SONOCO PRODUCTS COSON
SONOCO PRODUCTS CO Leases Disclosure
Leases
The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, and warehouses), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company’s lease contracts is performed after contemplating all the relevant facts and circumstances in accordance with guidance under ASC 842, “Leases.” Most real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from to five years. The Company’s leases do not have any significant residual value guarantees or restrictive covenants.
On November 3, 2025, the Company completed the sale of ThermoSafe, part of the All Other group of businesses. The divestiture included operating lease assets of $20,825 and operating lease liabilities of $21,082 as well as finance lease assets of $2,743 with finance lease liabilities of $2,920.
The Company completed the Eviosys acquisition on December 4, 2024. The acquisition included operating lease liabilities of $42,468 with a weighted-average remaining lease maturity term of 8.1 years and weighted-average discount rate of 4.5%.
The Company completed the divestiture of Protexic on April 1, 2024. The divestiture included operating lease assets of $21,989 and operating lease liabilities of $22,396.
For additional information about the Company’s acquisitions and divestitures, see Note 4.
The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at December 31, 2025 and December 31, 2024:
| Classification | Balance Sheet Location | December 31, 2025 | December 31, 2024 | |||||||||||||||||
| Lease Assets | ||||||||||||||||||||
| Operating lease assets | Right of Use Asset-Operating Leases | $ | 307,450 | $ | 307,688 | |||||||||||||||
| Finance lease assets | 49,059 | 76,831 | ||||||||||||||||||
| Total lease assets | $ | 356,509 | $ | 384,519 | ||||||||||||||||
| Lease Liabilities | ||||||||||||||||||||
| Current operating lease liabilities | $ | 53,978 | $ | 52,648 | ||||||||||||||||
| Current finance lease liabilities | 11,617 | 22,284 | ||||||||||||||||||
| Total current lease liabilities | $ | 65,595 | $ | 74,932 | ||||||||||||||||
| Noncurrent operating lease liabilities | Noncurrent Operating Lease Liabilities | $ | 263,192 | $ | 258,735 | |||||||||||||||
| Noncurrent finance lease liabilities | 41,925 | 45,344 | ||||||||||||||||||
| Total noncurrent lease liabilities | $ | 305,117 | $ | 304,079 | ||||||||||||||||
| Total lease liabilities | $ | 370,712 | $ | 379,011 | ||||||||||||||||
Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.
The following table sets forth the components of the Company’s total lease cost for the years ended December 31, 2025, 2024, and 2023:
| Lease Cost | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Operating lease cost | (a) | $ | 62,687 | $ | 49,327 | $ | 43,524 | ||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||
| Amortization of lease asset | (a) (b) | 13,051 | 12,871 | 11,789 | |||||||||||||||||||
| Interest on lease liabilities | (c) | 3,100 | 3,711 | 3,912 | |||||||||||||||||||
| Variable lease cost | (a) (d) | 48,807 | 31,404 | 32,016 | |||||||||||||||||||
| Impairment charges | (e) | 2,526 | — | — | |||||||||||||||||||
| Total lease cost | $ | 130,171 | $ | 97,313 | $ | 91,241 | |||||||||||||||||
(a) Production-related costs are included in “Cost of sales” and administrative costs are included in “Selling, general and administrative expenses” in the Consolidated Statements of Income.
(b) Included in depreciation and amortization.
(c) Included in interest expense.
(d) Also includes short term lease costs, which are deemed immaterial.
(e) Impairment charges are included in “Restructuring/Asset impairment charges, net” in the Company’s Consolidated Statements of Income. See Note 5 for additional information.
The following table sets forth the five-year maturity schedule of the Company’s lease liabilities as of December 31, 2025:
| Maturity of Lease Liabilities | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | 54,712 | $ | 11,841 | $ | 66,553 | ||||||||||||||
| 2027 | 47,158 | 10,382 | 57,540 | |||||||||||||||||
| 2028 | 42,551 | 8,750 | 51,301 | |||||||||||||||||
| 2029 | 39,459 | 6,512 | 45,971 | |||||||||||||||||
| 2030 | 35,978 | 4,845 | 40,823 | |||||||||||||||||
| Beyond 2030 | 177,821 | 20,207 | 198,028 | |||||||||||||||||
| Total lease payments | $ | 397,679 | $ | 62,537 | $ | 460,216 | ||||||||||||||
| Less: Interest | (80,509) | (8,995) | (89,504) | |||||||||||||||||
| Lease Liabilities | $ | 317,170 | $ | 53,542 | $ | 370,712 | ||||||||||||||
The following tables set forth the Company’s weighted average remaining lease term and discount rates used in the calculation of its outstanding lease liabilities at December 31, 2025, 2024, and 2023, along with other lease-related information for those years:
| Lease Term and Discount Rate | 2025 | 2024 | 2023 | ||||||||||||||
| Weighted-average remaining lease term (years): | |||||||||||||||||
| Operating leases | 9.6 | 10.1 | 10.0 | ||||||||||||||
| Finance leases | 8.2 | 6.7 | 7.1 | ||||||||||||||
| Weighted-average discount rate: | |||||||||||||||||
| Operating leases | 5.09% | 4.97% | 5.07% | ||||||||||||||
| Finance leases | 4.65% | 5.16% | 5.27% | ||||||||||||||
| Other Information | 2025 | 2024 | 2023 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows used by operating leases | $ | 59,172 | $ | 48,380 | $ | 43,638 | |||||||||||
| Operating cash flows used by finance leases | $ | 3,100 | $ | 3,711 | $ | 3,912 | |||||||||||
| Financing cash flows used by finance leases | $ | 14,997 | $ | 15,433 | $ | 14,617 | |||||||||||
| Noncash investing and financing activities: | |||||||||||||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | 42,646 | $ | 66,585 | $ | 18,225 | |||||||||||
| Leased assets obtained in exchange for new finance lease liabilities | $ | 20,579 | $ | 11,925 | $ | 7,755 | |||||||||||
| Modification to leased assets for increase in operating lease liabilities | $ | 17,621 | $ | 37,731 | $ | 4,431 | |||||||||||
| Modification to leased assets for increase/(decrease) in finance lease liabilities | $ | (31,502) | $ | 53 | $ | 18 | |||||||||||
| Termination reclasses to decrease operating lease assets | $ | 8,440 | $ | 5,765 | $ | 5,702 | |||||||||||
| Termination reclasses to decrease operating lease liabilities | $ | 8,544 | $ | 5,768 | $ | 6,063 | |||||||||||
| Termination reclasses to decrease finance lease assets | $ | 303 | $ | 270 | $ | 1,429 | |||||||||||
| Termination reclasses to decrease finance lease liabilities | $ | 305 | $ | 271 | $ | 482 | |||||||||||
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 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.