Upgrades - RBC Capital upgraded Sealed Air (SEE) to Outperform from Sector Perform with a price target of $48, up from $35, citing stabilization in Protective and continued strength in Food segments, along with over $100 million of cost reductions and G&A optimization [2] - Citi upgraded Tractor Supply (TSCO) to Buy from Neutral with a price target of $62, up from $60, noting same-store sales momentum and earnings growth heading into 2026 [2] - Piper Sandler upgraded PNC Financial (PNC) to Overweight from Neutral with a price target of $220, up from $211, expressing confidence in PNC's near-term prospects due to its conservative guidance and attractive valuation [3] - HSBC upgraded Iqvia (IQV) to Buy from Hold with a price target of $235, up from $195, expecting easing regulatory clouds in pharma to support a re-rating of the shares [3] - MoffettNathanson upgraded Roblox (RBLX) to Neutral from Sell, acknowledging that user metrics have significantly improved driven by new viral experiences [4] Downgrades - Jefferies downgraded Freshpet (FRPT) to Hold from Buy with a price target of $53, down from $97, citing an abrupt and persistent growth slowdown and lack of near-term catalysts [5] - HSBC downgraded Bloom Energy (BE) to Hold from Buy with a price target of $100, up from $44, while expecting consensus estimates to revise higher but awaiting a better entry point [5] - RBC Capital downgraded Graphic Packaging (GPK) to Sector Perform from Outperform with a price target of $21, down from $25, due to oversupply in bleached paperboard limiting price increases [5] - JPMorgan downgraded RenaissanceRe (RNR) to Neutral from Overweight with an unchanged price target of $303, adopting an incrementally cautious view on reinsurance pricing [5] - Northland downgraded Nutanix (NTNX) to Market Perform from Outperform with a price target of $76, highlighting risks related to VMware customer migrations and competition from Red Hat [5]

Core Insights - The materials sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator for identifying oversold conditions, with a value below 30 indicating potential buying opportunities [1] Company Summaries - **FMC Corp (NYSE:FMC)**: - Current RSI Value: 22.7 - Recent Price Action: Shares fell 2.5% to close at $30.34 - Stock Performance: Fell around 18% over the past month, with a 52-week low of $30.15 - Analyst Ratings: UBS and Citigroup maintained a Neutral rating, lowering price targets from $44 to $36 and $42 to $34 respectively [8] - **Corteva Inc (NYSE:CTVA)**: - Current RSI Value: 29.8 - Recent Price Action: Shares fell 3.8% to close at $63.11 - Stock Performance: Fell around 13% over the past month, with a 52-week low of $53.40 - Analyst Ratings: Mizuho maintained an Outperform rating, lowering the price target from $85 to $78 [8] - **Graphic Packaging Holding Co (NYSE:GPK)**: - Current RSI Value: 25.9 - Recent Price Action: Shares fell 1% to close at $18.79 - Stock Performance: Fell around 9% over the past month, with a 52-week low of $18.76 - Analyst Ratings: UBS and Citigroup maintained a Neutral rating, lowering price targets from $24 to $20 and $23 to $21 respectively [8]

Core Insights - The materials sector has several oversold stocks that present potential buying opportunities for undervalued companies [1][2] Group 1: Oversold Stocks - FMC Corp (NYSE:FMC) has an RSI of 22.7, with a recent stock price of $30.34, down 18% over the past month, and a 52-week low of $30.15 [8] - Corteva Inc (NYSE:CTVA) has an RSI of 29.8, with a recent stock price of $63.11, down 13% over the past month, and a 52-week low of $53.40 [8] - Graphic Packaging Holding Co (NYSE:GPK) has an RSI of 25.9, with a recent stock price of $18.79, down 9% over the past month, and a 52-week low of $18.76 [8]

Core Insights - Graphic Packaging Holding Company, a leader in sustainable consumer packaging, will announce its third quarter 2025 financial results on November 4, 2025, before market opens [1] - The company has scheduled a conference call to discuss these results at 10:00 a.m. ET on the same day [2] - A tentative date for the release of fourth quarter and full year 2025 financial results has been set for February 3, 2026 [3] Company Overview - Graphic Packaging designs and produces consumer packaging primarily from renewable or recycled materials, emphasizing innovation and commitment to reducing the environmental footprint of packaging [3] - The company operates a global network of design and manufacturing facilities, serving well-known brands across various sectors including food, beverage, foodservice, and household products [3]

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Group 1 - The company has undergone significant transformation over the past seven years, focusing on efficiency and cash flow generation [2] - The final major expenditure related to the Waco investment in recycled paperboard manufacturing is nearing completion, which is expected to enhance cash flow [2] - Capital expenditures (CapEx) are projected to decrease to approximately 5% of sales, contributing to improved EBITDA and working capital reductions [2]

Summary of Graphic Packaging Company (GPK) Conference Call Company Overview - **Company**: Graphic Packaging Holding Company (GPK) - **Sales**: Approximately $9 billion, with 70% in North America and 30% in Europe [3][63] - **Market Focus**: Primarily in packaging, with significant operations in recycled paperboard manufacturing [2][3] Key Points and Arguments Transformation and Growth Strategy - **Vision 2025**: Over the past seven years, the company has transformed its business model, focusing on expanding capabilities, innovation, and competitive advantage [4][64] - **Acquisitions**: The purchase of International Paper's consumer packaging business in 2018 positioned GPK as the number one player in paper cups, manufacturing about 30% of all paper cups in North America [5][64] - **Innovation**: GPK has invested heavily in innovation, establishing five global innovation and design centers to develop solutions that replace plastic and foam packaging [5][70] Financial Performance and Projections - **CapEx Reduction**: CapEx is expected to decrease to about 5% of sales, down from previous levels of 12%, leading to significant cash flow generation [2][61][30] - **EBITDA Growth**: Anticipated mid-single-digit growth in adjusted EBITDA, driven by innovation and operational efficiency [29][30] - **Dividend Growth**: The company is committed to growing dividends, which is seen as attractive to investors [31] Market Dynamics and Challenges - **Near-term Headwinds**: The company faces challenges including high food prices affecting customer volumes, the MAHA movement, and GLP-1 drugs impacting reformulation costs [21][24][25] - **SBS Market Issues**: The addition of capacity in the coated SBS market has led to lower operating rates and pricing pressures, impacting GPK's ability to push pricing on coated recycled paperboard [26][27] Sustainability and Environmental Commitment - **Carbon Reduction Goals**: GPK aims for a 50% reduction in overall carbon emissions by 2032, supported by investments in recycled packaging [15][73] - **Recycling Investments**: Nearly $2 billion invested in creating a high-quality recycling platform, allowing the company to process dirtier fiber into high-quality packaging [13][73] Additional Important Insights - **Customer Portfolio**: GPK has diversified its customer base, reducing reliance on top accounts, which previously represented 80% of sales [7][67] - **Market Adaptation**: The company is adapting to consumer trends, particularly in food service, by replacing plastic and foam products [18][19] - **Future Outlook**: Confidence remains high in the long-term business model, with expectations of resolving current challenges and capitalizing on market opportunities [28][43] Conclusion Graphic Packaging Company is positioned for growth through strategic investments in innovation, sustainability, and operational efficiency, despite facing near-term market challenges. The focus on reducing CapEx and enhancing cash flow generation will support its long-term financial stability and shareholder value.

Core Viewpoint - Graphic Packaging Holding Company is a leader in sustainable consumer packaging and is committed to reducing the environmental footprint of its products [2]. Group 1: Company Overview - Graphic Packaging Holding Company is headquartered in Atlanta, Georgia, and specializes in designing and producing consumer packaging primarily from renewable or recycled materials [2]. - The company operates a global network of design and manufacturing facilities that serve well-known brands in various sectors, including food, beverage, foodservice, household, and other consumer products [2]. Group 2: Upcoming Events - Michael P. Doss, President and CEO of Graphic Packaging, will present at the Jefferies Industrials Conference on September 3rd at 8:50 am ET [1]. - The presentation will be available live and can be accessed later via a webcast on the Graphic Packaging website [1].

PART I — FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (Unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed notes explaining the company's financial activities [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales and net income decreased for the three and six months ended June 30, 2025, compared to the same periods in 2024 Condensed Consolidated Statements of Operations | In millions, except per share amounts | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Sales | $2,204 | $2,237 | $4,324 | $4,496 | | Income from Operations | $193 | $324 | $414 | $602 | | Net Income | $104 | $190 | $231 | $355 | | Net Income Per Share - Basic | $0.35 | $0.62 | $0.77 | $1.16 | | Net Income Per Share - Diluted | $0.34 | $0.62 | $0.76 | $1.15 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income increased for both the three and six months ended June 30, 2025, driven by positive currency adjustments Condensed Consolidated Statements of Comprehensive Income | In millions | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Income | $104 | $190 | $231 | $355 | | Total Other Comprehensive Income (Loss), Net of Tax | $104 | $(18) | $186 | $(76) | | Total Comprehensive Income | $208 | $172 | $417 | $279 | - For the three months ended June 30, 2025, there was a **positive currency translation adjustment of $111 million**, compared to a negative $25 million in 2024; for the six months, the adjustment was **positive $188 million**, versus negative $82 million in 2024[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and equity increased as of June 30, 2025, driven by growth in fixed assets and a significant rise in short-term debt Condensed Consolidated Balance Sheets | In millions | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Total Current Assets | $2,968 | $2,784 | | Property, Plant and Equipment, Net | $5,598 | $5,258 | | Total Assets | $11,795 | $11,144 | | Total Current Liabilities | $2,072 | $1,903 | | Long-Term Debt | $5,392 | $5,145 | | Total Equity | $3,219 | $3,013 | - **Short-Term Debt and Current Portion of Long-Term Debt increased significantly** from $39 million at December 31, 2024, to **$443 million** at June 30, 2025[18](index=18&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased due to net income and other comprehensive income, despite share repurchases and dividend declarations Condensed Consolidated Statements of Shareholders' Equity | In millions, except share amounts | Balances at December 31, 2024 | Balances at June 30, 2025 | | :-------------------------------- | :---------------------------- | :------------------------ | | Total Equity | $3,013 | $3,219 | | Net Income (Q1 2025) | $127 | - | | Net Income (Q2 2025) | - | $104 | | Dividends Declared (Q1 2025) | $(33) | - | | Dividends Declared (Q2 2025) | - | $(33) | | Repurchase of Common Stock (Q2 2025) | - | $(112) | - The company repurchased **4,982,296 shares** of common stock for **$112 million** during the second quarter of 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased while investing activities became a net use of cash due to capital spending and lack of a major divestiture Condensed Consolidated Statements of Cash Flows | In millions | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $93 | $164 | | Net Cash (Used in) Provided by Investing Activities | $(505) | $175 | | Net Cash Provided by (Used in) Financing Activities | $362 | $(368) | | Capital Spending | $(541) | $(580) | | Proceeds from the Sale of Business and Properties | $12 | $711 | - Capital spending remained high at **$541 million** in 2025, primarily for the new Waco, Texas facility, compared to $580 million in 2024[21](index=21&type=chunk) - Financing activities in 2025 included **$99 million from Green Bonds issuance** and **$110 million in common stock repurchases**, while 2024 included $756 million from debt issuance and $200 million in repurchases[21](index=21&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed disclosures for the financial statements, covering accounting policies, debt, equity, and other key areas [NOTE 1 — GENERAL INFORMATION](index=10&type=section&id=NOTE%201%20%E2%80%94%20GENERAL%20INFORMATION) The company is a leading producer of sustainable consumer packaging, with details on its accounting, repurchase programs, and special items - The Company is a leading global producer of consumer goods packaging made from renewable or recycled materials, serving diverse end markets[23](index=23&type=chunk)[24](index=24&type=chunk) Revenue from contracts with customers | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue from contracts with customers | $2,193 | $2,228 | $4,303 | $4,479 | - On April 30, 2025, the Board authorized a new **$1.5 billion share repurchase program**, bringing total availability to **$1.754 billion** as of June 30, 2025[36](index=36&type=chunk) Share Repurchases (2023 program) | Share Repurchases (2023 program) | Amount Repurchased (millions) | Number of Shares Repurchased | | :------------------------------- | :---------------------------- | :--------------------------- | | Six Months Ended June 30, 2025 | $111 | 4,982,296 | | Six Months Ended June 30, 2024 | $200 | 7,243,734 | - The Company declared two quarterly dividends of **$0.11 per share** of common stock during the first six months of 2025[37](index=37&type=chunk) Business Combinations, Exit Activities and Other Special Items, Net | Business Combinations, Exit Activities and Other Special Items, Net (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Exit Activities | $13 | $13 | $27 | $22 | | (Gains)/Charges Associated with Divestitures | — | $(74) | $1 | $(72) | | Other Special Items | — | $5 | $(3) | $10 | | Total | $13 | $(56) | $25 | $(39) | - The Augusta Divestiture in Q2 2024 resulted in a **$74 million gain**, impacting the 'Gains/Charges Associated with Divestitures' line[42](index=42&type=chunk) - The Company closed its Middletown, Ohio, recycled paperboard manufacturing facility in May 2025 to consolidate production[44](index=44&type=chunk) [NOTE 2 — INVENTORIES, NET](index=13&type=section&id=NOTE%202%20%E2%80%94%20INVENTORIES,%20NET) Net inventories increased slightly from December 31, 2024, to June 30, 2025, with growth in finished goods and supplies Inventories, Net | In millions | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | Finished Goods | $574 | $552 | | Work in Progress| $216 | $209 | | Raw Materials | $714 | $724 | | Supplies | $301 | $269 | | Total | $1,805 | $1,754 | [NOTE 3 — DEBT](index=13&type=section&id=NOTE%203%20%E2%80%94%20DEBT) Short-term debt increased significantly due to reclassification, while total long-term debt grew from new Green Bonds issuance Short-Term Debt | In millions | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Short-Term Borrowings | $19 | $18 | | Current Portion of Long-Term Debt | $417 | $14 | | Total Short-Term Debt and Current Portion | $443 | $39 | Long-Term Debt | In millions | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Total Long-Term Debt Including Current Portion | $5,840 | $5,191 | | Total Long-Term Debt (excluding current portion and unamortized costs) | $5,392 | $5,145 | - On May 29, 2025, the Company issued **$100 million in tax-exempt Green Bonds** with a 5.0% annual interest rate to fund its new Waco facility[55](index=55&type=chunk) Revolving Credit Facilities | Revolving Credit Facilities (in millions) | Total Commitments | Total Outstanding | Total Available | | :---------------------------------------- | :---------------- | :---------------- | :-------------- | | Senior Secured Domestic Revolving Credit Facility | $1,900 | $1,027 | $871 | | Senior Secured International Revolving Credit Facility | $211 | $71 | $140 | | Other International Facilities | $51 | $22 | $29 | | Total | $2,162 | $1,120 | $1,040 | - As of June 30, 2025, the Company was **in compliance with all debt covenants**[58](index=58&type=chunk) [NOTE 4 — STOCK INCENTIVE PLANS](index=15&type=section&id=NOTE%204%20%E2%80%94%20STOCK%20INCENTIVE%20PLANS) The company operates under the 2024 Omnibus Incentive Compensation Plan, with recent changes accelerating expense recognition - As of June 30, 2025, **9.7 million shares remained available for grant** under the 2024 Plan[59](index=59&type=chunk) Stock Awards Granted (Six Months Ended June 30, 2025) | Stock Awards Granted (Six Months Ended June 30, 2025) | Number of Units | Weighted Average Grant Date Fair Value Per Share | | :---------------------------------------------------- | :-------------- | :----------------------------------------------- | | RSUs - Employees and Non-Employee Directors | 1,479,667 | $26.59 | | RSAs - Board of Directors | 35,075 | $22.81 | - During the first six months of 2025, **$1 million was credited to compensation expense** due to performance adjustments, and **$3 million was credited to special items** due to vesting provision changes[63](index=63&type=chunk) [NOTE 5 — PENSIONS AND OTHER POSTRETIREMENT BENEFITS](index=16&type=section&id=NOTE%205%20%E2%80%94%20PENSIONS%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) Net periodic pension cost decreased in 2025, with expected full-year contributions of $10 million to $15 million to pension plans Net Periodic Pension Cost | Net Periodic Pension Cost (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Pension Benefits | $2 | $3 | $4 | $6 | | Postretirement Benefits | $0 | $(1) | $0 | $(1) | - The Company contributed **$3 million to its pension plans** and **$1 million to its postretirement health care plans** during the first six months of 2025[70](index=70&type=chunk)[71](index=71&type=chunk) - Expected full-year 2025 contributions are **$10 million to $15 million for pension plans** and approximately **$2 million for postretirement health care plans**[70](index=70&type=chunk)[71](index=71&type=chunk) [NOTE 6 — FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT](index=17&type=section&id=NOTE%206%20%E2%80%94%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENT) The company uses derivative instruments to manage interest rate, commodity, and foreign currency risks, primarily as cash flow hedges Interest Rate Swap Positions (as of June 30, 2025) | Interest Rate Swap Positions (as of June 30, 2025) | Notional Amount (in millions) | Weighted Average Interest Rate | | :------------------------------------------------- | :---------------------------- | :----------------------------- | | 05/01/2025 - 05/01/2027 | $500 | 3.50% | - The Company has hedged approximately **55% of its expected natural gas usage** for the remainder of 2025 and **20% for 2026**[79](index=79&type=chunk) - As of June 30, 2025, forward exchange contracts had notional amounts totaling **$61 million**, expiring through the remainder of 2025[82](index=82&type=chunk) - Net notional amounts for derivatives not designated as hedges totaled **$160 million** at June 30, 2025, up from $116 million at December 31, 2024[84](index=84&type=chunk) Fair Value of Long-Term Debt | Fair Value of Long-Term Debt (in millions) | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :---------------- | | Fair Value | $5,603 | $4,894 | | Carrying Amount | $5,696 | $5,046 | [NOTE 7 — INCOME TAXES](index=19&type=section&id=NOTE%207%20%E2%80%94%20INCOME%20TAXES) Income tax expense for the first six months of 2025 was $78 million, with the effective tax rate influenced by discrete adjustments Income Taxes | In millions | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | | Income before Income Taxes | $309 | $482 | | Income Tax Expense | $78 | $127 | - The effective tax rate for the first six months of 2025 included a **$2 million tax benefit** from excess tax benefits on vested restricted stock units[91](index=91&type=chunk) - H.R. 1, 'The One Big Beautiful Bill Act,' signed on July 4, 2025, is expected to decrease the Company's **2025 U.S. federal income tax liability to zero**[93](index=93&type=chunk) [NOTE 8 — ENVIRONMENTAL AND LEGAL MATTERS](index=20&type=section&id=NOTE%208%20%E2%80%94%20ENVIRONMENTAL%20AND%20LEGAL%20MATTERS) The company is subject to various legal and environmental matters, none of which are expected to be materially adverse - The Company believes that accrued amounts for environmental loss contingencies and reasonably possible losses are **not material** to its financial position or results[97](index=97&type=chunk) - The Company does not believe that the disposition of current lawsuits will have a **material adverse effect** on its financial position or results[98](index=98&type=chunk) [NOTE 9 — SEGMENT INFORMATION](index=20&type=section&id=NOTE%209%20%E2%80%94%20SEGMENT%20INFORMATION) In Q1 2025, the company realigned its financial reporting into Americas and International Paperboard Packaging segments - The Company realigned its financial reporting structure into two reportable segments: **Americas Paperboard Packaging** and **International Paperboard Packaging**, effective Q1 2025[99](index=99&type=chunk) Net Sales by Segment | Net Sales (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Americas Paperboard Packaging | $1,511 | $1,551 | $2,987 | $3,082 | | International Paperboard Packaging | $560 | $531 | $1,083 | $1,056 | | Corporate and Other | $133 | $155 | $254 | $358 | | Total | $2,204 | $2,237 | $4,324 | $4,496 | Income (Loss) from Operations by Segment | Income (Loss) from Operations (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Americas Paperboard Packaging | $187 | $229 | $415 | $510 | | International Paperboard Packaging | $29 | $35 | $69 | $69 | | Corporate and Other | $(23) | $60 | $(70) | $23 | | Total | $193 | $324 | $414 | $602 | [NOTE 10 — EARNINGS PER SHARE](index=22&type=section&id=NOTE%2010%20%E2%80%94%20EARNINGS%20PER%20SHARE) Earnings per share decreased for the three and six months ended June 30, 2025, reflecting lower net income Earnings Per Share | In millions, except per share data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Income | $104 | $190 | $231 | $355 | | Earnings Per Share – Basic | $0.35 | $0.62 | $0.77 | $1.16 | | Earnings Per Share – Diluted | $0.34 | $0.62 | $0.76 | $1.15 | - **Weighted average basic shares outstanding decreased** from 305.7 million to 301.2 million for the three months ended June 30, 2025, and from 306.7 million to 301.7 million for the six-month period[110](index=110&type=chunk) [NOTE 11 — CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS](index=23&type=section&id=NOTE%2011%20%E2%80%94%20CHANGES%20IN%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated Other Comprehensive Loss improved significantly due to a positive currency translation adjustment of $188 million Changes in Accumulated Other Comprehensive Loss | In millions, net of tax | Balance at December 31, 2024 | Net Current-period Other Comprehensive (Loss) Income | Balance at June 30, 2025 | | :---------------------- | :--------------------------- | :--------------------------------------------------- | :----------------------- | | Derivative Instruments | $6 | $(2) | $4 | | Pension and Postretirement Benefit Plans | $(107) | $0 | $(107) | | Currency Translation Adjustments | $(354) | $188 | $(166) | | Total | $(455) | $186 | $(269) | - The Company expects to reclassify **$1 million of pre-tax loss** from Accumulated Other Comprehensive Loss to earnings in the next twelve months[113](index=113&type=chunk) [NOTE 12 — EXIT ACTIVITIES](index=23&type=section&id=NOTE%2012%20%E2%80%94%20EXIT%20ACTIVITIES) The company incurred $35 million in exit costs during the first six months of 2025 related to its network optimization strategy Exit Costs | Exit Costs (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Asset Write-Offs and Start-Up Costs | $21 | $15 | | Severance Costs and Other | $6 | $7 | | Accelerated Depreciation | $8 | $15 | | Total | $35 | $37 | - The Company expects to incur total charges of **$21 million to $25 million** for post-employment benefits and **$19 million to $20 million** for asset-related costs through 2026 for facility closures[118](index=118&type=chunk) - Total start-up charges for the new Waco facility are expected to be **$65 million to $75 million** through 2026, with $31 million incurred to date[120](index=120&type=chunk) [NOTE 13 — DIVESTITURES](index=24&type=section&id=NOTE%2013%20%E2%80%94%20DIVESTITURES) The 2024 sale of the Augusta facility resulted in a $75 million gain, while the 2023 sale of Russian operations led to a valuation allowance - The Augusta Divestiture on May 1, 2024, generated **$711 million in consideration** and a **$75 million gain on sale**[121](index=121&type=chunk) - The sale of Russian operations in November 2023 resulted in a **$52 million valuation allowance** against the Vendor Loan receivable[123](index=123&type=chunk) [NOTE 14 — SUBSEQUENT EVENTS](index=25&type=section&id=NOTE%2014%20%E2%80%94%20SUBSEQUENT%20EVENTS) Recently enacted legislation is expected to reduce the company's 2025 U.S. federal income tax liability to zero - H.R. 1, 'The One Big Beautiful Bill Act,' signed on July 4, 2025, is expected to decrease the Company's **2025 U.S. federal income tax liability to zero**[125](index=125&type=chunk) - The Act extends or modifies **100% bonus depreciation**, domestic research cost expensing, and the business interest expense limitation[125](index=125&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=26&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management provides its perspective on the company's financial performance, condition, and future outlook [INTRODUCTION](index=26&type=section&id=INTRODUCTION) This introduction sets the context for the MD&A, linking it to the consolidated financial statements [OVERVIEW OF BUSINESS](index=26&type=section&id=OVERVIEW%20OF%20BUSINESS) The company is a global leader in sustainable consumer packaging with a strategy focused on innovation and operational efficiency - Graphic Packaging is a leading global producer of consumer goods packaging made from renewable or recycled materials for diverse markets[128](index=128&type=chunk)[129](index=129&type=chunk) - The Company's strategy focuses on developing innovative sustainable packaging, expanding market share, and reducing costs through operational improvements[132](index=132&type=chunk) - Many multi-year supply contracts include cost pass-through terms to reduce exposure to raw material and energy volatility[131](index=131&type=chunk) [Recent Developments and Economic Conditions](index=26&type=section&id=Recent%20Developments%20and%20Economic%20Conditions) Recently enacted legislation, H.R. 1, is expected to reduce the company's 2025 U.S. federal income tax liability to zero - H.R. 1, 'The One Big Beautiful Bill Act,' signed on July 4, 2025, extends or modifies **100% bonus depreciation** and other key tax provisions[133](index=133&type=chunk) - The Company expects the Act to decrease its **2025 U.S. federal income tax liability to zero**, but not materially impact the annual effective tax rate[133](index=133&type=chunk) [Acquisitions and Dispositions](index=27&type=section&id=Acquisitions%20and%20Dispositions) This section directs readers to relevant financial statement notes for detailed information on acquisitions and dispositions [RESULTS OF OPERATIONS](index=27&type=section&id=RESULTS%20OF%20OPERATIONS) Net Sales and Income from Operations declined for both the three and six-month periods, driven by the Augusta divestiture and market pressures Results of Operations | In millions | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Sales | $2,204 | $2,237 | $4,324 | $4,496 | | Income from Operations | $193 | $324 | $414 | $602 | | Net Income | $104 | $190 | $231 | $355 | [SECOND QUARTER 2025 COMPARED WITH SECOND QUARTER 2024](index=27&type=section&id=SECOND%20QUARTER%202025%20COMPARED%20WITH%20SECOND%20QUARTER%202024) Net Sales decreased 1% and Income from Operations decreased 40%, impacted by the prior-year Augusta divestiture gain and lower pricing Net Sales Variances (Q2 2025 vs Q2 2024) | Net Sales Variances (in millions) | 2024 Net Sales | Price/Volume/Mix | M&A | Foreign Exchange | 2025 Net Sales | Decrease | Percent Change | | :-------------------------------- | :------------- | :--------------- | :----- | :--------------- | :------------- | :------- | :------------- | | Consolidated | $2,237 | $(40) | $(13) | $20 | $2,204 | $(33) | (1)% | - Innovation sales growth contributed **$61 million**, driven by sustainable consumer packaging solutions[136](index=136&type=chunk) - **Income from Operations decreased by $131 million (40%)** due to the Augusta divestiture (including a $75 million gain in 2024) and lower pricing[137](index=137&type=chunk) - **Interest Expense, Net decreased** from $60 million to **$53 million**, primarily due to increased capitalized interest from the Waco project[138](index=138&type=chunk) [FIRST SIX MONTHS OF 2025 COMPARED WITH FIRST SIX MONTHS OF 2024](index=28&type=section&id=FIRST%20SIX%20MONTHS%20OF%202025%20COMPARED%20WITH%20FIRST%20SIX%20MONTHS%20OF%202024) Net Sales decreased 4% and Income from Operations decreased 31%, mainly due to the Augusta divestiture and reduced paperboard pricing Net Sales Variances (H1 2025 vs H1 2024) | Net Sales Variances (in millions) | 2024 Net Sales | Price/Volume/Mix | M&A | Foreign Exchange | 2025 Net Sales | Decrease | Percent Change | | :-------------------------------- | :------------- | :--------------- | :------ | :--------------- | :------------- | :------- | :------------- | | Consolidated | $4,496 | $(23) | $(142) | $(7) | $4,324 | $(172) | (4)% | - Innovation sales growth contributed **$105 million**, driven by conversions to sustainable consumer packaging solutions[142](index=142&type=chunk) - **Income from Operations decreased by $188 million (31%)** due to the Augusta divestiture (including a $75 million gain in 2024) and lower pricing[143](index=143&type=chunk) - **Interest Expense, Net decreased** from $119 million to **$104 million**, primarily due to increased capitalized interest from the Waco project[144](index=144&type=chunk) [Segment Reporting](index=29&type=section&id=Segment%20Reporting) The company's financial reporting was realigned in Q1 2025 into Americas and International Paperboard Packaging segments - The Company realigned its financial reporting structure in Q1 2025 into two reportable segments: **Americas Paperboard Packaging** and **International Paperboard Packaging**[147](index=147&type=chunk) Net Sales by Segment | Net Sales (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Americas Paperboard Packaging | $1,511 | $1,551 | $2,987 | $3,082 | | International Paperboard Packaging | $560 | $531 | $1,083 | $1,056 | | Corporate/Other/Eliminations | $133 | $155 | $254 | $358 | | Total | $2,204 | $2,237 | $4,324 | $4,496 | Income (Loss) from Operations by Segment | Income (Loss) from Operations (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Americas Paperboard Packaging | $187 | $229 | $415 | $510 | | International Paperboard Packaging | $29 | $35 | $69 | $69 | | Corporate and Other | $(23) | $60 | $(70) | $23 | | Total | $193 | $324 | $414 | $602 | [2025 COMPARED WITH 2024](index=30&type=section&id=2025%20COMPARED%20WITH%202024) This section details segment performance, highlighting factors impacting Net Sales and Income from Operations for each segment [Second Quarter 2025 Compared to Second Quarter 2024](index=30&type=section&id=Second%20Quarter%202025%20Compared%20to%20Second%20Quarter%202024) Americas segment sales and income declined on lower pricing, while International sales grew but income fell due to inflation - **Americas Paperboard Packaging Net Sales decreased** due to lower pricing and unfavorable foreign currency, partially offset by innovation sales growth[154](index=154&type=chunk) - **Americas Paperboard Packaging Income from Operations decreased** due to lower pricing, higher commodity costs, and actions to reduce inventories[155](index=155&type=chunk) - **International Paperboard Packaging Net Sales increased** due to higher packaging volumes, innovation sales growth, and favorable foreign currency[156](index=156&type=chunk) - **International Paperboard Packaging Income from Operations decreased** due to lower pricing and higher inflation, partially offset by higher volumes[157](index=157&type=chunk) [First Six Months of 2025 Compared to First Six Months of 2024](index=30&type=section&id=First%20Six%20Months%20of%202025%20Compared%20to%20First%20Six%20Months%20of%202024) Americas segment sales and income declined on pricing and inflation, while International sales grew with flat operating income - **Americas Paperboard Packaging Net Sales decreased** due to lower pricing and unfavorable foreign currency, partially offset by innovation sales growth[158](index=158&type=chunk) - **Americas Paperboard Packaging Income from Operations decreased** due to lower pricing and higher inflation, offset by net performance improvements[159](index=159&type=chunk) - **International Paperboard Packaging Net Sales increased** due to innovation sales growth, higher volumes, and favorable foreign currency[160](index=160&type=chunk) - **International Paperboard Packaging Income from Operations was flat**, as lower pricing and inflation were offset by higher volumes and cost savings[161](index=161&type=chunk) [FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES](index=30&type=section&id=FINANCIAL%20CONDITION,%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity is supported by operating cash flows and credit facilities, with high capital spending for the Waco facility impacting cash use Cash Flows | Cash Flows (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $93 | $164 | | Net Cash (Used in) Provided by Investing Activities | $(505) | $175 | | Net Cash Provided by (Used in) Financing Activities | $362 | $(368) | - Capital spending was **$541 million** in the first six months of 2025, primarily for the new Waco, Texas recycled paperboard manufacturing facility[165](index=165&type=chunk) - In 2024, investing activities included **$711 million** from the sale of the Augusta Paperboard Manufacturing Facility[165](index=165&type=chunk) - Financing activities in 2025 included a **$100 million tax-exempt green bond transaction**, with net proceeds of $99 million used for the Waco facility[166](index=166&type=chunk) - The Company was in compliance with its maximum **Consolidated Total Leverage Ratio (3.55 to 1.00)** and minimum **Consolidated Interest Expense Ratio (7.03 to 1.00)** as of June 30, 2025[178](index=178&type=chunk)[179](index=179&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=34&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) The annual goodwill impairment test as of October 1, 2024, confirmed no impairment, with sufficient headroom in all reporting units - The Company's annual goodwill impairment tests as of October 1, 2024, concluded that **goodwill was not impaired**[184](index=184&type=chunk) - The **Europe reporting unit's fair value exceeded its carrying value by 24%**, while other reporting units exceeded by more than 69%[184](index=184&type=chunk) [NEW ACCOUNTING STANDARDS](index=34&type=section&id=NEW%20ACCOUNTING%20STANDARDS) This section refers to Note 1 for a discussion of recent accounting pronouncements, with no new significant standards adopted [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=34&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) The company is exposed to interest rate risk on its debt and uses interest rate swaps to manage this exposure - The Company uses interest rate swap agreements to manage interest rate risks on its variable rate debt[187](index=187&type=chunk) - As of June 30, 2025, the Company had active interest rate swap agreements with a combined notional amount of **$500 million**, expiring on May 1, 2027[187](index=187&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - The Company's disclosure controls and procedures were **effective** as of June 30, 2025[188](index=188&type=chunk) - **No material changes** in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[189](index=189&type=chunk) PART II — OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=36&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Current lawsuits are not expected to have a material adverse effect on the company's financial position or operations - The Company does not believe that the disposition of current lawsuits will have a **material adverse effect** on its consolidated financial position or results[191](index=191&type=chunk) [ITEM 1A. RISK FACTORS](index=36&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes have occurred to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There have been **no material changes** to risk factors since the 2024 Annual Report on Form 10-K[192](index=192&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=36&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company repurchased 4,982,296 shares during the second quarter of 2025 under its authorized repurchase programs - The Company has **$1.5 billion authorized** under the 2025 share repurchase program and **$500 million** under the 2023 program[193](index=193&type=chunk) Share Repurchases (Q2 2025) | Period (2025) | Total Number of Shares Purchased | Average Price Paid for Shares | | :---------------------- | :------------------------------- | :---------------------------- | | April 1, through April 30, | — | $— | | May 1, through May 31, | 2,555,937 | $22.73 | | June 1, through June 30, | 2,426,359 | $21.76 | | Total | 4,982,296 | $22.26 | [ITEM 4. MINE SAFETY DISCLOSURES](index=36&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the Company [ITEM 5. OTHER INFORMATION](index=36&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated any Rule 10b5-1 trading arrangements during the second quarter of 2025 - No director or officer adopted or terminated any **Rule 10b5-1 trading arrangements** during Q2 2025[196](index=196&type=chunk) [ITEM 6. EXHIBITS](index=37&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including required certifications and XBRL-related documents [SIGNATURES](index=38&type=section&id=SIGNATURES) The report is duly signed by the company's Chief Financial Officer and Chief Accounting Officer as of July 29, 2025

Financial Data and Key Metrics Changes - In Q2 2025, Graphic Packaging reported sales of $2.2 billion, adjusted EBITDA of $336 million, and an adjusted EBITDA margin of 15.3% [6][25][26] - Adjusted EPS for the quarter was $0.42, with overall volume up approximately 1% [25][26] - Packaging prices were approximately 1% lower, reflecting third-party price recognition from 2024 [25] Business Line Data and Key Metrics Changes - Volumes in The Americas were modestly better than expected, driven by increased beverage promotions and targeted promotional activity in food and foodservice [6][12] - Innovation sales growth reached $61 million in Q2, on track to meet the 2% of sales growth target for the year [13] - Food results remained uneven, with snacks under pressure while pasta, sauces, and prepared foods saw gains [15] Market Data and Key Metrics Changes - International results remained positive, but growth slowed modestly, indicating stretched consumer conditions [12] - Private label and store brands gained traction in select food categories, with trademarking activity accelerating [13] - Beverage season in 2025 started strong, with carbonated soft drinks showing good growth due to higher promotional activity [16][17] Company Strategy and Development Direction - The last major investment in the Vision 2025 program is nearing completion, with expectations to generate excess cash starting in 2026 [6][8] - The company is focusing on recycled paperboard, which has a lower environmental footprint and cost advantages over bleached paperboard [9][10] - Graphic Packaging aims to grow its presence in household products and health and beauty sectors, leveraging recycled paperboard [14] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are stretched, impacting spending habits, with a focus on volume growth and market share protection expected in the coming quarters [5][11] - The company anticipates improved adjusted EBITDA margins in the second half of 2025 due to inventory management and reduced maintenance [30] - There is caution among CPG and QSR customers regarding near-term volume outlooks, reflecting broader economic uncertainties [30][56] Other Important Information - Capital expenditures for 2025 are estimated at $850 million, with a decline to 5% of sales in 2026 [8][31] - The company has repurchased 1.6% of its outstanding shares in Q2 at an average price of $22.26 per share [28] - The Waco investment is expected to provide significant economic and quality advantages, with an anticipated EBITDA contribution of $80 million in 2026 [52][63] Q&A Session Summary Question: Clarification on capital spending increase and its impact on free cash flow - Management explained that the increase in capital expenditures for 2025 will not change free cash flow expectations due to offsetting factors like reduced working capital and lower cash taxes [34][35] Question: Inquiry about higher permitting and labor costs for Waco - Management indicated that labor costs, particularly for electricians, have been higher than expected due to market conditions, and some project elements required rework, contributing to cost overruns [38][40] Question: Discussion on margin expectations for the second half of the year - Management provided confidence in achieving improved margins due to reduced planned maintenance and inventory management efforts [46][48] Question: Inquiry about competitive dynamics in the packaging market - Management noted that there is a need for price discipline in the current competitive environment, with ongoing changes in customer strategies to stimulate growth [103]