Restructuring and asset impairment

12 Months Ended

Dec. 31, 2025

Restructuring and Related Activities [Abstract]

Due to its geographic footprint and the cost-competitive nature of its businesses, the Company is continually seeking more cost-effective means and structures to serve its customers and to respond to fundamental changes in its markets. As such, plant closures in connection with footprint rationalization and headcount reductions are an important component of the Company’s cost control initiatives. The amount of these costs can vary significantly from quarter to quarter and from year to year depending upon the scope, nature, and location of the restructuring activities.

Following are the total restructuring and asset impairment charges, net of adjustments, recognized during the periods presented:


	Year Ended December 31,
	2025		2024		2023
Restructuring and restructuring-related asset impairment charges, net	$	66,215	$	65,370	$	47,909
Other asset impairments	—		—		—
Restructuring/Asset impairment charges, net	$	66,215	$	65,370	$	47,909

The table below sets forth restructuring and restructuring-related asset impairment charges by type incurred:


	Year Ended December 31,
	2025		2024		2023
Severance and Termination Benefits	$	68,795	$	37,307	$	15,543
Asset Impairment/Disposal of Assets	(15,333)		15,719		24,415
Other Costs	12,753		12,344		7,951
Restructuring and restructuring-related asset impairment charges, net	$	66,215	$	65,370	$	47,909

The table below sets forth restructuring and restructuring-related asset impairment charges by reportable segment:


	Year Ended December 31,
	2025		2024		2023
Consumer Packaging	$	54,200	$	19,259	$	4,111
Industrial Paper Packaging	8,307		33,923		38,754
All Other	5		1,434		2,547
Corporate	3,703		10,754		2,497
Restructuring and restructuring-related asset impairment charges, net	$	66,215	$	65,370	$	47,909

“Restructuring and restructuring-related asset impairment charges” and “Other asset impairments” are included in “Restructuring/Asset impairment charges, net” in the Consolidated Statements of Income.

The following table sets forth the activity in the restructuring accrual included in “Accrued expenses and other payables” in the Company’s Consolidated Balance Sheets:


Accrual Activity	Severance and Termination Benefits		Asset Impairment/ Disposal of Assets		Other Costs		Total
Liability at December 31, 2023	$	8,864	$	—	$	272	$	9,136
2024 charges	37,307		15,719		12,344		65,370
Cash (payments)/receipts	(21,653)		9,680		(11,610)		(23,583)
Asset write downs/disposals	—		(25,399)		—		(25,399)
Foreign currency translation	(484)		—		(97)		(581)
Liability at December 31, 2024	$	24,034	$	—	$	909	$	24,943
2025 charges/(gains)	68,795		(15,333)		12,753		66,215
Cash (payments)/receipts	(38,367)		45,675		(10,779)		(3,471)
Asset write downs/disposals	—		(30,342)		—		(30,342)
Foreign currency translation	1,166		—		644		1,810
Liability at December 31, 2025	$	55,628	$	—	$	3,527	$	59,155

“Severance and Termination Benefits” in 2025 include the cost of severance for approximately 450 employees whose positions were eliminated in conjunction with the Company’s ongoing organizational effectiveness efforts, as well as severance costs related to the closures of metal can facilities in France and Spain, part of the Consumer Packaging segment, and the closures of a paper mill in Mexico, cone facilities in Taiwan and Mexico, and partitions facilities in Maine and California, all part of the Industrial Paper Packaging segment.

“Severance and Termination Benefits” in 2024 include the cost of severance for approximately 300 employees whose positions were eliminated in conjunction with the Company’s ongoing organizational effectiveness efforts, including the relocation of certain facilities in Greece and Germany, and severance related to the closures of paper mills in Sumner, Washington (the “Sumner Mill”) and Kilkis, Greece (the “Kilkis Mill”), the closures of two small industrial converted products facilities in China, and the closure of an industrial converted products facility in Mississauga, Canada, all part of the Industrial Paper Packaging segment.

“Asset Impairment/Disposal of Assets” in 2025 consist primarily of asset impairment charges related to the closures of the paper mill in Mexico, the cone facilities in China and Mexico, and the partitions facilities in Maine and California, all part of the Industrial Paper Packaging segment, and the closure of the metal packaging facility in France, part of the Consumer Packaging segment. These charges were offset by gains from the sales of the land and buildings associated with previously closed facilities, primarily the cone facility in Taiwan and the partitions facility in Maine. Also offsetting the impairment charges was a gain from the sale of water rights at our former paper mill in Hutchinson, Kansas, which was closed in 2023.

“Asset Impairment/Disposal of Assets” in 2024 consist primarily of asset impairment charges related to the closures of the Sumner Mill and the Kilkis Mill, both part of the Industrial Paper Packaging segment, and the exit of a small metal canning lid business within Metal Packaging, part of the Consumer Packaging segment. These charges were partially offset by gains from the sales of previously closed facilities that were part of the Industrial Paper Packaging and Consumer Packaging segments.

“Other Costs” in 2025 consist primarily of equipment removal, utilities, plant security, property taxes, insurance and environmental remediation costs related to the prior year’s closure of the Company’s paper mill in Washington, costs related to the current year’s closures of the metal can facilities in France and Spain, the paper mill in Mexico, the cone facility in Taiwan, and ongoing facility carrying costs of previously announced plant closures.

“Other Costs” in 2024 consist primarily of equipment removal, utilities, plant security, property taxes, insurance and environmental remediation costs related to the closure of the Sumner Mill, and ongoing facility carrying costs of previously announced plant closures.

The Company expects to pay the majority of the remaining restructuring reserves by the end of 2026 using cash generated from operations. The Company also expects to recognize future additional charges totaling approximately $11,000 in connection with previously announced restructuring actions and believes that the majority of these charges will be incurred and paid by the end of 2026. The Company continually evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken.

SONOCO PRODUCTS CO 10-K