01—Abstract
Summary
Summary of the 10-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.
Packaging Corporation of America (PCA) reported net sales of $8.4 billiona for 2024, up from $7.8 billion in 2023, and net income of $805 million, or $8.93 per diluted share, compared with $765 million, or $8.48 per diluted share, in 2023.
Excluding special items, net income was $814 millionb, or $9.04 per diluted share. The increase was driven primarily by higher volumes in the Packaging and Paper segments and lower freight and logistics expenses, partially offset by lower prices and mix, higher operating and converting costs, and higher annual outage expense. Packaging segment operating income rose to $1,102 million from $1,074 million, and Paper segment operating income rose to $130 million from $119 million.
Cash flow from operations was $1,191 millionc in 2024, versus $1,315 million in 2023. Investing outflows were $278 million, including $670 million of capital investments, and financing outflows were $876 million, which included $449 million of dividends and the repayment of $400 million of 3.65% senior notes due 2024. The company ended 2024 with $685 million of cash and cash equivalents, $167 million of marketable debt securities, and $323 million of unused revolver capacity.
Total debt was $2.5 billiond, all fixed-rate senior notes. The company expects 2025 capital investments of $840 million to $870 million. Management notified customers of a $70 per ton linerboard and $90 per ton medium price increase effective January 1, 2025, and a $60 per ton increase for office, printing, and converting papers effective January 13, 2025.
The DeRidder mill litigation was settled for a minimum of $59.2 million, which is fully offset by a corresponding insurance recovery receivable. The filing also notes that ODP Corporation, the largest Paper segment customer, accounted for 58% of Paper segment sales and 4% of consolidated sales in 2024, and that the agreement runs through December 31, 2025.
02—Key points
Key Highlights
- Net sales rose to $8.38 billion in 2024 from $7.80 billion in 2023, led by $735 million of higher Packaging volumes, partially offset by $180 million of lower Packaging prices and mix.
- Net income was $805.1 million ($8.93 per diluted share) versus $765.2 million ($8.48) in 2023; excluding special items, EPS was $9.04 versus $8.70.
- Packaging segment operating income increased to $1,101.5 million from $1,074.3 million; Paper segment operating income increased to $129.7 million from $118.9 million.
- Corrugated products shipments were up 10.5% for the year, with record-breaking third and fourth quarter volumes; containerboard production was approximately 294 BSF.
- Operating cash flow fell to $1,191.2 million from $1,315.1 million, while capital expenditures rose to $669.7 million from $469.7 million; 2025 capital investment is expected at $840 million to $870 million.
- Liquidity was $1,175 million at year-end, including $852 million of cash and marketable debt securities; total debt of $2.5 billion is entirely fixed-rate senior notes, with the $400 million 3.65% notes repaid in September 2024.
- Dividends paid totaled $448.8 million in 2024, and no shares were repurchased; $436.0 million remained available under the $1 billion repurchase authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Packaging Corp. of America kept $0.10.
- Revenue$8.38B100.0%
- Cost of revenue−$6.60B78.7%
- Gross profit$1.78B21.3%
- Operating costs−$681.8M8.1%
- Operating income$1.10B13.1%
- Interest, other & tax−$296.2M3.5%
- Net income$805.1M9.6%
Where FY2024 revenue went
$8.38B- Cost of revenue: $6.60B, 79% of revenue
- Net income: $805.1M, 9.6% of revenue
- SG&A: $610.3M, 7.3% of revenue
- Other operating costs: $71.5M, 0.9% of revenue
- Interest, other & tax: $296.2M, 3.5% of revenue
Kept 9.6% as net incomeNet income $805.1M · 9.6%Other operating costs $71.5M · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 27, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $8.38B$7.80B | +7.4% |
| Cost of Revenue | $6.60B$6.10B | +8.1% |
| Gross Profit | $1.78B$1.70B | +5.0% |
| SG&A Expenses | $610.30M$580.90M | +5.1% |
| Operating Income | $1.10B$1.08B | +2.4% |
| Net Income | $805.10M$765.20M | +5.2% |
| EPS (Basic) | $8.97$8.52 | +5.3% |
| EPS (Diluted) | $8.93$8.48 | +5.3% |
| Shares Outstanding (Basic) | 89.10M89.10M | 0.0% |
| Shares Outstanding (Diluted) | 89.50M89.50M | 0.0% |
05—Questions
Frequently Asked Questions
How did Packaging Corporation of America's profitability change in 2024?
Net income rose to $805.1 million, or $8.93 per diluted share, from $765.2 million, or $8.48 per diluted share, in 2023. Excluding special items, net income was $814.5 million, or $9.04 per diluted share. The increase was driven primarily by higher volumes and lower freight and logistics expenses, partially offset by lower prices and mix, higher operating and converting costs, and higher annual outage expense.
What price increases did the company announce for 2025?
The company notified customers of a $70 per ton price increase for linerboard and a $90 per ton increase for medium effective January 1, 2025. It also notified customers of a $60 per ton increase for all office, printing, and converting papers effective January 13, 2025.
How concentrated is the Paper segment's customer base?
ODP Corporation, formerly Office Depot, Inc., is the largest Paper segment customer. In 2024, sales to ODP represented 58% of Paper segment sales revenue and 4% of consolidated sales. The agreement covers supply through December 31, 2025; if it is not renewed, ODP's purchase obligation would phase down over two years beginning January 1, 2026.
What is the status of the DeRidder mill litigation?
A jury in April 2024 awarded plaintiffs approximately $91.8 million in compensatory damages plus interest. In the fourth quarter of 2024, the company, certain insurers, and plaintiffs agreed to settle for a minimum of $59.2 million, which the settling insurers will pay. The company recorded a $59.2 million liability and an equal insurance recovery receivable at year-end, and the settlement may increase to $68.2 million depending on a pending coverage action.
How is the company's debt structured and when does it mature?
At December 31, 2024, the company had $2.5 billion of debt, all in fixed-rate senior notes, and a $350 million unsecured revolving credit facility with $323.3 million unused. No principal matures in 2025 or 2026, $500.0 million matures in 2027, and $2.0 billion matures in 2029 and thereafter.
06—Continue