reported amount of assets and fair value. the amounts that are ultimately real- Revenue recognition ized upon the sale of divested assets may differ from the The Company records revenue when title and risk of owner. 50. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Sonoco Products Company (dollars in thousands except per share data) 1. The Company considers historical ing period.0% promote multi-vendor supply chain finance arrangements and. net of tax” in the Consolidated Statements accounts receivable. primarily in the Display and Packaging and significant influence at December 31.

usually on a straight-line accumulated other comprehensive income to retained earnings basis. and the carrying value of the reporting unit’s In February 2018. total inventory would have been higher by $17. customers served. 2018. environment. segments are the nature of the products and the type of tions of future years’ operating results and associated cash flows. and. The Company uses derivatives to mitigate the effect of fluctua- If the FIFO method of accounting had been used for all tions in some of its raw material and energy costs. which include expect. over their respective useful lives. derivatives are recognized either in net income or in other economic environment. and interim periods within those years. from time to time.” This liability method. and buildings from 15 to 40 years. The Company operations based on the estimated number of units of timber is exposed to interest-rate fluctuations as a result of using debt as cut during the year. respectively. impairment charge is recognized for the excess. Assets and liabilities are of Financial Position at December 31. type and class of customer. first-out (FIFO) Derivatives method. nature of products sold. The Company may from time to time use traditional. Amounts commensurate with the risks inherent in the cash flows. Changes in these assumptions the production processes. 2017. foreign curren- inventories. and nature of the regulatory values. ing the level of detail reviewed by the chief operating decision profit margins. the Company estimated values based on current price and/or rate quotes and uses either a qualitative evaluation or a quantitative test.319 at December 31. The Company may use reviewed for impairment whenever events indicate the carrying foreign currency forward contracts and other risk management value may not be recoverable. Equipment lives generally range instruments to manage exposure to changes in foreign currency from 3 to 11 years. periods during which the hedged forecasted transaction affects rent carrying value. comprehensive income. Amounts in accumulated other comprehensive customer wins and losses. income taxes. Pursuant to U. In performing the impairment test. comparable trading and transaction multiples. metal. and implied fair values from derivative instruments. methods and/or discount rates could materially impact the estimated fair used to distribute products. The quantitative test considers factors income are reclassified into earnings in the same period or such as the amount by which estimated fair value exceeds cur. Of these factors. The discounted estimated cash flows. The Company and $17. Comprehensive Income. depending on the designated purpose talization movement. equipment. The Company records its derivatives as assets or liabilities on stances surrounding individual reporting units or the Company the balance sheet at fair value using published market prices or as a whole. and from time to time when warranted by the facts and circum. purchases commodities such as recovered paper. cash flows and the translation of monetary assets and liabilities on Timber resources are stated at cost.239 from “Accumulated The Company provides for income taxes using the asset and other comprehensive income” to “Retained earnings. The Company evaluates its intangible assets Act. Depletion is charged to the Company’s consolidated financial statements.S. plant and equipment lished with the vendor as part of the purchase process for quanti- Plant assets represent the original cost of land. corroborated by comparable trading and transaction multiples. inventories are determined on the first-in. Under this method. and Consolidated measured using the enacted tax rates and laws that will be in Statements of Changes in Total Equity for the year ended effect when the differences are expected to reverse. 2017. unleveraged interest rate swaps to Goodwill and other intangible assets adjust its mix of fixed and variable rate debt to manage its The Company assesses its goodwill for impairment annually exposure to interest rate movements.632 cies. a source of financing for its operations. Company stock price and market capi. early adoption permitted. and significant of the derivative. The Company elected to early adopt this standard in the fourth quarter 2017 using specific identi- Income taxes fication and as a result reclassified $73. gross profit margins. the Financial Accounting Standards Board goodwill exceeds the implied fair value of that goodwill. capital expenditures and changes maker. If the fair value of a reporting unit exceeds the carrying value of the reporting unit’s assets. F7 SONOCO 2017 ANNUAL REPORT | FORM 10-K . GAAP for accounting for contingencies. the Company believes that the When the Company estimates the fair value of a reporting unit. Projected future cash flows are then discounted to pres. computed under the straight-line The Company may enter into commodity futures or swaps to method over the estimated useful lives of the assets. nature of in working capital requirements. with Company has no intangibles with indefinite lives. December 31. resins and energy generally at market or at fixed prices that are estab- Property. interest rates. It is the Company’s policy not to speculate in compared to prior projections. New accounting pronouncements impairment. If not. The Company’s projections incorporate management’s best Contingencies estimates of the expected future results. information becomes available indicating that losses are prob- ent value using a discount rate management believes is able and that the amounts are reasonably estimable.” which allow a reclassification from Intangible assets are amortized. This update is effective for fiscal years beginning after for impairment whenever indicators of impairment exist. Changes in the fair value of qualitative evaluation considers factors such as the macro. and are manage the effect of price fluctuations. including goodwill. which generally range for stranded tax effects resulting from the Tax Cuts and Jobs from 3 to 40 years. The December 15. Goodwill is not “Reclassification of Certain Tax Effects from Accumulated Other amortized. less depreciation. 2017 and 2016. most significant in determining the aggregation of operating it does so using a discounted cash flow model based on projec. deferred tax assets and reclassification related only to the change in the statutory tax liabilities are determined based on differences between financial rate and affected only the Company’s Consolidated Statement reporting requirements and tax laws. ations related to new and retained business and future operating accruals for estimated losses are recorded at the time margins. buildings and ties expected to be consumed in the ordinary course of business. business strategy changes. so accrued are not discounted. there is no 2. an (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02. Calculated reporting unit estimated fair values reflect a Reportable segments number of significant management assumptions and estimates The Company identifies its reportable segments by evaluat- including the Company’s forecast of sales volumes and prices. current year operating performance as earnings.

the FASB issued ASU 2016-08. recognize the assets and liabilities arising from all leases. In August 2016. The guidance following are the same immediately before and after the is effective for public business entities for fiscal years beginning change: the award’s fair value (or calculated value or intrinsic after December 15. the FASB issued ASU 2016-09. 4) insurance claim settlements. including among others. 7) beneficial interests in securitization trans- a share-based payment award will not be applied if all of the actions. prospective basis. “Scope of Mod. 2017. beginning after December 31. The account- impairment tests in fiscal years beginning after December 15. This update also allows only the service cost has elected to recognize forfeitures prospectively as they occur component to be eligible for capitalization when applicable and beginning January 1. of $318 for the elimination of estimated forfeitures associated side a subtotal of income from operations. ing for lessors does not fundamentally change except for 2019. The recognition prohibition was an related to the assessment of hedge effectiveness. “Revenue from amendments should be applied retrospectively for the pre. 5) life insurance award require an entity to apply modification accounting under settlements. with early adoption permitted in any interim does not expect the implementation of ASU 2016-16 to have a period after issuance of this update. Principal versus Agent Consid- sentation of the components of net benefit cost in the income erations (Reporting Revenue Gross versus Net). goods or services to a customer. “Intra-Entity a material impact on its Consolidated Statement of Financial Transfers of Assets Other Than Inventory.” providing clar- consolidated financial statements. prepayment or debt extinguishment costs.” which requires an employer to on a prospective basis within the operating section of the con- report service cost in the same line item as other compensation solidated statement of cash flows for 2017. While the new guidance does not change cial statements. elect early adoption of the standard effective January 1. 2018. and 8) separately identifiable cash flows. the FASB issued ASU 2016-15. excess tax benefits have also been recognized Postretirement Benefit Cost. and should be applied on a changes to conform and align guidance to the lessee guidance. Under ASU which changes accounting for leases and requires lessees to 2017-04. In August 2017. aligns the recognition and pre. the FASB issued ASU 2016-02. with early adoption permitted. The Company December 15. 2) settlement of rela- ification Accounting. “Improving the income statement during 2017. the FASB issued ASU 2016-16. is effective for periods beginning after December 15. This update is Accounting. the components of net benefit cost as defined are required to be Company recorded a cumulative charge to retained earnings presented separately from the service cost component and out.” eliminating the requirement in the same time frame as ASU 2014-09 as discussed below. The Company or disclosed. if one is presented. 2017. still assessing the impact of ASU 2016-02. resulted in the recognition of $2. The Company does not expect the basis based on the determination of whether an entity is a implementation of ASU 2017-07 to have a material effect on its principal or an agent when another party is involved in providing consolidated financial statements. eliminating the current recognition exception. Contracts with Customers. 2017. and the award’s classification as an equity or ASU 2016-15 to have a material effect on its consolidated finan- liability instrument. it is intended to reduce diver. In accordance with the provi- Presentation of Net Periodic Pension Cost and Net Periodic sions of this ASU. “Classification The adoption is not expected to have a material effect on its of Certain Cash Receipts and Cash Payments. with early adoption permitted in any interim period after issu. The update to exception to the principle of comprehensive recognition of the standard is effective for periods beginning after current and deferred income taxes in GAAP. the FASB issued ASU 2017-04. The In March 2016. 2018. with the Company’s share-based compensation. 2018.” which entity to recognize the income tax consequences of an intra- expands and refines hedge accounting for both financial and entity transfer of an asset upon transfer other than inventory.” which provides guidance about which tively insignificant debt instruments. In March 2016. 2017. the FASB issued ASU 2017-07. The other financing section. Any future goodwill December 15. 2017 material effect on its consolidated financial statements. non-financial risk components. 6) distributions received from equity method Topic 718.” which impacts several aspects of the accounting effective for annual periods. The standard in the fourth quarter 2017. Pursuant to adoption of the new ASU. the accounting for modifications. includ- ing the fair value of the reporting unit with its carrying amount ing those classified as operating leases under previous account- and recognizing an impairment charge for the amount by which ing guidance on the balance sheet and requires disclosure of the carrying amount exceeds the reporting unit’s fair value. The amendments in this In January 2017. but expects it to have In October 2016. The Company intends to material effect on its consolidated financial statements. Prior to this ASU. SONOCO 2017 ANNUAL REPORT | FORM 10-K F8 .” which provides statement and prospectively for the capitalization of the service guidance on recording revenue on a gross basis versus a net cost component. The Company is with this ASU. the award’s years. sentation of the effects of hedging instruments and hedge items GAAP prohibited the recognition of current and deferred in the financial statements. The Company intends to elect early adoption The guidance is effective for reporting periods beginning after of the standard effective January 1. The adoption did not have a Company’s adoption of this update effective January 1. including interim periods within those fiscal impairment. modification accounting to investees. and interim periods within those fiscal value. 2018.” effective for periods Position. ASU 2016-16 requires an Improvements to Accounting for Hedging Activities. “Targeted beginning after December 15.453 of excess tax benefits in the In March 2017. the FASB issued ASU 2017-09. rather than the costs arising from employees during the period. The Company elected to early adopt the income and cash flows and accounting for forfeitures. for share-based payment transactions. if those measurement methods are used). should it occur. 3) contingent consideration changes to the terms or conditions of a share-based payment payments. the classification of excess tax benefits in the statements of ance of this update. “Simplifying update affect the guidance in ASU No. The Company does not expect the implementation of vesting conditions. 2014-09 and are effective the Test for Goodwill Impairment. will be determined in accordance years and requires retrospective application. including 1) debt In May 2017. “Leases” reporting unit to measure goodwill impairment. and includes certain targeted income taxes for intra-entity asset transfers until the asset was improvements to ease the application of current guidance sold to an outside party. goodwill impairment testing is performed by compar. the FASB issued ASU 2017-12. 2017. to determine the fair value of individual assets and liabilities of a In February 2016. The key information about leasing arrangements to increase trans- new standard is effective for annual and interim goodwill parency and comparability among organizations. ification on eight cash flow classification issues. Under the new guidance. sity in practice and result in fewer changes to the terms of an “Improvements to Employee Share-Based Payment award being accounted for as modifications.

500 is barrier flexible and forming films used to package a variety of expected to be deductible for income tax purposes.673 Actual net income $ 3. The fair values of the assets acquired and liabilities without alternative use and would be entitled to payment for assumed in connection with the acquisition of Packaging Hold- work completed.394) at December 31. Inventories 42. property. prepared salad mixes. there Property.042 pending adoption that are expected to have a material impact Net assets $218.000 three-year term loan which was compared to current standards for those arrangements under subsequently repaid with proceeds from the $250. property. other intangible assets. ASU 2014-09 changes the manner in On March 14. the Company completed the acquisition which variable consideration is recognized. The Company the business will operate as the Peninsula brand of thermo- financed a portion of the transaction with $100. includ- quantification of the impact of ASU 2014-09 on its consolidated ing four in the United States and one in Mexico. the Company completed the acquisition of based on new information obtained about facts and circum- Clear Lam Packaging.190 material impact on the Company’s financial statements. purchase price funded from available short-term credit facilities. ASU 2014-09 is effective for packaging for a wide range of whole fresh fruits. 2017. 2017. China. include increased access to certain mar- Contracts With Customers. provides clarification on accounting for contract costs. which is expected to be completed by intangible assets. including Peninsula of the time value of money when payment terms exceed one Packaging LLC (“Packaging Holdings”). a Other intangible assets 60. Acquisitions and dispositions Subsequent to acquiring Packaging Holdings. formed packaging products within the Company’s global plas- ings from a $250. plant and equipment. plant and equipment 53. plant and equipment. “Revenue From income tax purposes. or are expected to have. trol. Factors com- prising goodwill.415 ning balance of retained earnings will be approximately $5.575 Packaging Holdings and Clear Lam Inventories 25.000 five-year term loan with the remaining tics division. and capital leases.” which changes the definitions/ kets as well as the value of the assembled workforce. Illinois. Goodwill 67.774 on the Company’s consolidated financial statements.886 Goodwill 52.959 Other than the pronouncements discussed above. Clear Lam manufactures high Factors comprising goodwill. Packaging Holding’s financial results are used for perishable foods. it expects the adoption to financed the transaction with a combination of cash and have the effect of accelerating the timing of revenue recognition borrowings. retailers increased access to certain markets as well as the value of the and other industrial manufacturers. (“Clear Lam”) for $164. net of cash year. Final consideration will be subject to an adjust. and capital leases. the FASB issued ASU 2014-09. Packaging Holdings manufactures thermoformed expands disclosure requirements. Trade accounts receivable $ 14.813) Other net tangible assets /(liabilities) (10. requires recognition of Packaging Holdings. deferred income taxes.924) Net assets $164. but not limited to: inventory.000 term loan which the Company is producing customer-specific products noted above. as well as baked goods in the Company will not complete its final assessment and retail supermarkets from five manufacturing facilities. unaudited finan- The provisional fair values of the assets acquired and liabilities cial results for Packaging Holdings and Clear Lam from their assumed in connection with the acquisition of Clear Lam are as respective dates of acquisition: follows: Aggregate Supplemental Information (unaudited) Clear Lam: 2017 Trade accounts receivable $ 11. The following table presents the aggregate. other ment for working capital.775 ing pronouncements that have had. the Company Acquisitions continued to finalize its valuations of certain assets and liabilities On July 24. and acquired. Trade accounts payable (22. and Nanjing. with a focus on structures assembled workforce. including a $150. The Company financial statements until adoption. 2017. pre-cut fruits reporting periods beginning after December 15. Packaging segment. It has production facilities in Elk included in the Company’s Consumer Packaging segment and Grove Village.933 Actual net sales $215.907 Other intangible assets 77. Although and produce. 3. limited to: inventory. but not cash acquired. all of which is expected to be deductible for F9 SONOCO 2017 ANNUAL REPORT | FORM 10-K . of which approximately $30. there were no other pronouncements Other net tangible assets /(liabilities) 2. the Company continued to finalize its valuations of certain assets and liabilities based on new information obtained about facts and circumstances that existed as of the acquisition date including.951 Subsequent to acquiring Clear Lam.000.951. Among other changes.227 Property. plant and equipment 25. including a reasonable margin. and subsidiaries. In May 2014. include products for consumer packaged goods companies. Inc. Clear criteria used to determine when revenue should be recognized Lam’s financial results are included in the Company’s Consumer from being based on risks and rewards to being based on con. 2017.787 have been no other newly issued nor newly applicable account. deferred income taxes.600 Trade accounts payable (17.774. net of stances that existed as of the acquisition date including. for $218. the end of the first quarter of 2018. Further. Inc. The Company ings are as follows: plans to adopt ASU 2014-09 in the first quarter of fiscal 2018 following the modified retrospective transition method and Packaging Holdings: estimates the impact of the transition adjustment on the begin.000 in borrow.

447 was paid in cash. of which $17.756. plant and equipment by $400. a chase price of the business was $863. measurement period adjustments were made and Industrial Converted Products segment. and goodwill of $417 izes in short-run. con- On September 19. the Company recorded net tangible assets part of the Company’s Consumer Packaging segment.K. licenses.040. the Company completed the acquisition of a employees.697. force.000 that was paid 12 months from the closing date. net of cash acquired.69 of the temperature-controlled cargo container assets. 2016 and 2015.184. 2016. 2015. intangibles of $18. brands in markets including food products.912 none of which is Graffo. held specialty medical products company based in the U.080. general and administrative expenses” in the Compa- Czech Republic. decreased deferred tax liabilities by $487.100. pharmaceutical and include the ability to leverage product offerings across a tobacco markets in Brazil with approximately 230 employees. aggregate cost of $21. broader customer base and the value of the assembled work.000 payable 24 months from the closing date.C.066 $5. the Company initially recorded net tangible is considered individually material. plant and equipment by $161. As a result.900. and goodwill of $25. Pro forma information $1.205 $ 271.000. $4. (“PPI”). and manufacturing rights from AAR Corporation. The effect for any future synergistic benefits that may result from non-contingent deferred payments are due in two installments.850. $500 due 36 months from the clos- fair value adjustments to acquisition-date inventory ing date and $500 due 48 months from the closing date. and operations with those of the Company.492 Net income attributable to Sonoco $ 178. identifiable intangibles of $5. The Company completed two acquisitions during 2015 at an fection. which is accounted for as part of the Company’s Protective Sol. and though having been incurred on January 1. The contingent to the previously disclosed provisional fair values of PPI’s net liability payment of $1. 2016. a privately ny’s Consolidated Statements of Income. respectively. Total consideration paid for Graffo was approximately $18. The acquired based on information obtained about facts and Company will manufacture these wood plugs at its existing circumstances that existed as of their respective acquisition facility in Hartselle. which is part of the Company’s Consumer Packaging expected to be tax deductible. value. including Company finalized its valuations of the assets and liabilities cash of $1. net of cash acquired. pet products. Founded in 1957. The 2017 2016 measurement period adjustments to the previously disclosed provisional fair values of Laminar’s net assets decreased goodwill Consolidated by $326. Company finalized its valuations of the assets and liabilities acquired based on information obtained about facts and circum- Pro Forma Supplemental Information (unaudited) stances that existed as of their respective acquisition dates. PPI. and decreased Net sales $5.67 trademarks. Factors ny’s estimated pro forma consolidated results for 2017 and 2016. sisting primarily of legal and professional fees. con. as well as the value of the assembled workforce. 2016. the Company expects to be met. the Company completed the acquisition Pro forma basic $ 1. which is accounted for as part of the acquisitions of Packaging Holdings and Clear Lam. purchase liability is based upon a highly attainable metric which amortization. the second anniversary of the acquisition. dairy. ness combinations under the acquisition method of accounting.654.749 property. 2016. a flexible packaging business located in Brazil. all of which will be tax deductible. facturing facilities in North Carolina with approximately 170 On April 1. Company’s expected results of any future period and gives no and a contingent purchase liability totaling $1. the Company acquired the high- was based on the Company’s preliminary estimates of their fair density wood plug business from Smith Family Companies. comprising goodwill include increased access to certain markets assuming both acquisitions had occurred on January 1. the Company of a small tube and core business in Australia. upon assets that increased identifiable intangibles by $1. which is Products segment. The initial allocation of the purchase price of PPI to the including cash of $15. Inc.77 $ 2. The all-cash pur- completed the acquisition of Plastic Packaging Inc. tion of the purchase price of Laminar to the tangible and poses only and is not necessarily indicative of the results of intangible assets acquired and liabilities assumed was based on operations that would have been achieved if the acquisitions the Company’s preliminary estimates of their fair value.143. from Clinimed (Holdings) Limited. On November 1. interest expense. and decreased goodwill by $1. the Total consideration for the acquisition was $2. identifiable intangibles of $297.000. tangible and intangible assets acquired and liabilities assumed On September 21. identifiable A (“Graffo”).334.201. and health and personal care. the Company 67% controlling interest in Graffo Paranaense de Embalagens S/ initially recorded net tangible assets of $22. and assumed debt of $2. based on had been completed as of the beginning of 2016.345 and non-recurring expenses related to payable in two installments.000.808 none of which is expected to be tax deductible.201.-based flexible packaging company acquisition. Factors comprising goodwill segment. the Company completed the acquis. The initial alloca- This pro forma information is presented for informational pur. consolidating these subsidiaries or costs from integrating their $1. serves the confectionery. The contingent for both 2017 and 2016 includes adjustments to depreciation. which is part of the Paper and Industrial Converted for $67. Although neither of the acquisitions completed during 2017 utions segment. customized flexible packaging for consumer none of which is expected to be tax deductible. $8. Earnings per share: On August 30.400. incurred in 2017. Acquisition. goodwill of $1. N. they are considered material assets of $2. are included in ition of Laminar Medica (“Laminar”) in the United Kingdom and “Selling. of $149. identifiable intangibles of $4. including cash The pro forma information above does not project the paid of $3. and income taxes.739. 2015.569 and $1. increased the Acquisition-related costs of $8. In conjunction with this acquisition. for The Company has accounted for these acquisitions as busi- $17.637. The acquisition is part of the Paper dates.100 was paid in September 2017. the necessarily indicative of future consolidated results. the Company recorded net are excluded from 2017 pro forma net income and reflected as tangible assets of $200. The contingent liability is related costs of $4. 2016.568. increased property. non-contingent deferred payments of $2.78 $ 2.750 and a contingent purchase liability of $1. Pro forma diluted $ 1. During 2017. The following table presents the Compa.663 were deferred tax liability by $599. and goodwill of on a combined basis. in accordance with the business combinations subtopic of the SONOCO 2017 ANNUAL REPORT | FORM 10-K F10 . These costs. nor are they information currently available at that time.700. In rela- of $5. special. The Company completed four acquisitions during 2016 at a On June 24. PPI operates two manu. In conjunction with this privately held Hickory. These costs Protective Solutions segment. 2016. the Company completed the acquisition net cash cost of $88.632.100. Total consideration for this business was $6. In conjunction with this acquisition.000. based on information currently available. During 2017.750 were recognized in 2017 in connection with the tion to this acquisition. Alabama.

775 held in escrow pending (part of the Protective Solutions segment) and five tubes and resolution of a contingency. The Company believes that On November 7.329 net of tax — — — Cash payments (6. Actions initiated prior to 2016. plant and equipment of were eliminated throughout 2017 in conjunction with the $41. food and beverage markets and consisted of seven manufactur- ing facilities (six in the U. Accounting Standards Codification and. Corporate 452 452 sequently.419 $42.570 7. Con.951) 636 (3.284 $35. ture. Consumer Packaging $ 4.479 2016 are reported as “2017 Actions” and “2016 Actions. the sale did not meet the criteria for reporting as a Asset Impairment/Disposal of discontinued operation. acquisition. During 2017.202 $ 27. goodwill of Company’s ongoing organizational effectiveness efforts. recognition of a gain on the disposition of $104. and one in Canada).102 F11 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K .398 1. Income tax benefit (13.817 at closing with another $7.031. recognized during the periods Total Charges and Adjustments $15. its targeted growth busi.883 $ 50.065 Accrual Activity Benefits of Assets Costs Total Restructuring/Asset impairment Liability. 2017 actions imately 850 employees.997 — and Impairment/ 2015 and Earlier Actions 2.001 1.935 32. including its manufacturing capacity. Actions initiated in 2017 and Consumer Packaging 879 1. and temperature-assurance packaging. with approx.735.502) Restructuring cost/(benefit) Asset write downs/ attributable to disposals — (1. approximately 255 positions accounts payable of $18. The Company expects to recognize future additional costs totaling approximately $3. Foreign currency net of tax (71) (161) (93) translation 40 — (2) 38 Total impact of restructuring/ Liability.494.127 3.329 $ — $ — Severance Asset 2016 Actions 1. the Company announced the closure of an $280.018 represent a strategic shift for the Company that will have a major Protective Solutions 1. charges $ 38. net December 31. accordingly. Disposal-related costs totaled $4.” Protective Solutions 742 742 Following are the total restructuring and asset impairment Corporate (9) (9) charges. In addition. and Company wrote off the following assets and liabilities: trade one in China (all part of the Paper and Industrial Converted accounts receivable of $35. and Severance and Termination Benefits provide resources to further enhance.800 1.941 Display and Packaging 741 741 nesses. resulting in the type incurred and estimated to be incurred through completion.585 2. The decision to sell the blow molding oper- ations was made in order to allow the Company to focus on.629 presented: The following table sets forth the activity in the 2017 Actions Year Ended December 31 restructuring accrual included in “Accrued expenses and other” 2017 2016 2015 on the Company’s Consolidated Balance Sheets: Restructuring/Asset impairment: 2017 Actions $ 15.269 38.489 respectively.251 “2015 and Earlier Actions.398 effect on the entity’s operations and financial results. and identifiable intangibles (primarily customer lists) of Below is a summary of 2017 Actions and related expenses by $14. inventory of $14. end of 2018. net of adjustments.191 $ 5.329 $18.700. Restructuring and asset impairment Products (95) (95) Protective Solutions 871 871 The Company has engaged in a number of restructuring Other Costs actions over the past several years. The selling price was approximately During 2017.520) (22. property. 2016 the Company completed the sale of the majority of these charges will be incurred and paid by the its rigid plastics blow molding operations to Amcor Rigid Plas. In conjunction with the sale.402 15.617 12. with the Company receiving net cash proceeds of expanded foam protective packaging plant in the United States $271. are reported as Products 1. 2017 charges 10. LLC and Amcor Packaging Canada. Estimated being released to the Company and no additional gain on sale 2017 Actions 2017 Total Cost being recorded.600 in connection with previously Dispositions announced restructuring actions. of tax $ 25.187) (9. $76. one in Belgium.000.763) noncontrolling interests. asset impairment charges.018 4.” Display and Packaging 789 1. all of which were Paper and Industrial Converted substantially complete at December 31. the contingency was resolved with no additional proceeds Year Ended December 31. The Company continually evaluates its cost struc- tics USA. Inc. and additional ations manufactured containers serving the personal care and restructuring actions are likely to be undertaken.763) — (1. trade Products segment). The sale did not Products 4.637 December 31.S. included in “Restructuring/Asset impairment charges” in the solidated statements of net income from the respective dates of Consolidated Statements of Income.903 2017 $ 3. including flexible packaging. There were no dispositions in 2017 or Assets 2015. Consumer Packaging 351 351 Paper and Industrial Converted 4.064) (7.641) 2016 $ — $ — $ — $ — Equity method investments.292.889 $ — $ 213 $ 4.435. the cores plants—three in the United States. has Pretax restructuring and asset impairment charges are included their results of operations in the Company’s con. 2017. thermoformed rigid plas- Paper and Industrial Converted tics.210. other net tangible liabilities totaling $499. These oper.572 2017 Actions Termination Disposal Other Other asset impairments 18.407.

property taxes and insurance.384) During 2016. 2015 $ — $ — $ —$ — The Company expects to pay the majority of the remaining 2016 charges 14. December 31. nation of approximately 180 positions. and completed the sales of a paper mill in France Asset write downs/ (part of the Paper and Industrial Converted Products segment) disposals — (141) (253) (394) and a retail security packaging plant in Puerto Rico (part of the Foreign currency Display and Packaging segment). (payments) (11.564 included net fixed assets of $217.887 6. the Company translation 14 — 35 49 continued to realign its cost structure.384) — (8.935 in Brazil (part of the Display and Packaging segment).300 13. on the Company’s Consolidated Balance Sheets: tective packaging plant in North Carolina.215.304 4.394) (4. Liability. and a fulfillment service center 2017 charges 493 141 1. Accrual Activity Benefits of Assets Costs Total sures including equipment removal. and one in Switzerland (all part of the Paper and Industrial Converted Products Liability. Included in “Asset Impairment/Disposal of Assets” above is The following table sets forth the activity in the 2016 Actions a loss of $1.465 32. Also included in “Asset Consumer Packaging $ 34 $ 2. In addition. Liability.997 2017 Actions restructuring costs by the end of 2018 using cash Cash receipts/ generated from operations.947.198 segment).255 4.935 $32. The Severance Asset Company received proceeds of $636 from the sale of these and Impairment/ buildings and wrote-off assets of $525. utilities.706 2.255 of a retail security packaging business in Puerto Rico in July Paper and Industrial 2016.988) were recognized from Display and Packaging 96 2.564 1. receipts (3. Additional disposals Consumer Packaging — (306) (306) (306) of fixed assets totaling $(13. which includes the payment of $8.385) Asset write downs/ 2016 actions disposals — (8.694 from the sale of a paperboard mill in France in Total May 2016. Assets written off in connection with the sale Protective Solutions — 678 678 678 Corporate 14 1. Included in “Asset Impairment/Disposal of Assets” above is Year Ended a loss of $12. one in Canada. The Adjustments — — — — Company also began manufacturing rationalization efforts in its Cash (payments)/ Reels division (part of the Paper and Industrial Converted Prod.997 $34.345 13.201.826 15. goodwill of $1.301 1.057.808 restructuring actions initiated in 2016. December 31.852) ucts segment).436 of cash December 31. and a net gain of $111 relating primarily to the sale of two vacated buildings.816 from the sale Converted Products 494 5.550 1. Consumer Packaging 59 731 790 790 The Company expects to pay the majority of the remaining Display and Packaging 388 286 674 674 2016 Actions restructuring costs by the end of 2018 using cash Paper and Industrial generated from operations. and other tangible assets. and other Disposal of Assets intangible assets (customer lists) of $1. Converted Products 804 1. Other Costs utilities.244) (7.345 costs related to plant closures including equipment removal. The Company received proceeds of $1. one in Ecuador.298 2. of $858.558 $ — $ 640 $ 4. 2017 $ 607 $ — $ 329 $ 936 Below is a summary of 2016 Actions and related expenses by type incurred and estimated to be incurred through completion. Termination Benefits net of liabilities disposed.458) — (1.441 Impairment/Disposal of Assets” is a loss of $2.381 of this business. 2016 $ 3. Other assets divested in connection with the sale Severance and included net fixed assets of $3.808 2. Paper and Industrial “Other Costs” in both 2016 and 2017 consist primarily of Converted Products 45 13. plant security. December 31. 2016 Actions Termination Disposal Other “Other costs” consist primarily of costs related to plant clo.102 2.238 primarily related to the impairment of fixed restructuring accrual included in “Accrued expenses and other” assets resulting from the closure of an expanded foam pro.421 from the sale Display and Packaging (49) 4.932 $34.932 SONOCO 2017 ANNUAL REPORT | FORM 10-K F12 . other tangible assets.322) (1. a packaging services center in Mexico (part of the Display and Packaging segment). property taxes and insurance. of $1. net of Asset Impairment/ liabilities disposed.819) (20.712 2. resulting in the elimi.102 Protective Solutions 50 150 200 200 Total Charges and Adjustments $1. plant security.441 $ 2. Incurred to Estimated required in order to consummate the disposition with the 2016 Actions 2017 2016 Date Total Cost acquiror.407 $ 2. the Company initiated the following actions: Foreign currency the closure of four tubes and cores plants—one in the United translation (24) — (6) (30) States.381 6.

200 unit had become impaired as a result of the continued deterio- 2016 charges 5. Assets and expects to pay the majority of the remaining 2015 and Ear- Consumer Packaging (1.608 $ — $ — $ 3. the Company used Venezuela’s official translation (217) — 5 (212) exchange rate to report the results of its operations in Ven- Liability. was recognized during the (payments) (15. Benefits “Other Costs” in both 2016 and 2017 consist primarily of Consumer Packaging $ 1. Year Ended December 31. 2016 $ 3.608 avoid distortion of its consolidated results from translation of its 2017 charges 1. Paper and Industrial Converted “Adjustments” in 2017 relate primarily to revisions to Products 249 (6) 8. the use of the significantly higher SIMADI Liability.108 against inventories and certain long-term nonmonetary assets as the U. was determined to Paper and Industrial Converted have been rendered obsolete by the Company’s new biomass facility and is scheduled for closure at the end of the first quarter Products 631 522 1. and to December 31. Foreign currency Prior to July 1. dollar carry- F13 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K . which is part of the Paper Display and Packaging 6 206 372 and Industrial Converted Products segment.S.773) — (1. Included in “Asset Impairment/Disposal of Assets” in 2017 is a gain of $2.109) appropriate time to begin translating its Venezuelan operations Cash receipts/ using an alternative exchange rate.822. plant security. the Company concluded that it was an Adjustments (596) — (513) (1. 2015. the disposition of a paper mill facility in Pennsylvania.340) ment testing. the Company began translating its Venezuelan operations disposals — (1. the Company Protective Solutions 129 187 532 recognized a pretax asset impairment charge of $17.S. This resulted translation 265 — 123 388 in a foreign exchange remeasurement loss on net monetary assets.921 (1. As a result of significant inflationary increases.S. rate resulted in the need to recognize impairment charges December 31.741 and wrote off assets of $719. the Company has recognized foreign exchange and Impairment/ remeasurement losses on net monetary assets of $425.085 13.730 $ — $ 470 $ 16.365 ration of economic conditions in Brazil. dollar carrying val- Severance Asset ues.828) (2. In addition. Accordingly. dollar value of the projected cash flows from these assets was no longer sufficient to recover their U. In addition.729 reserves for remaining severance payments and future building Protective Solutions — — 25 rental costs. downs related to the closure of a rigid paper plant in Man- chester.377) 1.570 $7.269 $38. The facility. 2015 and Earlier Actions Termination Disposal Other During the Company’s 2016 annual goodwill impairment Accrual Activity Benefits of Assets Costs Total testing. an impair- Adjustments (1.221) (6. 2015 and earlier actions Included in “Asset Impairment/Disposal of Assets” in 2016 2015 and Earlier Actions are comprised of a number of plant were the proceeds and gain from the sale of an asset related to closures and workforce reductions initiated prior to 2016. 2015 $ 15. England. As a result of the continued devaluation of the Venezuelan Bolivar in 2017.124) 2. Also Below is a summary of 2015 and Earlier Actions and related included in 2016 were asset impairment charges and asset write expenses by type incurred. ezuela.360 of 2018. the Company recognized impairment charges The following table sets forth the activity in the 2015 and Ear- against inventories and certain long-term nonmonetary assets lier Actions restructuring accrual included in “Accrued expenses totaling $338.617.778) 2. effective July 1. in Total Charges and Adjustments $ 2. Corporate 6 (19) 2. Paper and Industrial Converted Products 263 190 10.561 949 1.840 3. Accordingly.S.096) ment charge totaling $2. 2017 $ 1.022 from the sale of the land and building of a rigid 2015 and Earlier Actions 2017 2016 2015 paper plant in Manchester.339) (15.876) (999) (3.572 December 2017. As a result of the pending closure.490 manufacturing complex.154 (2. England (part of the Consumer Packaging segment).987 (1.486 $ — $ 622 $ 2. The Company received Severance and Termination proceeds from the sale of $2. the entire amount of goodwill Cash receipts/ associated with this reporting unit.303) lier Actions restructuring costs by the end of 2018 using cash Display and Packaging (6) 335 474 generated from operations. Display and Packaging 83 97 994 utilities.309) third quarter of 2016.148) 2.658 (4. management concluded that goodwill associated with Liability. the Company recognized Other Costs the impairment of a power generating facility at its Hartsville Consumer Packaging 1. No other impairments were identified Asset write downs/ during this most recently completed annual goodwill impair- disposals — (4.775 The Company expects to recognize future pretax charges of Asset Impairment/Disposal of approximately $300 associated with 2015 and Earlier Actions.053 $3. the Paper and Industrial Converted Products—Brazil reporting December 31.147 $15.883 costs related to plant closures including equipment removal.685) Asset write downs/ 2015.679 Venezuelan operations. (payments) (3. which Corporate — — 11 includes the remaining net book value of the facility.095 3. property taxes and insurance.340) — (4.773) using the most current published Venezuelan exchange rate Foreign currency (which at that time was known as the SIMADI rate). dollar value of projected future cash flows from these assets was no longer sufficient to recover their U.097 Other asset impairments Protective Solutions (28) 3 133 During the fourth quarter of 2017.185 5. The assets were deemed to be impaired as the and other” on the Company’s Consolidated Balance Sheets: U.

300.682 of security interest in the cash deposits.441 Goodwill is tested for impairment using either a qualitative Buildings 502. respectively.800 in 2016 and Management’s projections related to revenue growth and/or $72. currency The Company uses a notional pooling arrangement with an translation 17. Property.404 and quantitative factors in determining goodwill impairment. Future minimum and associated cash flows. respectively.682 December 31.664 41.645 — 11. implied fair values from comparable trading and transaction net $ 1.753 siders factors such as the macroeconomic environment. As 2017 2016 part of this testing. capital expenditures construction totaled approximately $79. recognized in the third quarter of 2015. 2017 $435. When the Company estimates the fair in 2017.060. Balance as of Under this pooling arrangement.046 478. The changes in the carrying amount of goodwill by segment These asset impairment charges are included in for the year ended December 31. which include expectations related to new busi- thereafter – $32.622 2. acquisition of Laminar Medica totaling $(1. When calculated. it does so using a discounted cash flow The Company has certain properties and equipment that are model based on projections of future years’ operating results leased under noncancelable operating leases. the Company analyzed certain qualitative Land $ 87. improvement in general economic con- ditions.924 evaluation or a quantitative test.215 addition.201) — — (326) (1. The 3.795 1. and customer retention.775 was recorded in connection with the cash deposits against the borrowings. improved price/cost.236) (2. assumptions and/or discount rates could materially impact the Depreciation and depletion expense amounted to $178. current year depletion (2. 2019 – incorporate management’s best estimates of the expected $38. plant and equipment at stances surrounding individual reporting units or the Company December 31 are as follows: as a whole. In January 1.400 in 2015.613 3.343 and $10.ing values. Total rental expense under operating ness. and Property. Because it maintains a Acquisitions in 2017 resulted in the addition of $120.377 $ 1. Goodwill and other intangible assets and remeasurement loss was $12. Inc. Paper and Display Industrial 5. The qualitative evaluation con- Machinery and equipment 2.000 at December 31.878 $ 84. $71.700 and future results. value of a reporting unit.967 $1.403 113.065 30. The combined impact of the impairment charges 7.907 Company and its participating subsidiaries favorable interest was recorded in connection with the July 2017 acquisition of terms on both. together with comparable trading rentals under noncancelable operating leases with terms of and transaction multiples. so long as the aggregate position of the global pool is a notionally calculated net cash deposit. where applicable.118 pany stock price and market capitalization movement. 2017. improved operating margins.527) “Accrued wages and other compensation” on the Company’s Foreign Consolidated Balance Sheets. were included in “Payable to Balance as of suppliers” on the Company’s Consolidated Balance Sheets.500.017 multiples. 2020 – $30.900 in 2017. Changes in these 2017. income taxes. and has the right to offset goodwill.414 $233. were included in Other (1. Timber resources 41.716 $203.295.241. 2017 and 2016. Com- Construction in progress 143. In addition to these acquisitions. participating subsidiaries may maintain either cash deposit or 2017 $572.065 on both a before and Goodwill after-tax basis.400. the bank provides the the March 2017 acquisition of Packaging Holdings and $52. The Company’s projections more than one year are as follows: 2018 – $46. outstanding payroll checks of $259 and $11 as of Acquisitions 120. product expansion. and changes in working capital requirements.049 estimated fair values.871.328 and $2. productivity gains. margin improvements arise from a combination of factors. Projected future cash flows are then discounted to present value SONOCO 2017 ANNUAL REPORT | FORM 10-K F14 . reporting unit estimated fair values reflect a number of significant management assumptions and estimates including the Company’s forecast of sales volumes Estimated costs for completion of capital additions under and prices. Book overdrafts and cash pooling Consumer and Converted Protective At December 31.400. See Note 3 for additional information. 2017 and 2016. $173. The Company completed its most recent annual goodwill impairment testing during the third quarter of 2017.983 $231.477.295 in 2016 and $179. the Company made reflect a net cash deposit under this pooling arrangement of small adjustments to the goodwill related to the November 2016 $3. respectively. profit margins. and. The Company assesses goodwill for impairment annually and 6.640 quantitative test considers factors such as the amount by which Accumulated depreciation and estimated fair value exceeds current carrying value. The Company’s Consolidated Balance Sheets Clear Lam.637. 2017 and 2016. including expectations for volume growth with existing custom- ers. business strategy changes. fixed cost leverage.201) and $(326). $67. leases was approximately $68. outstanding checks totaling Packaging Packaging Products Solutions Total $17. 2021 – $21. 2022 – $17. and significant customer wins and losses. plant and equipment. are as follows: “Restructuring/Asset impairment charges” in the Company’s Consolidated Statements of Income.875 borrowing positions through local currency accounts with the bank.789 as of December 31.169.646.505 international bank to help manage global liquidity requirements.500.073. acquisition of Plastics Packaging. increased operational capacity.682 — — — 120.888 in 2015.355.228 $1.590 $203. plant and equipment from time to time when warranted by the facts and circum- Details of the Company’s property. Of this total.092.778 $231. the Company and its December 31. and the September 2016 respectively.414 $221.623) operating performance as compared to prior projections.

800 in 2021 and $35. Commercial paper. the Company entered into a $150.254 greatest risk of a significant future impairment if actual results fall Other notes 25. the loss of either of which could impact the Company’s conclusion regarding the likelihood of On March 13. there is no specific singular event or single change in circumstances the Company has identified that it 8. management has concluded intangible assets is expected to approximate $42.000. and Paper and Industrial Converted Products—Europe. Details at December 31 are as follows: On July 20. average rate of clusions. names. Proceeds from the $250. $36.052.5 basis points above the Other 1. expected average useful life of 13.192) (11. and the in the addition of $60. including forecasted growth customer lists.000 — Although no reporting units failed the assessments noted Other foreign denominated debt. 2016 and 2015.556 $ 417.400 remaining $100. the Company concluded that 5.887 and $33.292) Consistent with prior facilities.721 ment and the Company’s current credit ratings.000.309 income taxes.148 19. if there are changes in the rele. of which $75.958 commercial paper at December 31. 1.000 Less current portion and short-term notes 159.740 1. capital expenditures and changes in working 1. of which $48.000 five- Trade names 25.500.045 and $95. the reporting units having the 3.329 1.165. 2017 and none at December 31.375% debentures due November management assumptions and estimates including the 2021 248. 2016.618 short of expectations are Display and Packaging. manage.171 $ 599.24% in 2017 and 0. 2017. Gross $ 567.780 12.000 to trade acquisition.938 Credit Agreement are pre-payable at any time at the discretion Accumulated Amortization: of the Company and the term loan has annual amortization Patents $ (7.327 32. Based on the pricing grid in the Credit Agree- Proprietary technology 20. Aggregate amortization expense on intangible assets was ment’s assessment regarding goodwill impairment may change $38. In addition.8% in 2016 21. The July 2017 acquisition of Clear Lam resulted in the In May 2016. and reflecting substantially the Patents $ 21. the Company’s wholly-owned subsidiary addition of $77. Other than in Display 2022.698 concentrated in two customers.164 same terms and conditions. Total goodwill asso.490 Company’s forecast of sales volumes and prices.136 units. Included in the new facility are a Customer lists 497. Gross: entered into on October 2. The loan bears interest at a F15 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K .000 goodwill impairment for the unit.779 20.000 was used to partially fund the Clear Lam related to customer lists. 2017. 150. 2016 acquisition of PPI which resulted in the recognition of an Because the Company’s assessments incorporate manage. Customer lists (210.212) (172.63% in 2016 124.700 in 2020.218 154. vant facts and circumstances and/or expectations.000 term loan were used to repay The March 2017 acquisition of Packaging Holdings resulted the $150.75% debentures due November there was no impairment of goodwill for any of its reporting 2040 $ 599. Amortization expense on potential for goodwill impairment. and $3. Changes in these assumptions and/or Term loan.000 of outstanding Other Intangible Assets. Total debt 1.936 capital requirements.790 to patents.200 in changes in more than one assumption.300 in 2019. that any such impairment would likely be the result of adverse $41.190 of intangible assets.020. due July 2022 246.295 $ 224.031) tractual right to draw funds directly on the underlying bank Accumulated Amortization $(236. as well.294 4.000 bank credit facility with 2017 2016 a syndicate of eight banks replacing an existing credit facility Other Intangible Assets. The assessments reflected a number of significant 4.00% foreign loan due May 2021 177.000 term loan entered into on March 13. 2017. the borrowing Land use rights 298 288 has an all-in drawn margin of 112. and Packaging.400 of intangible assets. If circumstances were to prevent Land use rights (47) (41) the Company from issuing commercial paper. 9. at December 31. unsecured three-year floating-rate assignable loan agreement. additional $1. A large portion of projected sales in the Display and Packaging reporting unit is Long-term debt $1.162 $500.1 years. respectively.7% in 2017 and above. Debt believes could reasonably result in a change to expected future Debt at December 31 was as follows: results in any of its reporting units sufficient to result in goodwill impairment. the $500.196) (1. 2017 2016 Based on its assessments. $31.261) $(192.733) facility will continue to support the Company’s $350.957 $ 13.743 ciated with these reporting units was approximately $203. $8. profit margins.600 of intangible assets. In considering the level of uncertainty regarding the 2017.2% debentures due August 2021 4. Net $ 331. it has the con- Other (1.447.328 — discount rates could materially impact the Company’s con.236) commercial paper program.701 London Interbank Offered Rate (LIBOR).000 five-year revolving credit facility and a $250.500 in 2018.902 year term loan. unsecured five-year fixed-rate assignable loan agree- adjustments were made in 2017 to the provisional fair values of ment guaranteed by the Company.647) payments totaling $12. $38. average rate of 3. using a discount rate management believes is commensurate the assets acquired and the liabilities assumed in the November with the risks inherent in the cash flows for each reporting unit. Borrowings under the Other Intangible Assets.735 33.500 related Sonoco Deutschland Holdings GmbH entered into a Euro to customer lists and $2.288.187) $ (5.273 for the years ended December 31.000 revolving credit Trade names (4.000 Proprietary technology (13. The Company had $124.100 to trade names. respectively.803 248. 2014. the Company entered into a Credit Agree- ment in connection with a new $750. all of which related to ment’s expectations for the future. in management’s opinion.002 $1. 2017. These intangible assets will be amortized over an and/or margin improvements.427) (2. The proceeds from this term loan were used to fund the acquis- Other intangible assets ition of Packaging Holdings.634 362.980) credit facility.

These contracts represent approximately 76. Polish zloty Sell (173. changes in fair value are recorded directly to income and expense in the periods that they occur. 2017 The following table sets forth the carrying amounts and fair and 2016. expected The proceeds of the loan were used primarily to settle the to be reclassified to the income statement during the next remaining balance of the three-year term loan used to fund the twelve months is $(1. The carrying value of cash and cash equivalents.646 flows. As urement. 2020 – $16.327.166). and Cana- dian usage for 2018 and 2019.988 which the hedged item impacts earnings. New Zealand dollar Sell (809) nants. The Company utilized cash on hand to fund the repayment Currency Action Quantity of its 5. the changes in fair value of these contracts are recorded in other comprehensive Mexican peso Purchase 262.796 metric tons of aluminum representing approximately 24% of anticipated usage for 2018. 2017.592) years are: 2018 – $159. Russian ruble Purchase 1. accounting treatment under ASC 815 for these instruments. these contracts at December 31. respectively.636 at SONOCO 2017 ANNUAL REPORT | FORM 10-K F16 . as defined. Other derivatives The fair value of long-term debt is based on recent trade The Company routinely enters into forward contracts or information in the financial markets of the Company’s public swaps to economically hedge the currency exposure of inter- debt or is determined by discounting future cash flows using company debt and existing foreign currency denominated interest rates available to the Company for issues with similar receivables and payables.000 committed revolving bank credit The Company has entered into forward contracts to hedge facility. The fair value of the Company’s other derivatives was $(581) Commodity cash flow hedges and $(696) at December 31. Gains total- ing $64 and $59 were reclassified from accumulated other December 31. such.336 2017. 2017. 2017. purchases forecasted to occur in 2017. 2017. Long-term debt $1. 7. with interest at mutually agreed-upon rates. 2017. aluminum and old corrugated containers (OCC). Amount Value Amount Value 2017 and 2016. During 2017 and 2016.531. Certain of the Company’s debt agreements impose Colombian peso Purchase 7. The total fair values of the Company’s commodity cash flow hedges were in a net loss position totaling $(1.125) The principal requirements of debt maturing in the next five British pound Sell (12.644.713) at December 31.625% debentures upon their maturity in June 2016.546 interest coverage.414.020. The total net fair values of the Company’s foreign currency 9. The loan may be December 31. Financial instruments and derivatives cash flow hedges were $950 and $(184) at December 31. The Company does not apply hedge terms and maturities.002 $1. Australian dollar Sell (2. 2017 December 31. 2017 and 2016.137) 2021 – $446. The net positions of Cash flow hedges these contracts at December 31.439. The Company has entered into certain derivative contracts to The Company has determined all derivatives for which it has manage some of the cost of anticipated purchases of natural applied hedge accounting under ASC 815 to be highly effective gas. short-term debt and long-term variable-rate debt approximates fair value.S. the Company had derivative financial instruments outstanding to hedge antici. Turkish lira Purchase 14.5% of anticipated U. expected to be reclassified to the income statement dur- ing the next twelve months is $88.876 income and reclassified to income or expense in the period in Canadian dollar Purchase 19. 2016 comprehensive loss and netted against the carrying value of the Carrying Fair Carrying Fair capitalized expenditures during the years ended December 31.5 MMBTUs were outstanding. and a net gain position totaling $3.694 and 2022 – $199. were as follows: poses. November 2014 acquisition of Weidenhammer Packaging Group.764.426. 2017 and 2016. Additionally.131 As of December 31.288. The most restrictive covenant Canadian dollar Purchase 53.2% and 35. the Company had substantial toler.00% and is due in May 2021. The net positions of These short-term lines of credit are for general Company pur. 2017. Foreign currency cash flow hedges In addition to the $500.551 restrictions with respect to the maintenance of financial ratios Mexican peso Purchase 713.000 available certain anticipated foreign currency denominated sales and under unused short-term lines of credit at December 31.410 ance above the minimum levels required under these cove.116. It is considered a Level 2 fair value meas. the Company had swap contracts covering 1. To the extent considered effective. lated other comprehensive loss at December 31. 2019 – $16. 2016. certain foreign values of the Company’s significant financial instruments where currency cash flow hedges related to construction in progress the carrying amount differs from the fair value. and a minimum level of net worth. were as follows: At December 31. The amount of the gain included in accumulated other comprehensive income at December 31.698 $1. the Company had approximately $203.rate of 1. The amount of the loss included in accumu- redeemed in whole by the Company at any time with notice. At and as a result no material ineffectiveness has been recorded December 31.862 $1. respectively. 2017. Currency Action Quantity pated transactions and certain asset and liability related cash Colombian peso Purchase 4.178 and the disposition of assets. respectively. natural gas swaps covering approximately during the periods presented. were settled as the capital expenditures were made. respectively.771 currently requires the Company to maintain a minimum level of Euro Purchase 53.

667 Cost of sales $176 Location of Gain or (Loss) Recognized in Gain or (Loss) Income Statement Recognized Derivatives not designated as hedging instruments: Foreign Exchange Contracts Cost of sales $ — Selling.738 Net sales $ — Cost of sales $ (6. The following table sets forth the location and fair values of the Company’s derivative instruments: Fair Value at December 31 Description Balance Sheet Location 2017 2016 Derivatives designated as hedging instruments: Commodity Contracts Prepaid expenses $ 149 $3. The following table sets forth the effect of the Company’s derivative instruments on financial performance for the twelve months ended December 31. 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: Amount of Gain or Location of Gain or Amount of Gain or Location of Gain or Amount of Gain or (Loss) Recognized (Loss) Reclassified (Loss) Reclassified (Loss) Recognized (Loss) Recognized in OCI on from Accumulated from Accumulated in Income on in Income on Derivative OCI Into Income OCI Into Income Derivative Derivative Description (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion) (Ineffective Portion) Derivatives in Cash Flow Hedging Relationships: Foreign Exchange Contracts $ 5.240 Commodity Contracts Other assets $ — $ 527 Commodity Contracts Accrued expenses and other $(1.062) Cost of sales $ 1.417) $ (89) Commodity Contracts Other liabilities $ (445) $ (42) Foreign Exchange Contracts Prepaid expenses $ 2. There are no collateral arrangements or requirements in these agreements.947 Net sales $11. 2017.764) Cost of sales $ — Commodity Contracts $(3.232 $ 761 Foreign Exchange Contracts Accrued expenses and other $(1.138) F17 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K . the Company reports its derivative positions on a gross basis.282) $ (946) Derivatives not designated as hedging instruments: Foreign Exchange Contracts Prepaid expenses $ 90 $ 194 Foreign Exchange Contracts Accrued expenses and other $ (671) $ (890) While certain of the Company’s derivative contract arrangements with its counterparties provide for the ability to settle contracts on a net basis. general and administrative $ (2.

690 56. net: Foreign exchange contracts (581) — — (581) — Deferred compensation plan assets 268 — 268 — — Postretirement benefit plan assets: Common Collective Trust(a) 1.010.690 — — — Cash and accrued income 640 — 640 — — Total postretirement benefit plan assets $1.136. 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.890 $1.500 69.769) Net sales $ — Cost of sales $ 3.274 — — — Mutual funds(b) 214. measured Description 2017 at NAV (g) Level 1 Level 2 Level 3 Hedge derivatives.118) 10. that are observable either directly or indirectly.032 Cost of sales $(3.992 — Short-term investments(d) 2. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. and Level 3 – Unobservable inputs for which there is little or no market data. net: Commodity contracts $ (1. general and administrative $(2.713) $— Foreign exchange contracts 950 — — 950 — Non-hedge derivatives.052 1.981 Cost of sales $ — Commodity Contracts $3. other than quoted prices in active markets.555 — Fixed income securities(c) 167. representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.187 — Hedge fund of funds(e) 69. 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: Amount of Gain or Location of Gain or Amount of Gain or Location of Gain or Amount of Gain or (Loss) Recognized (Loss) Reclassified (Loss) Reclassified from (Loss) Recognized (Loss) Recognized in OCI on from Accumulated Accumulated OCI in Income on in Income on Derivative OCI Into Income Into Income Derivative Derivative Description (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion) (Ineffective Portion) Derivatives in Cash Flow Hedging Relationships: Foreign Exchange Contracts $(420) Net sales $(8.583) Cost of sales $(444) Location of Gain or (Loss) Recognized in Gain or (Loss) Income Statement Recognized Derivatives not designated as hedging instruments: Foreign Exchange Contracts Cost of sales $ — Selling. Level 2 – Inputs.692 $383. The following tables set forth information regarding the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis: Assets December 31.521. which require the reporting entity to develop its own assumptions.734 $— SONOCO 2017 ANNUAL REPORT | FORM 10-K F18 .500 — — — Real estate funds(f) 56.992 — — 167.464 $1.010. The following table sets forth the effect of the Company’s derivative instruments on financial performance for the twelve months ended December 31.555 — — 214.239 1. 2016. Fair value measurements Fair value is defined as exit price.274 1.713) $ — $ — $ (1.

(f) This category includes investments in real estate funds (including office. private securities. and international equities. (c) Fixed income securities include funds that invest primarily in government securities and long-term bonds.551 $— (a) Common collective trust investments consist of domestic and international large and mid capitalization equities. are not inputs.694 62.636 $ — $ — $ 3. value measurements during the years ended December 31. restricted stock units and other share-based interest rate movements. 11. net: Foreign exchange contracts (696) — — (696) — Deferred compensation plan assets 349 — 349 — — Postretirement benefit plan assets: Common Collective Trust(a) 874. Share-based compensation plans As discussed in Note 9. long and short positions in U. and limited partnerships are valued at unit values or net asset values provided by the investment managers. and limited partnerships are valued at unit values or net asset values provided by the investment managers. Awards issued and spot and future exchange rates. appreciation rights. arbitrage investments and emerging market equity investments. yield curves. and independent financial analysts. industrial.996 — — — Mutual funds(b) 213. residential and retail) primarily throughout the United States. fixed income pricing models.996 874. see Note 9. from 2012 through 2013 were issued pursuant to the Sonoco Certain deferred compensation plan liabilities are funded Products Company 2012 Long-Term Incentive Plan (the “2012 and the assets invested in various exchange traded mutual Plan”) and awards issued from 2009 through 2011 were issued funds. Commingled funds. financial instruments.224 — — 118. which are valued at closing prices from national exchanges. (e) The hedge fund of funds category includes investments in funds representing a variety of strategies intended to diversify risks and reduce volatility. share-based awards were issued Company’s derivatives are classified under Level 2 because such pursuant to the Sonoco Products Company 2014 Long-Term measurements are estimated based on observable inputs such Incentive Plan (the “2014 Plan”). (d) Short-term investments include several money market funds used for managing overall liquidity. private securities. from time to time. The Company’s pension plan assets comprise more than The Company does not currently have any nonfinancial 98% of its total postretirement benefit plan assets. None of the Company’s financial assets or insurance plans are largely invested in the same funds and liabilities is measured at fair value using significant unobservable investments and in similar proportions and. Underlying real estate securities are generally valued at closing prices from national exchanges. foreign currency fluctuations and. Underlying investments are generally valued at closing prices from national exchanges. Fair value measurements for the awards.083 — Hedge fund of funds(e) 72. including emerging markets and funds invested in both short-term and long-term bonds.349. spot and future commodity prices approval by the shareholders on April 16.237 $1.244 — — 213. 2017 retirement benefit plan assets are netted against postretirement or 2016.636 $— Foreign exchange contracts (185) — — (185) — Non-hedge derivatives.686 6. (b) Mutual fund investments are comprised of equity securities of corporations with large capitalizations and also include funds invested in corporate equities in international and emerging markets and funds invested in long-term bonds. These assets are measured using quoted prices in acces. For additional fair value information on the Company’s benefit obligations to determine the funded status of each plan.S. It includes event-driven credit and equity investments targeted at economic policy decisions.003 — — — Real estate funds(f) 62. There were no transfers in or out of Level 1 or Level 2 fair shown separately. which became effective upon as interest rates. Post. Underlying investments are generally valued at closing prices from national exchanges. Investments are val- ued at unit values or net asset values provided by the investment managers. but are combined in the tables above. (g) Certain assets that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.783 $903 $332. as such.003 72.015. measured Description 2016 at NAV (g) Level 1 Level 2 Level 3 Hedge derivatives. Fixed income commingled funds are valued at unit values provided by the investment managers.090 513 1. Underlying investments are generally valued at closing prices from national exchanges. The funded status is recognized in the Company’s Consolidated Balance Sheets as shown in Note 12. the Company uses derivatives to The Company provides share-based compensation to cer- mitigate some of the effect of raw material and energy cost fluc. The assets of assets or liabilities that are recognized or disclosed at fair value the Company’s various pension plans and retiree health and life on a recurring basis. Awards issued prior to 2009 F19 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K . net: Commodity contracts $ 3. Incentive Plan (the “2008 Plan”). Assets December 31.224 — Short-term investments(d) 7. pursuant to the Sonoco Products Company 2008 Long-Term sible active markets for identical assets. tain employees and non-employee directors in the form of stock tuations.694 — — — Cash and accrued income 390 — 390 — — Total postretirement benefit plan assets $1. Beginning in 2014. 2014. Commingled funds are valued at unit values provided by the invest- ment managers. Commingled funds.244 — Fixed income securities(c) 118.

and $2. for a time period equal to the expected life.53 change in control.137 shares remain available Risk-free interest rate 2. $5. Awards granted under all previous plans which are forfeited.631.06 Beginning in 2015. The ultimate number of PCSUs awarded is dependent upon the degree to SONOCO 2017 ANNUAL REPORT | FORM 10-K F20 .488.926 and $10.128. ments was $13.786.3% 1.8% added to the total shares available under the 2014 Plan. which includes all shares then remaining under the 2012 of all SARs using the Black-Scholes option-pricing model apply- Plan and an additional 4. stock-based compensation associated with SARs totaled $3.510. The related tax benefit recognized in net income tility of the Company’s common stock measured weekly was $5. GAAP. and 2015 was $3. dend divided by the stock price at the time of grant.2% December 31.2% 18. these excess tax benefits were not recognized on the income statement.000 shares authorized under the ing the assumptions set forth in the following table: 2014 Plan.04 and $6. respectively. the compensation cost related to nonvested SARs totaled $2.14 per share. 2017 was 8.082) (4.122) (292.990 2. Previously. An “excess” tax benefit is created when the tax deduction • Expected life – calculated using the simplified method as for an exercised stock appreciation right. The Company issues new Expected life of SARs 6 years 6 years 6 years shares for stock appreciation right exercises and stock unit conversions. respectively. expire or are cancelled without delivery of shares.405 — graded-vesting method.29. involuntary (or good reason) termination within two years of a December 31.646 $41. $9.324 for 2015.352. $7.0 years SARs granted in and since 2015 vest over three years.915. and $3.46 being recognized during the early years of the required service Exercised — (292.695 and $3. Share-based compensation expense is included in “Selling. (the “1996 Plan”). 2016 and 2015. There were no stock options exercised during 2017 and 2016. average vesting period of approximately 24 months. “1991 Plan”) or the 1996 Non-Employee Directors Stock Plan 2016. or Outstanding.749 768. Stock appreciation rights and stock options December 31. The aggregate intrinsic value of stock options exercised $2. 2017 1.022 915. disability. The assumptions employed in the calculation of the fair value of SARs were determined as follows: Accounting for share-based compensation • Expected dividend yield – the Company’s annual divi- Total compensation cost for share-based payment arrange.122) $40. • Risk-free interest rate – based on U. 2016 and 2015. but rather on the con. • Expected stock price volatility – based on historical vola- respectively. ASU 2016-09 required that excess tax benefits be recognized on the income statement The activity related to the Company’s SARs is as follows: beginning in 2017. Unvested SARs are cancelable upon termination of Forfeited/Expired (28. during 2015 was $975. The Company’s stock-based awards to non-employee directors have not been material. As of December 31. 2016 and 2015.” The additional net excess tax benefit realized was Exercise $2.500.012 $44. a total of 6. respectively.622 for 2017.0% 1. the Company has granted SARs annually on a discretionary basis to key employees.379. Nonvested Vested Total Price Outstanding.49 per share in 2017.212.S. $2. The aggregate intrinsic value for one-third vesting on each anniversary date of the grant. and SARs outstanding and exercisable at December 31. These SARs are granted at market (have an exercise price equal to the closing market price The weighted average remaining contractual life for SARs on the date of the grant) and can be settled only in stock.381. 2017.750 for 2017. will be Expected dividend yield 2. intrinsic value was $53.760 — 536.533 respectively. 2017. and $11.760 $54. fair market value of the Company’s stock used to calculate This cost will be recognized over the remaining weighted. unrecognized $18. respectively. The outstanding and exercisable at December 31. The weighted-average grant date fair value of SARs granted was The maximum number of shares of common stock that may $7.058.040.190) (32. Consolidated Financial Statements.7% for future grant under the 2014 Plan. As discussed in Note 2 to these divided by two.8 years. stock appreciation rights (SARs) granted vest over three years and expense is recognized following the Vested (443.146.5% 18. 2016 1. SARs granted prior to 2015 vested over one Exercisable.405) 443.S. $19. respectively.7% 3.5% 2. respectively. Cash received by the Company on option exercises was $1. except in the case of death.29 employment.272) $43. Noncash There were no stock options outstanding at December 31.897 1.990 915. Weighted- solidated balance sheet within the line item “Capital in excess of average stated value. exercised stock option prescribed in U. expected life.731.878. or 2017 2016 2015 which result in forfeiture of shares back to the Company. where the expected life is equal or converted stock unit exceeds the compensation cost that has to the sum of the vesting period and the contractual term been recognized in income. which results in front-loaded expense Granted 536.82 Since 2006. 2017 — 915. Treasury yields in general and administrative expenses” in the Consolidated effect at the time of grant for maturities equal to the Statements of Income.453.17 period. At December 31.990 $40.888. December 31.257. Performance-based stock awards The Company grants performance contingent restricted stock units (PCSUs) annually on a discretionary basis to executive officers and certain key management employees. and 2015. 2017. 2017 was have 10-year terms. for the same years.719.were issued pursuant to the 1991 Key Employee Stock Plan (the The aggregate intrinsic value of SARS exercised during 2017. for 2017. 2017. with and 5. The Company computed the estimated fair values shares. be issued under the 2014 Plan was originally set at 10. year. 2016. At Expected stock price volatility 17.289 and $9.

the 2016 PCSUs to be Officers and directors can elect to defer receipt of RSUs. $38.140 remaining number of threshold shares vested at the end of the units vested on December 31. these units was $13. 2015. respectively. 2017. PCSUs are convertible 2011 PCSU. Regardless of grant date. 2015. in the event of 2014. but awarded are estimated to range from 0 to 373.874) (1. Date Fair Value Nonvested Vested Total per Share Restricted stock awards During 2017 and 2016.017 of total unrecognized compen- sation cost related to nonvested PCSUs. disability or retirement prior to full vest. 2015. No units will be fied for vesting on December 31. 2017 PCSU.414 — good reason) termination within two years of a change in control Converted — (220. disability. As of December 31. respectively.568 and $2. Based on the performance ance targets were met. As of December 31. the Company on the vesting date for shares to be issued.56 year period with one-third vesting on each anniversary date of Granted 130.336 for 2014 PCSU. The fair value of to be recognized over a weighted-average period of 26 months. fourth and fifth anniversaries of the grant. 2014 with a fair value of $6.40 and $43. For PCSUs units was $8. are achieved over a completed on December 31. and $2. Outstanding stock units of there was $2.037. or involuntary (or Vested (145. 2017.899) — (134. respectively. A partic- 2017 334. qualified for vesting on December 31. 50% of the A total of 4. completed on December 31. except in the adjustments (134. as defined under the 2014 Plan. 2016 141. in some circumstances vested over a shorter period. 2016.271 for The activity related to performance contingent restricted 2017.020 1. respectively.469 of total unrecognized compensation cost 247. 2016. if a partic. associated with PCSUs totaled $3. 2016.33.697 and $2. The weighted-average grant-date fair value of 2018. and vested at the end of the performance period. PCSUs granted in 2015 and the terms of the awards as of December 31. relative to defined targets related to earn. shares will be issued on a pro rata basis up through the time 2014 and 2015 was $2.155) (220.12 ipant must be actively employed by. these awards do not expire. vesting. respectively.043 $37. and $42. but December 31. $36. The performance cycle for the 2013 PCSUs was ings and return on net assets employed. the 2017 PCSUs to be However.065 $35. The performance cycle for the 2014 PCSUs was 2017. the participant’s employment or service ceases. The fair value of the stock units vesting in ing. 2017.43 event of the participant’s death.673 stock afterwards vest at the end of the three-year performance period units were determined to have been earned.68. 123. stock issued. 2016 PCSU.874) $36. Dividend Prior to 2015. achieved and the terms of the award.291. 2013 PCSU. Cancelled (1.11 the grant. 2013. units awarded vested at the end of 2012 PCSU. Noncash stock-based compensation control occurs during the three-year performance period. Based on performance and three-year performance cycle.546 units were determined to have been earned.761 — 130. 2015.11. normally vested over a five-year period with one-third vesting on each of the third. 2014.155) $36.522 units and are of the participant’s death. 2017.572 units and are key management employees are required to take receipt of tied to the three-year performance period ending December 31. The fair value of shares vesting completed on December 31. stock units is as follows: there was approximately $7. restricted stock grants totaled $3. 2015. all of which related to nonvested restricted stock units. certain award agreements provided that in the event awarded are estimated to range from 0 to 261.414) 145.35 per share in 2017. or retirement. $3. all unvested granted was $50. 2016 PCSUs will vest at target on a pro rata basis if the change in and 2015. These awards Outstanding. formance period. in which case shares will immediately vest. $10. $1. all of which and 2015.554 units were determined to have been earned.519 stock units quali- not met.145 10. 2016 and 2015. respectively. key management employees. 2017. respectively. In the event performance targets were achieved and the terms of the award. 2016 and 2015.899) $39.707 stock units vesting on the participant’s death.414 stock units were ipant is not employed by the Company at the end of the per. and 4.619 486.406 as of December 31. These awards vest over a three- 2016 486. a minimum number of outstanding units were awarded fied for vesting on December 31.129. which performance. disability. awarded. This cost is expected qualified for vesting on December 31. As of December 31.522. upon vesting. Outstanding stock units of during the year was $1. Except in the event completed on December 31.424 821.896.145 $51. 205. The fair value of Noncash stock-based compensation associated with these units was $5.31 Once vested. with the remaining 61. or serving as a director of. all of which quali- if the respective performance targets are met. This cost is expected to Average Grant be recognized over a weighted-average period of 20 months. The performance cycle for the 2011 PCSUs was into common shares on a one-for-one basis. the Company from time to time granted RSUs equivalents — 10. In the event of a The weighted-average grant-date fair value of PCSUs change in control.387 units vested on December 31. 2017.046 as of December 31.90 prior to full vesting. no PCSU’s will vest. Based on the performance of the participant’s death.066 for 2017. December 31.045 551. 2015.707 stock units vested on December 31. restricted stocks units (RSUs) to executive officers and certain December 31. However. completed on December 31.761 $50. shares would be issued on a pro rata basis up through 2019.554. F21 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K . the time the participant’s employment or service ceases.73 to certain of its executive officers and directors. The performance cycle for the 2015 PCSUs was 2016 and 2015. The fair value of the stock fourth year and the remaining 50% at the end of the fifth year. Participants must be actively employed by the Com- Performance pany on the vesting date for shares to be issued. the Company granted awards of Outstanding. The performance cycle for the 2012 PCSUs was the three-year performance period if the respective perform.272. 143. A total of 61. granted in 2014 and earlier.44 per share in 2017.906 as of December 31. 2016. disability or retirement prior to full tied to the three-year performance period ending December 31. The fair value of these awarded if the performance targets are not met. As of December 31. RSUs granted was $51. 2015 PCSU. 2017. units vesting in 2015 and 2016 was $179 and $218.122 and $2.

455) (2.346 178. 2017 365.73 SRC contributions effective January 1. and Turkey.956) Company also sponsors contributory defined benefit pension Impact of foreign plans covering certain of its employees in the United Kingdom.568 $19.118) $ (1.510 388.508 $ 23.212) (85. Greece.362 Converted (4.41 2017 2016 2015 Deferred compensation plans Retirement Plans Certain officers of the Company receive a portion of their Service cost $ 18.636) (1. To replace this Date Fair benefit.957 8. employees hired Nonvested Vested Total Value Per Share on or after January 1. $2. 2004. Belgium.249) (1. following: 2017 225. SONOCO 2017 ANNUAL REPORT | FORM 10-K F22 .380) $38.053 respectively. and are issued in shares of Sonoco common stock Interest cost 463 482 766 six months following termination of Board service. qualified plan will become eligible for equivalents 2. The activity related to restricted stock units is as follows: The Company froze participation in its U.568 based on certain age and/or service eligibility requirements. the Sonoco Retirement Contribution (SRC).873 59.584 ately vest and earn dividend equivalents. 2016.753 (40. the U. qualified defined benefit pen- Converted — (38.721.S.209 39. Amortization of net actuarial loss 39.777. was deferred during 2017. at December 31 $1. with an annual contribution. The units immedi. 2009. Outstanding.543 $ 19.543) 53.437 $38. Directors Expected return on plan assets (1. The Benefits paid (81.856) 35 15 Canada and the Netherlands. Service cost 18.579) (1. Remaining active Dividend participants in the U. and provides postretirement Other — (111) — — healthcare and life insurance benefits to a limited number of its Benefit obligation retirees and their dependents in the United States and Canada.307) would have otherwise been paid using the closing price of the Amortization of net transition Company’s common stock on that day.223) Mexico.947. Non-employee directors may elect to defer a portion of their Net periodic benefit cost $ 66.124 5.835) Retiree Health and Dividend equivalents 10.424 $1.S.719 463 482 Retirement plans and retiree health and life Plan participant insurance plans contributions 391 439 744 888 The Company provides non-contributory defined benefit Plan amendments 639 812 — — pension plans for certain of its employees in the United States.01 ticipants effective December 31. Also 2016 210.850. Actuarial loss/(gain) 99.299 cash retainer or other fees (except chair retainers) into phantom Retiree Health and Life stock equivalent units as if Sonoco shares were actually pur.373 $51.953) $ (961) Total The following tables set forth the Plans’ obligations and Outstanding.733.084 $ 33.S. exchange rates 29.493) $42. which will be settled in Company Benefit obligation stock at retirement. 2016 323.661) must elect to receive these deferred distributions in one.S. Units are distributed in Effect of settlement loss 32. The deferred stock equivalent units accrue dividend Service cost $ 313 $ 309 $ 711 equivalents. and 2015. Vested (53.081 $51.837. qualified Granted 69. at January 1 $1.048 2017 2016 2017 2016 Change in Benefit Deferred compensation for employees and directors of Obligation $2.009 42.772 (1.719 70.183) (1.S.579 $ 43.543 19.424 $15. The components of net periodic benefit cost include the December 31.777. qualified defined benefit pension plan for newly hired salaried and non-union Average Grant hourly employees effective December 31.761 — — the form of common stock upon retirement over a period Other — — 49 elected by the employee. either current or deferred. accounts in the Sonoco Retirement and Savings Plan. the Company provides non-union U.85 eligible for the SRC are former participants of the U.373 — 69.466) (94.938 $1. 2019.81 sion plan was amended to freeze plan benefits for all active par- Cancelled (2. December 31.68 defined benefit pension plan who elected to transfer out of that plan under a one-time option effective January 1. Employee benefit plans Interest cost 55.508 313 309 12. Insurance Plans chased. Units are granted as of the day the cash compensation Expected return on plan assets (81.856 $35.243 Retirement Plans Life Insurance Plans Outstanding.797 units.807 199. France.596 $17.380) (38. in the form of stock Interest cost 55. Germany.873 59. three Amortization of prior service or five annual installments.691 $17.543 — On February 4. 2018. and $1. called Outstanding. 2010.630 425.547) (89. The activity related to deferred compensation for equity credit (499) (498) (104) award units granted to both employees and non-employee Amortization of net actuarial gain (759) (667) (673) directors combined is as follows: Net periodic benefit income $ (2.493) — (2. 2003. Deferrals into stock obligation — — 65 equivalent units are converted into phantom stock equivalents Amortization of prior service cost 910 809 745 as if Sonoco shares were actually purchased.402 93. to their participant December 31. December 31.278 assets at December 31: Deferred 36.366 compensation.

2022 $ 96.237) $(6. 2017 and 2021 $ 94.662 32.129) Prior service cost/(credit) 639 1.489) (545) (424) Company Net (liability)/asset $(343.717 3.268 $1.225) $(452.713 $1.177 $23.455) (2.851 $7.186.060 $ 8.056) Prior service cost/ (credit) 3.280 contributions 93.872 Noncurrent liabilities (354.554.487 $1.380 $ 3.225) (7.403 2016.603 $ 5. and $1.586) Of the amounts included in Accumulated Other Compre.458) 2018 $ 97.186 $23.663 F23 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K .848 $22.625) Total recognized in net periodic benefit cost and other comprehensive loss/(income) $(16. are as exchange rates 29.611 $712.385 $ (960) Prior service cost/(credit) 972 (498) Retiree Health and Net transition obligation — — Year Retirement Plans Life Insurance Plans $38. as of December 31.810.474.525) $(1. 2017. the portions the obligation (ABO) and fair value of plan assets for pension plans Company expects to recognize as components of net periodic with accumulated benefit obligations in excess of plan assets benefit cost in 2018 are as follows: were.462 and $1.357 $(1.409) (820) (802) plan assets 198. 2017.350 and $1.732) $ 56.993.385) (446.789.183) (1.094.956) pension cost that are included in Accumulated Other Compre- Impact of foreign hensive Loss (Income) as of December 31.427 plans was $1.770 $(4.209) (39.325.889) $ 50.298.071 130. accumulated benefit hensive Loss/(Income) as of December 31.280 (gain) $625.352 $(3. as of December 31.986 1.486 $6.273) Net settlements/curtailments (32. respectively.124 $1. $1.506 Actual return on Current liabilities (13.890 $ 8. Retiree Health and Retiree Health and Retirement Plans Life Insurance Plans Retirement Plans Life Insurance Plans 2017 2016 2017 2016 2017 2016 2017 2016 Change in Plan Total Recognized Assets Amounts in the Fair value of plan Consolidated assets at Balance Sheets January 1 $1.498 The accumulated benefit obligation for all defined benefit 2020 $ 96.547) (89.486 $ 6.280 $1.830) The amounts recognized in Other Comprehensive Loss/(Income) include the following: Retiree Health and Retirement Plans Life Insurance Plans 2017 2016 2015 2017 2016 2015 Adjustments arising during the period: Net actuarial loss/(gain) $(10.533 $ (9. $1.275) (1.250 Noncurrent assets $ 24.389 $1. respectively.738.863 $12.624 and $1.035) $11.220) (9.449) $(4.385) $(2. Retirement Retiree Health and respectively.019.515 2019 $ 93. 2017 and 2016.009) (42.584 $(11.460 (39.688 $1.311 $(34.225) $ (452.267) $ (284) $(5. 2016.780 4.529) $(2.584) 759 667 673 Prior service (cost)/credit (910) (809) (745) 499 498 104 Net transition obligation — — (65) — — — Total recognized in other comprehensive loss/(income) $(82.147) — — follows: Expenses paid (8.973) $ 17.822) $(7.774) $629.504 851 860 Plan participant contributions 443 439 744 888 Items not yet recognized as a component of net periodic Benefits paid (81.097) $(8.848 2017 2016 2017 2016 Funded Status of Net actuarial loss/ the Plans $ (343.325.761) — — — — — Reversal of amortization: Net actuarial (loss)/gain (39.069 513 — — (2.389 $27.051 (1. Plans Life Insurance Plans The following table sets forth the Company’s projected benefit payments for the next ten years: Net actuarial loss/(gain) $37.327 2022-2026 $510.196 at December 31.395.831 $708.446.494. $1.855) (69) (66) Retiree Health and Fair value of plan Retirement Plans Life Insurance Plans assets at December 31 $1.538. The projected benefit obligation (PBO).035) $11.

9% management’s expectations regarding future salary and Debt securities 2017 37. Health and 2016 4.6% 0.75% 6. The Company does not expect to recognize any addi- tional settlement charges in 2018.8% 35.52% require the Company to make any additional cash contributions 2015 3. All 2017 3.50% 4.95% 2016 2059 2059 Rate of Compensation Increase Increasing the assumed trend rate for healthcare costs by 2017 3.6% 64.78% 2017 2026 2026 2016 4.36% 3. 2017 6. the Company recog- Increase nized non-cash settlement charges of $32.K. The plan. ABO and net periodic cost: 2016 7.7% rate of compensation increase reflects historical experience and 2016 51.98% 4.S.36% 2. Based on amendments to the U. qualified retirement of Return plans through either a single.47% 7.12% 3. The Company successfully settled approximately 47% of 2015 7.S.80% obligations at Retirement Life Insurance Foreign December 31 Plans Plans Plans Year at which the Rate Reaches Discount Rate the Ultimate Trend Rate Pre-age 65 Post-age 65 2017 3.69% 3. and expected nominal returns of these asset classes using an economic “building block” approach. changes and amendments 2016 4.60% 3.65% retirement benefit obligation (the APBO) and total service and interest cost component approximately $176 and $15. Weighted-average respectively. Total 2017 100. The expected long-term rate of return assumption is based effect of this and other smaller amendments was a reduction in on the Company’s current and expected future portfolio mix by the accumulated postretirement benefit obligation of $2. Discount Rate 2017 4.60% 3.0% 100.00% 7. Canada investment portfolio under active management.99% 3.75% prised approximately 15% of the beginning of year PBO of these plans. also gives consideration to the expected level of out- performance to be achieved on that portion of the Company’s Asset Category U. Retiree and $13. plan periodic benefit U.1% following information relates to the U.7% 27.S.62% one percentage point would increase the accumulated post- 2016 3.S.0% 100.12% 3. Therefore.7% 52. The Company adjusts its discount rates at the end of each During 2015.6% 0.49% a portion of the projected benefit obligation (PBO) relating to Expected Long-term Rate terminated vested participants in the U.78% 3. U. The assumed Equity securities 2017 51.32% 3.32% 3.4% 46.31% 4.S. The terminated vested population com- 2016 7.0% The Company employs a total-return investment approach whereby a mix of equities and fixed income investments are SONOCO 2017 ANNUAL REPORT | FORM 10-K F24 .1% 54.0% Alternative 2017 11. Expectations for Retirement plan assets inflation and real interest rates are developed and various risk The following table sets forth the weighted-average asset premiums are assigned to each asset class based primarily on allocations of the Company’s retirement plans at December 31. cost cost for years ended Retirement Life Insurance Foreign increases borne by the Company are limited to the Urban CPI.39% 4.9% —% —% The U.71% In February 2017.65% settlement payments were funded from plan assets and did not 2016 3.S.70% 2.40% 3. by asset category. historical performance.0% 100.70% 2.761 in 2017.Assumptions Healthcare Cost Trend Rate Pre-age 65 Post-age 65 The following tables set forth the major actuarial assump. asset class.52% 3. lump-sum payment or the pur- 2017 6.S. plan only.75% tions used in determining the PBO. Health and approved in 1999.59% 3. the Company initiated a program to settle 2015 4.S.273.7% 44.52% chase of an annuity.00% Weighted-average Ultimate Trend Rate Pre-age 65 Post-age 65 assumptions U. which became effective in 2003. respectively.2% —% —% Medical trends 2016 13.95% Plan settlements.9% incentive increases.67% 7. 2016 34. December 31 Plans Plans Plans as defined. Decreasing the assumed trend rate for healthcare assumptions costs by one percentage point would decrease the APBO and total service and interest cost component approximately $163 used to determine net U.S.28% 3.86% 6. As a result Rate of Compensation of these and other smaller settlements. Retiree Health and Life Insurance Plan makes up Cash and short-term 2017 —% 0. the Company’s U.0% 2016 100. the investments 2016 —% 0.92% the PBO for the terminated vested plan participants. The expected long-term rate of return 2017 and 2016.4% approximately 96% of the Retiree Health liability.00% 3. Retiree 2017 4.80% 4.7% 71.42% 3.51% in 2017.0% 100.S.36% 3.50% used to determine benefit U. Retiree Medical and Life fiscal year based on yield curves of high-quality debt instruments Insurance Plan was amended to eliminate certain life insurance over durations that match the expected benefit payouts of each benefits for all nonunion and applicable union participants.

Income taxes (midpoint) for the investment portfolio is: Equity Securities – The provision for taxes on income for the years ended 60%. $11.288 Cash 0.8% Total current $166. as they will depend largely on actual private equity funds and hedge funds are used to enhance investment returns and future actuarial assumptions. plan funded status and corporate The Sonoco Savings and Retirement Plan is a defined con- financial condition. $13. 2017.499 (869) (2. for each. which is designed to totaled $1.500. 2016 and 2015 were approximately $11.049 Total pretax income $314.946 December 31. Debt Securities – 52%.575 72.702 $255. meet the requirements of section 401(k) of the Internal Revenue Defined Benefit Plans. the fully vested. 2016 and 2015 were Alternative – 13% and Cash – 0%. ny’s expenses related to the plan for 2017. The plan is comprised of both an elective and reviews and periodic asset/liability studies. Debt Securities – 30%.468 $ (5. and international stocks of small Other plans and large capitalizations.0% 100.808 6.1% Deferred Total 100.352 and $12.623 10. The current target allocation The Company also provides retirement and postretirement (midpoint) for the investment portfolio is: Equity Securities – benefits to certain other non-U.374 122. Foreign 146.K. however. of which $1.567 $ 55.865 in United Kingdom defined benefit plan 2017.S. used to maximize the long-term return of plan assets for a 2018.631 $ 87.6% 61. employees through various 48%. The plan provides for participant contributions of 1% to and are diversified among U. quali- asset categories.S. will be approximately $38.S. December 31 consists of the following: Retiree health and life insurance plan assets 2017 2016 2015 The following table sets forth the weighted-average asset Pretax income allocations by asset category of the Company’s retiree health Domestic $168. Since January 1.349 $162.788 31.0% Federal $ (16.398 $110.890. 2010. approximately $14.S.500 in F25 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K .970. At December 31. respectively.797) $ (861) $ 11. the liabilities Canada defined benefit plan related to these arrangements are funded in the period they The equity investments consist of direct ownership and funds arise. The participant accounts. The current target allocation (midpoint) for annual Company contribution of 4% of all eligible pay plus 4% of the Inactive Plan investment portfolio is: Equity Securities – 49%. Participants are fully vested after three current target allocation (midpoint) for the Active Plan invest.180 $318.550) Based on current actuarial estimates.9% State 5.000 Debt securities 30. Company-sponsored and local government sponsored defined contribution arrangements. Alternative – 11% and Cash – 0%. Debt Securities – 39%.2% 0.453 were assets of the U.124. Alternative – 0% and Cash – 1%. respectively. if earlier. the Company has large capitalizations. stocks of small to 100% of gross pay. Sonoco Savings and Retirement Plan eration of plan liabilities. No assurances can be made. eligible pay in excess of the Social Security wage base to eligible Debt Securities – 40%.554 $441. respectively.2% Foreign 40. primarily large capitalizations and short to intermediate duration corporate and government bonds. allows participants to set aside a portion of their wages and salaries for retirement and encourages saving by matching a U. Cash contributions to the SRC totaled $14.400 and plans during 2011 and adopted revised investment guidelines $11.8% 31. and non-U.4% 6.328 40.521. defined benefit plans portion of their contributions with contributions from the Com- The equity investments consist of direct ownership and funds pany.359) Foreign (6. The Company’s expenses related to the plan for Company completed separate asset/liability studies for both 2017. expected long-term returns while improving portfolio diversification. $13. The current target allocation 13. non-elective component.S. the Company antici- pates that the total contributions to its retirement plans and Total taxes $146.678 Equity securities 63. Risk tolerance is established through consid. the Sonoco Retire- framework that will gradually shift the allocation of assets to ment Contribution (SRC). years of service or upon reaching age 55. Code. The Compa- ment portfolio is: Equity Securities – 57%.738 retiree health and life insurance plans. employees.198 (14. postretirement benefit plan assets The elective component of the plan.277 $327.200. The revised guidelines establish a dynamic de-risking The non-elective component of the plan. Alternative assets such as real estate funds.S. qualified defined benefit pension plan into the the participant as pretax contributions which are immediately Active Plan and the Inactive Plan effective January 1. about funding desired level of risk.897 and life insurance plan. December 31.S.655 and $14.760) $ 2. Alternative – 0% and Cash – 0%.540. Current Asset Category 2017 2016 Federal $120. 2011. The SRC provides for an increases over time. excluding contributions to the Sonoco Savings Plan. Investment risk is measured and monitored tribution retirement plan provided for certain of the Company’s on an ongoing basis through periodic investment portfolio U.193) Contributions Total deferred $ (19. requirements beyond 2018.462) 4.610 Alternative 5.066.163 $ 93. as the relative funding ratio of each plan fied defined benefit pension plan. is available to certain employees who long-duration domestic fixed income from equity and other are not currently active participants in the Company’s U.002 State 3.589 $164. For the most part. The equity investments consist of direct ownership and funds and are diversified among U. 2016 and 2015. The Company’s expenses for these plans were not and are diversified among Canadian and international stocks of material for all years presented.S. Following the December 2010 amendment matched 50% on the first 4% of compensation contributed by that split the U.

S.996) (3.078 2. rates (16. the SEC staff issued Staff Accounting at December 31. respectively.142) fourth quarter of 2017. Changes include. federal statutory tax rate to the and 2015.085) has recorded $51.704) enacted. the total expected to be paid in 2018. was $25.530 one-time transition tax on certain accumulated foreign earnings Retiree health benefits $ 595 $ (971) as of December 31.7) (5. is included approximately $85. plant and equipment $ 83.155.738 26. and the remaining non-current respective entities and expire between 2029 and 2037.215) (1. These state loss and credit carryforwards are limited based for the year ended December 31.0% $114. earnings of the respective foreign subsidiaries.933 24.8)% future tax benefit will be recognized.0% decreased the reserve by a total of approximately $(2.102) (0. Valuation allowance (3.094 35.517 0.5)% Tax examinations earnings are taxed at rates lower than in the U.810 5.1) 2.S.S. State income taxes.5 — — — — pertains primarily to recognition of beneficial tax attributes Other.S.233) (5. amounts will be recorded to current tax expense in 2018 in the The Company has recorded a $15.6% $164. Of the remaining foreign subsidiary loss carryforwards. if any.5% The effect on tax expense for “Disposition of business” in Foreign earnings taxed at 2016 relates to the sale of the Company’s rigid plastic blow other than U. Under the provisions of the Tax Act.1)% 7.200 for uncertain items arising in 2017.080) (2.7)% adjustment reflects the recognition of tax gains in excess of Deduction related to qualified production book gains due to basis differences. changes in interpretations wards are reflected at their “tax” value. Approximately GAAP in situations where a registrant does not have the necessary $219. among other things. and a Gross deferred tax liabilities $ 257.5 7.159) $(367. a change in method- Intangibles 174. net (2. taxes and accrued interest. Included in the change are net Accordingly.600 remaining at December 31.700 deferred tax asset in quarter the analysis is completed.265 as additional income tax expense in the Accrued liabilities and other (100.7% 4.778 is included in “Other Liabilities. Federal loss carryforwards (17.477 1. 2017. $6. $2. additional analysis. The change in “Tax examinations including change in reserve These losses have an indefinite carryforward period and the for uncertain tax positions” is shown net of associated deferred Company expects to utilize them over the next 20 to 25 years. primarily decreases related to lapses of statutes of limitations in international.300 remain On December 22.384) (1.0)% Adjustments to prior year earnings in the periods presented.895 1. expire between 2018 and 2037. rates” reserve for uncertain tax along with other items. net $ 12.975) (61. This benefit is including change in reflected in “Foreign earnings taxed at other than U.2) (15. For 2015.020 $ 17.668 Total deferred taxes.930) (3.2% (3.200 $ 49.589 46. France primarily related to cumulative net operating losses. 2017.000 and $3. based on the rates assets $ 47.300).447 35.1% (8.500) in 2017. State loss and credit carryfor.2% (11.183) (7.2)% (5. Their use is limited to future taxable Bulletin No.979 $ 335. Any subsequent adjustment to these entities and states in which they file. and its paper mill in France.600. the Tax Cuts and Jobs Act (“Tax at December 31: Act”) was signed into law making significant changes to the Internal Revenue Code. respectively.584 $ 115. 2017.623 of additional benefit.596 0. and losses on which no activities (5.6)% (9.631 37. additional regulatory amount of expected gross deduction due to the vastly different guidance that may be issued.900 expire between 2023 and 2035. 2016 A reconciliation of the U.781 35.8)% Disposition of business 537 0.7) (445) (0. 2017. prepared. The Company has recognized approximately $2.3% $ 87.6)% molding operations. and actions the Company may take apportionment and statutory tax rates applicable to the various as a result of the Tax Act.2% related to the disposition of a portion of the Company’s metal Total taxes $146.401) (0.6% (2.771) (202.235) (0.6 732 0. a valuation allowance on the deferred asset has not increases in reserves for uncertain tax positions of approximately been provided. the period in which the legislation was Gross deferred tax assets $(293.” subsidiary loss carryforwards of approximately $230. deferred taxes (1.300) and $(6. SONOCO 2017 ANNUAL REPORT | FORM 10-K F26 . but are not limited to.245) (1. These in “Accrued taxes” in the Company’s Consolidated Balance losses are limited based upon future taxable earnings of the sheet at December 31.977) (10.584 ology for taxation of earnings from non-US operations. Deferred tax liabilities/(assets) are comprised of the following On December 22. 2017. The above enacted during the year (22. or analyzed (including computa- date.000 expire within the next five years and income tax effects of the Tax Act.780 1. 2017 2016 a corporate tax rate decrease from 35% to 21% effective for tax Property. due to. These adjustments Statutory tax rate $110. Foreign portion of $70.S. net of $(2.105) provision in accordance with its understanding of the Tax Act Capital loss carryforwards — (20) and guidance available as of the date of this filing and as a result Employee benefits (115.395 219. that impacted taxes on foreign positions 4. $3.S. The tax is payable in installments over a period of 8 years. combined with adjustments related to actual consolidated tax expense is as follows: prior year items. federal and state jurisdictions as well 2017 2016 2015 as overall changes in facts and judgment. 2017.2 22.797 at which they are expected to reverse in the future.946 years beginning after December 31.968) (1.381) estimate of the impact of the Tax Act in its year-end income tax U.031) (93.5)% 1. Puerto Rico.000 in tax value of state loss carryforwards and and the revaluation of deferred tax assets and liabilities and $15.4) (2.000 of state credit carryforwards remain at December 31. the provisional tax impacts related to the one time transition tax imately $14.065) (2.400 of these loss carryforwards do not have an expiration information available. 2017.0% $154.8% ends and closures business. Accord- Company has total federal net operating loss carryforwards of ingly. The Company has calculated its best Foreign loss carryforwards (59. possibly materially.5% In many of the countries in which the Company operates. The provisional amount related to the remeasurement Valuation allowance on deferred tax of certain deferred tax assets and liabilities. the transition acquired in the 2017 acquisition of Packaging Holdings. its retail security packaging operation in Effect of tax rate changes Juncos. The ultimate impact may upon future taxable earnings of the respective entities and differ from these provisional amounts. as opposed to the and assumptions the Company has made. the adjustment Transition tax 76. 2016 and 2015.872 1. Approx. included these amounts in its consolidated financial statements 2017. 118 (“SAB 118”) to address the application of U. federal tax benefit 4.933. 2017. tions) in reasonable detail to complete the accounting for certain approximately $8.000 were was $76. The provisional amount related to the one-time transition tax on certain accumulated foreign earnings Federal loss carryforwards of approximately $69.415) (0.333) (1.1) 639 0.

in many countries outside of the United States and the taxes ments of future periods within the provided time frame. as if it were a cash distribution made in 2013. January 1 $17. with the remainder as a tax free return of basis and taxable capital gain. However.700 $17. 2017. the Company received benefits from the lapse of two final NOPAs proposing the same adjustments and penalties statutes of limitations (300) (100) (9. The assurance that this matter will be resolved in the Company’s amounts listed above for accrued interest and interest expense favor.700 NOPAs proposing the same adjustments and penalties as in the Decreases in unrecognized tax prior NOPAs. With few exceptions. This change includes the anticipated increase in rate changes enacted during the year” for 2017 consists of the reserves related to existing positions offset by settlements of benefits related to the revaluation of deferred tax assets and issues currently under examination and the release of existing liabilities due to the enactment of the Tax Act.200 $26. Division of the IRS. would have an impact on the effective tax tax liability associated with the income adjustment proposed in rate if ultimately recognized.400) (3. the Company received a draft NOPA proposing Increases in prior years’ penalties of $18.100 related to the revaluation of the valuation any uncertain tax issue is highly judgmental.500 as well as an Information Document Request (“IDR”) requesting Decreases in prior years’ the Company’s analysis of why such penalties should not unrecognized tax benefits (2.000 In March 2017. respectively. 2017 and December 31.300. The Company mates. 2018.000 associated with the IRS’s recharacterization. jurisdiction to an extent that loss of those benefits would have a material effect on the Company’s overall effective tax rate. Reserve for uncertain tax positions As previously disclosed.200) as in the prior NOPAs. On November 14. reserves due to the expiration of the statute of limitations. the final resolution of this matter could be be available if the interest were ultimately paid. management allowance due to the enactment of the Tax Act. 2017. 2017. includes approximately $100 of interest cable tax laws and existing Treasury regulations. the reported as part of income tax expense. federal income taxes or made or resolved or when statutes of limitation on potential foreign withholding taxes have been provided as all accumu. The Company strongly believes the position 2016.600 3. and accordingly has jurisdictions.S. The benefits included in “Valuation allowance” include a Although the Company’s estimate for the potential outcome for benefit of $3. unrecognized tax benefits 700 1. the effective tax rate may fluctuate will finalize its analysis during 2018 and. At the December 31 $17.100) apply. On January 22. proposes to recharacterize the distribution. believes that any reasonably foreseeable outcomes related to As of December 31.100 $17.200 time of the distribution in 2012. material effect on its results of operations and financial con- dition. 2016. While The Company and/or its subsidiaries file federal. assessments expire. The Company had Company filed a protest to the proposed deficiency with the approximately $2. 2017. However. includ. and the subsequent repayment of the note over Gross Unrecognized Tax Benefits at the course of 2013. Company’s previously reported income tax provision for the imately $800 related to the adjustment of prior years’ items and year in question is appropriate.700 $17. the jurisdictions in which earn- lated earnings of foreign subsidiaries are deemed to have been ings or deductions are realized may differ from current esti- remitted as part of the one-time transition tax. As a result. The Company has operations 118.500 and tribution would be characterized as a dividend. the Company received a draft The following table sets forth the reconciliation of the gross Notice of Proposed Adjustment (“NOPA”) from the Internal amounts of unrecognized tax benefits at the beginning and Revenue Service (IRS) in February 2017 proposing an adjustment ending of the periods indicated: to income for the 2013 tax year based on the IRS’s recharacterization of a distribution of an intercompany note 2017 2016 2015 made in 2012. will make any necessary adjustments in the financial state. as provided for in SAB significantly on a quarterly basis. The benefits included in “Adjustments to prior year deferred The Company believes that it is reasonably possible that the taxes” for each of the years presented consist primarily of amount reserved for uncertain tax positions at December 31. The benefits included in the “Effect of tax months. no additional U.000 1.500) (2. 2017. respectively. the Company is no longer not provided additional reserve for tax uncertainty.300 and $2. F27 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K . With respect to accumulated earnings of to estimated tax liabilities in the period the assessments are foreign subsidiaries. which is comprised of an interest benefit of approx. there is still a subject to income tax examinations by tax authorities for years possibility that an adverse outcome of the matter could have a before 2012. Tax expense for the year ended of the IRS with regard to this matter is inconsistent with appli- December 31. the Company Settlements (200) (300) (700) received a Revenue Agents Report (“RAR”) that included the Gross Unrecognized Tax Benefits at same adjustments and penalties as in the prior NOPAs. which will cause the matter to be referred to the Appeals uncertain tax positions at December 31.400 1. adjustments to deferred tax assets and liabilities arising from 2017 will increase by approximately $400 over the next twelve changes in estimates. On Increases in current year’s October 5. expensive and time consuming to defend and/or settle. paid on those earnings are subject to varying rates. approximately $15. it was characterized as a divi- dend to the extent of earnings and profits. the Company received two revised draft unrecognized tax benefits 1. the RAR would be approximately $89.000. the entire dis- 2017 and December 31. The incremental $15. excluding interest and Interest and/or penalties related to income taxes are the previously referenced penalties. and that the benefit. Regardless of whether the matter is resolved in the do not reflect the benefit of a federal tax deduction which would Company’s favor. The Com- ing a determination of our intentions with respect to pany is not dependent upon the favorable benefit of any one undistributed earnings of international subsidiaries. evaluating the impact of the Tax Act on its permanent future results may include favorable or unfavorable adjustments reinvestment assertion.300 accrued for interest related to IRS. Additionally. the Company is in the process of these matters have been adequately provided for. there can be no interest expense of $700 on unrecognized tax benefits. state and the Company believes that the amount of tax originally paid local income tax returns in the United States and various foreign with respect to this distribution is correct. As the IRS Of the unrecognized tax benefit balances at December 31. The Company responded to this IDR in April 2017. On November 20.

in most cases. there is still a possibility that an adverse outcome of becoming final. excluding interest and penalties.300. related to environmental contingencies. beyond 15. as well as long-term purchase commit- Company has increased its reserves for this site by a total of $17 ments for certain raw materials.821. The guidance indicates that. SONOCO 2017 ANNUAL REPORT | FORM 10-K F28 . Some of to income for the 2013 tax year. principally old corrugated con- in order to reflect its best estimate of what it is likely to pay in tainers. However.000. Mills). the Company income in excess of a deemed return on tangible assets of for.S.129 shares during 2016. the In connection with its acquisition of Tegrant in November Company does not believe that the resolution of these matters 2011. the Company (and its not elected a method and will only do so after its completion of subsidiaries) had accrued $20. Paper Mills Corp. the Company’s accrual for environmental contingencies $118. $58. the Company’s share. The settlement was paid during the first quarter of this matter could be expensive and time consuming to defend 2017. South Carolina. In addition to those described above. While the Company believes that the amount of paid during the course of 2017.900 from 2022 through 2026. the Company filed a protest to the proposed Environmental matters deficiency with the IRS. $71. as well as any such proceedings known to be con. These purchase commitments require the Company to order to complete the remediation.739 and the sites are also the responsibility of other parties. (U.334. The total on the Company’s financial statements. On Jan- uary 22.S. remediation cost of the Spartanburg site was estimated to be $17. Company’s financial statements. The Company pollution control laws and regulations in all jurisdictions in which strongly believes the position of the IRS with regard to this it operates. matter is inconsistent with applicable tax laws and existing Treasury regulations. 2017 and make total payments of approximately $289.504 and $16.900 in 2019. there can be no assurance that this matter will owned subsidiary of the Company.515.400 in 2018. at a cost of $6. imately $89. Inc. if any. Pursuant to U. nize deferred taxes for temporary differences expected to reverse as GILTI or treat the effects of such a reversal as a cur. as discussed below. the Company has received a final Revenue industries. claims and litigation aris- ing in the normal course of business. which will cause the matter to be The Company is subject to a variety of environmental and referred to the Appeals Division of the IRS. U.868. 2017. These accruals are included in “Accrued expenses and other” on the Company’s 14. The poten. River matter. have the potential to be associated with the proposed adjustment would be approx- material. the Company has spent a total of $913 on gations to purchase electricity and steam.S. However. the Company is sub- templated by governmental authorities. matter is resolved in the Company’s favor. These repurchases.300 in related to the Spartanburg site totaled $16. All of 172. During previous years.884 shares during 2015. respectively. The Company cannot currently estimate its poten- tial liability. 2018. The GILTI provisions impose a tax on foreign sonably estimated at the current time. respectively. it will be acceptable to either recog. Currently. However. Shareholders’ equity and earnings per share the amounts accrued with respect to this exposure. While the outcome of Spartanburg these matters could differ from management’s expectations.335. and that the Company’s previously Fox River settlement reported income tax provision for the year in question is appro- In January 2017. cannot be rea- of the Tax Act. $7. 2021 and a total of $2. In January 2018. Commitments and contingencies Consolidated Balance Sheets. As of December 31.400 at the time of the acquisition and an accrual in this Commitments amount was recorded on Tegrant’s opening balance sheet. Mills have resolved all the matter could have a material effect on its results of oper- pending or threatened legal proceedings related to the Fox ations and financial condition. subject to an sonable possibility of having a material adverse effect on the accounting policy election. Regardless of whether the final settlement of cost recovery claims made by Appvion. the FASB released guidance on accounting tial remediation liabilities are shared with such other parties. As a result of this settlement uncertainty. As is the case with other companies in similar Financial Statements. which it uses in its remediation of the Spartanburg site. if any. $6. the production processes. obtained Court approval of a be resolved in the Company’s favor. the Company had long-term obli- Since the acquisition. the analysis of the GILTI provisions. ject to other various legal proceedings. as follows: 2016. association with the exercise of stock appreciation rights and performance-based stock awards. and previously established reserves and no additional expense was accordingly has not provided additional reserve for tax required to be recognized in 2017.306 and $24. The incremental tax liability these exposures. accruals for estimated losses are recorded at the time information becomes available indicating Other legal and regulatory matters that losses are probable and that the amounts are reasonably As described more fully in Note 13 to these Consolidated estimable. the Company faces exposure from actual or potential Agent’s Report (“RAR”) from the IRS proposing an adjustment claims and legal proceedings from a variety of sources. the Company identified potential environmental con. the Company has As of December 31. which are Other environmental matters not part of a publicly announced plan or program. the Company and U. and party at several other environmentally contaminated sites. 2017 and 2016. Summary rent tax item if and when incurred. and related legal and professional fees totaling $369 were and/or settle. $37. 148. All payments were made against tax originally paid with respect to this distribution is correct. for the global intangible low-taxed income (“GILTI”) provisions and. At December 31.800 in 2020. has a reasonable possibility of having a material adverse effect tamination at a site in Spartanburg.349 shares during 2017. respectively. as provided for in SAB 118. Stock repurchases the Company does not believe that the resolution of this matter The Company occasionally repurchases shares of its com- has a reasonable possibility of having a material adverse effect mon stock to satisfy employee tax withholding obligations in on the Company’s financial statements.S. damages or range of potential loss. a wholly priate. GAAP. does not believe that the resolution of these matters has a rea- eign corporations. totaled The Company has been named as a potentially responsible 119. the final resolution of for $3.

During 2016.37 cards. such as coasters and glass covers. from the exercise of all dilutive stock appreciation rights (SARs) fiber-based construction tubes and forms. period or assumed repurchases from proceeds from the The Protective Solutions segment includes the following exercise of the SARs were antidilutive.341 noncontrolling interest related to the creation of a joint shares were repurchased under this authorization at a cost of venture for the manufacture of tubes and cores from a facility in $100. Certain composite wire and cable reels and spools. On February 10. assembling. share was as follows for the years ended December 31.46 The Display and Packaging segment includes the following Diluted $ 1. and $1. In April 2015.969. The Company consolidates 100% of Graffo. with the partner’s 33% Earnings per share share included in “Noncontrolling Interests” on the Con- The following table sets forth the computation of basic and solidated Balance Sheet. retail packaging. pension settlement charges.482 trays (both composite and thermoformed plastic). Basic $ 1. Saudi Arabia.392 membrane ends and closures.345 $286. including printed backer The Company paid dividends totaling $1. corrugating medium. Net income attributable to when the Company completed the sale of its rigid plastics blow Sonoco: molding operations. a total of 2. insurance settlement gains. which assumes the proceeds includes the following products: paperboard tubes and cores. Potentially dilutive securities are calculated in accordance The Paper and Industrial Converted Products segment with the treasury stock method. 2017 2016 2015 16.030. the Company acquired a 67% controlling inter- No shares were repurchased during 2015. Denominator: The Consumer Packaging segment includes the following Weighted average common products and services: round and shaped rigid containers and shares outstanding 100. acquisition-related costs. and Protective Solutions.611 shares remain ture and the assets have been consolidated. and metal and peelable Diluted outstanding shares 100. at December 31.75 $ 2. F29 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K . The fair value of this noncontrolling diluted earnings per share (in thousands.81 $ 2.922 at the time of the acquisition. products: custom-engineered paperboard-based and expanded The average number of shares that were not dilutive and foam protective packaging and components.000.74 $ 2. linerboard. compensation 615 689 910 global brand artwork management. paper amenities.782 102.093 101. printed flexible packaging. Segment reporting Numerator: The Company reports its financial results in four reportable Net income attributable to segments – Consumer Packaging. a total of 2.000. 2016.” These stock appreciation rights may become dilutive in future periods if the market price of the Company’s common stock appreciates.46. available for repurchase under this authorization. fulfillment and scal- computation of earnings per share. wooden. Accord. the Company recorded a Company’s common stock. 2016. 2017. and recycled SARs are not dilutive because either the exercise price is greater paperboard. and per share in 2017. manufacturing.000 shares of the During the third quarter of 2017. thermoformed blisters and heat sealing equipment. packing and distributing temporary. This segment also included blow- Per common share: molded plastic bottles and jars through November 7. except per share data): interest was $7.136 and Industrial Converted Products. supply chain manage- No adjustments were made to reported net income in the ment services. Restructuring charges. 2016 and 2015. gains from 2016 and 2015 (in thousands): the disposition of businesses.434 $250. asset impairment charges. 2017. semipermanent and permanent point-of-purchase displays.54. $1. able service centers. metal and are used to repurchase the Company’s common stock. recovered paper than the average market price of the stock during the reporting and material recycling services. No shares were repurchased during 2017. Paper Sonoco $175. The Company owns a 51% share in the joint ven- ingly.852 101.237 101.83 $ 2. the Company’s Board of Directors Noncontrolling interests authorized the repurchase of up to 5. interest 2017 2016 2015 expense and interest income are included in income before Anti-dilutive stock appreciation rights 487 357 902 income taxes under “Corporate.44 products and services: designing. and temperature- therefore not included in the computation of diluted income per assurance packaging. extruded and Dilutive effect of stock-based injection-molded plastic products. respectively.389 $1. including contract packing. Display and Packaging. est in Graffo Paranaense de Embalagens S/A (“Graffo”).

280 561.168 $1.453 525.866.556 262.744 23.850 $ 26.097 3.608.111 1.129.365 573.203 2015 1.178 951.953 106.016 $3.567 1.975 $3.516 $480.886 446.892 $1.916 608.574 — 213.351 441.443 $ 19.107 2016 2.512 527.277 2015 231.623 76.924 4.671.618) 327.013 (84.782.071 $ 43.554 2016 240. plant and equipment.457 2016 5.914 $ 188.621 491.925 14.877 2015 2.899 $ 2. property insurance settlement gains.946 Identifiable Assets3 2017 $1.465 $508.896 $ — $ 151.369 186.962.863 $ 141.013.783 971.110 2.803 $ — $ 217. asset impairment charges.497 $4.038 Sales are attributed to countries/regions based upon the All other 545.908 $ 61.267 $ 82.500) 7.742 24.538 2015 2.126 2017 2016 2015 Canada 120.650 $4.678 51.685 Depreciation.059 1.522 524.835.516 plant location from which products are shipped. pension settlement charges.395 101. Long-lived Total $5. and other non-operational income and expenses not associated with a particular segment. interest income.391 $552. gains from the sale of a business.797 129.048. 4 Depreciation.281 $ 3.269 — 114.057 46.020 The remaining amounts reported as Corporate consist of interest expense.268 $2.112 520.955 1.890.849 — 205.908) 2015 15.698 627.964.812 (490) (1.070 30.097 1.650 2016 2.671 192.206.099 $2. and other non-operational income and expenses associated with the following seg- ments: Paper and Display Industrial Consumer and Converted Protective Packaging Packaging Products Solutions Corporate Total 2017 $ 9.542 100.141 $ 1.990 $ 2.447.860 15.502 $ 154.058 Intersegment Sales1 2017 $ 5.064 1.413 1. investments in affiliates. intangible assets and investment in affiliates (see Notes 6 and 7).625 2016 88.850. acquisition related charges. The following table sets forth financial information about each of the Company’s business segments: Years ended December 31 Paper and Display Industrial Consumer and Converted Protective Packaging Packaging Products Solutions Corporate Consolidated Total Revenue 2017 $2. 3 Identifiable assets are those assets used by each segment in its operations. good- will. depletion and amortization incurred at Corporate are allocated to the reportable segments.036.369 11.036.542 60.592 253.769 $ — $5. environmental settlement gains.468 $ 42.161 Capital Expenditures 2017 $ 63.146 $2.357 1.875 16.182 2015 96.557 $ 2.896 508.469) 15.199.369 Income Before Income Taxes2 2017 $ 250.236 $1.716 74.182 — 5.590 10.741 2015 75.559 606.786 505.079.007. 2 Included in Corporate are restructuring.082 $24.062 111.484. headquarters facilities. Depletion and Amortization4 2017 $ 98.008 15.090 $ 74.882 $ 17.729.906 1.899 — 4.436) $ 314.180 $538.913 — 4.615 599.691 2016 (80.665 $ — $5.369 assets are comprised of property.220 16.018 (11.693.126. Corporate assets consist primarily of cash and cash equivalents.661 2015 4.563 Customers Total $2.923. Geographic regions 2017 2016 2015 Sales to unaffiliated customers and long-lived assets by Long-lived Assets geographic region are as follows: United States $1.295 1 Intersegment sales are recorded at a market-related transfer price.551 — 109.121 $(135.507.450 — 4.122.721 2016 1.164.505 450.263.452 157.302 Canada 245. SONOCO 2017 ANNUAL REPORT | FORM 10-K F30 .986 10.964.904 124.043.782.828 104.617 $ 23.724 15.022 $511.913 2016 86.321 $540.513 Europe 981.601 12.188.876) (55.557. deferred income taxes and prepaid expenses.208 Sales to Unaffiliated All other 108.123.883 27.346.509 2.877 $4.425 $ 287.031 $ 20.949 290.112.992 268.689 Sales to Unaffiliated Customers 2017 $2.906 74.793.621 522.526 4.719.892.746 Europe 659.268 1.643 United States $3.196 $1.

738 $ (8.109 Amounts reclassified from accumulated other comprehensive loss to net income — 49.667 (3. and administrative items expenses (71.821) $ 1.577) 7. 2017 December 31.990) Cost of sales Amortization of defined benefit pension (9.389 Provision for income taxes (49.146) (28.174 Amounts reclassified from accumulated other comprehensive loss to fixed assets — — 64 64 Other comprehensive income/(loss) 88.137) $(444.091 (35.347 Amounts reclassified from accumulated other comprehensive loss to retained earnings — (73.663) Selling. 2017 $(198.675) 45.136) $ (641) $(666.272) “Other comprehensive income/(loss) before reclassifications” during 2017.715) (9.623) Net income F31 S O N O C O 2 0 1 7 A N N U A L R E P O R T | FORM 10-K .981 Cost of sales Commodity contracts 1.371) Income before income taxes (1.689 (2. net of tax as applicable.264 5.012 Provision for income taxes $ 4.847) Balance at December 31.071 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 sub- sidiary.361) (9.849) (26.003 9. 2016 Consolidated Statements of Net Income Gains and losses on cash flow hedges Foreign exchange contracts $ 11.622) (38. general. and administrative expenses Amortization of defined benefit pension items (29. general.359) Net income Defined benefit pension items Effect of settlement $(32.361) (35.841) 1.174) $(31.623 Amounts reclassified from accumulated other comprehensive loss to fixed assets — — 59 59 Other comprehensive income/(loss) (33.359 31.653) Income before income taxes 21.966) 3.849 (4.761) $ — Selling. 2016 $(286.495) $(467.264) Net income Total reclassifications for the period $(45. Accumulated other comprehensive loss The following table summarizes the components of accumulated other comprehensive loss and the changes in accumulated other comprehensive loss.239) Balance at December 31.533) Other comprehensive income/(loss) before reclassifications (33.152) $(702. for the years ended December 31.673 (67.003 59.675 $ (5.583) Cost of sales 6.004) (235) (73.345) 145. 17.380) Other comprehensive income/(loss) before reclassifications 88.266 100.244) $(5.529) Amounts reclassified from accumulated other comprehensive loss to net income — 26.769) Net Sales Foreign exchange contracts (6.641 (8. 2017 and 2016: Defined Gains and Accumulated Foreign Benefit Losses on Other Currency Pension Cash Flow Comprehensive Items Items Hedges Loss Balance at December 31. 2015 $(253. The following table summarizes the amounts reclassified from accumulated other comprehensive loss and the affected line items in the consolidated statements of net income for the years ended December 31.840 2.773 12.764) 3. includes $5.498) $(453.939 $(738. 2017 and 2016: Amount Reclassified from Accumulated Other Comprehensive Loss Details about Accumulated Other Twelve Months Ended Twelve Months Ended Affected Line Item in the Comprehensive Loss Components December 31.

197 Gross profit 245.324 $1.252 65.361) Defined benefit pension items: Other comprehensive income/(loss) before reclassifications 13. 18.875 250.048) $ 4.897 511 25.013 235.634 $1.37 0.740 (25.172.72 0.04 .371 (3.264 Net other comprehensive income/(loss) from defined benefit pension items 84.873 242.577) Gains and losses on cash flow hedges: Other comprehensive income/(loss) before reclassifications 3.58 54.841) Amounts reclassified from accumulated other comprehensive income/(loss) to net income 71.111 7.914 56. tax reform legislation.S.37 0.278 8.347 $(40.37 0.359 Amounts reclassified from accumulated other comprehensive income/(loss) to fixed assets 64 — 64 59 — 59 Net other comprehensive income/(loss) from cash flow hedges (3.265 resulting from new U.174) $145.018 Gross profit 220.39 0.389) 26.50 * Net income attributable to Sonoco in the fourth quarter of 2017 includes an additional tax provision of $51.003 $(33.012) 5.208.diluted 0.240.276 $ 1.222) 877 (2.57 55.43 $ 0.73 $ 0.common 0.10 49.947 1.689 (17.54 $ 0. 2017 and 2016: For the year ended December 31.733 43.341 from the sale of the Company’s rigid plas- tic blow molding operations.730) 8.542 (35.43 0.common 0.787 Restructuring/Asset impairment charges 9. For the year ended December 31.373 214.680 $ 1.153 (9. and the fourth quarter of 2016 includes a net after-tax gain of $49.142.basic $ 0.64 1.051) 59.673 Amounts reclassified from accumulated other comprehensive income/(loss) to net income (6.361) $ — $(33.118 (3.66 47.952) 7.06 Cash dividends .383) 20.324.06 . 2017 2016 Tax After Tax After Before Tax (Expense) Tax Before Tax (Expense) Tax Amount Benefit Amount Amount Benefit Amount Foreign currency items $ 88.low 51.228 23.77 .10 50.13 53.low 36.87 49.299.201 $(35.00 53.278) 9.043 (3.high 55.724 $ 1.641) 1.653 (12. SONOCO 2017 ANNUAL REPORT | FORM 10-K F32 .840 (56.35 0.773) 49.873 Per common share: Net income attributable to Sonoco: .847) The change in defined benefit plans includes pretax changes of $(836) and $(767) during the years ended December 31.266 2.675 Per common share: Net income attributable to Sonoco: .55 0.091 Other comprehensive income/(loss) $169.355 (1.521 $(24. The following table summarizes the tax (expense) benefit amounts for the other comprehensive loss components for the years ended December 31.345) 11.56 45.37 Market price .47 .125 72.622 (21.430 Net income attributable to Sonoco 59.003 $ — $ 88.39 Market price .04 Cash dividends .812 5.675) 8.basic $ 0.diluted 0. related to one of the Company’s equity method investments.253 242.966 (4.02 49. Selected quarterly financial data The following table sets forth selected quarterly financial data of the Company: First Second Third Fourth (unaudited) Quarter Quarter Quarter Quarter* 2017 Net sales $1.77 55.08 50.39 2016 Net sales $ 1. 2017 and 2016.420 Restructuring/Asset impairment charges 4.222 235.53 0.674 $1.59 $ 0.226.65 $ 1.56 $ 0.39 0.59 0.613 (940) 1.900 Net income attributable to Sonoco 53.205.089) 2.high 49.849 38.395 104.

Our internal if any. Control—Integrated Framework (2013). Our management. acquired March 14. including the CEO and CFO. CFO concluded that such controls and procedures. assurance that any design will succeed in achieving its stated cial reporting as of December 31. Our disclosure controls and procedures are designed to ensure that information disclosed in the reports that we file or Changes in internal control over financial submit is recorded. were excluded. constituted approximately 4. evaluation as described above. accountants on accounting and financial and Clear Lam Packaging. PricewaterhouseCoopers LLP. 2017 controls and procedures as defined in Rule 13a-15(e) under the as stated in their report. which are included in the Company’s 2017 con- solidated financial statements. our CEO and CFO to provide reason.1% of total assets as of December 31. such term is defined in Exchange Act Rule 13a-15(f). misstatements due to error or fraud Based on our evaluation under the framework in Internal may occur and not be detected timely. summarized and reported within reporting the relevant time periods specified in SEC rules and forms. we conducted an about the likelihood of future events. Other information effective as of December 31. Packaging Holdings. the end of the period goals under all potential future conditions. not absolute. Controls and procedures of the Company’s consolidated revenues and approximately Disclosure controls and procedures 4. effective control system. For There have been no changes in the Company’s internal con- this purpose. disclosure 2017. 2017. Internal control over financial report- ing. may become inadequate because of changes in conditions or trol—Integrated Framework (2013) issued by the Committee of deterioration in the degree of compliance with policies or Sponsoring Organizations of the Treadway Commission procedures. assurance that the objectives will financial reporting be met. ing can be faulty and that breakdowns can occur because of able assurance regarding the reliability of financial reporting and simple error or mistake. controls covered by this report based on the framework in Internal Con. as absolute assurance that all control issues and instances of fraud. including our CEO and CFO. These inherent control over financial reporting is a process designed by. within the Company have been detected. our management con- cluded that our internal control over financial reporting was Item 9B. Inc. 2017. communicated to the Company’s management. by collusion of two or more accordance with generally accepted accounting principles. The operations of Packaging Holdings and None. can provide Management’s report on internal control over only reasonable. has audited the effectiveness of our cial Officer (“CFO”). to allow timely decisions regard. acquired July 24. as amended (the “Exchange 8 of this Annual Report on Form 10-K.3% Item 9A. including the CEO and CFO. Because of the inherent limitations in a cost- (“COSO”). The design Under the supervision and with the participation of our of any system of controls is based in part on certain assumptions management. with. 2017. 2017. were effective. Controls can also be circumvented by the preparation of financial statements for external purposes in the individual acts of some persons. (“Clear Lam”). trol over financial reporting during the three months ended out limitation. people. Changes in and disagreements with subsidiaries (“Packaging Holdings”). Clear Lam. as of does not expect that the Company’s disclosure controls and December 31. that have materially affected. and 36 SONOCO 2017 ANNUAL REPORT | FORM 10-K . over financial reporting. Act”). an independent registered ipation of our Chief Executive Officer (“CEO”) and Chief Finan. Over time. the end of the period covered by this procedures or internal control over financial reporting will pre- Annual Report on Form 10-K. 2017. or that are information that is required to be disclosed in the reports we file reasonably likely to materially affect. our CEO and The Company’s management. Inc. or limitations include the realities that judgments in decision mak- under the supervision of. Based on this evaluation. public accounting firm. In conducting management’s Not applicable. or by management override of the controls. and there can be no evaluation of the effectiveness of our internal control over finan. processed. 2017. no matter how well designed and operated. Item 9. no evaluation of controls can provide taining adequate internal control over financial reporting. Limitations on the effectiveness of controls ing required disclosures. which appears at the beginning of Item Securities Exchange Act of 1934. Because of the inherent limitations in internal control Our management is responsible for establishing and main. controls and procedures designed to ensure that December 31. as appropriate. vent all error and all fraud. disclosure controls and procedures include. our internal control over or submit under the Exchange Act is accumulated and financial reporting. conducted an evaluation of our disclosure internal control over financial reporting as of December 31. under the supervision and with the partic.

obligations and liability imposed on April 18.739.sonoco. obligations or liability that Statement for the annual meeting of shareholders to be held on are greater than the duties. 2017. and is available in print to any shareholder who requests it.533 shares.53 6. The maximum number of shares of common stock that may be issued under this plan was set at 10. Corporate Governance and Nominating (as defined in Item 406 of Regulation S-K) that applies to its Committee Charter and Executive Compensation Committee principal executive officer. Equity compensation plan information The following table sets forth aggregated information about all of the Company’s compensation plans (including individual compensation arrangements) under which equity securities of the Company are authorized for issuance as of December 31. but pursuant Thomas E. Directors Whose Terms Continue. and shall be deemed to be “furnished” and Audit Committee Financial Expert – The Company’s Board of not “filed” and will not be deemed incorporated by reference Directors has determined that the Company has at least two into any filing under the Securities Act of 1933 or the Securities “audit committee financial experts. Item 407(d)(5) of Regulation S-K promulgated by the Securities and Exchange Commission. Pursuant to the terms of The information set forth in the Proxy Statement under the Item 407(d)(5) of Regulation S-K.” “Information Concerning Directors in the absence of such designation or identification. obligations or liability of any other member is set forth in Item 1 of this Annual Report on Form 10-K under of the audit committee or Board of Directors.53 6. the caption “Executive Officers of the Registrant.731. At December 31. a person who is determined to caption “Security Ownership of Certain Beneficial Owners.739. a total of 6. Awards granted under all previous plans which are forfeited.000 shares authorized under the 2014 Plan. incorporated herein by reference. Item 12.540 $44. and Richard G. PART III Item 10. Sundaram Nagajaran. principal financial officer.com. serving on its audit committee. Statement under the caption “Compensation Committee The audit committee is comprised of the following members: Report” is also incorporated herein by reference. Security ownership of certain beneficial Thomas E. Audit Code of Ethics – The Company has adopted a code of ethics Committee Charter. caption “Compensation Committee Interlocks and Insider ment. Directors.” is incorporated herein by “audit committee financial expert” pursuant to Item 407 does reference. Chairman. Executive compensation to the provisions of this code of ethics will be posted to this The information set forth in the Proxy Statement under the website within four business days after the waiver or amend. Philippe to the Instructions to Item 407(e)(5) of Regulation S-K. Blythe J.540 $44.” as that term is defined by Exchange Act of 1934 as a result of being so furnished.sonoco. Any waivers or amendments Item 11. report shall not be deemed to be “soliciting material” or subject Kyle. www. Oken meet the terms of the owners and management and related stockholder definition and are independent based on the criteria in the New matters York Stock Exchange Listing Standards. Oken.137 1 The Sonoco Products Company 2014 Long-term Incentive Plan was adopted at the Company’s 2014 Annual Meeting of Share- holders. principal Charter are available through the Company’s website. Marc D. which included all shares remaining under the 2012 Plan and an additional 4. SONOCO 2017 ANNUAL REPORT | FORM 10-K 37 . executive officers and fied as an “audit committee financial expert” pursuant to corporate governance Item 407.381. expire or are cancelled without delivery of shares. McGarvie. accounting officer.137 Equity compensation plans not approved by security holders — — — Total 3.” and be an “audit committee financial expert” will not be deemed an under the caption “Security Ownership of Management” is expert for any purpose as a result of being designated or identi. securities reflected in warrants and rights warrants and rights column (a))1 Plan category (a) (b) (c) Equity compensation plans approved by security holders 3. The information set forth in the Proxy with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. to Regulation 14A. This code of ethics is available through the shareholder who requests it.” The Company’s Corporate Governance Guidelines.” under the caption “Executive Compensation. 2017: Number of securities remaining available for Number of securities future issuance under to be issued upon Weighted-average equity compensation exercise of exercise price of plans (excluding outstanding options. This information is available in print to any cial officers.731.500. or which result in forfeiture of shares back to the Company. 2018 (the Proxy Statement). and such designation or identification does not The information set forth in the Company’s definitive Proxy impose on such person any duties.731. and other senior executive and senior finan. Information about executive officers of the Company not affect the duties. such Guillemot.” Audit Committee Members – The Company has a separately and under the caption “Director Compensation” is incorporated designated standing audit committee established in accordance herein by reference.137 shares remain available for future grant under the 2014 Plan. Company’s website. under the captions such person as a member of the audit committee and Board of “Proposal 1: Election of Directors. Participation. will be added to the total shares available under the 2014 Plan.com.” and “Section 16(a) Beneficial Further. Whiddon. Whiddon and Marc D. outstanding options. www. the designation or identification of a person as an Ownership Reporting Compliance.

The remaining caption “Independent Registered Public Accounting Firm” is 1. incorporated herein by reference.128. The weighted-average exercise price of $44.611.528 securities relate to deferred compensation stock units. 38 SONOCO 2017 ANNUAL REPORT | FORM 10-K . Certain relationships and related transactions. and director independence The information set forth in the Proxy Statement under the captions “Related Party Transactions” and “Corporate Gover- nance – Director Independence Policies” is incorporated herein by reference. Item 13. Principal accountant fees and services stock appreciation rights.739. Each current member of the Audit.53 relates to Item 14.012 of the The information set forth in the Proxy Statement under the 3. performance-contingent restricted stock units and restricted stock unit awards that have no exercise price requirement. Corporate Governance and Nominating and Executive Compensation Committees is independent as defined in the listing standards of the New York Stock Exchange.540 securities issuable upon exercise. which account for 2.

2005 47.464 1 Includes translation adjustments and other insignificant adjustments.069 $ 1. Exhibit Index 3 Exhibit Index 3-1 Restated Articles of Incorporation.. N.319 Valuation Allowance on Deferred Tax Assets 49.6345 49. 2010) SONOCO 2017 ANNUAL REPORT | FORM 10-K 39 .A.75% Notes due 2040)(incorporated by reference to Registrant’s Form 8-K filed October 28. Form 10-K summary The Company has chosen not to provide a Form 10-K summary. between Registrant and The Bank of New York.199 2016 Allowance for Doubtful Accounts $11.575)3 — — 17.365)4 7.Item 15.439 $ 2431 $ 2. 2016 and 2015 – Consolidated Statements of Comprehensive Income for the years ended December 31.913 LIFO Reserve 17.908 9863 — — 18.248 (5. as amended through June 7. 4 Includes translation adjustments and increases to deferred tax assets which were previously fully reserved. net operating loss carryforwards and other deferred tax assets. 3 Includes adjustments based on pricing and inventory levels.632 Valuation Allowance on Deferred Tax Assets 49. as Trustee (including form of 5. are not applicable or the required information is given in the financial statements or notes thereto.501 $ 4671 $ 4462 $11.566 $ (86)1 $ 1.797 6.069 LIFO Reserve 17.273 (306)4 2. 1991.3295 49. Exhibits and financial statement schedules PART IV (a) 1 Financial Statements – The following financial statements are provided under Item 8 – Financial Statements and Supplementary Data of this Annual Report on Form 10-K: – Report of Independent Registered Public Accounting Firm – Consolidated Balance Sheets as of December 31. 2017. 5 Includes utilization of capital loss carryforwards. 2017.319 3133 — — 17.894 (1. 2017.231 2. Item 16. dated as of June 15. 2017.967 (2.6652 $10. 2010.894 Valuation Allowance on Deferred Tax Assets 63.884 LIFO Reserve 18.6532 $ 9. 2016 and 2015 – Consolidated Statements of Cash Flows for the years ended December 31. as amended (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended April 3. as Trustee (incorporated by reference to the Registrant’s Form S-4 (File Number 333-119863)) 4-2 Form of Second Supplemental Indenture.686)4 10. 2016 and 2015 – Notes to Consolidated Financial Statements 2 Financial Statement Schedules Schedule II – Valuation and Qualifying Accounts for the Years Ended December 31. 2016 and 2015 – Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31.547 $ 2.797 2015 Allowance for Doubtful Accounts $ 8. All other schedules not included have been omitted because they are not required. Column A Column B Column C—Additions Column D Column E Balance at Charged to Balance Beginning Costs and Charged to at End Description of Year Expenses Other Deductions of Year 2017 Allowance for Doubtful Accounts $10. dated as of November 1. 3 The exhibits listed on the Exhibit Index to this Form 10-K have been incorporated herein by reference.884 $ 1. 2017. 2016 and 2015. 2 Includes amounts written off. between the Registrant and The Bank of New York Mellon Trust Company. 2017 and 2016 – Consolidated Statements of Income for the years ended December 31. 2017 3-2 By-Laws.464 3. 2016) 4-1 Indenture.

2011) 10-1 1991 Sonoco Products Company Key Employee Stock Plan. 2017) 10-21 Description of Stock Appreciation Rights. amended and restated as of January 1.75% Notes due 2040). as amended (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 28. 2014 (incorporated by reference to Registrant’s Form 8-K filed February 18. 2000. 2012). as amended (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 30. N. as amended (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 28. Deferred Compensation Plan for Corporate Officers of Sonoco Products Company). 4-3 Form of Third Supplemental Indenture (including form of 4. 2014) 10-18 Description of Stock Appreciation Rights. 10-4 Sonoco Products Company 2008 Long-term Incentive Plan (incorporated by reference to the Company’s Proxy Statement for the Annual Meeting of Shareholders on April 16. 2014) 10-7 Deferred Compensation Plan for Key Employees of Sonoco Products Company (a. 2004) 10-14 Description of Stock Appreciation Rights and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 8. 2008) 10-9 Sonoco Products Company Amended and Restated Trust Agreement for Executives. 2008 (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 28. filed on March 2. 2013 (incorporated by reference to Registrant’s Form 8-K filed February 19. 2012 (incorporated by reference to Registrant’s Form 8-K filed February 13. 2007) 10-2 Sonoco Products Company 1996 Non-employee Directors’ Stock Plan. 2015) 10-12 Performance-based Annual Incentive Plan for Executive Officers (incorporated by reference to the Registrant’s Proxy Statement for the April 19. as amended (incorporated by reference to the Registrant’s Form 10-K for the year ended December 31. 2008) 10-10 Sonoco Products Company Amended and Restated Directors Deferral Trust Agreement. 2015) 10-19 Description of Stock Appreciation Rights. 2017 (incorporated by reference to Registrant’s Form 8-K filed February 14. 2016 (incorporated by reference to Registrant’s Form 8-K filed February 16. 2013) 10-17 Description of Stock Appreciation Rights and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 12. 2012) 10-6 Sonoco Products Company 2014 Long-term Incentive Plan (incorporated by reference to the Company’s Proxy Statement for the Annual Meeting of Shareholders on April 16. 2018 (incorporated by reference to Registrant’s Form 8-K filed February 20. 2016) 10-20 Description of Stock Appreciation Rights. 2008) 10-5 Sonoco Products Company 2012 Long-term Incentive Plan (incorporated by reference to the Company’s Proxy Statement for the Annual Meeting of Shareholders on April 18. between Sonoco Products Company and the Bank of New York Mellon Trust Company. as of October 15. 2007) 10-3 Sonoco Retirement and Savings Plan (formerly the Sonoco Savings Plan).375% Notes due 2021). Restricted Stock Units and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 8. Restricted Stock Units and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 14.A. 2018) 40 SONOCO 2017 ANNUAL REPORT | FORM 10-K . 2008) 10-8 Deferred Compensation Plan for Outside Directors of Sonoco Products Company. 2014. 2012) 10-16 Description of Stock Appreciation Rights and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 12. N. 2011) 10-15 Description of Stock Appreciation Rights and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 7. Annual Meeting of Shareholders) 10-13 Form of Executive Bonus Life Agreement between the Company and certain executive officers (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 26. between Sonoco Products Company and the Bank of New York Mellon Trust Company. 2015 (incorporated by reference to Registrant’s Form 8-K filed February 17. 2015 (incorporated by reference to the Registrant’s Form 10-K for the year ended December 31. 2011) 4-4 Form of Fourth Supplemental Indenture (including form of 5. 2011 (incorporated by reference to Registrant’s Form 8-K filed February 14. 2008 (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 28. Restricted Stock Units and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 11.k.a. (incorporated by reference to Registrant’s Form 8-K filed October 27. as amended (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 30. Restricted Stock Units and Performance Contingent Restricted Stock Units granted to executive officers of the Registrant on February 10. (incorporated by reference to Registrant’s Form 8-K filed October 27. 2008) 10-11 Omnibus Benefit Restoration Plan of Sonoco Products Company. as of October 15.A.

2018 (to be filed within 120 days after December 31. (v) Consolidated Statements of Cash Flows for the years ended December 31.F. 2017.10-22 Unsecured Five-Year Fixed Rate Assignable Loan Agreement.A.R. 2016 (incorporated by reference to Registrant’s Form 10-Q for the quarter ended July 3. formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31. (iv) Consolidated Statements of Changes in Total Equity for the years ended December 31. and (vi) Notes to the Consolidated Financial Statements. SONOCO 2017 ANNUAL REPORT | FORM 10-K 41 . 2016 and 2015. 2017. 2016 and 2015. 2017 between the Registrant and Bank of America. 2016 and 2015. filed in conjunction with annual shareholders’ meeting scheduled for April 18. effective July 20. 2017) 12 Statements regarding Computation of Ratio of Earnings to Fixed Charges 21 Subsidiaries of the Registrant 23 Consent of Independent Registered Public Accounting Firm with respect to Registrant’s Form 10-K 31 Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 and 17 C.R. (iii) Consolidated Statements of Comprehensive Income for the years ended December 31.F.13a-14(a) 32 Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 and 17 C. 240. 2017. 240. dated May 25. N. (incorporated by reference to the Registrant’s Form 10-Q for the quarter ended April 2. 2016 and 2015.13a-14(b) 99 Proxy Statement. 2017. 2017 (incorporated by reference to Registrant’s Form 10-Q for the quarter ended July 2. (ii) Consolidated Statements of Income for the years ended December 31. 2017) 101 The following materials from Sonoco Products Company’s Annual Report on Form 10-K for the year ended December 31. 2017 and 2016. 2017) 10-24 Credit Facility. 2017. 2016) 10-23 Three-year Term Loan Agreement dated March 13.

Micali /s/ S. Kirkland Senior Vice President and Chief Financial Officer Corporate Controller (principal financial officer) (principal accounting officer) /s/ H. SONOCO PRODUCTS COMPANY /s/ M. Saunders /s/ James W.E.J. this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on this 28th day of February 2018.E.L. Oken /s/ T.A. Cockrell Director H. Jr. Guillemot Director P.J.D. Chief Executive Officer and Director M.G. Whiddon Director T.J. Oken Director M.SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. /s/ Barry L. on this 28th day of February 2018. Micali Director J. DeLoach. Nagarajan Director S. Whiddon 42 SONOCO 2017 ANNUAL REPORT | FORM 10-K .J. McGarvie /s/ J.R. Sanders President. Director (Executive Chairman) H.E.J. thereunto duly authorized. Sanders /s/ H.G.R. Davies /s/ P. Jr.E.D. Kirkland Barry L. Haley /s/ R. Saunders James W. the Registrant has duly caused this report to be signed on its behalf by the undersigned. /s/ M. Haley Director J. Davies Director P. Kyle /s/ B. DeLoach. Guillemot /s/ J.L. McGarvie Director B.M. Kyle Director R. Sanders President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934. Sanders M.J. Cockrell /s/ P. Nagarajan /s/ M.A.M.

90 218.84 208.47 183. Containers & Packaging 2017 2016 2012 2014 2013 2015 12/12 12/13 12/14 12/15 12/16 12/17 Sonoco Products Company 100. Comparison of 5-Year Cumulative Total Return* among Sonoco Products Company.S.42 154.06 S&P 500 100. Containers & Packaging index.14 Dow Jones U. ©2017 S&P Dow Jones Indices LLC. All rights reserved.71 161. Fiscal year ending December 31. a division of S&P Global. shareholder return comparison Investor Information The graph below matches Sonoco Products Company’s cumulative 5-year total shareholder return on common stock with the cumulative total returns of the S&P 500 index and the Dow Jones U.S. Containers & Packaging 100.83 151.00 132. S O N O C O 2 0 17 A N N U A L R E P O R T 17 . the S&P 500 Index and the Dow Jones U.18 209.00 145.59 170. All rights reserved.S. The stock price performance included in this graph is not necessarily indicative of future stock price performance.51 152.S. a division of S&P Global.39 150.88 *$100 invested on 12/31/12 in stock or index. ©2017 Standard & Poor’s. Containers & Packaging Sonoco Products Company S&P 500 Dow Jones U.33 201.00 140. including reinvestment of dividends. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2012 to 12/31/2017.17 156.

Dollars and shares in thousands except per share
selected eleven-year financial data (unaudited)

Years ended December 31 2017 2016 2015 *2014
Results
Operating Results
Net sales $5,036,650 $4,782,877 $4,964,369 $5,016,994
Cost of sales and operating expenses 4,630,932 4,351,452 4,531,188 4,616,104
Restructuring/Asset impairment charges 38,419 42,883 50,637 22,792
Gain on disposition of business 104,292
Loss from the early extinguishment of debt
Interest expense 57,220 54,170 56,973 55,140
Interest income 4,475 2,613 2,375 2,749
Income before income taxes 314,554 441,277 327,946 325,707
Provision for income taxes 146,589 164,631 87,738 108,758
Income before equity in earnings of affiliates 167,965 276,646 240,208 216,949
Equity in earnings of affiliates, net of tax 1 9,482 11,235 10,416 9,886
Net income 177,447 287,881 250,624 226,835
Less: Net (income)/loss attributable to noncontrolling interests 2 (2,102) (1,447) (488) (919)
Net income attributable to Sonoco 175,345 286,434 250,136 225,916
Per common share:
Net income attributable to Sonoco:
Basic $1.75 $2.83 $2.46 $2.21
Diluted $1.74 2.81 2.44 2.19
Cash dividends $1.54 1.46 1.37 1.27
Weighted average common shares outstanding:
Basic 100,237 101,093 101,482 102,215
Diluted 100,852 101,782 102,392 103,172
Actual common shares outstanding at December 31 99,414 99,193 100,944 100,603

Financial Position
Net working capital $563,666 $ 546,152 $ 384,862 $ 461,596
Property, plant and equipment, net 1,169,377 1,060,017 1,112,036 1,148,607
Total assets 4,557,721 3,923,203 4,013,685 4,186,706
Long-term debt 1,288,002 1,020,698 1,015,270 1,193,680
Total debt 1,447,329 1,052,743 1,128,637 1,245,960
Total equity 1,730,060 1,554,705 1,532,873 1,503,847
Current ratio 1.6 1.7 1.4 1.5
Total debt to total capital 3 45.6% 40.4% 42.4% 45.3%

Other Data
Depreciation, depletion and amortization expense $217,625 $ 205,182 $ 213,161 $ 198,718
Cash dividends—common 153,137 146,364 138,032 128,793
Market price per common share (ending) 53.14 52.70 40.87 43.70
Return on total equity 10.5% 18.3% 16.5% 13.4%
Return on net sales 3.5% 6.0% 5.0% 4.5%

* As restated/revised
1 2017, 2012, 2011, 2010 and 2009 data include non-operational restructuring and other charges of $581, $22, $17, $671 and $908, respectively.
22017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008 and 2007 data include restructuring charges/(income) of $(71), $(161), $(93), $(52), $2, $116, $200, $138,
$3,787, $(4,107) and $(63), respectively.
3 Calculated as total debt divided by the sum of total debt and total equity.

18 S O N O C O 2 0 17 A N N U A L R E P O R T

selected eleven-year financial data (unaudited)
*2013 *2012 *2011 *2010 *2009 2008 2007

$4,861,657 $ 4,813,571 $4,498,932 $ 4,124,121 $ 3,597,331 $ 4,122,385 $4,039,992
4,487,184 4,437,722 4,139,626 3,761,945 3,317,744 3,772,751 3,695,917
25,038 32,858 36,826 23,999 26,801 100,061 36,191

48,617
59,913 64,114 41,832 37,413 40,992 53,401 61,440
3,187 4,129 3,758 2,307 2,427 6,204 9,182
292,709 283,006 284,406 254,454 214,221 202,376 255,626
93,631 100,402 77,634 63,575 66,445 54,797 55,186
199,078 182,604 206,772 190,879 147,776 147,579 200,440
12,029 12,805 12,061 11,505 7,742 9,679 11,586
211,107 195,409 218,833 202,384 155,518 157,258 212,026
(1,282) (110) (527) (421) (3,663) 7,350 2,130
209,825 195,299 218,306 201,963 151,855 164,608 214,156


$2.05 $1.92 $2.16 $1.99 $1.50 $1.64 $2.13
2.03 1.90 2.14 1.97 1.50 1.63 2.10
1.23 1.19 1.15 1.11 1.08 1.07 1.02

102,577 101,804 101,071 101,599 100,780 100,321 100,632
103,248 102,573 102,173 102,543 101,029 100,986 101,875
102,147 100,847 100,211 100,510 100,149 99,732 99,431

$ 498,105 $ 453,145 $ 467,958 $ 376,867 $ 190,934 $ 231,794 $ 269,598
1,021,920 1,034,906 1,013,622 944,136 926,829 973,442 1,105,342
3,967,322 4,152,390 3,971,362 3,272,398 3,061,265 3,084,426 3,337,285
939,056 1,091,454 1,224,290 599,904 461,055 654,807 801,381
974,257 1,365,062 1,277,956 616,853 579,108 687,785 846,580
1,706,049 1,487,539 1,412,692 1,503,114 1,381,003 1,174,518 1,463,486
1.6 1.4 1.6 1.5 1.2 1.3 1.4
36.3% 47.9% 47.5% 29.1% 29.5% 36.9% 36.6%

$ 197,671 $ 200,403 $ 179,871 $ 169,665 $ 173,587 $ 183,034 $ 181,339
124,845 119,771 114,958 111,756 107,887 106,558 102,658
41.72 29.73 32.96 33.67 29.25 23.16 32.68
13.4% 13.2% 14.3% 14.0% 12.0% 11.6% 16.1%
4.3% 4.1% 4.9% 4.9% 4.2% 4.0% 5.3%

S O N O C O 2 0 17 A N N U A L R E P O R T 19

investor information

Sonoco (NYSE: SON) Availability of Form 10-K and Exhibits
Sonoco has filed with the Securities and Exchange
offers its shareholders
Commission its Annual Report on Form 10-K for the
a wide range of services fiscal year ended December 31, 2017.
and several ways to access
A copy of the Form 10-K, including the financial
important Company information. statements and financial schedules and a list of
exhibits, forms a part of this 2017 Annual Report to
Transfer Agent and Registrar shareholders. The exhibits to the Form 10-K are not
Shareholder inquiries, certificates for transfer, included with this Annual Report, but will be
address changes and dividend reinvestment delivered without charge to any shareholder upon
transactions should be sent to: receipt of a written request. Requests for the exhibits
Continental Stock Transfer & Trust Company should be directed to:
1 State Street Plaza–30th floor Sonoco–A09
New York, NY 10004-1561 1 North Second Street
Domestic: 866 509 5584 Hartsville, SC 29550-3305
International shareholders: +212 981 1705
Email: sonoco@continentalstock.com Dividend Reinvestment Plan
Website: continentalstock.com Enrolling in Sonoco’s Dividend Reinvestment
Plan (“Plan”) provides a simple, economical and
Shareholder Services convenient way for you to invest in Sonoco common
Elizabeth Kremer shares. To be eligible for participation, you must own
Sonoco–A09 at least one share of the common stock in registered
1 North Second Street form. Benefits of enrolling include:
Hartsville, SC 29550-3305 • Provides a convenient way to sell or transfer your
+843 383 7924 shares
elizabeth.kremer@sonoco.com • Protects your “certificated” shares against possible
loss or theft, which also protects you from the
Electronic Payment of Dividends additional expense to replace those certificates
Shareholders may elect to have their dividends • Allows for reinvestment of your cash dividend.
deposited directly into their bank accounts by Dividends are reinvested in Sonoco common stock
contacting Continental Stock Transfer & Trust and additional shares purchased with these
Company at sonoco@continentalstock.com. dividends are credited to your account
• Allows you to invest as little as $50 per month
Shareholder Investment Program to purchase additional shares
This program allows participants to purchase
Sonoco stock and reinvest dividends directly To enroll in the Plan or to receive more information,
without contacting a broker. For more information please contact the Plan administrator, Continental
and a prospectus, go to sonoco.com or Stock Transfer & Trust Company, by visiting
continentalstock.com. continentalstock.com or by calling toll free
866 509 5584. International callers should dial
Duplicate Annual Reports +212 981 1705. You can also reach the Plan
To eliminate duplicate report mailings, contact administrator by writing to:
Continental Stock Transfer & Trust Company at Continental Stock Transfer & Trust Comp any
sonoco@continentalstock.com. Dividend Reinvestment Department
1 State Street Plaza–30th Floor
New York, NY 10004-1561

20 S O N O C O 2 0 17 A N N U A L R E P O R T

Suite 3600 Annual reports.com. financial reports and presentations. religion. Hartsville.com/sonocoproducts). national origin or physical disability. Fax: +843 383 7008 Email: corporate. Sonoco – A43 1 North Second Street Information about Sonoco’s products. with a replay Sonoco on the Internet archived for six months. The site approximately one week prior to the event. of information about the Company. manages the 1 North Second Street Company’s intellectual assets. and are The Center Theater not intended to. sonoco. proxy Legal Counsel statements. various SEC filings. Instructions for listening Sonoco’s website. into this annual report. or their Hartsville. SC 29550-4136 contents by reference. April 18. A live audiocast will be available. Paper copies are also available without charge from: Intellectual Capital Management Sonoco – A09 Sonoco Development. gender. NC 28202-2137 on sonoco. general information Address Equal Opportunity Employer Corporate Headquarters and Investor Relations Sonoco believes a diverse workforce is required 1 North Second Street to compete successfully in today’s global market- Hartsville.florence@sonoco.m. Company trademarks. awards and activities is also john. 2018. domain names and patents are managed by SPC Resources. Florence sustainability activity and more.com available on Facebook (facebook. Eastern Time on Wednesday. photos.com/sonoco_products) Public Accounting Firm and YouTube (youtube. Inc. age. SC 29550-3305 technologies.com. incorporate those 212 North Fifth Street websites or social media platforms. color. sexual Toll-free: 800 377 2692 orientation. events. products). LinkedIn (linkedin.. features a newsroom for press releases. current and past. John M.com/companies/ Independent Registered sonoco). The address for both companies is: 125 West Home Avenue Hartsville.com. Hartsville. SC 29550-4123 S O N O C O 2 0 17 A N N U A L R E P O R T . can be found Charlotte. at: are for informational purposes only. Inc.com/sonoco. and do not. The Company provides equal employment Main: +843 383 7000 opportunities in its global operations without Investor Relations: +843 383 7862 regard to race.communications@sonoco. Transfer & Trust Company’s website address. SC 29550-3305 licenses and agreements. Twitter (twitter. PricewaterhouseCoopers LLP Hearst Tower Sonoco Publications 214 North Tryon Street. SC 29550-3305 place. provides a variety to this audiocast will be available at sonoco.com References to Website Addresses and Social Media Platforms Annual Meeting References to Sonoco’s website address and The annual meeting of shareholders will be held social media platforms. and Continental Stock at 11 a. including patents.

com . SC 29550-3305 US 843 383 7000 sonoco. 1 North Second Street Hartsville.Paper in Sonoco’s Annual Report was manufactured with electricity in the form of renewable energy and came from well-managed forests or other controlled sources certified in accordance with the international standards of the Forest Stewardship Council® (FSC®).