Sonoco Reports Fourth Quarter and Full Year 2022 Results
Fourth Quarter and 2022 Highlights
- Delivered progress on strategic priorities including portfolio simplification and structural transformation
- Achieved record fourth quarter and annual financial results. In the fourth quarter, revenue grew 16%. GAAP EPS grew by 48% and Base EPS grew by 28% year-over-year
- Successfully integrated the
Metal Packaging acquisition to expand rigid packaging inNorth America - Completed Skjern Paper acquisition in
Denmark in the fourth quarter to expand sustainable paper packaging products inEurope - Reaffirmed commitments to ESG initiatives as noted in our annual corporate responsibility report
Fourth Quarter 2022 Consolidated Financial Results
(Dollars in millions except per share data)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
GAAP Results | Change | Change | ||||||||||||||||||
Net sales | $ | 1,676 | $ | 1,439 | 16 | % | $ | 7,251 | $ | 5,590 | 30 | % | ||||||||
Operating profit | $ | 127 | $ | 105 | 21 | % | $ | 675 | $ | 487 | 39 | % | ||||||||
Net income/(loss) attributable to |
$ | 97 | $ | 65 | 49 | % | $ | 466 | $ | (85 | ) | N/M | ||||||||
EPS (diluted) | $ | 0.98 | $ | 0.66 | 48 | % | $ | 4.72 | $ | (0.86 | ) | N/M | ||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
Non-GAAP Results (1) | Change | Change | ||||||||||||||||||
Base operating profit | $ | 184 | $ | 137 | 34 | % | $ | 920 | $ | 565 | 63 | % | ||||||||
Base net income attributable to |
$ | 125 | $ | 98 | 28 | % | $ | 639 | $ | 393 | 63 | % | ||||||||
Base EPS (diluted) | $ | 1.27 | $ | 0.99 | 28 | % | $ | 6.48 | $ | 3.93 | 65 | % | ||||||||
(1) See the Company's definitions of non-GAAP financial measures, explanations as to why they are used, and reconciliations to the most directly comparable GAAP financial measures later in this release. Prior period results have been revised to conform to the current year presentation.
- Net sales increased 30% year over year to
$7.3 billion driven by strategic pricing performance and strong results from theSonoco Metal Packaging ("Metal Packaging ") acquisition. These increases were partially offset by lower volumes in industrial paper products and the impact of foreign currency exchange. - GAAP operating profit and base operating profit increased year-over-year from strategic pricing performance and acquisitions.
- The effective tax rates on GAAP and base earnings in the fourth quarter of 2022 were 1.9% and 21.3%, respectively, compared with 27.8% and 23.8%, respectively, in the prior year's fourth quarter. The decrease in the GAAP effective tax rate for the fourth quarter 2022 was primarily due to the release of valuation allowance on foreign tax credits due to an increase in projected foreign source income in future years. The lower base tax rate for the fourth quarter 2022 was driven primarily by a change in the mix of income and loss in various jurisdictions, as well as various discrete adjustments.
- The effective tax rates on GAAP and base earnings for the full year 2022 were 20.7% and 23.9%, respectively, compared with 41.9% and 23.7%, respectively, in the prior year. The decrease in the GAAP effective tax rate for 2022 was due primarily to the prior year regular tax benefit recognized on the Company's reported pretax loss together with a prior year discrete tax benefit from the realization of additional foreign tax credits.
- GAAP net income and base net income increased year-over-year from strong operating performance, partially offset by higher interest expense related to the financing of the
Metal Packaging acquisition and absence of the pension charge in 2022. - Diluted GAAP EPS and Base EPS for the fourth quarter increased 48% and 28%, respectively, from the same period last year. GAAP EPS for the 2021 full year included the impact of after-tax pension settlement charges of approximately
$410 million , mostly related to the Company's settlement of itsU.S. Inactive Pension Plan.
"2022 was a year of record performance and meaningful change at
"We carry sustained momentum from our strategy and operating model into 2023 which we believe positions us well to navigate near term volatility. Our continued focus on portfolio optimization, improving price/cost through strategic pricing, and productivity positions us to expand profits and increase free cash flow, to increase long-term returns for our shareholders."
Fourth Quarter 2022 Segment Results
(Dollars in millions except per share data)
As previously disclosed, starting in 2022, the Company excludes amortization expense on acquisition intangibles in determining segment and All Other operating results. Prior period results have been revised to conform to the current-year presentation.
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
Change | Change | |||||||||||||||||||
Net sales | $ | 879 | $ | 589 | 49 | % | $ | 3,768 | $ | 2,368 | 59 | % | ||||||||
Segment operating profit | $ | 85 | $ | 62 | 37 | % | $ | 526 | $ | 275 | 91 | % | ||||||||
Segment operating profit margin | 10 | % | 11 | % | 14 | % | 12 | % | ||||||||||||
- Q4-22: Consumer segment net sales increased 49% and segment operating profit increased 37% year-over-year primarily from the
Metal Packaging acquisition and strategic pricing. As expected, sequential sales declined compared to the third quarter of 2022 driven by seasonality and softness in plastic food packaging, which was impacted by lower harvest volumes resulting from inclement weather such as flooding and freezes.
- 2022: Consumer segment net sales increased 59% and segment operating profit increased 91% year over year primarily from the
January 26, 2022 acquisition ofMetal Packaging , and strong strategic pricing performance. Volume/mix growth in the segment was positive for the full year driven by food packaging.
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
Change | Change | |||||||||||||||||||
Net sales | $ | 597 | $ | 655 | (9 | )% | $ | 2,685 | $ | 2,464 | 9 | % | ||||||||
Segment operating profit | $ | 79 | $ | 59 | 34 | % | $ | 328 | $ | 227 | 45 | % | ||||||||
Segment operating profit margin | 13 | % | 9 | % | 12 | % | 9 | % | ||||||||||||
- Q4-22: Industrial segment net sales decreased 9% year over year from lower demand in all regions, especially in
Europe andAsia . Industrial segment operating profit improved 34% from strategic pricing performance.
- 2022: Industrial segment net sales increased 9% and segment operating profit increased 45% from strong strategic pricing performance, partially offset by the impact of foreign currency exchange and lower volume/mix globally in both paper and converted products. This lower volume includes a
$54 million impact as compared to 2021 from the exit of the corrugated medium market and from the conversion of the #10 paper machine in ourHartsville, SC paper mill complex.
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
All Other | Change | Change | ||||||||||||||||||
Net sales | $ | 200 | $ | 195 | 3 | % | $ | 798 | $ | 758 | 5 | % | ||||||||
All Other operating profit | $ | 20 | $ | 16 | 25 | % | $ | 66 | $ | 63 | 5 | % | ||||||||
All Other operating profit margin | 10 | % | 8 | % | 8 | % | 8 | % | ||||||||||||
- Q4-22: Net sales from All Other businesses increased 3% and operating profit improved by 25% from the prior year's fourth quarter due primarily to positive strategic pricing performance.
- 2022: Net sales and operating profit from All Other businesses both increased 5% from the prior year primarily due to strong strategic pricing performance on flat volume/mix.
Segment and All Other operating results do not include restructuring and asset impairment charges, acquisition/divestiture-related charges, LIFO adjustments, or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis. See the reconciliation of segment operating profit to GAAP operating profit later in this release. Prior period results have been revised to conform to the current year presentation.
Balance Sheet and Cash Flow Highlights
- Cash and cash equivalents was
$227 million atDecember 31, 2022 , compared to$171 million at December 31, 2021. - Total debt (long-term, notes payable and current portion of long-term debt) increased
$1,612 million fromDecember 31, 2021 , primarily as a result of financing transactions used to fund theMetal Packaging acquisition inJanuary 2022 . - At
December 31, 2022 , the Company had available liquidity of$977 million , consisting of$227 million of cash and$750 million of undrawn capacity under the revolving credit facility. - Cash flow from operating activities for the full year of 2022 was
$509 million , compared to$299 million in 2021, an increase of$210 million . - Net capital expenditures for the full year of 2022 were
$319 million , compared to$243 million in 2021. - Free cash flow for the full year of 2022 was
$190 million . See the Company's definition of free cash flow, explanation as to why it is used, and reconciliation to net cash provided by operating activities later in this release. - The Company has continued to provide value to shareholders through cash dividends. Total dividends paid increased to
$187 million in 2022 compared to$179 million in 2021.
Guidance(1)
First Quarter 2023
- Base EPS(2) for Q1 2023:
$1.15 to$1.25
- Q1-23: First quarter guidance assumes improving sequential volumes in the Consumer segment and no sequential volume improvement in the Industrial segment.
Full Year 2023
- Base EPS(2):
$5.70 to$5.90 - Cash flow from operating activities: $925 million to $975 million
- Free cash flow(3): $550 million to $650 million
- 2023: Annual guidance assumes full year improvements in Consumer segment volumes and limited recovery in volumes in the Industrial segment.
(1) Although the Company believes the assumptions reflected in the range of guidance are reasonable, given the uncertainty regarding the future performance of the overall economy, continued effects of the pandemic on global supply chains, and potential changes in raw material prices, other costs, and the Company's effective tax rate, as well as other risks and uncertainties, including those described below, actual results could vary substantially. Further information can be found in the Forward-looking Statements in this release.
(2) First quarter and full-year 2023 GAAP EPS guidance are not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast without unreasonable efforts: restructuring costs and restructuring-related impairment charges, acquisition/divestiture-related costs, gains or losses on the sale of businesses or other assets, and the income tax effects of these items and/or other income tax-related events. These items could have a significant impact on the Company's future GAAP financial results. Accordingly, quantitative reconciliations of base EPS guidance have been omitted in reliance on the exception provided by Item 10 of Regulation S-K.
(3) See reconciliation of cash flow from operating activities to projected free cash flow later in this release.
Conference Call Webcast
Management will host a conference call and webcast to further discuss these results beginning at
Contact Information:
Vice President of Investor Relations
lisa.weeks@sonoco.com
843-383-7524
About
Founded in 1899,
Forward-looking Statements
Statements included herein that are not historical in nature, are intended to be, and are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. In addition, the Company and its representatives may from time to time make other oral or written statements that are also "forward-looking statements." Words such as "anticipate," "assume," "believe," "committed," "consider," "could," "estimate," "expect," "forecast," "future," "goal," "guidance," "intend," "may," "might," "objective," "opportunity," "outlook," "plan," "potential," "project," "should," "strategy," "target," "will," "would," or the negative thereof, and similar expressions identify forward-looking statements.
Forward-looking statements in this communication include statements regarding, but not limited to: the Company's future operating and financial performance, including full-year 2023 and first quarter 2023 outlook; the Company's ability to navigate volatility, expand profits, increase free cash flow, and efficiently deploy capital; the Company's portfolio strategy and its ability to drive growth and profitability; the Company's ability to create long-term value and returns for shareholders and to return cash to shareholders; expected accretion and other benefits from acquisitions and the strategic advantages and synergies, technology and process opportunities related thereto; momentum from and the effects of the Company's strategy and operating model, including portfolio management, sustainability-led and productivity management activities and efforts to simplify the Company’s structure; efforts to improve price/cost through strategic pricing; the effects of the macroeconomic environment, inflation and COVID-19 coronavirus on the Company; and outcomes of certain tax issues and tax rates.
Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements. The risks, uncertainties and assumptions include, without limitation, those related to: the Company's ability to achieve the benefits it expects from acquisitions; the Company's ability to execute on its strategy, including with respect to acquisitions, cost management, restructuring and capital expenditures, and achieve the benefits it expects therefrom; the operation of new manufacturing capabilities; assumptions regarding and the Company's ability to achieve anticipated cost and energy savings; the availability and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs and escalating trade wars, and the Company's ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these pricing risks; the effects of the COVID-19 pandemic on the Company's results of operations, financial condition, value of assets, liquidity, prospects and growth, and on the industries in which it operates and that it serves; the costs of labor; the effects of inflation, fluctuations in consumer demand and other macroeconomic factors on the Company and the industries in which it operates and that it serves; the Company's ability to meet its goals relating to sustainability and reduction of greenhouse gas emissions; the Company's ability to return cash to shareholders and create long-term value; and the other risks, uncertainties and assumptions discussed in the Company's filings with the
References to our Website Address
References to our website address and domain names throughout this release are for informational purposes only, or to fulfill specific disclosure requirements of the
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars and shares in thousands except per share)
Three Months Ended | Year Ended | ||||||||||||||
Net sales | $ | 1,676,022 | $ | 1,439,187 | $ | 7,250,552 | $ | 5,590,438 | |||||||
Cost of sales | 1,362,085 | 1,175,563 | 5,810,903 | 4,528,528 | |||||||||||
Gross profit | 313,937 | 263,624 | 1,439,649 | 1,061,910 | |||||||||||
Selling, general and administrative expenses | 173,466 | 153,563 | 707,343 | 558,180 | |||||||||||
Restructuring/Asset impairment charges | 13,553 | 5,321 | 56,910 | 14,210 | |||||||||||
Gain/(Loss) on divestiture of business | — | — | — | (2,667 | ) | ||||||||||
Operating profit | 126,918 | 104,741 | 675,396 | 486,853 | |||||||||||
Non-operating pension cost | 2,822 | 5,598 | 7,073 | 568,416 | |||||||||||
Net interest expense | 29,250 | 12,491 | 97,041 | 59,235 | |||||||||||
Loss from the early extinguishment of debt | — | — | — | 20,184 | |||||||||||
Income/(Loss) before income taxes | 94,846 | 86,652 | 571,282 | (160,982 | ) | ||||||||||
Provision for/(Benefit from) income taxes | 1,797 | 24,112 | 118,509 | (67,430 | ) | ||||||||||
Income/(Loss) before equity in earnings of affiliates | 93,049 | 62,540 | 452,773 | (93,552 | ) | ||||||||||
Equity in earnings of affiliates, net of tax | 4,056 | 5,140 | 14,207 | 10,841 | |||||||||||
Net income/(loss) | 97,105 | 67,680 | 466,980 | (82,711 | ) | ||||||||||
Net (income)/loss attributable to noncontrolling interests | 99 | (2,522 | ) | (543 | ) | (2,766 | ) | ||||||||
Net income/(loss) attributable to |
$ | 97,204 | $ | 65,158 | $ | 466,437 | $ | (85,477 | ) | ||||||
Weighted average common shares outstanding – diluted | 98,922 | 98,743 | 98,732 | 99,608 | |||||||||||
Diluted earnings/(loss) per common share | $ | 0.98 | $ | 0.66 | $ | 4.72 | $ | (0.86 | ) | ||||||
Dividends per common share | $ | 0.49 | $ | 0.45 | $ | 1.92 | $ | 1.80 | |||||||
FINANCIAL SEGMENT INFORMATION (Unaudited)
(Dollars in thousands)
Three Months Ended | Year Ended | ||||||||||||||
Net sales | |||||||||||||||
$ | 879,326 | $ | 588,822 | $ | 3,767,956 | $ | 2,368,347 | ||||||||
596,582 | 655,152 | 2,684,563 | 2,464,312 | ||||||||||||
All Other | 200,114 | 195,213 | 798,033 | 757,779 | |||||||||||
Consolidated | $ | 1,676,022 | $ | 1,439,187 | $ | 7,250,552 | $ | 5,590,438 | |||||||
Operating profit: | |||||||||||||||
$ | 85,139 | $ | 61,929 | $ | 526,028 | $ | 274,926 | ||||||||
79,139 | 59,230 | 327,859 | 226,798 | ||||||||||||
All Other | 19,551 | 15,801 | 65,978 | 63,060 | |||||||||||
Segment operating profit | 183,829 | 136,960 | 919,865 | 564,784 | |||||||||||
Restructuring/Asset impairment charges | (13,553 | ) | (5,321 | ) | (56,910 | ) | (14,210 | ) | |||||||
Amortization of acquisition intangibles | (20,065 | ) | (12,302 | ) | (80,427 | ) | (49,419 | ) | |||||||
Other non-base (charges)/income, net | (23,293 | ) | (14,596 | ) | (107,132 | ) | (14,302 | ) | |||||||
Operating profit | $ | 126,918 | $ | 104,741 | $ | 675,396 | $ | 486,853 | |||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
Year Ended | |||||||
Net income/(loss) | $ | 466,980 | $ | (82,711 | ) | ||
Asset impairment charges/(gains), losses on disposition of assets and net loss on divestiture of business | 15,465 | (1,400 | ) | ||||
Depreciation, depletion and amortization | 308,824 | 245,184 | |||||
Pension and postretirement plan (contributions), net of non-cash expense | (26,712 | ) | 431,961 | ||||
Changes in working capital | (304,646 | ) | (107,444 | ) | |||
Changes in tax accounts | (4,371 | ) | (201,040 | ) | |||
Other operating activity | 53,509 | 14,122 | |||||
Net cash provided by operating activities | $ | 509,049 | $ | 298,672 | |||
Purchase of property, plant and equipment, net | (319,148 | ) | (242,853 | ) | |||
Proceeds from divestiture of business | — | 91,569 | |||||
Cost of acquisitions, net of cash acquired | (1,427,020 | ) | (22,209 | ) | |||
Net debt borrowings/(repayments) | 1,518,844 | (107,077 | ) | ||||
Excess cash costs of early extinguishment of debt | — | (20,111 | ) | ||||
Cash dividends paid | (187,093 | ) | (178,622 | ) | |||
Payments made to repurchase shares | (4,547 | ) | (218,085 | ) | |||
Other, including effects of exchange rates on cash | (33,625 | ) | 4,846 | ||||
Net increase/(decrease) in cash and cash equivalents | $ | 56,460 | $ | (393,870 | ) | ||
Cash and cash equivalents at beginning of period | 170,978 | 564,848 | |||||
Cash and cash equivalents at end of period | $ | 227,438 | $ | 170,978 | |||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 227,438 | $ | 170,978 | |||
Trade accounts receivable, net of allowances | 862,712 | 755,609 | |||||
Other receivables | 99,492 | 95,943 | |||||
Inventories | 1,102,185 | 562,113 | |||||
Prepaid expenses | 106,392 | 74,034 | |||||
$ | 2,398,219 | $ | 1,658,677 | ||||
Property, plant and equipment, net | 1,710,399 | 1,297,500 | |||||
Right of use asset-operating leases | 296,781 | 268,390 | |||||
1,675,311 | 1,324,501 | ||||||
Other intangible assets, net | 741,598 | 278,143 | |||||
Other assets | 267,598 | 246,024 | |||||
$ | 7,089,906 | $ | 5,073,235 | ||||
Liabilities and Shareholders' Equity | |||||||
Current Liabilities: | |||||||
Payable to suppliers and other payables | $ | 1,255,256 | $ | 1,102,662 | |||
Notes payable and current portion of long-term debt | 502,440 | 411,557 | |||||
Income taxes payable | 16,905 | 11,544 | |||||
$ | 1,774,601 | $ | 1,525,763 | ||||
Long-term debt, net of current portion | 2,719,783 | 1,199,106 | |||||
Noncurrent operating lease liabilities | 250,994 | 234,167 | |||||
Pension and other postretirement benefits | 120,084 | 158,265 | |||||
Deferred income taxes and other | 151,647 | 106,393 | |||||
Total equity | 2,072,797 | 1,849,541 | |||||
$ | 7,089,906 | $ | 5,073,235 | ||||
*Includes preliminary purchase price accounting estimates related to the
Definition and Reconciliation of Non-GAAP Financial Measures
The Company's results determined in accordance with
- restructuring initiatives(1);
- asset impairment charges;
- acquisition/divestiture-related costs;
- gains or losses from the divestiture of businesses;
- losses from the early extinguishment of debt;
- non-operating pension costs (2);
- amortization expense on acquisition intangibles;
- changes in last-in, first-out ("LIFO") inventory reserves;
- certain income tax events and adjustments; and
- other items, if any.
(1) Restructuring and restructuring-related asset impairment charges are a recurring item as
(2) Non-Operating pension expense is a recurring item. However, this expense is subject to significant fluctuations from period to period due to changes in actuarial assumptions, global financial markets (including stock market returns and interest rate changes), plan changes, settlements, curtailments, and other changes in facts and circumstances.
The adjusted non-GAAP results are identified using the term "base," for example, "base operating profit," "base net income," and "base EPS." The Company's management believes the exclusion of these items improves the period-to-period comparability and analysis of the underlying financial performance of the business. As previously disclosed, the Company modified its definition of base results to include adjustments for amortization-related expense on acquisition intangibles starting in 2022. Prior period results have been revised to conform to this presentation.
The Company uses the non-GAAP financial measure of "segment operating profit" which is synonymous with "base operating profit" to describe operating profit at a segment level. The Company believes this presentation improves comparability and analysis of segment and results.
The Company also uses the non-GAAP financial measure of "free cash flow," which it defines as cash flow from operations minus net capital expenditures. Net capital expenditures are defined as capital expenditures minus proceeds from/costs incurred in the disposition of capital assets. Free cash flow may not represent the amount of cash flow available for general discretionary use because it excludes non-discretionary expenditures, such as mandatory debt repayments and required settlements of recorded and/or contingent liabilities not reflected in cash flow from operations.
These non-GAAP financial measures are not in accordance with, nor an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.
Whenever
For the three months ended |
||||||||||||||||||
Dollars in thousands, except per share data | GAAP | Restructuring/Asset Impairments(1) | Amortization of Acquisition Intangibles(2) | Acquisition/Divestiture Related(3) | Other Adjustments(4) | Base | ||||||||||||
Operating profit | $ | 126,918 | $ | 13,553 | $ | 20,065 | $ | 7,555 | $ | 15,739 | $ | 183,830 | ||||||
Non-operating pension costs | 2,822 | — | — | — | (2,822 | ) | — | |||||||||||
Interest expense, net | 29,250 | — | — | — | — | 29,250 | ||||||||||||
Income before income taxes | 94,846 | 13,553 | 20,065 | 7,555 | 18,561 | 154,580 | ||||||||||||
Provision for income taxes | 1,797 | 3,930 | 4,888 | 2,110 | 20,182 | 32,907 | ||||||||||||
Income before equity in earnings of affiliates | 93,049 | 9,623 | 15,177 | 5,445 | (1,621 | ) | 121,673 | |||||||||||
Equity in earnings of affiliates, net of tax | 4,056 | — | — | — | — | 4,056 | ||||||||||||
Net income | 97,105 | 9,623 | 15,177 | 5,445 | (1,621 | ) | 125,729 | |||||||||||
Net (income)/loss attributable to noncontrolling interests | 99 | (385 | ) | — | — | — | (286 | ) | ||||||||||
Net income attributable to |
$ | 97,204 | $ | 9,238 | $ | 15,177 | $ | 5,445 | $ | (1,621 | ) | $ | 125,443 | |||||
Per diluted common share* | $ | 0.98 | $ | 0.09 | $ | 0.15 | $ | 0.06 | $ | (0.02 | ) | $ | 1.27 | |||||
*Due to rounding individual items may not sum across |
For the three months ended |
||||||||||||||||||
Dollars in thousands, except per share data | GAAP | Restructuring/Asset Impairments(5) | Amortization of Acquisition Intangibles(2) | Acquisition/Divestiture Related(3) | Other Adjustments(6) | Base | ||||||||||||
Operating profit | $ | 104,741 | $ | 5,321 | $ | 12,302 | $ | 5,219 | $ | 9,377 | $ | 136,960 | ||||||
Non-operating pension costs | 5,598 | — | — | — | (5,598 | ) | — | |||||||||||
Interest expense, net | 12,491 | — | — | — | — | 12,491 | ||||||||||||
Income before income taxes | 86,652 | 5,321 | 12,302 | 5,219 | 14,975 | 124,469 | ||||||||||||
Provision for income taxes | 24,112 | 2,710 | 3,047 | 550 | (739 | ) | 29,680 | |||||||||||
Income before equity in earnings of affiliates | 62,540 | 2,611 | 9,255 | 4,669 | 15,714 | 94,789 | ||||||||||||
Equity in earnings of affiliates, net of tax | 5,140 | — | — | — | (1,394 | ) | 3,746 | |||||||||||
Net income | 67,680 | 2,611 | 9,255 | 4,669 | 14,320 | 98,535 | ||||||||||||
Net (income) attributable to noncontrolling interests | (2,523 | ) | — | — | — | 2,052 | (471 | ) | ||||||||||
Net income attributable to |
$ | 65,157 | $ | 2,611 | $ | 9,255 | $ | 4,669 | $ | 16,372 | $ | 98,064 | ||||||
Per diluted common share* | $ | 0.66 | $ | 0.03 | $ | 0.09 | $ | 0.05 | $ | 0.16 | $ | 0.99 | ||||||
*Due to rounding individual items may not sum across | ||||||||||||||||||
(1) The Company recognized net restructuring and asset impairment charges related to severance, asset write-offs and other restructuring activities of approximately
(2) Beginning in 2022, the Company redefined base results to exclude amortization of intangible assets related to acquisitions.
(3) Includes costs related to potential and actual acquisitions and divestitures.
(4) Includes non-operating pension costs, changes in LIFO inventory reserves, unrealized losses related to the Company's commodity derivatives hedges of approximately
(5) The Company recognized net restructuring and asset impairment charges related to severance, asset write-offs and other restructuring activities of approximately
(6) Other adjustments are primarily comprised of costs related to non-operating pension costs (including settlement charges), losses on the early extinguishment of debt, gains from insurance proceeds, and gains/losses from the divestiture of businesses, net of the applicable tax effect.
For the year ended |
|||||||||||||||||||||||
Dollars in thousands, except per share data | GAAP | Restructuring/ Asset Impairment(1) |
Amortization of Acquisition Intangibles(2) | Acquisition/Divestiture Related Costs(3) |
Other Adjustments(4) | Base | |||||||||||||||||
Operating profit | $ | 675,396 | $ | 56,910 | $ | 80,427 | $ | 70,210 | $ | 36,922 | $ | 919,865 | |||||||||||
Non-operating pension costs | 7,073 | — | — | — | (7,073 | ) | — | ||||||||||||||||
Interest expense, net | 97,041 | — | — | — | 136 | 97,177 | |||||||||||||||||
Income before income taxes | 571,282 | 56,910 | 80,427 | 70,210 | 43,859 | 822,688 | |||||||||||||||||
Provision for income taxes | 118,509 | 11,269 | 19,554 | 17,640 | 29,788 | 196,760 | |||||||||||||||||
Income before equity in earnings of affiliates | 452,773 | 45,641 | 60,873 | 52,570 | 14,071 | 625,928 | |||||||||||||||||
Equity in earnings of affiliates, net of tax | 14,207 | — | — | — | — | 14,207 | |||||||||||||||||
Net Income | 466,980 | 45,641 | 60,873 | 52,570 | 14,071 | 640,135 | |||||||||||||||||
Less: Net (income) attributable to noncontrolling interests, net of tax | (543 | ) | (99 | ) | — | — | — | (642 | ) | ||||||||||||||
Net income attributable to |
466,437 | 45,542 | 60,873 | 52,570 | 14,071 | 639,493 | |||||||||||||||||
Per diluted common share* | $ | 4.72 | $ | 0.46 | $ | 0.62 | $ | 0.53 | $ | 0.14 | $ | 6.48 | |||||||||||
*Due to rounding individual items may not sum across |
For the year ended |
|||||||||||||||||||||||
Dollars in thousands, except per share data | GAAP | Restructuring/ Asset Impairment(5) |
Amortization of Acquisition Intangibles(2) | Acquisition Related Costs(6) |
Other Adjustments(7) | Base | |||||||||||||||||
Operating profit | $ | 486,853 | $ | 14,210 | $ | 49,419 | $ | 17,722 | $ | (3,420 | ) | $ | 564,784 | ||||||||||
Non-operating pension costs | 568,416 | — | — | — | (568,416 | ) | — | ||||||||||||||||
Interest expense, net | 59,235 | — | — | — | 2,165 | 61,400 | |||||||||||||||||
Loss from the early extinguishment of debt | 20,184 | — | — | — | (20,184 | ) | — | ||||||||||||||||
(Loss)/Income before income taxes | $ | (160,982 | ) | $ | 14,210 | $ | 49,419 | $ | 17,722 | $ | 583,015 | $ | 503,384 | ||||||||||
(Benefit from)/Provision for income taxes | (67,430 | ) | 5,363 | 12,241 | 3,535 | 165,531 | 119,240 | ||||||||||||||||
(Loss)/Income before equity in earnings of affiliates | $ | (93,552 | ) | $ | 8,847 | $ | 37,178 | $ | 14,187 | $ | 417,484 | $ | 384,144 | ||||||||||
Equity in earnings of affiliates, net of tax | 10,841 | — | — | — | (1,394 | ) | 9,447 | ||||||||||||||||
Net (loss)/income | $ | (82,711 | ) | $ | 8,847 | $ | 37,178 | $ | 14,187 | $ | 416,090 | $ | 393,591 | ||||||||||
Less: Net (income) attributable to noncontrolling interests, net of tax | (2,766 | ) | — | — | — | 2,052 | (714 | ) | |||||||||||||||
Net (loss)/ income attributable to |
$ | (85,477 | ) | $ | 8,847 | $ | 37,178 | $ | 14,187 | $ | 418,142 | $ | 392,877 | ||||||||||
Diluted weighted average common shares outstanding(8): | 99,608 | 469 | 100,077 | ||||||||||||||||||||
Per diluted common share* | $ | (0.86 | ) | $ | 0.09 | $ | 0.37 | $ | 0.14 | $ | 4.18 | $ | 3.93 | ||||||||||
*Due to rounding individual items may not sum across |
(1) In 2022, the Company recognized net restructuring and asset impairment charges related to severance, asset write-offs and other restructuring activities of approximately
(2) Beginning in 2022 the Company redefined base results to exclude amortization of intangible assets related to acquisitions.
(3) Consists primarily of legal and professional fees related to acquisition and divestiture transactions, whether proposed or consummated, of approximately
(4) Includes non-operating pension costs, unrealized losses related to commodity hedges of approximately
(5) In 2021, the Company recognized net restructuring and asset impairment charges related to severance, asset write-offs and other restructuring activities of approximately
(6) Includes costs related to potential and actual acquisitions and divestitures.
(7) Includes non-operating pension expenses, which include after-tax settlement charges of
(8) Due to the magnitude of certain expenses considered by management to be non-base, the Company reported a 2021 GAAP net loss attributable to
Year Ended | |||||||
FREE CASH FLOW | |||||||
Net cash provided by operating activities | $ | 509,049 | $ | 298,672 | |||
Purchase of property, plant and equipment, net | (319,148 | ) | (242,853 | ) | |||
Free Cash Flow | $ | 189,901 | $ | 55,819 | |||
*Excluding the net |
|||||||
Year Ended | |||||||
Estimated Low End | Estimated High End | ||||||
FREE CASH FLOW | |||||||
Net cash provided by operating activities | $ | 925,000 | $ | 975,000 | |||
Purchase of property, plant and equipment, net | (375,000 | ) | (325,000 | ) | |||
Free Cash Flow | $ | 550,000 | $ | 650,000 | |||

Source: Sonoco Products Company