Sonoco Products : First Quarter 2025 Non-GAAP Reconciliations for Q1 2025

‌Sonoco Products Company Reconciliation of Non-GAAP Financial Measures

In accordance with the SEC's Regulation G, the following provides definitions of the non-GAAP financial measures used by the Company, together with the most directly comparable financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), and a reconciliation of the differences between the non-GAAP financial measures disclosed and the most directly comparable financial measures calculated in accordance with GAAP.

Definition and Reconciliation of Non-GAAP Financial Measures

The Company's results determined in accordance with U.S. generally accepted accounting principles ("GAAP") are referred to as "as reported" or "GAAP" results. The Company uses certain financial performance measures, both internally and externally, that are not in conformity with GAAP ("non-GAAP financial measures") to assess and communicate the financial performance of the Company. These non-GAAP financial measures, which are identified using the term "adjusted" (for example, "adjusted operating profit", "adjusted net income attributable to Sonoco", and "adjusted diluted EPS"), reflect adjustments to the Company's GAAP operating results to exclude amounts, including the associated tax effects, relating to:

• restructuring/asset impairment charges1;

• acquisition, integration, and divestiture-related costs;

• gains or losses from the divestiture of businesses and other assets;

• losses from the early extinguishment of debt;

• non-operating pension costs;

• amortization expense on acquisition intangibles;

• changes in last-in, first-out ("LIFO") inventory reserves;

• certain income tax events and adjustments;

• derivative gains/losses;

• other non-operating income and losses; and

• certain other items, if any.

1Restructuring and restructuring-related asset impairment charges are a recurring item as the Company's restructuring programs usually require several years to fully implement, and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.

The Company's management believes the exclusion of the above-listed items improves the period-to-period comparability and analysis of the underlying financial performance of the business.

In addition to the "adjusted" results described above, the Company also uses Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt, and Net Leverage. Adjusted EBITDA is defined as net income excluding the following: interest expense; interest income; provision for income taxes; depreciation, depletion and amortization expense; non-operating pension costs; net income/loss attributable to noncontrolling interests; restructuring/asset impairment charges; changes in LIFO inventory reserves; gains/losses from the divestiture of businesses and other assets; acquisition, integration and divestiture-related costs; other income; derivative gains/losses; and other non-GAAP adjustments, if any, that may arise from time to time. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. Net Debt is defined as the total of the Company's short and long-term debt less cash and cash equivalents. Net Leverage is defined as Net Debt divided by Adjusted EBITDA.

Adjusted EBITDA by segment is reconciled to the closest GAAP measure of segment profitability, segment operating profit as the Company does not calculate net income by segment. Segment operating profit is the measure of segment profit or loss reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance in accordance with Accounting Standards Codification 280 - "Segment Reporting," as prescribed by the Financial Accounting Standards Board.

Segment results, which are reviewed by the Company's management to evaluate segment performance, do not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration and divestiture-related costs; changes in LIFO inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses from derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term "segment operating profit" is defined as the segment's portion of "operating profit" excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company's reportable segments and the All Other group of businesses, except for costs related to discontinued operations.

The Company's non-GAAP financial measures are not calculated in accordance with, nor are they an alternative for, measures conforming to GAAP, and they may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.

The Company presents these non-GAAP financial measures to provide investors with information to evaluate Sonoco's operating results in a manner similar to how management evaluates business performance. The Company consistently applies its non-GAAP financial measures presented herein and uses them for internal planning and forecasting purposes, to evaluate its ongoing operations, and to evaluate the ultimate performance of management and each business unit against plans/forecasts. In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.

Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances that the investor may find material and view differently.

To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in evaluating the Company's results to review both GAAP information, which includes all of the items impacting financial results, and the related non-GAAP financial measures that exclude certain elements, as described above. Further, Sonoco management does not, nor does it suggest that investors should, consider any non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Whenever reviewing a non-GAAP financial measure, investors are encouraged to review the related reconciliation to understand how it differs from the most directly comparable GAAP measure.

The following tables reconcile the Company's non-GAAP financial measures to their most directly comparable GAAP financial measures for the three-month periods ended March 30,2025 and March 31,2024.

Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Net Income Attributable to Sonoco, and Adjusted Diluted Earnings Per Share ("EPS")

For the three-month period ended March 30, 2025 Income

Dollars in thousands, except per share data

Operating Profit Before Income Taxes Provision for Income Taxes Net Income Attributable to Sonoco Diluted EPS

As Reported (GAAP)1	$ 126,860	$ 68,543	$ 21,147 $	54,429	$ 0.55
Acquisition, integration and divestiture-related costs2	27,266	27,266	6,637	30,295	0.30
Changes in LIFO inventory reserves	562	562	142	420	-
Amortization of acquisition intangibles	41,961	41,961	9,604	32,144	0.32
Restructuring/Asset impairment charges	13,581	13,581	3,200	10,715	0.11
Loss on divestiture of business and other assets	4,183	4,183	372	3,811	0.04
Non-operating pension costs	-	3,121	798	2,323	0.02
Net gains from derivatives	(2,949)	(2,949)	(744)	(2,205)	(0.02)
Other adjustments3	1,259	1,259	(603)	4,908	0.06
Total adjustments4	85,863	88,984	19,406	82,411	0.83
Adjusted	$ 212,723	$ 157,527	$ 40,553 $	136,840	$ 1.38

Due to rounding, individual items may not sum appropriately.

1Operating profit, income before income taxes, and provision for income taxes exclude results related to discontinued operations of $37,791, $12,979 and $7,807, respectively.

2Acquisition, integration and divestiture-related costs relate mostly to the company's December 2024 acquisition of Eviosys and the divestiture of their TFP business on April 1, 2025.

3 Other adjustments include discrete tax items primarily related to a $3,500 tax expense due to the reduction of the deferred tax asset on the outside basis of certain held-for-sale entities.

4The difference between GAAP Gross Profit of $353,687 and Adjusted Gross Profit of $372,340 is attributable to amortization of the fair value step-up of finished goods inventory at Eviosys of $17,949, "Changes in LIFO inventory reserves" shown above of $562, and other items totaling $142. The financial measure titled "SG&A Expenses" on the schedule "P&L Summary (Adjusted) First Quarter: 2025 Vs. 2024" is the sum of the GAAP measures of "Selling, general and administrative expenses," "Restructuring/Asset impairment charges," and "Loss on divestiture of business and other assets," $226,827, adjusted for the remaining items above, for an Adjusted total of $159,617.

For the three-month period ended March 31, 2024 Income

Dollars in thousands, except per share data

Operating Profit Before Income Taxes Provision for Income Taxes Net Income Attributable to Sonoco Diluted EPS

As Reported (GAAP)1$ 72,572 $ 42,246 $ 7,871 $ 65,177 $ 0.66

Acquisition, integration and

divestiture-related costs	5,504	5,504	1,408	4,209	0.04
Changes in LIFO inventory reserves	431	431	108	323	-
Amortization of acquisition intangibles	17,894	17,894	4,368	17,366	0.18
Restructuring/Asset impairment
charges	31,010	31,010	6,980	24,584	0.25
Non-operating pension costs	-	3,295	823	2,472	0.02
Net gains from derivatives	(286)	(286)	(72)	(214)	-
Other adjustments	3,323	3,323	5,653	(2,425)	(0.03)
Total adjustments2	57,876	61,171	19,268	46,315	0.46
Adjusted	$ 130,448	$ 103,417	$ 27,139	$ 111,492 $	1.12

Due to rounding, individual items may not sum appropriately.

1Operating profit, income before income taxes, and provision for income taxes exclude results related to discontinued operations of $39,881, $39,250 and $9,489 , respectively.

2The difference between GAAP Gross Profit of $271,165 and Adjusted Gross Profit of $271,596 is attributable to the "Changes in LIFO inventory reserves" shown above. The financial measure titled "SG&A Expenses" on the schedule "P&L Summary (Adjusted) First Quarter: 2025 Vs. 2024" is the sum of the GAAP measures of "Selling, general and administrative expenses," "Restructuring/Asset impairment charges," and "Loss on divestiture of business and other assets," $198,593, adjusted for the remaining items above, for an Adjusted total of $141,148.

‌Adjusted EBITDA

Three Months Ended

Dollars in thousands		March 30, 2025		March 31, 2024
Net income attributable to Sonoco	$	54,429	$	65,177
Adjustments
Interest expense		80,938		31,220
Interest income		(7,629)		(3,558)
Provision for income taxes		28,954		17,360
Depreciation, depletion, and amortization		121,492		90,559
Non-operating pension costs		3,121		3,295
Net (income)/loss attributable to noncontrolling interests		60		96
Restructuring/Asset impairment charges		14,007		31,618
Changes in LIFO inventory reserves		562		431
Gain on divestiture of business and other assets		4,183		-
Acquisition, integration and divestiture-related costs		39,942		5,661
Net gains from derivatives		(2,949)		(286)
Other non-GAAP adjustments		646		3,180
Adjusted EBITDA1	$	337,756 $		244,753

1Adjusted EBITDA is calculated on a total Company basis, including both continuing and discontinued operations.

‌Segment Adjusted EBITDA and All Other Adjusted EBITDA, Adjusted EBITDA Margin Reconciliation For the Three Months Ended March 30, 2025

Excludes results of discontinued operations

Dollars in thousands

Consumer segment Industrial segment All Other Corporate Total Segment and Total Operating Profit $ 140,771 $ 71,124 $ 11,926 $ (96,961) $ 126,860

Adjustments:

Depreciation, depletion and amortization148,955 28,333 2,554 41,961 121,803 Other (expenses)/income2- - - (6,517) (6,517)

Equity in (loss)/earnings of affiliates, net of

tax (51) 1,972 - - 1,921

Restructuring/Asset impairment charges3- - - 13,581 13,581 Changes in LIFO inventory reserves4- - - 562 562

Acquisition, integration and divestiture-

related costs5- - - 27,266 27,266

Gain on divestiture of business and other

assets6- - - 4,183 4,183

Net gains from derivatives7- - - (2,949) (2,949)

Other non-GAAP adjustments - - - 1,259 1,259

Segment Adjusted EBITDA $ 189,675 $ 101,429 $ 14,480 $ (17,615) $ 287,969

Net Sales $1,066,593 $ 557,709 $ 84,926

Segment Operating Profit Margin 13.2 % 12.8 % 14.0 %

Segment Adjusted EBITDA Margin 17.8 % 18.2 % 17.1 %

1Included in Corporate is the amortization of acquisition intangibles associated with the Consumer segment of

$36,502, the Industrial segment of $5,265, and the All Other group of businesses of $194.

2These expenses relate to charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables from customers in order to accelerate its cash collection cycle primarily within the Consumer Packaging segment.

3Included in Corporate are restructuring/asset impairment charges associated with the Consumer segment of

$1,220, the Industrial segment of $12,401, and a gain in the All Other group of businesses of $40.

4Included in Corporate are changes in LIFO inventory reserves associated with the Consumer segment of $562.

5Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer segment of $20,072 and the Industrial segment of $218.

6Included in Corporate are losses on the divestiture of business associated with the Industrial segment of $4,183 related to the sale of production facility in France and the entirety of our business in Venezuela.

7Included in Corporate are net gains from derivatives associated with the Consumer segment of $(284), the

Industrial segment of $(2,552), and the All Other group of businesses of $(113).

Segment Adjusted EBITDA and All Other Adjusted EBITDA, Adjusted EBITDA Margin Reconciliation For the Three Months Ended March 31, 2024

Excludes results of discontinued operations

Dollars in thousands	Consumer segment	Paper segment	All Other	Corporate	Total
Segment and Total Operating Profit	$ 58,567	$ 65,844	$ 17,125	$ (68,964) $	72,572
Adjustments:
Depreciation, depletion and amortization1	24,897	28,503	3,652	17,894	74,946
Equity in earnings of affiliates, net of tax	13	1,124	-	-	1,137
Restructuring/Asset impairment charges2	-	-	-	31,010	31,010
Changes in LIFO inventory reserves3 Acquisition, integration and divestiture-	-	-	-	431	431
related costs4	- - -			5,504	5,504
Net gains from derivatives5	- - -			(286)	(286)
Other non-GAAP adjustments	- - -			3,323	3,323
Segment Adjusted EBITDA $ 83,477 $ 95,471 $ 20,777 $ (11,088) $ 188,637
Net Sales	$ 581,670	$ 593,060	$ 133,906
Segment Operating Profit Margin	10.1 %	11.1 %	12.8 %
Segment Adjusted EBITDA Margin	14.4 %	16.1 %	15.5 %

Industrial Packaging

1Included in Corporate is the amortization of acquisition intangibles associated with the Consumer segment of

$11,057, the Industrial segment of $6,631, and the All Other group of businesses of $206.

2Included in Corporate are restructuring/asset impairment charges associated with the Consumer segment of

$4,317, the Industrial segment of $22,603, and the All Other group of businesses of $1,148.

3Included in Corporate are changes in LIFO inventory reserves associated with the Consumer segment of $92 and the Industrial segment of $339.

4Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer segment of $(280) and the Industrial segment of $655.

5Included in Corporate are net gains from derivatives associated with the Consumer segment of $(43), the Industrial segment of $(190), and the All Other group of businesses of $(53).