SONOCO PRODUCTS COSON

SONOCO PRODUCTS CO Commitments Disclosure

10-KFiled Feb 26, 20262 min read
Commitments and contingencies
In accordance with the requirements of ASC 450, “Contingencies,” the Company records accruals for estimated losses at the time information becomes available indicating that losses are probable and that the amounts are reasonably estimable. As is the case with other companies in similar industries, the Company faces exposure from actual or potential claims and legal proceedings from a variety of sources. Some of these exposures, as discussed below, have the potential to be material.
Environmental matters
The Company is subject to a variety of environmental and pollution control laws and regulations in all jurisdictions in which it operates.
Spartanburg
In connection with its acquisition of Tegrant in November 2011, the Company identified potential environmental contamination at a site in Spartanburg, South Carolina. At December 31, 2024, the Company’s accrual for environmental contingencies related to the Spartanburg site totaled $5,096 and was reflected in “Current liabilities of discontinued operations” on the Company’s Consolidated Balance Sheet at December 31, 2024 . The Spartanburg site and related environmental liabilities were part of the sale of TFP to Toppan, which was completed on April 1, 2025.
Other environmental matters
The Company has been named as a potentially responsible party at several other environmentally contaminated sites. All of the sites are also the responsibility of other parties. The potential remediation liabilities are shared with such other parties, and, in most cases, the Company’s share, if any, cannot be reasonably estimated at the current time. However, the Company does not believe that the resolution of these matters has a reasonable possibility of having a material adverse effect on the Company’s financial statements. At December 31, 2025 and 2024, the Company’s accrual for these other sites totaled $1,779 and $1,933, respectively, and are included in “Accrued expenses and other payables” on the Company’s Consolidated Balance Sheets.
Commitments
As of December 31, 2025, the Company had long-term obligations to purchase electricity and steam, which it uses in its production processes, as well as long-term purchase commitments for raw materials. These purchase commitments require the Company to make total payments of approximately $71,200, as follows: $23,700 in 2026; $24,500 in 2027; $23,000 in 2028; $0 in 2029, and a total of $0 from 2030 through 2034.
In addition,as of December 31, 2025, the Company has purchase commitments of approximately $93,900 to be paid in 2026 for the acquisition of tax credits that are expected to offset a portion of taxes payable currently recorded within “Accrued taxes” on the Company’s Consolidated Balance Sheets at December 31, 2025.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 28, 2025
2023Feb 28, 2024
2022Feb 28, 2023
2021Feb 28, 2022
2020Feb 26, 2021
2019Feb 28, 2020
2018Feb 28, 2019
2017Feb 28, 2018
2016Mar 1, 2017
2015Feb 29, 2016

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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