Packaging Corp of America 10-Q 2025-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2025

or

For the transition period from to

Commission file number 1-15399

(Exact Name of Registrant as Specified in its Charter)

Registrant's telephone number, including area code

(847) 482-3000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2025, the Registrant had outstanding 89,978,783 shares of common stock, par value $0.01 per share.

Securities registered pursuant to Section 12(b) of the Exchange Act:

Table of Contents

All reports we file with the Securities and Exchange Commission (SEC) are available free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC website at www.sec.gov. We also provide copies of our SEC filings at no charge upon request and make electronic copies of our reports available through our website at www.packagingcorp.com as soon as reasonably practicable after filing such material with the SEC.

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PART I

FINANCIAL INFORMATION

Packaging Corporation of America

Consolidated Statements of In****come and Comprehensive Income

(unaudited, dollars in millions, except per-share data)

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

Packaging Corporation of America

Consolidated B****alance Sheets

(unaudited, dollars and shares in millions, except per-share data)

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

Packaging Corporation of America

Consolidated Statem****ents of Cash Flows

(unaudited, dollars in millions)

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This management’s discussion and analysis includes statements regarding our expectations with respect to our future performance, expected business conditions, liquidity, and capital resources. Such statements, along with any other statements that are not historical in nature, are forward-looking. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in our 2024 Annual Report on Form 10-K, as well as those factors listed in other documents we file with the Securities and Exchange Commission (“SEC”). We do not assume any obligation to update any forward-looking statement. Our actual results may differ materially from those contained in or implied by any of the forward-looking statements in this Form 10-Q. Please see “Forward Looking Statements” elsewhere in this Item 2.

Overview

PCA is the third largest producer of containerboard products and a leading producer of UFS paper in North America. We operate eight mills and 85 corrugated products manufacturing plants. Our containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. We also manufacture and sell UFS papers, including both commodity and specialty papers, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. We are headquartered in Lake Forest, Illinois and operate primarily in the United States.

Included in this Item 2 are various non-GAAP financial measures, including earnings per diluted share excluding special items, net income excluding special items, earnings before non-operating pension income, interest, income taxes, and depreciation, amortization, and depletion (“EBITDA”), segment EBITDA, EBITDA excluding special items, and segment EBITDA excluding special items. We provide important disclosures regarding our presentation of non-GAAP financial measures and reconciliations of presented non-GAAP financial measures to the most comparable measures presented in accordance with GAAP later in this section under the caption “Non-GAAP Financial Measures.”

This Item 2 is intended to supplement, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.

Executive Summary

Second quarter net sales were $2.17 billion in 2025 and $2.08 billion in 2024. We reported $242 million of net income, or $2.67 per diluted share, during the second quarter of 2025, compared to $199 million, or $2.21 per diluted share, during the same period in 2024. Net income included $17 million of income for special items in the second quarter of 2025, compared to an insignificant amount of income for special items in 2024 (discussed below). Excluding special items, net income was $224 million, or $2.48 per diluted share, during the second quarter of 2025, compared to $199 million, or $2.20 per diluted share, in the second quarter of 2024.1 The increase in net income was driven primarily by higher prices and mix in the Packaging segment, lower fiber costs, higher prices and mix in the Paper segment, and a lower tax rate. These items were partially offset by higher operating costs, higher maintenance outage expense, lower production and export sales volume in the Packaging Segment, higher depreciation expense, higher fixed and other expense, lower volume in the Paper segment, higher freight expense, and higher interest expense. For additional detail on special items included in reported GAAP results and other non-GAAP measures, see “Item 2. Non-GAAP Financial Measures.”

Packaging segment operating income was $346 million in the second quarter of 2025, compared to $280 million in the second quarter of 2024. Packaging segment EBITDA excluding special items was $453 million in the second quarter of 2025 compared to $400 million in the second quarter of 2024.1 The increase was due to higher prices and mix and lower fiber costs, partially offset by higher operating and converting costs, higher maintenance outage expense, lower production and export sales volumes, higher fixed and other expense, and higher freight and logistics expense. Prices and mix moved higher, reflecting our price increases for containerboard and corrugated products announced to customers in 2024 and earlier in 2025. Corrugated plant shipments were up 1.7% per day compared to the second quarter of 2024.

Paper segment operating income was $26 million in the second quarter of 2025, compared to $27 million in the second quarter of 2024. Paper segment EBITDA excluding special items was $30 million in the second quarter of 2025, compared to $31 million in the second quarter of 2024.1 The slight decrease in EBITDA excluding special items was due to higher operating costs and lower sales and production volumes and higher maintenance outage expense, partially offset by higher prices and mix and lower freight and fixed expenses.

Packaging segment operating income was $624 million in the first six months of 2025, compared to $484 million in the same period in 2024. Packaging segment EBITDA excluding special items was $862 million in the first six months of 2025 compared to $726 million in the first six months of 2024.1 The increase in EBITDA excluding special items was due primarily to higher prices and mix, lower fiber costs, higher sales and production volumes, partially offset by higher operating and converting costs, higher maintenance outage expenses, higher fixed and other costs, and higher freight and logistics expense.

1 Net income excluding special items, earnings per diluted share excluding special items, and segment EBITDA excluding special items are non-GAAP financial measures. See “Non-GAAP Financial Measures” later in this Item 2.

Paper segment operating income was $61 million in the first six months of 2025, compared to $56 million in the first six months of 2024. Paper segment EBITDA excluding special items was $71 million in the first six months of 2025 and 2024.1 The slight decrease in EBITDA excluding special items was due to lower sales and production volumes, higher operating costs, and higher maintenance outage expenses, partially offset by higher prices and mix, lower fixed and other costs, and lower freight and logistic expense.

On July 1, 2025, we announced our entry into a definitive agreement to purchase the containerboard business of Greif for $1.8 billion in cash. The transaction is expected to close by the end of the third quarter, subject to certain customary conditions, including regulatory approval. The Greif containerboard business includes two containerboard mills with approximately 800,000 tons of production capacity and eight sheet feeder and corrugated plants located across the United States. The operating results of the Greif Acquisition will be included in PCA’s results upon closing of the transaction. The acquisition is consistent with our historical growth strategy and will provide additional integration of containerboard we produce into our own corrugated products facilities.

Industry and Business Conditions

Trade publications reported North American industry-wide corrugated products shipments were down (2.6%) in total and (1.0%) per workday during the second quarter of 2025 compared to the same quarter of 2024. Reported industry containerboard production decreased (5.2%) compared to the second quarter of 2024. Reported industry containerboard inventories at the end of the second quarter of 2025 were approximately 2.6 million tons, down (2.1%) compared to the same period in 2024. Reported containerboard export shipments were down (16.2%) compared to the second quarter of 2024. In February 2025, reported index prices increased $40 per ton for linerboard and for corrugating medium.

The market for communication papers competes heavily with electronic data transmission and document storage alternatives. Increasing shifts to these alternatives have reduced usage of traditional print media and communication papers. Trade publications reported North American UFS paper shipments were down (8.5%) in the first six months of 2025, compared to the same period of 2024. Average prices reported by a trade publication for cut size office papers were higher by $20 per ton, or 1.4% in the second quarter of 2025, compared to the first quarter of 2025, and higher by $47 per ton, or 3.2%, compared to the second quarter of 2024. Reported index prices increased $30 per ton for cut size office papers and for offset printing papers in February 2025 and $10 per ton in April 2025.

Outlook

In the Packaging segment, we expect higher corrugated shipments and containerboard production compared to the second quarter. Export containerboard sales will be lower due to the effects of the global trade environment. We will build some containerboard inventory ahead of our fourth quarter maintenance outage at the DeRidder mill. We expect prices and mix in the Packaging segment to be relatively flat with second quarter levels. We also expect flat pricing in the Paper segment and expect production and sales to increase in the third quarter with the International Falls mill outage completed in the second quarter and seasonal back-to-school orders. We have no scheduled maintenance outages during the third quarter and expect maintenance outage expense to be lower. Freight costs will be higher with the full effect of first and second quarter rail rate increases at our mills. Operating costs are expected to be near second quarter levels and fiber costs will be slightly lower. Considering these items, we expect third quarter earnings to be higher than second quarter earnings, excluding special items. Our third quarter outlook does not include any possible impact from the pending acquisition of the Greif containerboard business.

Results of Operations

Three Months Ended June 30, 2025, compared to Three Months Ended June 30, 2024

The historical results of operations of PCA for the three months ended June 30, 2025 and 2024 are set forth below (dollars in millions):

(a)

See “Non-GAAP Financial Measures” included in this Item 2 for a reconciliation of non-GAAP measures to the most comparable GAAP measure.

Net Sales

Net sales increased $96 million, or 4.6%, to $2,171 million during the three months ended June 30, 2025, compared to $2,075 million during the same period in 2024.

Packaging. Net sales increased $98 million, or 5.1%, to $2,006 million, compared to $1,908 million in the second quarter of 2024 due to higher containerboard and corrugated products prices and mix ($107 million), partially offset by lower volume ($9 million). In the second quarter of 2025, export and domestic containerboard outside shipments decreased (11.4%) compared to the second quarter of 2024. Our total corrugated products shipments were flat in total and up 1.7% per workday, with one less workday, compared to the same period in 2024. In the second quarter of 2025, our domestic containerboard prices were 10.8% higher, while export prices were 10.4% higher than the same period in 2024.

Paper. Net sales decreased $4 million, or (2.9%), to $146 million, compared to $150 million in the second quarter of 2024, due to lower volume ($8 million), partially offset by higher prices and mix ($4 million).

Gross Profit

Gross profit increased $45 million during the three months ended June 30, 2025, compared to the same period in 2024. The increase was driven primarily by higher prices and mix in the Packaging segment, lower fiber costs, higher prices and mix in the Paper segment, partially offset by higher operating costs, higher maintenance outage expense, lower volumes in the Packaging and Paper segment, higher fixed and other expense, and higher freight expense. In the three months ended June 30, 2025, gross profit included $1 million of special items expense related to corrugated facility closure. In the three months ended June 30, 2024, gross profit included no special items.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses (“SG&A”) increased $4 million during the three months ended June 30, 2025, compared to the same period in 2024. The increase was primarily due to higher employee-related expenses and insurance.

Other Income (Expense), Net

Other income (expense), net, for the three months ended June 30, 2025 and 2024 are set forth below (dollars in millions):

We discuss these items in more detail in Note 5, Other Income (Expense), Net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.

Income from Operations

Income from operations increased $58 million, or 20.9%, during the three months ended June 30, 2025, compared to the same period in 2024. The second quarter of 2025 included $23 million of special items income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs and costs related to the announced Greif, Inc. acquisition, compared to an insignificant amount of special items in the second quarter of 2024.

Packaging. Packaging segment operating income increased $66 million to $346 million, compared to $280 million during the three months ended June 30, 2024. The increase related primarily to higher containerboard and corrugated products prices and mix ($119 million), and lower fiber costs ($18 million), partially offset by higher operating and converting costs ($33 million), higher maintenance outage expenses ($25 million), lower sales and production volumes ($15 million), higher depreciation expense ($11 million), higher fixed and other expense ($8 million), and higher freight expenses ($3 million).The second quarter of 2025 included $25 million of special items income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs, compared to an insignificant amount of special items in the second quarter of 2024.

Paper. Paper segment operating income decreased $1 million to $26 million, compared to $27 million during the three months ended June 30, 2024. The decrease primarily related to higher operating costs ($4 million), lower volumes ($2 million), higher maintenance outage expenses ($1 million), partially offset by higher prices and mix ($4 million), lower freight expenses ($1 million), and lower fixed expense ($1 million). There were no significant special items in the second quarter of 2025 or 2024.

Non-Operating Pension Income, Interest Expense, Net and Income Taxes

Non-operating pension income decreased $1 million during the three months ended June 30, 2025, compared to the same period in 2024. The decrease in non-operating pension income was related to unfavorable 2024 asset performance partially offset by favorable assumption changes.

Interest expense, net for the three months ended June 30, 2025 increased $3 million when compared to the same period in 2024. The increase in interest expense, net was primarily due to higher interest expense in 2025 related to the Company’s November 2023 debt refinancing.

During the three months ended June 30, 2025, we recorded $79 million of income tax expense, compared to $68 million of expense during the three months ended June 30, 2024. The effective tax rate for the three months ended June 30, 2025 and 2024 was 24.7% and 25.4%, respectively. The decrease in our effective tax rate for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to higher excess tax benefits associated with employee restricted stock and performance unit vests.

On July 4, 2025, the President signed into law H.R.1, the One Big Beautiful Bill Act (“OBBBA”). For additional information regarding the impact of the OBBBA, see Note 6, Income Taxes, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.

Six Months Ended June 30, 2025, compared to Six Months Ended June 30, 2024

The historical results of operations of PCA for the six months ended June 30, 2025 and 2024 are set forth below (dollars in millions):

(a)

See “Non-GAAP Financial Measures” included in this Item 2 for a reconciliation of non-GAAP measures to the most comparable GAAP measure.

Net Sales

Net sales increased $257 million, or 6.4%, to $4,312 million during the six months ended June 30, 2025, compared to $4,055 million during the same period in 2024.

Packaging. Net sales increased $270 million, or 7.3%, to $3,976 million, compared to $3,707 million in the six months ended June 30, 2024, due to higher containerboard and corrugated products prices and mix ($202 million) and higher containerboard and corrugated products volume ($68 million). In the first six months of 2025, export and domestic containerboard outside shipments were flat compared to the first six months of 2024. Total corrugated products shipments were up 1.3% overall and up 2.1% per workday compared to the same period in 2024. In the first six months of 2025, our domestic containerboard prices were 7.1% higher, while export prices were 11.7% higher, than the same period in 2024.

Paper. Net sales during the six months ended June 30, 2025 decreased $14 million, or (4.4%), to $300 million, compared to $314 million in the six months ended June 30, 2024, due to lower volume ($20 million), partially offset by higher prices and mix ($6 million).

Gross Profit

Gross profit increased $130 million during the six months ended June 30, 2025, compared to the same period in 2024. The increase was driven primarily by higher prices and mix and sales volumes in the Packaging segment, lower fiber costs, and higher prices and mix in the Paper segment, partially offset by higher operating costs, higher maintenance outage expense, lower volume in the Paper Segment, and higher fixed and other expense. In the six months ended June 30, 2025, gross profit included $4 million of special items expense related to corrugated facility closure. In the six months ended June 30, 2024, gross profit included $2 million of special items expense related to Jackson mill conversion-related activities.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses (“SG&A”) increased $13 million during the six months ended June 30, 2025, compared to the same period in 2024. The increase was primarily due to higher employee-related expenses, insurance, and bad debt expense.

Other Income (Expense), Net

Other income (expense), net, for the six months ended June 30, 2025 and 2024 are set forth below (dollars in millions):

We discuss these items in more detail in Note 5, Other Income (Expense), Net, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.

Income from Operations

Income from operations increased $142 million, or 30.1%, during the six months ended June 30, 2025, compared to the same period in 2024. The first six months of 2025 included $17 million of special items income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs and costs related to the announced Greif, Inc. acquisition, compared to $10 million in the same period in 2024 related to Jackson mill conversion-related costs.

Packaging. Packaging segment operating income increased $141 million to $624 million during the first six months of 2025, compared to the same period last year. The increase related primarily to higher containerboard and corrugated products prices and mix ($210 million), lower fiber costs ($27 million), and higher sales and production volumes ($16 million), partially offset by higher operating and converting costs ($71 million), higher maintenance outage expenses ($24 million), higher fixed and other costs ($21 million), and higher depreciation expense ($18 million). Special items during the first six months of 2025 included $19 million of income primarily related to gains on sales of corrugated products facilities, partially offset by corrugated products facility closure costs, compared to $4 million of expense related to Jackson mill conversion-related activities in the same period in 2024.

Paper. Paper segment operating income increased $5 million to $61 million, compared to the six months ended June 30, 2024. The increase primarily related to no special items in the Paper segment during the first six months of 2025, compared to $6 million of expense for Jackson mill conversion-related activities in the first six months of 2024, along with higher prices and mix ($6 million), lower fixed and other expenses ($2 million), and lower freight expense ($1 million), partially offset by lower sales and production volumes ($5 million), higher operating costs ($5 million), and higher maintenance outage expenses ($1 million).

Non-Operating Pension Income, Interest Expense, and Income Taxes

Non-operating pension income decreased $2 million during the six months ended June 30, 2025, compared to the same period in 2024. The decrease in non-operating pension income was related to unfavorable 2024 asset performance partially offset by favorable assumption changes.

Interest expense, net increased $6 million during the six months ended June 30, 2025, compared to the same period in 2024. The increase in interest expense, net was primarily due to higher interest expense in 2025 related to the Company’s November 2023 debt refinancing and lower interest income due to lower interest rates.

During the six months ended June 30, 2025, we recorded $143 million of income tax expense, compared to $108 million of expense during the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 and 2024 was 24.3% and 23.9%, respectively. The increase in our effective tax rate for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to lower excess tax benefits associated with employee restricted stock and performance unit vests.

Liquidity and Capital Resources

Sources and Uses of Cash

Our primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under our revolving credit facility. At June 30, 2025, we had $788 million of cash and cash equivalents, $168 million of marketable debt securities, and $323 million of unused borrowing capacity under the revolving credit facility, net of letters of credit. Currently, our primary uses of cash are for operations, capital expenditures, acquisitions, debt service, common stock dividends, and repurchases of common stock. We believe that net cash generated from operating activities, cash on hand, available borrowings under our revolving credit facility, and available capital through access to capital markets will be adequate to meet our liquidity and capital requirements, including payments of any declared common stock dividends, for the foreseeable future. As our debt or credit facilities become due, we will need to repay, extend, or replace such facilities. Our ability to do so will be subject to future economic conditions and financial, business, and other factors, many of which are beyond our control.

Below is a summary table of our cash flows, followed by a discussion of our sources and uses of cash through operating activities, investing activities, and financing activities (dollars in millions):

Operating Activities

Our operating cash flow is primarily driven by our earnings and changes in operating assets and liabilities, such as accounts receivable, inventories, accounts payable and other accrued liabilities, as well as factors described below. Cash requirements for operating activities are subject to PCA’s operating needs and the timing of collection of receivables and payments of payables and expenses.

During the six months ended June 30, 2025, net cash provided by operating activities was $639 million, compared to $539 million in the same period in 2024, an increase of $100 million. Cash from operations excluding changes in cash used for operating assets and liabilities increased $84 million primarily due to higher income from operations in 2025 as discussed above. Cash from operations increased by $16 million when comparing the first six months of 2025 to the same period in 2024 due to changes in operating assets and liabilities primarily due to the following:

a)

a net favorable change in prepaid expenses and other current assets primarily related to the establishment of a receivable for the DeRidder trial and related insurance recoveries during the first six months of 2024 and reduction of receivables against insurance carriers in the first six months of 2025 related to the DeRidder settlement and settlement of other litigation; and

b)

a net favorable change in accounts receivable due to a smaller increase in Packaging segment accounts receivable levels during the first six months of 2025 compared to the same period in 2024 primarily related to higher prices and sales volumes in 2024, partially offset by an increase in Paper segment accounts receivable levels during the first six months of 2025 compared to the same period in 2024 primarily related to an increase in days sales outstanding during 2025.

These favorable changes were partially offset by the following:

c)

a net unfavorable change in accrued liabilities predominantly related to the establishment of an accrued liability for the DeRidder trial in the first half of 2024 and reduction of accrued liabilities in the first half of 2025 related to the DeRidder settlement and settlement of other litigation;

d)

a net unfavorable change in accounts payable primarily related to a smaller increase in accounts payable levels during the first six months of 2025 compared to the same period in 2024 due to a larger increase in cost of sales and days payables outstanding during 2024 compared to 2025; and

e)

a net unfavorable change in inventories primarily related to an increase in Paper segment inventory balances during the first six months of 2025 compared to the same period in 2024 due to lower sales volumes in the first half of 2025, partially offset by a favorable change in Packaging segment inventory due to a smaller increase in inventory balances during the first half of 2025 compared to the same period in 2024.

Investing Activities

We used $287 million for investing activities during the six months ended June 30, 2025 compared to $324 million during the same period in 2024. We spent $318 million for internal capital investments during the six months ended June 30, 2025, compared to $322 million during the same period in 2024.

We expect capital investments in 2025 to be within a range of $840 million to $870 million. These expenditures could increase or decrease as a result of a number of factors, including our financial results, strategic opportunities, future economic conditions, and our regulatory compliance requirements. We currently estimate capital expenditures to comply with environmental regulations will be about $24 million in 2025. Our estimated environmental expenditures could vary significantly depending upon the enactment of new environmental laws and regulations. For additional information, see “Environmental Matters” in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K.

Financing Activities

During both of the six month periods ended June 30, 2025 and 2024, net cash used for financing activities was $249 million. We paid $225 million of dividends during the first six months of 2025, compared to $224 million of dividends paid during the comparable period in 2024. In addition, we withheld shares to cover $23 million of employee restricted stock taxes during the first six months of 2025 compared to $24 million of employee restricted stock taxes withheld during the same period in 2024. We did not have any repurchases and retirements of the Company’s common stock during both the six months ended June 30, 2025 and 2024.

In addition to the items discussed in Note 11, Debt, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q, see Note 10, Debt, of the Notes to Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of our 2024 Annual Report on Form 10-K for more information.

Contractual Obligations

There have been no material changes to the contractual obligations disclosed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K.

Non-GAAP Financial Measures

Earnings per diluted share excluding special items, net income excluding special items, EBITDA, segment EBITDA, EBITDA excluding special items, and segment EBITDA excluding special items are non-GAAP financial measures. Management excludes special items, as it believes that these items are not necessarily reflective of the ongoing operations of our business. These measures are presented because they provide a means to evaluate the performance of our segments and our Company on an ongoing basis using the same measures that are used by our management, because these measures assist in providing a meaningful comparison between periods and because these measures are frequently used by investors and other interested parties in the evaluation of companies and the performance of their segments. Any analysis of non-GAAP financial measures should be done in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such. Reconciliations of the non-GAAP measures to the most comparable measure reported in accordance with GAAP are detailed below.

The following table reconciles earnings per diluted share to earnings per diluted share excluding special items for the periods indicated (dollars in millions):

(a)

For the three and six months ended June 30, 2025, includes $24.6 million and $18.8 million, respectively, of income related to gains on sales of corrugated products facilities, partially offset by closure costs related to corrugated products facilities. For the three months ended June 30, 2024, includes $0.1 million of charges consisting of closure costs related to corrugated products facilities. For the six months ended June 30, 2024, these charges were completely offset by $0.1 million of income primarily related to a favorable lease buyout for a closed corrugated products facility during the first quarter of 2024.

(b)

For the three months and six months ended June 30, 2025, includes $1.6 million of charges related to the announced Greif, Inc. acquisition.

(c)

For the three and six months ended June 30, 2024, includes $0.6 million of income and $9.7 million of charges, respectively, related to the announced discontinuation of production of UFS paper grades on the No. 3 machine at the Jackson, Alabama mill associated with the permanent conversion of the machine to produce linerboard and other paper-to-containerboard conversion related activities.

(d)

Amount may not foot due to rounding.

The following tables reconcile net income to net income excluding special items for the periods indicated (dollars in millions):

(e)

For the three and six months ended June 30, 2025, includes income related to gains on sales of corrugated products facilities, partially offset by closure costs related to corrugated products facilities. For the three months ended June 30, 2024, includes charges consisting of closure costs related to corrugated products facilities. For the six months ended June 30, 2024, these charges were completely offset by income primarily related to a favorable lease buyout for a closed corrugated products facility during the first quarter of 2024.

(f)

For the three months and six months ended June 30, 2025, includes charges related to the announced Greif, Inc. acquisition.

(g)

Includes items related to the announced discontinuation of production of UFS paper grades on the No. 3 machine at the Jackson, Alabama mill associated with the permanent conversion of the machine to produce linerboard and other paper-to-containerboard conversion related activities.

The following table reconciles net income to EBITDA and EBITDA excluding special items for the periods indicated (dollars in millions):

The following table reconciles segment operating income (loss) to segment EBITDA and segment EBITDA excluding special items for the periods indicated (dollars in millions):

Market Risk and Risk Management Policies

PCA is exposed to the impact of commodity price changes, interest rate changes, and changes in the market value of its financial instruments. To manage these risks, we may from time to time enter into transactions, including certain physical commodity transactions, that are determined to be derivatives. As of June 30, 2025, we are party to certain physical commodity transactions related to natural gas supply contracts. These contracts qualify for the normal purchase normal sale ("NPNS") exception, and we have elected that exception. For a discussion of derivatives and hedging activities, see Note 2, Summary of Significant Account Policies, of the Notes to Consolidated Financial Statements in “Part II, Item 8. Financial Statements and Supplementary Data” of our 2024 Annual Report on Form 10-K.

At June 30, 2025, interest rates on 100% of PCA’s outstanding debt are fixed.

Off-Balance-Sheet Activities

The Company does not have any off-balance sheet arrangements as of June 30, 2025.

Environmental Matters

There have been no material changes to the disclosure set forth in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters” filed with our 2024 Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, PCA evaluates its estimates, including those related to business combinations, pensions and other postretirement benefits, goodwill and intangible assets, long-lived asset impairment, environmental liabilities, and income taxes, among others. PCA bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

PCA has included in its 2024 Annual Report on Form 10-K a discussion of its critical accounting policies and estimates which require management’s most difficult, subjective, or complex judgments used in the preparation of its consolidated financial statements. PCA has not had any changes to these critical accounting estimates during the first six months of 2025.

New and Recently Adopted Accounting Standards

For a listing of our new and recently adopted accounting standards, see Note 2, New and Recently Adopted Accounting Standards, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in “Part I, Item 1. Financial Statements” of this Form 10-Q.

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q, and in particular, statements found in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our expectations regarding our future liquidity, earnings, expenditures, and financial condition. These statements are often identified by the words “will,” “should,” “anticipate,” “believe,” “expect,” “intend,” “estimate,” “hope,” or similar expressions. These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties. There are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. These factors, risks and uncertainties include the following:

the impact of general economic conditions;

the impact of acquired businesses and risks and uncertainties regarding operation, expected benefits and integration of such businesses;

containerboard, corrugated products, and white paper general industry conditions, including competition, product demand, product pricing, and input costs;

fluctuations in wood fiber and recycled fiber costs;

fluctuations in purchased energy costs;

the possibility of unplanned outages or interruptions at our principal facilities; and

governmental, legislative or regulatory actions or requirements, particularly concerning environmental or tax matters or trade policy.

Our actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, and accordingly, we can give no assurances that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, what impact they will have on our results of operations or financial condition. Given these uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. We expressly disclaim any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date hereof. For a discussion of other factors, risks and uncertainties that may affect our business, see Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2024.

For a discussion of market risks related to PCA, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk and Risk Management Policies” in this Quarterly Report on Form 10-Q.

PCA maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in PCA’s filings under the Securities Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to PCA’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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 June 30, 2025. The evaluation of PCA’s disclosure controls and procedures included a review of the controls’ objectives and design, PCA’s implementation of the controls, and the effect of the controls on the information generated for use in this report. 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 June 30, 2025.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule13a-15(f) under the Exchange Act) that occurred during the most recent fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The disclosure set forth under the caption "Legal Proceedings" in Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q is incorporated herein by reference.

There have been no material changes to the risk factors disclosed in “Part I, Item IA. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. UNREGISTERED SALES OF EQUI****TY SECURITIES AND USE OF PROCEEDS

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 June 30, 2025:

(a)

All shares were withheld from employees to cover income and payroll taxes on equity awards that vested during the period.

Item 3. DEFAULTS UPO****N SENIOR SECURITIES

None.

Item 4. MINE SAF****ETY DISCLOSURES

Not applicable.

During the three months ended June 30, 2025, none of the Company's directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangements as defined in Item 408(a) of Regulation S-K.

† Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 7, 2025