SONOCO PRODUCTS COSON
SONOCO PRODUCTS CO Fair Value Disclosure
Fair value measurements
Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
| Level 1 – | Observable inputs such as quoted market prices in active markets; | ||||
| Level 2 – | Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | ||||
| Level 3 – | Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||||
Assets that are calculated at net asset value (“NAV”) per share are not required to be categorized within the fair value hierarchy.
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:
| Description | December 31, 2025 | Assets measured at NAV (f) | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Hedge derivatives, net: | |||||||||||||||||||||||||||||
| Commodity contracts | $ | 1,683 | $ | — | $ | — | $ | 1,683 | $ | — | |||||||||||||||||||
| Foreign exchange contracts | 49 | — | — | 49 | — | ||||||||||||||||||||||||
| Net investment hedge | (207,203) | — | — | (207,203) | — | ||||||||||||||||||||||||
| Non-hedge derivatives, net: | |||||||||||||||||||||||||||||
| Commodity contracts | (1,332) | — | — | (1,332) | — | ||||||||||||||||||||||||
| Foreign exchange contracts | 219 | — | — | 219 | — | ||||||||||||||||||||||||
| Postretirement benefit plan assets: | |||||||||||||||||||||||||||||
Common Collective Trust (a) | 13,139 | 13,139 | — | — | — | ||||||||||||||||||||||||
Mutual funds (b) | 25,885 | — | — | 25,885 | — | ||||||||||||||||||||||||
Fixed income securities (c) | 263,441 | 63,517 | — | 199,924 | — | ||||||||||||||||||||||||
Short-term investments (d) | 3,184 | — | — | 3,184 | — | ||||||||||||||||||||||||
Real estate funds (e) | 5,019 | 5,019 | — | — | — | ||||||||||||||||||||||||
| Cash and accrued income | 9,789 | — | 9,789 | — | — | ||||||||||||||||||||||||
| Total postretirement benefit plan assets | $ | 320,457 | $ | 81,675 | $ | 9,789 | $ | 228,993 | $ | — | |||||||||||||||||||
| Description | December 31, 2024 | Assets measured at NAV (f) | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Hedge derivatives, net: | |||||||||||||||||||||||||||||
| Commodity contracts | 652 | $ | — | $ | — | $ | 652 | $ | — | ||||||||||||||||||||
| Foreign exchange contracts | (1,841) | — | — | (1,841) | — | ||||||||||||||||||||||||
| Net investment hedge | 11,919 | — | — | 11,919 | — | ||||||||||||||||||||||||
| Non-hedge derivatives, net: | |||||||||||||||||||||||||||||
| Commodity contracts | 387 | — | — | 387 | — | ||||||||||||||||||||||||
| Foreign exchange contracts | (3,081) | — | — | (3,081) | — | ||||||||||||||||||||||||
| Postretirement benefit plan assets: | |||||||||||||||||||||||||||||
Common Collective Trust (a) | 13,259 | 13,259 | — | — | — | ||||||||||||||||||||||||
Mutual funds (b) | 43,059 | — | — | 43,059 | — | ||||||||||||||||||||||||
Fixed income securities (c) | 235,952 | 62,458 | — | 173,494 | — | ||||||||||||||||||||||||
Short-term investments (d) | 3,493 | — | — | 3,493 | — | ||||||||||||||||||||||||
Real estate funds (e) | 480 | 480 | — | — | — | ||||||||||||||||||||||||
| Cash and accrued income | 7,757 | — | 7,757 | — | — | ||||||||||||||||||||||||
| Total postretirement benefit plan assets | $ | 304,000 | $ | 76,197 | $ | 7,757 | $ | 220,046 | $ | — | |||||||||||||||||||
a.Common collective trust investments consist of domestic and international large and mid capitalization equities, including emerging markets and funds invested in both short-term and long-term bonds. Underlying investments are generally valued at closing prices from national exchanges. Commingled funds, private securities, and limited partnerships are valued at unit values or NAVs provided by the investment managers.
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, which are valued at closing prices from national exchanges.
c.Fixed income securities include funds that invest primarily in government securities and long-term bonds. Underlying investments are generally valued at closing prices from national exchanges, fixed income pricing models, and independent financial analysts. Fixed income commingled funds are valued at unit values provided by the investment managers.
d.Short-term investments include several money market funds used for managing overall liquidity. Underlying investments are generally valued at closing prices from national exchanges. Commingled funds are valued at unit values provided by the investment managers.
e.Includes investments in real estate funds (including office, industrial, residential and retail). Underlying real estate securities are generally valued at closing prices from national exchanges.
f.Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
The Company’s pension plan assets comprise more than 96% of its total postretirement benefit plan assets. Accordingly, the assets of the Company’s various pension plans and retiree health and life insurance plans are not shown separately, but are combined in the tables above. Postretirement benefit plan assets are netted against postretirement benefit obligations to determine the funded status of each plan. The funded status is recognized in the Company’s Consolidated Balance Sheets as shown in Note 15.
As discussed in Note 12, the Company uses derivatives to mitigate the effect of commodity fluctuations, foreign currency fluctuations and, from time to time, interest rate movements. Fair value measurements for the Company’s derivatives are classified under Level 2 because such measurements are estimated based on observable inputs such as interest rates, yield curves, spot and future commodity prices and spot and future exchange rates. There were no transfers in or out of Level 1 or Level 2 fair value measurements during the years ended December 31, 2025 or 2024.
The Company measures certain non-financial assets and non-financial liabilities at fair value on a non-recurring basis. See Note 4 for a discussion of assets acquired and liabilities assumed in acquisitions and sold in dispositions, and Note 5 for a discussion of asset impairments associated with restructuring activities. The fair value of assets determined based on third-party appraisals and classified as Level 3 measurements due to the use of significant unobservable inputs was not material at December 31, 2025 or 2024.
The Company has an investment in the preferred stock of a nonaffiliated private company. This investment is accounted for under the measurement alternative of cost less impairment, adjusted for any qualifying observable price changes on a non-recurring basis. Observable price changes would consist of Level 2 inputs based on privately negotiated transactions with the nonaffiliated company. The total investment in of $21,212 is included in “Other Assets” in the Company’s Consolidated Balance Sheet as of December 31, 2025.
For additional fair value information on the Company’s financial instruments, see Note 12.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.