Packaging Corp of America (PKG) 10-K risk factor changes: FY2020 vs FY2019

For our discussion and analysis of our results of operations, financial condition and cash flows for the year ended December 31, [removed: 2017,] [added: 2018,] the earliest of the years presented in the accompanying audited financial statements included in Item 8 herein, please refer to our Annual Report on Form 10-K for the year ended December 31, [removed: 2018,] [added: 2019,] filed with the Securities and Exchange Commission on February [removed: 28, 2019.][added: 26, 2020.]

Such information is presented in Item 7 of such report under the subcaptions “Results of Operations —Year Ended December 31, [removed: 2018,] [added: 2019,] Compared with Year Ended December 31, [removed: 2017”] [added: 2018”] and “Liquidity and Capital Resources” and is incorporated by reference herein.

We operate six containerboard mills, two paper mills, and [removed: 95] [added: 90] corrugated products manufacturing plants.

Net sales were [removed: $6.96] [added: $6.66] billion for the year ended December 31, [removed: 2019] [added: 2020] and [removed: $7.01] [added: $6.96] billion in [removed: 2018.][added: 2019.]

We reported [removed: $696] [added: $461] million of net income, or [removed: $7.34] [added: $4.84] per diluted share, in [removed: 2019,] [added: 2020,] compared to [removed: $738] [added: $696] million, or [removed: $7.80] [added: $7.34] per diluted share, in [removed: 2018.][added: 2019.]

Net income included [removed: $29] [added: $89] million of expense for special items in [removed: 2019,] [added: 2020,] compared to [removed: $22] [added: $29] million of expense for special items in [removed: 2018.][added: 2019.]

Excluding special items, we recorded [removed: $726] [added: $550] million of net income, or [removed: $7.65] [added: $5.78] per diluted share, in [removed: 2019,] [added: 2020,] compared to [removed: $760] [added: $726] million, or [removed: $8.03] [added: $7.65] per diluted share, in [removed: 2018.][added: 2019.]

The decrease was driven primarily by lower prices and mix in our Packaging [removed: segment,] [added: and Paper segments,] lower volumes in our Paper segment, [removed: and] higher [removed: operating] [added: freight] and [removed: converting costs,] [added: logistic expense, and higher annual outage expense,] partially offset by higher volumes in our Packaging segment, [removed: higher prices] and [removed: mix in our Paper segment,] lower [removed: annual outage expense, and lower freight] [added: operating] and [removed: logistic expenses.][added: converting costs.]

Packaging segment income from operations was [removed: $963] [added: $830] million in [removed: 2019,] [added: 2020,] compared to [removed: $1,045] [added: $963] million in [removed: 2018.][added: 2019.]

Packaging segment EBITDA excluding special items was [removed: $1,310] [added: $1,229] million in [removed: 2019,] [added: 2020,] compared to [removed: $1,401] [added: $1,310] million in [removed: 2018.][added: 2019.]

The decrease was driven primarily by lower [removed: domestic and export] containerboard [removed: prices] and [removed: mix and higher operating] [added: corrugated prices] and [removed: converting costs,] [added: mix,] partially offset by higher sales and production volumes, [removed: higher corrugated products prices] [added: lower operating] and [removed: mix,] [added: converting costs,] lower annual outage expense, and lower freight and logistic expenses.

Paper segment [removed: income] [added: loss] from operations was [removed: $175] [added: $20] million in [removed: 2019,] [added: 2020,] compared to [removed: $98] [added: income of $175] million in [removed: 2018.][added: 2019.]

Paper segment EBITDA excluding special items was [removed: $213] [added: $73] million in [removed: 2019,] [added: 2020,] compared to [removed: $165] [added: $213] million in [removed: 2018.][added: 2019.]

The [removed: increase] [added: decrease] was due primarily to [removed: higher] [added: lower sales and production volumes, lower] paper prices and mix, [removed: lower operating costs,] [added: higher annual outage expense,] and [removed: lower] [added: higher] freight and logistic expenses, partially offset by lower [removed: sales and production volumes, and higher annual outage expense.][added: operating costs.]

During the second quarter of 2018, the Company discontinued production of paper grades at its Wallula, Washington mill and converted the No. 3 paper machine to a [removed: 400,000 ton-per-year] virgin kraft linerboard machine.

The Company incurred charges in the Packaging and Paper segments relating to these activities during 2019 [removed: and 2018] as described below under “Special Items and Earnings per Diluted Share, Excluding Special Items.”

[removed: *Special] [added: Special] Items and Earnings per Diluted Share, Excluding Special [removed: Items*][added: Items]

Earnings per diluted share, excluding special items, in [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] were as follows:

| Earnings per diluted share | | $ | [removed: 7.34] [added: 4.84] | | | $ | [removed: 7.80] [added: 7.34] | |

| Debt refinancing [removed: (a)] [added: (e)] | | | [removed: 0.28] [added: —] | | | | [removed: —] [added: 0.28] | |

| DeRidder mill fixed asset disposals [removed: (b)] [added: (f)] | | | [removed: 0.02] [added: —] | | | | [removed: —] [added: 0.02] | |

| Wallula mill restructuring [removed: (c)] [added: (g)] | | | [removed: 0.01] [added: —] | | | | [removed: 0.24] [added: 0.01] | |

| Facilities closure and other costs [removed: (d)] [added: (b)] | | | [removed: —] [added: 0.23] | | | | [removed: 0.01] [added: —] | |

| Total special items expense | | | [removed: 0.31] [added: 0.94] | | | | [removed: 0.23] [added: 0.31] | |

| Earnings per diluted share, excluding special items | | $ | [removed: 7.65] [added: 5.78] | | | $ | [removed: 8.03] [added: 7.65] | |

| [removed: (a)] [added: (e)] | Includes $38.7 million of charges related to the Company’s November 2019 debt refinancing, which included premiums paid to redeem the debt being refinanced and the write-offs of remaining balances of treasury locks and unamortized debt issuance costs. Also includes $3.2 million of income tax benefit from the stranded tax effects in Accumulated Other Comprehensive Income related to the write-offs of the treasury locks in connection with the debt refinancing. |

| [removed: (b)] [added: (f)] | Includes $3.0 million of charges for the disposal of fixed assets related to the containerboard mill conversion at our DeRidder, Louisiana mill. |

| [removed: (c)] [added: (g)] | [removed: For 2019 and 2018, includes] [added: Includes] $1.0 million [removed: and $30.0 million, respectively,] of charges related to the [removed: second quarter 2018] discontinuation of uncoated free sheet and coated one-side paper grades at the Wallula, Washington mill associated with the conversion of the No. 3 paper machine to produce virgin kraft linerboard. |

Trade publications reported North American industry-wide corrugated products [removed: total] shipments [added: per workday] were [removed: flat] [added: up 3.0%] during [removed: 2019,] [added: 2020,] compared to [removed: 2018.][added: 2019.]

Reported industry containerboard production [removed: decreased 3.7%] [added: increased 3.6%] compared to [removed: 2018,] [added: 2019,] and reported industry containerboard inventories at the end of [removed: 2019] [added: 2020] were approximately [removed: 2.5] [added: 2.3] million tons, down [removed: 5.1%] [added: 8.9%] compared to [removed: 2018.][added: 2019.]

Reported containerboard export shipments [removed: decreased 13.1%] [added: increased 9.0%] compared to [removed: 2018.][added: 2019.]

Prices reported by trade publications decreased by $10 per ton for linerboard [removed: in March, May,] and [removed: June 2019, and corrugating medium decreased $20] [added: $15] per ton [added: for corrugating medium] in January [removed: and $10] [added: 2020, followed by a $50] per ton [added: increase] in [removed: May] [added: linerboard] and [removed: June 2019.][added: medium in November 2020.]

[removed: Additionally,] [added: Prices reported by trade publications, which serve as an index for] prices [added: for our corrugated products in many of our customer contracts,] decreased by $10 per ton for linerboard and $15 per ton for corrugating medium in [removed: January] [added: January, followed by a $50 per ton increase in linerboard and medium in November] 2020.

Trade publications reported North American uncoated freesheet paper shipments were down [removed: 10.9%] [added: 20.1%] in [removed: 2019,] [added: 2020,] compared to [removed: 2018.][added: 2019.]

Average copy paper prices reported by a trade publication for cut size office papers [removed: increased $3] [added: decreased $15] per ton in [removed: the first quarter] [added: May 2020] and [added: $20 per ton in June 2020.]

[removed: Results of Operations][added: Results of Operations]

Year Ended December 31, [removed: 2019,] [added: 2020,] Compared with Year Ended December 31, [removed: 2018][added: 2019]

The historical results of operations of PCA for the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] are set forth below (dollars in millions):

| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | Change | | |

| Corporate and other and eliminations | | | [removed: 67.8] [added: 63.9] | | | | [removed: 74.1] [added: 67.8] | | | | [removed: (6.3] [added: (3.9] | ) |

Reconciliations of Non-GAAP Financial Measures to Reported Amounts.” PCA ended the year with $1.1 billion of cash and marketable debt securities and, including borrowing availability under its revolving credit facility, $1.4 billion in liquidity.

The Company was committed to conducting safe operations through the COVID-19 pandemic during the year in adherence with the guidelines of the Center for Disease Control and applicable health and safety regulations.

As PCA’s operations continued to operate as “essential businesses,” we adopted measures to protect the health and safety of our employees, including social distancing practices, enhanced sanitation procedures and modified absence pay policies.

These practices will continue into 2021 as the effects of the pandemic continue.

PCA did not experience significant disruptions in its operations as a result of the pandemic and has maintained adequate availability of its workforce and supply of raw materials and services to continue to serve its customers.

Demand for Packaging segment products remained strong throughout the year, with our corrugated products shipments up 5.8% over 2019 (an increase of 5.4% on a per day basis as 2020 had one more operating day than 2019) and is expected to remain strong into the first quarter of 2021.

We notified our customers of increased prices on our containerboard and corrugated products

during the fourth quarter of 2020.

We expect to incur some inflation in freight, labor, energy and fiber costs into the first quarter of 2021.

Sales were 30% lower than last year, as demand for our paper products has continued to be negatively affected by the COVID-19 pandemic due to office and school closures.

As described in Note 8, Goodwill and Intangible Assets included in Item 8 of this Annual Report on Form 10-K, we incurred a charge of $55.2 million during the year associated with the full impairment of goodwill within the Paper segment.

Operations at our Jackson, Alabama mill were idled for the majority of the second and third quarters of 2020.

During the fourth quarter of 2020, due to an increase in demand for our corrugated products and as part of our assessment of a potential conversion to produce containerboard, we began producing high-performance, virgin kraft linerboard on the No. 3 machine at our Jackson mill.

Before October 2020, operating results for the Jackson mill were included in the Paper segment.

Beginning in October 2020, operating results for the Jackson mill are included in both the Packaging and Paper segments.

We expect to continue to produce containerboard on the Jackson machine during the first quarter of 2021 to fulfill the needs of our packaging customers, as well as produce uncoated freesheet to service our paper customers.

| Goodwill impairment (a) | | | 0.58 | | | | — | |

| Hurricane Laura impact (c) | | | 0.08 | | | | — | |

| Incremental costs for COVID-19 (d) | | | 0.05 | | | | — | |

| (a) | During the second quarter of 2020, with the exacerbated deterioration in uncoated freesheet market conditions and the estimated impact on our Paper reporting unit arising from the COVID-19 pandemic, as well as projected future results of operations, we identified a triggering event indicating possible impairment of goodwill within our Paper reporting unit. The Company performed an interim quantitative impairment analysis as of May 31, 2020, and, based on the evaluation performed, we determined that goodwill was fully impaired for the Paper reporting unit and recognized a non-cash impairment charge of $55.2 million. |

| (b) | Includes $28.1 million of restructuring costs for paper administrative functions and closure costs related to corrugated products facilities, substantially all of which relates to the previously announced closure of the San Lorenzo, California facility during the second quarter of 2020, partially offset by income related to the sale of a corrugated products facility during the second quarter of 2020. |

| (c) | Includes $10.0 million of charges related to the impact of Hurricane Laura at our DeRidder, Louisiana mill, including unabsorbed costs related to lost production, excess purchased containerboard and freight costs, repair expenses, rental and supplies costs, and other recovery expenses. |

| (d) | Includes $6.9 million of incremental, out-of-pocket costs related to COVID-19 that were incurred in the first half of 2020. Costs include materials, cleaning supplies, and sick pay as well as expenses for establishing processes and logistics for the new work requirements in all of our facilities for mitigating the spread of the virus within the Company. With the |

| | process now established, we anticipate any corresponding COVID-19 related expenses to be included in normalized costs through the span of the pandemic. |

| Packaging | | $ | 5,919.5 | | | $ | 5,932.2 | | | $ | (12.7 | ) |

| Paper | | | 674.8 | | | | 964.3 | | | | (289.5 | ) |

| Packaging | | $ | 829.5 | | | $ | 963.4 | | | $ | (133.9 | ) |

| Paper | | | (20.0 | ) | | | 175.4 | | | | (195.4 | ) |

| EBITDA (a) | | $ | 1,133.9 | | | $ | 1,441.2 | | | $ | (307.3 | ) |

| EBITDA excluding special items (a) | | $ | 1,225.0 | | | $ | 1,445.2 | | | $ | (220.2 | ) |

Net sales decreased $306 million, or 4.4%, to $6,658 million in 2020, compared to $6,964 million in 2019.

The decrease was driven primarily by lower prices and mix in our Packaging and Paper segments, lower volumes in our Paper segment, higher freight and logistic expense, and higher annual outage expense, partially offset by higher volumes in our Packaging segment, and lower operating and converting costs.

In 2020, gross profit included $21 million of special item expense related to the impact of Hurricane Laura at our DeRidder, Louisiana mill, incremental out-of-pocket costs related to COVID-19, and facility closure costs, compared to no significant special items in 2019.

The decrease was primarily due to lower travel and entertainment expenses and lower administrative and other corporate costs, partially offset by higher employee salaries and fringes.

During 2020, with the exacerbated deterioration in uncoated freesheet market conditions and the estimated impact on our Paper reporting unit arising from the COVID-19 pandemic, as well as projected future results of operations, we identified a triggering event indicating possible impairment of goodwill within our Paper reporting unit.

The Company performed an interim quantitative impairment analysis as of May 31, 2020, and, based on the evaluation performed, we determined that goodwill was fully impaired for the Paper reporting unit and recognized a non-cash impairment charge of $55 million.

Special items in 2020 consisted of $55 million of expense for the Paper reporting unit goodwill impairment; $28 million of restructuring costs for paper administrative functions and closure costs related to corrugated products facilities; $10 million related to the impact of Hurricane Laura at our DeRidder, Louisiana mill; and $7 million of incremental, out-of-pocket costs related to COVID-19 that were incurred in the first half of 2020.

Special items in 2020 included expense of $27 million of closure costs for corrugated products facilities, $10 million of charges related to the impact of Hurricane Laura at our DeRidder, Louisiana mill, and $6 million of incremental, out-of-pocket costs related to COVID-19.

Special items in the Paper segment in 2020 included $55 million related to goodwill impairment, $1 million of restructuring costs for paper administrative functions, and $1 million of incremental, out-of-pocket costs related to COVID-19, compared to an insignificant amount of special items in the Paper segment in 2019.

The decrease in non-operating pension expense was primarily related to the favorable 2019 asset performance, partially offset by assumption changes.

Reconciliations of Non-GAAP Financial Measures to Reported Amounts.”

| | | 2019 | | | | 2018 | | |

| Tax reform (e) | | | — | | | | (0.02 | ) |

| (d) | Includes $1.8 million of charges consisting of closure costs related to corrugated products facilities and a corporate administration facility. |

| (e) | Includes $2.0 million of income tax benefit for the re-measurement of our net deferred tax liability for the reduction in the U.S. corporate federal statutory income tax rate related to our 2017 measurement period adjustments in accordance with SEC Staff Accounting Bulletin No. 118 (SAB 118), *Income Tax Accounting Implications of the Tax Cuts and Jobs Act*. |

$35 per ton in the second quarter, followed by a decrease of $35 per ton in the third quarter and $13 per ton in the fourth quarter of 2019.

Outlook

Looking ahead to the first quarter of 2020, in our Packaging segment we expect lower prices as the remaining impact of the published domestic containerboard price decreases from 2019 are fully realized as well as the negative impact from the decreases in the published index prices for kraft linerboard and medium reported in January 2020.

We also expect export prices to continue to decline.

Containerboard volumes will be lower due to scheduled maintenance outages at our three largest mills during the quarter, but we do expect higher corrugated products shipments driven by higher demand.

In our Paper segment, volumes are expected to be lower partly due to timing, as we shipped higher than expected volumes during the fourth quarter as well as the scheduled outage we have at our Jackson Mill.

Expenses relating to our scheduled maintenance outage activities will be significantly higher with four outages scheduled in the first quarter versus one in the fourth quarter of 2019.

Freight costs will be higher due to rail rate increases in certain areas and scheduled outage-related increases.

Labor and benefits costs will be higher with annual wage increases and other timing-related expenses.

We also expect input cost inflation with purchased electricity and most of our chemical and repair and materials costs, while seasonally colder weather will increase energy and wood costs.

We also expect our tax rate and depreciation expense to be slightly higher.

Considering these items, we expect first quarter earnings to be lower than fourth quarter 2019.

| Packaging | | $ | 5,932.2 | | | $ | 5,938.5 | | | $ | (6.3 | ) |

| Paper | | | 964.3 | | | | 1,002.0 | | | | (37.7 | ) |

| Packaging | | $ | 963.4 | | | $ | 1,045.4 | | | $ | (82.0 | ) |

| Paper | | | 175.4 | | | | 97.7 | | | | 77.7 | |

| --- | --- | --- |

Net sales decreased $50 million, or 0.7%, to $6,964 million in 2019, compared to $7,015 million in 2018.

Prices reported by trade publications decreased by

$10 per ton for linerboard in March, May, and June 2019, and corrugating medium decreased $20 per ton in January and $10 per ton in May and June 2019, which drove lower selling prices for containerboard and corrugated products.

In 2019, gross profit included no significant special items, compared to $15 million related to the conversion of the No. 3 machine at the Wallula mill in 2018.

The increase in 2019 was primarily due to higher employee salaries and fringes ($20 million).

| Insurance deductible for property damage | | | — | | | | (0.5 | ) |

| Acquisition and integration related costs | | | — | | | | (0.2 | ) |

Special items in 2018 included $12 million of charges related to the conversion of the Wallula No. 3 paper machine and $2 million related to facilities closures and other costs.

There were an insignificant amount of

special items in the Paper segment in 2019, compared to $18 million in 2018 related to the conversion of the Wallula No.3 paper machine to virgin kraft linerboard.

The increase in non-operating pension expense was primarily related to the 2018 asset performance (i.e. lower asset balances resulted in lower than expected return) and the amortization of the 2018 losses.

| | a) | a decrease in accounts receivable in 2019 compared to 2018 due to lower net sales in 2019 as previously discussed and the timing of collections in the Packaging segment, and |

| | b) | a net decrease in inventory in 2019 compared to 2018 primarily due to less containerboard inventory on hand in the Packaging segment, partially offset by higher levels of finished goods in the Paper segment. |

| | a) | higher taxes paid in 2019 compared to 2018 due to the 2018 use of a federal overpayment from the 2017 tax year resulting from Federal Tax Reform, and |

During 2019, we did not acquire any businesses, compared to $56 million for acquisitions in 2018 (Englander dZignPak).

| | | $ | 399.5 | | | $ | 551.4 | |

We expect capital investments in 2020 to be between $400 million and $425 million.

We paid $31 million more in dividends on our common stock in 2019 ($299 million in total) than in 2018 ($268 million in total) and paid $124 million less in 2019 than in 2018 on our long-term debt, net of proceeds received.

We were not party to any derivative-based arrangements at December 31, [removed: 2019.][added: 2020.]

For a discussion of derivatives and hedging activities, see Note [removed: 16,] [added: 15,] Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

At December 31, [removed: 2019,] [added: 2020,] the interest rates on 100% of PCA’s outstanding debt are fixed.

We operate six containerboard mills, two uncoated freesheet (UFS) paper [removed: mills] [added: mills,] and [removed: 95] [added: 90] corrugated products manufacturing plants.

For segment financial information see Note [removed: 20,] [added: 19,] Segment Information, of the Notes to Consolidated Financial Statements in “Part II, Item 8, Financial Statements and Supplementary Data” of this Form 10-K.

| [removed: Containerboard Production (a)] [added: (thousand tons)] | | | 2019 | | | | 1,037 | | | | 1,063 | | | | 1,070 | | | | 1,079 | | | | 4,249 | |

| [removed: (thousand tons)] | | | 2018 | | | | 953 | | | | 1,020 | | | | 1,087 | | | | 1,021 | | | | 4,081 | |

| [removed: Corrugated Shipments (BSF)] | | | 2019 | | | | 14.5 | | | | 14.9 | | | | 15.1 | | | | 14.9 | | | | 59.4 | |

| [removed: UFS Production (a)] [added: (thousand tons)] | | | 2019 | | | | 239 | | | | 236 | | | | 236 | | | | 236 | | | | 947 | |

| [removed: (thousand tons)] | | | 2018 | | | | 279 | | | | 252 | | | | 239 | | | | 247 | | | | 1,017 | |

[removed: ][added: ]

During the year ended December 31, [removed: 2019,] [added: 2020,] our Packaging segment produced [removed: 4.2] [added: 4.3] million tons of containerboard at our mills.

Our corrugated products manufacturing plants sold [removed: 59.4] [added: 62.8] billion square feet (BSF) of corrugated products.

[removed: Our] [added: The Packaging segment’s] net sales to third parties totaled $5.9 billion in [removed: 2019.][added: 2020.]

We [removed: currently] manufacture containerboard, which includes a variety of performance and specialty grades, at six containerboard mills.

Total annual containerboard capacity was approximately 4.3 million tons as of December 31, [removed: 2019.][added: 2020.]

We also produce corrugated and protective packaging products at [removed: 95] [added: 90] manufacturing locations.

We operate [removed: 95] [added: 90] corrugated manufacturing and protective packaging operations, a technical and development center, [removed: 11] [added: 10] regional design centers, a rotogravure printing operation, and a complement of packaging supplies and distribution centers.

Of the [removed: 95] [added: 90] manufacturing facilities, [removed: 62] [added: 58] operate as combining operations, commonly called corrugated plants, which manufacture corrugated sheets and finished corrugated packaging products, [removed: 32] [added: 31] are sheet plants, which procure combined sheets and manufacture finished corrugated packaging products, and one is a corrugated sheet-only manufacturer.

In [removed: 2019,] [added: 2020,] our usage of recycled fiber, net of internal generation, represents 17% of our containerboard production.

We participate in the Sustainable Forestry Initiative® [removed: (SFI®),] [added: (SFI),] the Programme for the Endorsement of Forest Certification (PEFC), as well as the Forest Stewardship Council® (FSC®), and we are certified under their sourcing and chain of custody standards.

In [removed: 2019,] [added: 2020,] our packaging mills consumed about [removed: 75] [added: 74] million [removed: MMBTU’s] [added: MMBTUs] of fuel to produce both steam and electricity.

Of the [removed: 75] [added: 74] million [removed: MMBTU’s] [added: MMBTUs] consumed, about [removed: 62%] [added: 63%] was from mill generated by-products and [removed: 38%] [added: 37%] was from purchased fuels.

Of the purchased fuels, [removed: 72%] [added: 78%] was from natural gas, [removed: 25%] [added: 20%] was from purchased wood waste and [removed: 3%] [added: 2%] was from other purchased fuels.

We sell containerboard and corrugated products to approximately [removed: 17,000] [added: 16,000] customers in approximately [removed: 35,000] [added: 33,000] locations.

The primary end-use markets in the United States for corrugated products are shown below as reported in the [removed: 2018] [added: 2019] Fibre Box Association annual report:

| Food, beverages, and agricultural products | | | [removed: 44] [added: 45] | % |

| Chemical, plastic, and rubber products | | | [removed: 11] [added: 10] | % |

As of December 31, [removed: 2019,] [added: 2020,] we were the third largest producer of containerboard products in North America, according to industry sources and our own estimates.

According to industry sources, corrugated products are produced by about [removed: 460] [added: 450] U.S. companies operating approximately 1,200 plants.

However, with our strategic focus on regional and local accounts, we also compete with the smaller, [removed: independent] [added: local] producers.

Our papers consist of communication papers, including cut-size office [removed: papers] [added: papers,] and printing and converting papers.

In [removed: 2019,] [added: 2020,] our paper mills consumed about [removed: 22] [added: 19] million [removed: MMBTU’s] [added: MMBTUs] of fuel to produce both steam and electricity.

Of the [removed: 22] [added: 19] million [removed: MMBTU’s] [added: MMBTUs] consumed, about [removed: 68%] [added: 75%] was from mill generated by-products and [removed: 32%] [added: 25%] was from purchased fuels.

Of the purchased fuels, [removed: 91%] [added: 89%] was from natural gas and [removed: 9%] [added: 11%] from purchased wood waste.

In [removed: 2019,] [added: 2020,] our sales revenue to Office Depot represented [removed: 50%] [added: 45%] of our Paper segment sales revenue and [removed: 7%] [added: 5%] of our consolidated sales revenue.

As of December 31, [removed: 2019,] [added: 2020,] we had approximately [removed: 15,500] [added: 15,200] employees, including 4,500 salaried and [removed: 11,000] [added: 10,700] hourly employees.

Approximately [removed: 63%] [added: 62%] of our hourly employees worked pursuant to collective bargaining agreements.

We are currently in negotiations to renew or extend [removed: any] union contracts that have recently expired or are expiring in the near future.

During [removed: 2019,] [added: 2020,] we experienced no work stoppages, and we believe we have satisfactory labor relations with our employees.

[added: Regulatory and] Environmental Matters

A discussion of the financial impact of our compliance with environmental laws is presented under the caption [removed: “Environmental] [added: “Regulatory and Environmental] Matters” in “Part II, Item 7.

Brief statements setting forth the age at February [removed: 26, 2020,] [added: 24, 2021,] the principal occupation, employment during the past five years, the year in which such person first became an officer of PCA, and other information concerning each of our executive officers appears below.

During the fourth quarter of 2020, due to an increase in demand for our corrugated products and as part of our assessment of a potential conversion to produce containerboard, we began producing high-performance, virgin kraft linerboard on the No. 3 machine at our Jackson, Alabama mill on a trial basis.

Before October 2020, operating results for the Jackson mill were included in the Paper segment.

Beginning in October 2020, operating results for the Jackson mill are included in both the Packaging and Paper segments.

| Containerboard Production | | | 2020 | | | | 1,047 | | | | 1,072 | | | | 1,048 | | | | 1,174 | | | | 4,341 | |

| Corrugated Shipments (BSF) | | | 2020 | | | | 15.3 | | | | 15.1 | | | | 16.0 | | | | 16.4 | | | | 62.8 | |

| UFS Production | | | 2020 | | | | 224 | | | | 148 | | | | 129 | | | | 147 | | | | 648 | |

We participate in the Sustainable Forestry Initiative® (SFI), the Programme for the Endorsement of Forest Certification (PEFC), as well as the Forest Stewardship Council® (FSC®), and we are certified under their sourcing and chain of custody standards.

These duties remain in effect and are subject to review in 2021.

Human Capital

PCA’s success depends on a highly engaged, results-oriented workforce operating in an entrepreneurial culture.

Our primary objective is to place the right people in the right roles, and empower them to succeed.

Safety is a core value at PCA and we believe that all accidents are preventable and an injury-free environment is achievable.

We have implemented a robust occupational health and safety management system to assure accountability throughout the organization for safe work practices.

Key components to our system include commitment from management, extensive training of employees, hazard identification and communication and regular safety audits.

During 2020, we were committed to conducting safe operations through the COVID-19 pandemic in accordance with the guidelines of the Center for Disease Control and applicable health and safety regulations.

As PCA’s operations continued to operate as “essential businesses,” we adopted measures to protect the health and safety of our employees, including social distancing practices, health screening procedures, enhanced sanitation procedures and enhanced absence pay policies.

These practices will continue into 2021 as the effects of the pandemic continue.

PCA did not experience significant disruptions in its operations as a result of the pandemic and has maintained adequate availability of its workforce and supply of raw materials and services to continue to serve its customers.

We have extensive recruiting, training and development programs designed to attract and retain a highly talented workforce aligned with our objectives to relentlessly serve our customers and achieve operational excellence throughout our organization.

As demand for qualified personnel is increasing, we are expanding our efforts in these critical areas along with efforts to continue to develop, promote and maintain a diverse workforce with a culture and an environment of respect and inclusion.

These principles are designed to develop and promote strong and increasing engagement of all PCA employees.

Jeff S.

Kaser, 55, Senior Vice President – Corrugated Products \- Mr. Kaser has served as Senior Vice President — Corrugated Products since May 2020.

Prior to this, he served as Vice President and Area General Manager of PCA’s Midwest Area, Mid-Atlantic Area and Pennsylvania Region.

Mr. Kaser joined PCA in 1987 and has also held plant positions in sales, sales management and general management.

Management's Discussion and Analysis of Financial Condition and Results of Operations”) or in our other filings with the

Risks Related to the COVID-19 Pandemic

The future effect of the COVID-19 pandemic on our operations is uncertain.

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

Since that time, federal, state and local authorities have taken measures to control the outbreak of COVID-19 in the United States, where we primarily operate.

These measures have included travel bans and restrictions, quarantines and shelter in place orders.

Due to the importance of our products to the continued distribution of food, beverage and other necessities, our operating facilities have been permitted to remain in operation and we have not experienced material disruptions in operations to date.

Despite the spread of the virus in the United States, we have maintained sufficient workforce availability as well as adequate supply of raw materials and necessary services to continue operating without material disruption.

However, the impact of the further spread of the virus and the measures to control the spread of the virus are uncertain and may materially restrict or hinder our ability to operate our facilities due to measures we may need to take to assure the health and safety of our employees, lack of available workforce, disruptions in the supply of key materials and services or restrictions due to governmental actions.

We cannot assure you as to the timing and effectiveness of vaccination efforts on the control of spread of the virus.

If our operations are hindered or restricted, we may not be able to serve our customers, which could have a material adverse effect on our business, financial condition and results of operations.

The pandemic resulting from the COVID-19 outbreak, and measures to control the outbreak, are having a negative impact on domestic economic activity, which could adversely affect demand for our products and our business, financial condition and results of operations.

Many businesses in the United States have been required to cease or curtail operations and workers have been laid off or furloughed, and have slowed down economic activity.

The severity and duration of the impact on the economy will depend on the future spread of the outbreak, future measures by governmental authorities to control the outbreak, the timing and effectiveness of vaccination efforts, the timing and manner in which normal social and business activities are permitted to resume and the effectiveness of governmental efforts to mitigate the economic effect of the outbreak, all of which are highly uncertain.

We have experienced significantly lower demand for our uncoated freesheet paper products, due to economic conditions, office closings and school shutdowns associated with the COVID-19 pandemic, which harmed the performance of our Paper segment.

| --- | --- |

| | | | 2017 | | | | 932 | | | | 947 | | | | 996 | | | | 1,006 | | | | 3,881 | |

| | | | 2017 | | | | 13.6 | | | | 13.9 | | | | 13.7 | | | | 14.5 | | | | 55.7 | |

| | | | 2017 | | | | 273 | | | | 289 | | | | 278 | | | | 278 | | | | 1,118 | |

| (a) | In May 2018, PCA ceased production of paper grades at our Wallula, Washington mill and converted the No. 3 machine to produce virgin kraft linerboard. We provide more information about the production capability of the converted machine elsewhere in this section under “– Packaging – Facilities – Wallula.” |

These duties remain in effect.

Employees

and managerial positions within its mill organization.

Mergers and Acquisitions - Our acquired businesses may underperform relative to our expectations, and we may not be able to successfully integrate these businesses into our own. We have completed several mergers and acquisitions and investments in recent years.

Our success will depend in part on our ability to successfully integrate, and receive the intended benefits from, these acquisitions.

There may be difficulties, costs and delays involved in the integration of these businesses into ours.

Integration requires modification of operational and financial systems and may result in significant additional expenses.

If the acquired businesses underperform relative to our expectations, or if we fail to successfully integrate these businesses, our business, financial condition and results of operations may be materially and adversely affected.

Information concerning legal proceedings can be found in Note [removed: 21,] [added: 20,] Commitments, Guarantees, Indemnifications, and Legal Proceedings, of the Notes to Consolidated Financial Statements in “Part II, Item 8.

For the fiscal year ended December 31, [removed: 2019][added: 2020]

[removed: ][added: ]

Yes ☐ No [removed: ☐][added: ☒]

At June 30, [removed: 2019,] [added: 2020,] the last day of the Registrant's most recently completed second fiscal quarter, the aggregate market value of Registrant's common equity held by non-affiliates was approximately [removed: $8,891,651,488] [added: $9,321,915,008] based upon the closing sale price as reported on the New York Stock Exchange.

On February [removed: 21, 2020,] [added: 19, 2021,] there were [removed: 94,652,815] [added: 94,828,214] shares of Common Stock outstanding.

Specified portions of the Proxy Statement for the Registrant's [removed: 2020] [added: 2021] Annual Meeting of Stockholders are incorporated by reference to the extent indicated in Part III of this Form 10-K.

| Item 1. | [Business](#ITEM_1_BUSINESS) | [removed: 3] [added: 2] |

| | [Packaging](#PACKAGING) | [removed: 4] [added: 3] |

| | [Paper](#PAPER) | [removed: 7] [added: 6] |

| | [Corporate and Other](#CORPORATE_OR) | [removed: 8] [added: 7] |

| | [removed: [Environmental] [added: [Regulatory and Environmental] Matters](#EM) | 8 |

| Item 1A. | [Risk Factors](#Item_1A_RISK_FACTORS) | [removed: 10] [added: 9] |

| | [Industry and Business Conditions](#INDUSTRY_BUSINESS_CONDITIONS) | [removed: 20] [added: 21] |

| | [Results of Operations](#RESULTS_OPERATIONS) | [removed: 21] [added: 22] |

| | [Liquidity and Capital Resources](#LIQUIDITY_CAPITAL_RESOURCES) | [removed: 23] [added: 24] |

| | [Commitments](#COMMITMENTS) | [removed: 25] [added: 26] |

| | [removed: [Off-Balance-Sheet Arrangements](#FBALANCESHEET_ARRANGEMENTS)] [added: [Off-Balance Sheet Arrangements](#Off_Balance_Sheet_Arrangements)] | [removed: 26] [added: 27] |

| | [Inflation and Other General Cost Increases](#INFLATION_OR_GENERAL_COST_INCREASES) | [removed: 26] [added: 27] |

| | [removed: [Environmental] [added: [Regulatory and Environmental] Matters](#EM1) | [removed: 27] [added: 28] |

| | [Critical Accounting Policies and Estimates](#CRITICAL_ACCOUNTING_POLICIES_ESTIMATES) | [removed: 28] [added: 29] |

| | [New and Recently Adopted Accounting Standards](#NEW_RECENTLY_ADOPTED_ACCOUNTING_STARDS) | [removed: 31] [added: 32] |

| | [Reconciliations of Non-GAAP Financial Measures to Reported Amounts](#RECONCILIATIONS_NONGAAP_FINANCIAL_MEASUR) | [removed: 31] [added: 32] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#Item_7A_QUANTITATIVE_AND_QUALITATIVE) | [removed: 33] [added: 34] |

| Item 8. | [Financial Statements and Supplementary Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR) | [removed: 34] [added: 35] |

| Item 9. | [Changes In and Disagreements With Accountants on Accounting and Financial Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC) | [removed: 77] [added: 80] |

| Item 9A. | [Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURES) | [removed: 77] [added: 80] |

| Item 9B. | [Other Information](#ITEM_9B_OR_INFORMATION) | [removed: 77] [added: 80] |

| Item 10. | [Directors, Executive Officers, and Corporate Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO) | [removed: 78] [added: 81] |

| Item 11. | [Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | [removed: 78] [added: 81] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF) | [removed: 78] [added: 81] |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR) | [removed: 79] [added: 82] |

| Item 14. | [Principal Accounting Fees and Services](#ITEM_14_PRINCIPAL_ACCOUNTING_FEES_SERVIC) | [removed: 79] [added: 82] |

| Item 15. | [Exhibits, Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH) | [removed: 80] [added: 83] |

| | [Signatures](#SIGNATURES) | [removed: 83] [added: 86] |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| | [Human Capital](#Human_Capital) | 7 |

| | | |

| | [Employees](#EMPLOYEES) | 8 |

| | [Outlook](#OUTLOOK) | 21 |

Information [removed: concerning capacity and utilization of] [added: regarding] our principal operating facilities, the segments that use those facilities, and a map of geographical locations is presented in “Part I, Item 1.

Additionally, we have [removed: 95] [added: 90] corrugated manufacturing operations, of which the buildings and land for [removed: 53] [added: 52] are owned, including [removed: 45] [added: 44] combining operations, or corrugated plants, one corrugated sheet-only manufacturer, and seven sheet plants.

We lease the buildings for [removed: 17] [added: 14] corrugated plants and [removed: 25] [added: 24] sheet plants.

We lease the cutting rights to approximately [removed: 73,000] [added: 71,000] acres of timberland located near our Valdosta mill [removed: (66,000] [added: (64,000] acres) and our Counce mill (7,000 acres).

On average, these cutting rights agreements have terms with approximately [removed: 18] [added: 17] years remaining.

[removed: Our] [added: We own our] corporate headquarters [added: building, which] is located in Lake Forest, Illinois.

Additionally, we previously leased 3,000 acres of land where we operated fiber farms as a source of future fiber supply; however, we exited the leases in conjunction with the conversion of the No. 3 machine at the Wallula mill to kraft linerboard.

The headquarter facility is owned, and we lease additional neighboring office space through the next two years with provisions for two additional five year lease extensions.

On February [removed: 21, 2020,] [added: 19, 2021,] there were [removed: 96] [added: 109] holders of record of our common stock.

The Company did not repurchase any shares of its common stock under this authority during the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017.][added: 2018.]

As of December 31, [removed: 2019,] [added: 2020,] we are authorized to repurchase $193.0 million of the Company’s common stock.

Total shares withheld in 2019 were 87,668 to cover $8.2 million [removed: in] [added: of] employee tax liabilities.

Total shares withheld in 2018 were 69,255 [removed: to cover] [added: for] $7.9 million [removed: of] [added: in] employee tax liabilities.

Total shares withheld in [removed: 2017] [added: 2020] were [removed: 97,946 for $10.8] [added: 107,627 to cover $10.5] million in employee tax liabilities.

The following table presents information related to our repurchases of common stock made under repurchase plans authorized by PCA's Board of Directors, and shares withheld to cover taxes on vesting of equity awards, during the three months ended December 31, [removed: 2019:][added: 2020:]

| October 1-31, [removed: 2019] [added: 2020] | | | [removed: —] [added: 40] | | | | $ | [removed: —] [added: 118.70] | | | | — | | | $ | 193.0 | |

| November 1-30, [removed: 2019] [added: 2020] | | | [removed: 65] [added: —] | | | | | [removed: 111.33] [added: —] | | | | — | | | | 193.0 | |

| Total | | | [removed: 763] [added: 40] | | | | $ | [removed: 111.93] [added: 118.70] | | | | — | | | $ | 193.0 | |

| (a) | [removed: 763] [added: 40] shares were withheld from employees to cover income and payroll taxes on equity awards that vested during the period. |

The graph tracks the performance of a $100 investment (including the reinvestment of all dividends) in our common stock, in each index, and in each peer group's common stock from December 31, [removed: 2014,] [added: 2015] through December 31, [removed: 2019.][added: 2020.]

[removed: ][added: ]

| | | [removed: 2014 | | | |] 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | | | 2019 | | | [added: | 2020 | | |]

| December 1-31, 2020 | | | — | | | | | — | | | | — | | | | 193.0 | |

| Packaging Corporation of America | | $ | 100.00 | | | $ | 139.09 | | | $ | 202.37 | | | $ | 143.96 | | | $ | 199.16 | | | $ | 253.47 | |

| S&P 500 | | | 100.00 | | | | 111.96 | | | | 136.40 | | | | 130.42 | | | | 171.49 | | | | 203.04 | |

| S&P Midcap 400 | | | 100.00 | | | | 120.74 | | | | 140.35 | | | | 124.80 | | | | 157.49 | | | | 179.00 | |

| Peer Group | | | 100.00 | | | | 136.61 | | | | 163.30 | | | | 111.72 | | | | 132.91 | | | | 144.12 | |

| December 1-31, 2019 | | | 698 | | | | | 111.99 | | | | — | | | | 193.0 | |

| Packaging Corporation of America | | $ | 100.00 | | | $ | 83.41 | | | $ | 116.02 | | | $ | 168.80 | | | $ | 120.08 | | | $ | 166.13 | |

| S&P 500 | | | 100.00 | | | | 101.38 | | | | 113.51 | | | | 138.29 | | | | 132.23 | | | | 173.86 | |

| S&P Midcap 400 | | | 100.00 | | | | 97.82 | | | | 118.11 | | | | 137.30 | | | | 122.08 | | | | 154.07 | |

| Peer Group | | | 100.00 | | | | 75.15 | | | | 102.67 | | | | 122.72 | | | | 83.96 | | | | 99.89 | |

| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Net sales | | $ | [removed: 6,964.3] [added: 6,658.2] | | | $ | [removed: 7,014.6] [added: 6,964.3] | | | $ | [removed: 6,444.9] [added: 7,014.6] | | | $ | [removed: 5,779.0] [added: 6,444.9] | | | $ | [removed: 5,741.7] [added: 5,779.0] | |

| Net income | | | [removed: 696.4] [added: 461.0] | | | | [removed: 738.0] [added: 696.4] | | | | [removed: 668.6] [added: 738.0] | | | | [removed: 449.6] [added: 668.6] | | | | [removed: 436.8] [added: 449.6] | |

| — basic | | | [removed: 7.36] [added: 4.86] | | | | [removed: 7.82] [added: 7.36] | | | | [removed: 7.09] [added: 7.82] | | | | [removed: 4.76] [added: 7.09] | | | | [removed: 4.47] [added: 4.76] | |

| — diluted | | | [removed: 7.34] [added: 4.84] | | | | [removed: 7.80] [added: 7.34] | | | | [removed: 7.07] [added: 7.80] | | | | [removed: 4.75] [added: 7.07] | | | | [removed: 4.47] [added: 4.75] | |

| — basic | | | [removed: 93.8] [added: 94.1] | | | | [removed: 93.7] [added: 93.8] | | | | [removed: 93.5] [added: 93.7] | | | | 93.5 | | | | [removed: 96.6] [added: 93.5] | |

| — diluted | | | [removed: 94.1] [added: 94.4] | | | | [removed: 93.9] [added: 94.1] | | | | [removed: 93.7] [added: 93.9] | | | | 93.7 | | | | [removed: 96.7] [added: 93.7] | |

| Cash dividends declared per common share | | | [removed: 3.16] [added: 3.37] | | | | [removed: 3.00] [added: 3.16] | | | | [removed: 2.52] [added: 3.00] | | | | [removed: 2.36] [added: 2.52] | | | | [removed: 2.20] [added: 2.36] | |

| Total assets | | $ | [removed: 7,235.8] [added: 7,433.2] | | | $ | [removed: 6,569.7] [added: 7,235.8] | | | $ | [removed: 6,197.5] [added: 6,569.7] | | | $ | [removed: 5,777.0] [added: 6,197.5] | | | $ | [removed: 5,272.3] [added: 5,777.0] | |

| Total long-term obligations (b) | | | [removed: 2,494.3] [added: 2,495.4] | | | | [removed: 2,502.7] [added: 2,494.3] | | | | [removed: 2,650.7] [added: 2,502.7] | | | | [removed: 2,667.4] [added: 2,650.7] | | | | [removed: 2,319.7] [added: 2,667.4] | |

| Stockholders' equity | | | [removed: 3,071.0] [added: 3,246.3] | | | | [removed: 2,672.4] [added: 3,071.0] | | | | [removed: 2,182.6] [added: 2,672.4] | | | | [removed: 1,759.8] [added: 2,182.6] | | | | [removed: 1,633.3] [added: 1,759.8] | |

Net income and net income per common share are impacted by a lower U.S. corporate federal statutory income tax rate of 21% in [removed: 2019] [added: 2020, 2019,] and 2018 and 35% in all prior years presented in this table.

See Note [removed: 8,] [added: 7,] Income Taxes, for more information.

| [Reports of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | [removed: 35] [added: 36] |

| [Consolidated Statements of Income and Comprehensive Income for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#CONSOLIDATED_STATEMENTS_INCOME_COMPREHEN)] [added: 2018](#CONSOLIDATED_STATEMENTS_INCOME_COMPREHEN)] | [removed: 37] [added: 39] |

| [Consolidated Balance Sheets as of December 31, [removed: 2019] [added: 2020] and [removed: 2018](#CONSOLIDATED_BALANCE_SHEETS)] [added: 2019](#CONSOLIDATED_BALANCE_SHEETS)] | [removed: 38] [added: 40] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] [added: 2018](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] | [removed: 39] [added: 41] |

| [Consolidated Statement of Changes in Stockholders' Equity for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#CONSOLIDATED_STATEMENTS_CHANGES_IN_STOCK)] [added: 2018](#CONSOLIDATED_STATEMENTS_CHANGES_IN_STOCK)] | [removed: 40] [added: 42] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | [removed: 41] [added: 43] |

We have audited the accompanying consolidated balance sheets of Packaging Corporation of America and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases [removed: effective] [added: as of] January 1, 2019 due to the adoption of Accounting Standards Update 2016-02, *Leases (Topic 842)*, and its subsequent amendments.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying [removed: “Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting”.][added: Reporting.]

Critical Audit [removed: Matter][added: Matters]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

*Evaluation of the value of the pension [added: benefit] obligation*

As discussed in Note [removed: 13] [added: 12] to the consolidated financial statements, the Company’s estimated pension benefit obligation totaled [removed: $1,420] [added: $1,566] million as of December 31, [removed: 2019.][added: 2020.]

We identified the evaluation of the value of the pension benefit obligation as a critical audit matter because of the specialized skills required to [removed: measure] [added: evaluate] the [removed: value] [added: measurement] of the pension benefit obligation.

The [added: following are] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] certain internal controls over the Company’s pension benefit obligation valuation process, including [removed: controls] [added: a control] related to the development of the discount rate.

- changes in the discount rate from the prior year against changes in published [removed: indices,][added: indices;]

- the pattern of cash flows, including consideration of the plan type and plan [removed: provisions,] [added: provisions;] and

| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | |

| Net sales | | $ | [removed: 6,964.3] [added: 6,658.2] | | | $ | [removed: 7,014.6] [added: 6,964.3] | | | $ | [removed: 6,444.9] [added: 7,014.6] | |

| Cost of sales | | | [removed: (5,320.3] [added: (5,288.8] | ) | | | [removed: (5,369.3] [added: (5,320.3] | ) | | | [removed: (4,974.1] [added: (5,369.3] | ) |

| Gross profit | | | [removed: 1,644.0] [added: 1,369.4] | | | | [removed: 1,645.3] [added: 1,644.0] | | | | [removed: 1,470.8] [added: 1,645.3] | |

| Selling and administrative expenses | | | [removed: (557.6] [added: (539.6] | ) | | | [removed: (536.4] [added: (557.6] | ) | | | [removed: (519.9] [added: (536.4] | ) |

| Other expense, net | | | [removed: (32.7] [added: (50.7] | ) | | | [removed: (41.2] [added: (32.7] | ) | | | [removed: (18.4] [added: (41.2] | ) |

| Income from operations | | | [removed: 1,053.7] [added: 723.9] | | | | [removed: 1,067.7] [added: 1,053.7] | | | | [removed: 932.5] [added: 1,067.7] | |

| Non-operating pension [removed: expense] [added: income (expense)] | | | [removed: (7.9] [added: 2.3] | [removed: )] | | | [removed: (2.1] [added: (7.9] | ) | | | [removed: (1.3] [added: (2.1] | ) |

| Interest expense, net | | | [removed: (128.8] [added: (93.5] | ) | | | [removed: (95.1] [added: (128.8] | ) | | | [removed: (102.6] [added: (95.1] | ) |

| Income before taxes | | | [removed: 917.0] [added: 632.7] | | | | [removed: 970.5] [added: 917.0] | | | | [removed: 828.6] [added: 970.5] | |

| Provision for income taxes | | | [removed: (220.6] [added: (171.7] | ) | | | [removed: (232.5] [added: (220.6] | ) | | | [removed: (160.0] [added: (232.5] | ) |

| Net income | | $ | [removed: 696.4] [added: 461.0] | | | $ | [removed: 738.0] [added: 696.4] | | | $ | [removed: 668.6] [added: 738.0] | |

| Basic | | $ | [removed: 7.36] [added: 4.86] | | | $ | [removed: 7.82] [added: 7.36] | | | $ | [removed: 7.09] [added: 7.82] | |

| Diluted | | $ | [removed: 7.34] [added: 4.84] | | | $ | [removed: 7.80] [added: 7.34] | | | $ | [removed: 7.07] [added: 7.80] | |

| Dividends declared per common share | | $ | [removed: 3.16] [added: 3.37] | | | $ | [removed: 3.00] [added: 3.16] | | | $ | [removed: 2.52] [added: 3.00] | |

| Foreign currency translation adjustment | | $ | — | | | $ | [removed: (0.1] [added: —] | [removed: )] | | $ | [removed: (0.2] [added: (0.1] | ) |

| Reclassification adjustments to cash flow hedges included in net income, net of tax of [removed: $7.9] [added: $0.0] million, [removed: $1.3] [added: $7.9] million, and [removed: $2.2] [added: $1.3] million for [added: 2020,] 2019, [removed: 2018,] and [removed: 2017,] [added: 2018,] respectively | | | [removed: 10.2] [added: —] | | | | [removed: 4.0] [added: 10.2] | | | | [removed: 3.5] [added: 4.0] | |

| Amortization of pension and postretirement plans actuarial loss and prior service cost, net of tax of [removed: $3.2] [added: $3.6] million, [removed: $4.0] [added: $3.2] million, and [removed: $4.9] [added: $4.0] million for [added: 2020,] 2019, [removed: 2018,] and [removed: 2017,] [added: 2018,] respectively | | | [removed: 9.6] [added: 10.7] | | | | [removed: 11.8] [added: 9.6] | | | | [removed: 8.2] [added: 11.8] | |

Goodwill impairment assessment

As discussed in Note 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $863.5 million as of December 31, 2020, which related to the Packaging reporting unit.

Goodwill is tested for impairment annually in the fourth quarter of each fiscal year, or more frequently when events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

During the second quarter of the year-ended December 31, 2020, the Company identified a triggering event and recorded a goodwill impairment loss of $55.2 million related to its Paper reporting unit.

To estimate the fair value of the Paper reporting unit, the

Company utilized a combination of the income approach and a market approach that used observable comparable company information.

We identified the evaluation of goodwill for impairment for the Paper reporting unit as a critical audit matter.

Especially subjective and challenging auditor judgment was required to evaluate the Company’s estimated future cash flows, specifically the selection of forecasted revenue growth rates, gross profit margins, operating margins, and the discount rate used in the income approach.

Additionally, the audit effort associated with the evaluation of goodwill for impairment for the Paper reporting unit required the use of professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment evaluation, including controls over the selection of forecasted revenue growth rates, gross profit margins, operating margins, and the discount rate used in the estimate of the fair value of the Paper reporting unit.

We evaluated the reasonableness of management’s forecasted revenue growth rates, gross profit margins, and operating margins by comparing the forecasts to historical revenue growth rates, gross profit margins, and operating margins, and considering industry conditions and growth plans.

We performed sensitivity analyses to assess the impact of reasonably possible changes to the forecasted revenue growth rates, gross profit margins, operating margins, and the discount rate assumptions on the reporting unit fair value.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

| | • | evaluating the Company’s discount rate by comparing the Company’s discount rate inputs to publicly available data for comparable entities and assessing the results; and |

| | • | testing the estimate of fair value for the Paper reporting unit using the Company’s estimated future cash flows and discount rate and comparing the result to the Company’s fair value estimate. |

| | February 24, 2021 |

| Goodwill impairment | | | (55.2 | ) | | | — | | | | — | |

| Net income | | $ | 461.0 | | | $ | 696.4 | | | $ | 738.0 | |

| Changes in unrealized gains on marketable debt securities, net of tax of $0.1 million, $0.0 million, and $0.0 million for 2020, 2019, and 2018, respectively | | | 0.3 | | | | — | | | | — | |

| Net income | | $ | 461.0 | | | $ | 696.4 | | | $ | 738.0 | |

| Goodwill impairment | | | 55.2 | | | | — | | | | — | |

| Net loss on asset disposals | | | 6.8 | | | | 8.2 | | | | 5.8 | |

| Other, net | | | 18.2 | | | | (3.4 | ) | | | 1.3 | |

| Proceeds from sales of marketable debt securities | | | 24.2 | | | | 10.9 | | | | — | |

| Proceeds from maturities of marketable debt securities | | | 82.8 | | | | — | | | | — | |

| Comprehensive income | | | — | | | | — | | | | — | | | | 461.0 | | | | 15.0 | | | | | 476.0 | |

| Balance at December 31, 2020 | | | 94,830 | | | $ | 0.9 | | | $ | 554.4 | | | $ | 2,835.5 | | | $ | (144.5 | ) | | | $ | 3,246.3 | |

During the fourth quarter of 2020, due to an increase in demand for our corrugated products and as part of our assessment of a potential conversion to produce containerboard, we began producing high-performance, virgin kraft linerboard on the No. 3 machine at our Jackson, Alabama mill on a trial basis.

Before October 2020, operating results for the Jackson mill were included in the Paper segment.

Beginning in October 2020, operating results for the Jackson mill are included in both the Packaging and Paper segments.

The Company’s marketable debt securities are analyzed at the individual debt security level.

Changes in the fair value of the debt security have the potential to impact accumulated other comprehensive income (loss) (AOCI), the Company’s earnings, or both.

A decline in the fair value of the debt security below its amortized cost results in an impairment of the debt security.

If there is an intent to sell the debt security, or if it is more likely than not that the debt security will be sold prior to recovering the amortized cost basis, the Company recognizes the impairment as a realized loss in earnings by writing down the debt security’s amortized cost basis.

Additional analysis is required if there is not an intent to sell the debt security, or if a recovery of the amortized cost basis is expected to be made prior to the sale of the security.

If any portion of the impairment is the result of a credit loss, the Company recognizes this portion in earnings through an allowance for credit losses, with the remainder recognized as unrealized loss in AOCI.

Subsequent improvements in credit losses are recognized as a reduction in the allowance.

Any impairment not attributed to credit loss is recognized as an unrealized loss in AOCI in its entirety.

The Company considers several factors when determining if a portion of an impairment is the result of a credit loss including, but not limited to, adverse conditions related to the financial health and future outlook of the issuer; the credit quality of the issuer, as reported by credit rating agencies; trends present in the issuer’s industry in which it operates; and general market conditions.

| --- | --- |

| | February 26, 2020 |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Other, net | | | 4.8 | | | | 7.1 | | | | 3.0 | |

| Balance at January 1, 2017 | | | 94,213 | | | $ | 0.9 | | | $ | 451.4 | | | $ | 1,447.1 | | | $ | (139.6 | ) | | | $ | 1,759.8 | |

| Comprehensive income | | | — | | | | — | | | | — | | | | 668.6 | | | | (17.3 | ) | | | | 651.3 | |

Our investments in AFS securities are reported at fair value.

Unrealized gains and losses on AFS securities are recognized in accumulated other comprehensive income (loss) (AOCI).

Realized gains and losses on the sale of AFS securities are accounted for using the specific identification method.

Changes in the fair value of marketable debt securities impact net income only when such securities are sold or an other-than-temporary impairment is recognized.

In making this judgment, PCA evaluates, among other things, the duration and the extent to which the fair value of a marketable debt security is less than its cost; the financial condition of the issuer and any changes thereto; and the intent to sell, or whether we will more likely than not be required to sell, the marketable debt security before recovery of its amortized cost basis.

Trade accounts receivable are stated at the amount we expect to collect.

The collectability of our accounts receivable is based upon a combination of factors.

In circumstances where a specific customer is unable to meet its financial obligations to PCA (e.g., bankruptcy filings, substantial downgrading of credit sources), a specific reserve for bad debts is recorded against amounts due to the Company to reduce the net recorded receivable to the amount the Company reasonably believes will be collected.

For all other customers, reserves for bad debts are recognized based on historical collection experience.

If collection experience deteriorates (i.e., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligations to the Company), the estimate of the recoverability of amounts due could be reduced by a material amount.

We periodically review our allowance for doubtful accounts and adjustments to the valuation allowance are recorded as income or expense.

Trade accounts receivable balances that remain outstanding after we have used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

based on the information available at commencement date in determining the present value of lease payments.

Environmental

Additionally, we previously leased 3,000 acres of land where we operated fiber farms as a source of future fiber supply; however, we exited the leases in conjunction with the conversion of the No. 3 machine at the Wallula mill to produce virgin kraft linerboard.

Management performed a recoverability test on the associated fiber farms in 2018 and 2017 and deemed the asset group to not be fully recoverable.

As a result of the recoverability calculation on the fiber farm asset group, the Company recorded an impairment loss of $3.1 million and $13.5 million in 2018 and 2017, respectively.

Effective January 1, 2019, we adopted ASU 2018-02 (Topic 220*): Income Statement—Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income*, which allows for optional reclassification from Accumulated Other Comprehensive Income (“AOCI”) to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act in December 2017 (“Tax Act”).

Stranded tax effects are the difference in deferred taxes between the amount initially recorded to other comprehensive income (“OCI”) at historical corporate income tax rates and the amount recorded using the newly-enacted corporate income tax rate.

The cumulative tax rate adjustment to deferred taxes was required to be recorded through income tax expense from continuing operations in the period of enactment as opposed to OCI, resulting in the stranded tax effects in AOCI.

The Company elected to not reclassify the stranded tax effects related to the

Tax Act.

Effective October 1, 2019, we early adopted ASU 2018-15, *Intangibles – Goodwill and Other – Internal Use Software* (Subtopic 350-40): *Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract*, which includes amendments to align the accounting for costs incurred to implement a cloud computing arrangement that is a service contract with the guidance on capitalizing costs associated with developing or obtaining internal-use software.

The accounting for the service component of a hosting arrangement that is a service contract is not affected by the amendments in this update.

This guidance will be applied prospectively.

The adoption of this guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows.

In August 2018, the FASB issued ASU 2018-14, *Compensation – Retirement Benefits – Defined Benefit Plans – General* (Subtopic 715-20): *Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans*.

The ASU is effective for annual periods beginning after December 31, 2020, with early adoption permitted.

The amendments in ASU 2018-14 would need to be applied on a retrospective basis.

The ASU is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted.

All other amendments need to be applied retrospectively.

The amendments in ASU 2016-13 would need to be applied using the modified retrospective method.

The Company is currently evaluating the impact of the new guidance but does not expect this ASU to have a material impact on the Company’s financial position, results of operation, or cash flow.

Prior to filing this report, PCA completed an evaluation under the supervision and with the participation of PCA’s management, including PCA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of PCA’s disclosure controls and procedures as of December 31, [removed: 2019.][added: 2020.]

Based on this evaluation, PCA’s Chief Executive Officer and Chief Financial Officer concluded that PCA’s disclosure controls and procedures were effective at the reasonable assurance level as of December 31, [removed: 2019.][added: 2020.]

During the quarter ended December 31, [removed: 2019,] [added: 2020,] there were no changes in internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, PCA’s internal control over financial reporting.

PCA’s management, under the supervision of and with the participation of the Chief Executive Officer and Chief Financial Officer, assessed the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, PCA’s management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2019,] [added: 2020,] based on the specified criteria.

The following information required by this Item 10 will be included in PCA’s Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders and is incorporated by reference herein:

| | • | Information regarding PCA’s [removed: code] [added: codes] of ethics included under the caption “Election of Directors - Code of Ethics” |

| | • | Information regarding PCA’s stockholder nominating procedures included under the captions “Election of Directors - Nominating and Governance Committee,” “Other Information - Recommendations for Board - Nominated Director Nominees,” and “Other Information - Procedures for Nominating Directors or Bringing Business Before the [removed: 2021] [added: 2022] Annual Meeting” |

Authorization of Securities under Equity Compensation Plans — Securities authorized for issuance under our equity compensation plans at December 31, [removed: 2019] [added: 2020] are as follows:

| Equity compensation plans approved by securityholders | | | — | | | $ | — | | | | [removed: 423,342] [added: 1,498,417] | |

| (a) | [added: Assumes that outstanding performance units pay out at the target level.] Does not include [removed: 1,040,099] [added: 1,026,519] shares of unvested restricted stock and performance units granted pursuant to our Amended and Restated 1999 Long-Term Equity Incentive Plan. |

| Total | | | — | | | $ | — | | | | 1,498,417 | |

| Total | | | — | | | $ | — | | | | 423,342 | |

| 3.3 | | [Amended and Restated By-laws of PCA. (Incorporated herein by reference to Exhibit 3.1 to PCA’s Current Report on Form 8-K filed December [removed: 7, 2012,] [added: 13, 2020,] File No. [removed: 1-15399.)](http://www.sec.gov/Archives/edgar/data/75677/000119312512495422/d450427dex31.htm)] [added: 1-15399.)](http://www.sec.gov/Archives/edgar/data/75677/000119312520316937/d90011dex31.htm)] |

| 10.4 | | [Packaging Corporation of America Supplemental Executive Retirement Plan, as Amended and Restated Effective as of February 27, 2019. [removed: *†](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex104_432.htm)] [added: (Incorporated herein by reference to Exhibit 10.4 to PCA's Annual Report on Form 10-K for the year ended December 31, 2019, File No. 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex104_432.htm)] |

| 10.5 | | [Packaging Corporation of America Deferred Compensation Plan, as Amended and Restated Effective as of February 27, [removed: 2019.*†](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex105_433.htm)] [added: 2019. (Incorporated herein by reference to Exhibit 10.5 to PCA's Annual Report on Form 10-K for the year ended December 31, 2019, File No. 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex105_433.htm)] |

| 10.6 | | [Amended and Restated 1999 Long-Term Equity Incentive Plan, effective as of May [removed: 1, 2013,] [added: 5, 2020,] conformed to incorporate all amendments. (Incorporated herein by reference to [removed: Exhibit 10.8] [added: Appendix A] to [removed: PCA’s Annual Report on Form 10-K] [added: PCA's Proxy Statement] for the [removed: year ended December 31, 2016, File No. 1-15399.)*](http://www.sec.gov/Archives/edgar/data/75677/000007567717000004/pkg12312016-exx108.htm)] [added: 2020 Annual Meeting of Stockholders)*](http://www.sec.gov/Archives/edgar/data/75677/000119312520080666/d861725ddef14a.htm#toc861725_13)] |

| 10.11 | | [Trade Vendor Purchasing Agreement, dated December 6, 2019, between Boise White Paper, L.L.C. and Office Depot, [removed: Inc.†](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex1011_301.htm)] [added: Inc. (Incorporated by reference to Exhibit 10.11 to PCA's Annual Report on Form 10-K for the year ended December 31, 2019, File No. 1-15399)](http://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex1011_301.htm)] |

| 10.12 | | [Form of [added: Return on Invested Capital] Performance Unit Agreement for executive officer awards made in [added: and after] June [removed: 2016.] [added: 2018.] (Incorporated by reference to Exhibit 10.2 to PCA’s Quarterly Report on Form 10-Q for the period ended June 30, [removed: 2016,] [added: 2018,] File No. [removed: 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000007567716000039/pkg-06302016xexx102formofe.htm)] [added: 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459018020254/pkg-ex102_54.htm)] |

| [removed: 10.13] [added: 10.14] | | [Form of Restricted Stock Agreement for executive officer awards made in [added: and after] June [removed: 2016.] [added: 2018.] (Incorporated by reference to Exhibit 10.1 to PCA’s Quarterly Report on Form 10-Q for the period ended June 30, [removed: 2016,] [added: 2018,] File No. [removed: 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000007567716000039/pkg-06302016xexx101formofe.htm)] [added: 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459018020254/pkg-ex101_55.htm)] |

| [removed: 10.14] [added: 10.13] | | [Form of [added: Total Shareholder] Return [removed: on Invested Capital] Performance Unit Agreement for executive officer awards made in and after June 2018. (Incorporated by reference to Exhibit [removed: 10.2] [added: 10.3] to PCA’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, File No. [removed: 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459018020254/pkg-ex102_54.htm)] [added: 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459018020254/pkg-ex103_53.htm)] |

| 21.1 | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex211_10.htm)†] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/75677/000156459021008051/pkg-ex211_8.htm)†] |

| 23.1 | | [Consent of KPMG [removed: LLP.](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex231_7.htm)†] [added: LLP.](https://www.sec.gov/Archives/edgar/data/75677/000156459021008051/pkg-ex231_6.htm)†] |

| 24.1 | | [Powers of [removed: Attorney.](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex241_9.htm)†] [added: Attorney.](https://www.sec.gov/Archives/edgar/data/75677/000156459021008051/pkg-ex241_10.htm)†] |

| 31.1 | | [Certification of Chief Executive Officer, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex311_11.htm)†] [added: 2002.](https://www.sec.gov/Archives/edgar/data/75677/000156459021008051/pkg-ex311_13.htm)†] |

| 31.2 | | [Certification of Chief Financial Officer, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex312_8.htm)†] [added: 2002.](https://www.sec.gov/Archives/edgar/data/75677/000156459021008051/pkg-ex312_7.htm)†] |

| 32 | | [Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. §1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex32_6.htm)†] [added: 2002.](https://www.sec.gov/Archives/edgar/data/75677/000156459021008051/pkg-ex32_15.htm)†] |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized on February [removed: 26, 2020.][added: 24, 2021.]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February [removed: 26, 2020,] [added: 24, 2021,] by the following persons on behalf of the registrants and in the capacities indicated.

| 4.13 | | [Description of Common Stock. (Incorporated herein by reference to Exhibit 4.13 to PCA's Annual Report on Form 10-K for the year ended December 31, 2019, File No. 1-15399).](http://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex413_182.htm) |

| | | Principal Executive Officer |

| | | Principal Financial Officer |

| | | Principal Accounting Officer |

| | | |

| 4.13 | | [Description of Common Stock †](https://www.sec.gov/Archives/edgar/data/75677/000156459020006774/pkg-ex413_182.htm) |

| 10.15 | | [Form of Total Shareholder Return Performance Unit Agreement for executive officer awards made in and after June 2018. (Incorporated by reference to Exhibit 10.3 to PCA’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, File No. 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459018020254/pkg-ex103_53.htm) |

| 10.16 | | [Form of Restricted Stock Agreement for executive officer awards made in and after June 2018. (Incorporated by reference to Exhibit 10.1 to PCA’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, File No. 1-15399).*](http://www.sec.gov/Archives/edgar/data/75677/000156459018020254/pkg-ex101_55.htm) |

| * | | |

| Hasan Jameel | | Director |