Sonoco Reports Third Quarter 2007 Financial Results



    HARTSVILLE, S.C., October 19 /CNW/ - Sonoco (NYSE:   SON), one of the
largest diversified global packaging companies, today reported third quarter
2007 earnings of $.63 per diluted share, compared with $.60 per diluted share
reported in the third quarter of 2006. Results for the third quarter of 2007
benefited from a significantly lower effective tax rate, partially offset by
restructuring and asset impairment charges.

    Base earnings for the third quarter of 2007 were $.64 per diluted share,
compared with the $.61 per diluted share reported in the same period in 2006.
Base earnings is a non-GAAP financial measure that excludes restructuring
charges, asset impairment charges, environmental charges, and certain other
non-recurring or infrequent and unusual items, as applicable. After-tax
restructuring, asset impairment and environmental charges totaling $.13 per
diluted share were excluded from base earnings in the 2007 quarter, while 2006
base earnings excluded $.01 per diluted share of restructuring charges. Also
excluded from third quarter 2007 base earnings was a $.12 per diluted share
income tax benefit related to unusual items which are not expected to recur.
Third quarter 2007 base earnings had an effective tax rate of 20.9 percent,
compared with 28.7 percent in 2006. Additional information about base earnings
and base earnings per share along with reconciliations to the most closely
applicable GAAP financial measure is provided later in this release.

    "Third quarter base earnings exceeded the high end of our revised
guidance due to the lower than expected effective tax rate," said Harris E.
DeLoach, Jr., chairman, president and chief executive officer. "Results from
operations were in line with our revised projections and reflected slightly
lower year-over-year volumes stemming from slowing activity in most of our
served markets and higher raw material and other costs."

    Net sales for the third quarter of 2007 were $1.03 billion, up 11
percent, compared with the $932 million reported in the same period in 2006.
"The improvement in sales during the third quarter was the result of
acquisitions in our Consumer Packaging and Tubes and Cores/Paper segments, the
favorable impact of foreign currency rates and higher selling prices aimed at
recovering higher raw material costs," said DeLoach. "Slightly lower overall
volumes in Consumer Packaging and Tubes and Cores/Paper segments, which were
more notable in North America, partially offset these gains."

    Net income for the third quarter of 2007 was $64.5 million, an increase
of 6 percent, compared with $61.1 million for the same period in 2006. Third
quarter 2007 results benefited significantly from a lower effective tax rate
driven primarily by the release of reserves upon expiration of their related
statutory assessment periods. This benefit was partially offset by $12.1
million in after-tax restructuring and asset impairment charges and an
additional environmental reserve. These charges consisted primarily of asset
impairment at the Company's metal ends plant in Brazil and rigid plastics
plant in Wisconsin and costs related to previously initiated restructuring
activities. In the third quarter of 2006, after-tax restructuring charges
totaled approximately $.6 million.

    Base earnings for the quarter increased to $64.8 million, compared with
$61.7 million in the prior year period. Current quarter base earnings reflect
the benefit of a lower effective tax rate, as mentioned above.

    "While the Company realized productivity improvements in many of our
businesses and benefited from the impact of acquisitions, the year-over-year
improvement in base earnings was primarily attributable to the lower effective
tax rate," said DeLoach. "Partially offsetting these favorable factors were
the slight declines in volumes, an unfavorable shift in the mix of certain
business and a negative selling price/material cost relationship resulting
from higher raw material costs, primarily in old corrugated containers (OCC)."

    Cash generated from operations for the third quarter of 2007 was $131
million, compared with $166 million for the same period in 2006. The decrease
was due primarily to a smaller quarterly improvement in overall working
capital. "Our working capital program continues to deliver benefits and is on
track to meet our goals for the year, following the significant improvement
realized last year," added DeLoach. Capital expenditures and cash dividends
totaled $49.4 million and $26.4 million, respectively, in the third quarter of
2007. In addition, Sonoco repurchased 1.5 million shares of common stock in
August 2007 for approximately $51.4 million. Effective October 15, 2007,
Sonoco's Board of Directors increased the standing authorization to buy back
the Company's common stock to a total of five million shares.

    For the nine-month period ending September 30, 2007, net sales increased
12 percent to $2.98 billion, compared with $2.67 billion in the same period in
2006. Net income for the nine-month period of 2007 was $160 million ($1.56 per
diluted share), compared with $155.6 million ($1.54 per diluted share) in the
same period of 2006. As a result of the Company's accounting calendar, the
nine-month period of 2007 included six more days than the same period in 2006.
Year-to-date 2007 earnings were negatively impacted by after-tax asset
impairment and restructuring-related charges of $19.1 million ($.20 per
diluted share) and $12.4 million ($.12 per diluted share) resulting from an
increase in the environmental reserve at a subsidiary's paper operation. These
unfavorable factors were partially offset by the recovery from a third party
of $5.5 million ($.04 per diluted share) in certain benefit costs and by a
lower effective tax rate. Year-to-date earnings in 2006 included $3.5 million
($.03 per diluted share) of restructuring charges.

    Base earnings were $179.7 million ($1.76 per diluted share) in the first
nine months of 2007, up 13 percent, compared with $159.1 million ($1.57 per
diluted share) in the same period of 2006. This increase in base earnings was
due to productivity improvements, a slightly favorable selling price/material
cost relationship, acquisitions and a lower effective tax rate primarily
resulting from the third quarter release of tax reserves. Partially offsetting
these improvements was the impact of inflation on energy, freight and labor
costs.

    For the nine-month period ending September 30, 2007, cash generated from
operations was $258 million, compared with $324 million in the same period in
2006. Capital expenditures and cash dividends totaled $135.3 million and $76.6
million, respectively for the 2007 nine-month period. Additionally, the
Company repurchased a total of three million shares of Sonoco common stock for
$108.1 million during February and August of 2007. Cash used for acquisitions
totaled $215 million, primarily associated with the purchase of Matrix
Packaging, Inc.

    Overview and Full-Year Outlook

    "We remain cautious about the remainder of 2007 as we continue to believe
that general economic conditions will remain challenging, especially in North
America. As a result we are taking actions to improve our operations and
streamline our cost structure even more," said DeLoach. "We are raising our
full-year guidance to $2.28 to $2.31 to reflect the favorable effect of the
third quarter tax adjustments and expect fourth quarter base earnings to be in
the range of $.52 to $.55 per diluted share." The guidance assumes an
effective tax rate of approximately 34 percent in the fourth quarter. In
addition, the fourth quarter will have six fewer days than last year's fourth
quarter.

    Segment Review

    The Company uses a non-GAAP financial measure when discussing the
operational results of its segments. Base Operating Profit at the segment
level is defined as the segments' portion of consolidated Income Before Income
Taxes, excluding restructuring charges, impairment charges, environmental
charges, net interest expense and certain non-recurring or infrequent and
unusual items. A reconciliation of Base Operating Profit for the Company's
three reportable segments and All Other Sonoco to GAAP Income Before Income
Taxes is provided later in this release.

    Consumer Packaging

    Sonoco's Consumer Packaging segment includes the following products:
round and shaped rigid packaging (both composite and plastic); printed
flexible packaging; and metal and peelable membrane ends and closures.

    Third quarter 2007 sales for the Consumer Packaging segment increased 12
percent to $369 million, compared with $329 million in the third quarter of
2006. Base operating profit for this segment was $23.7 million in the third
quarter of 2007, compared with $28 million in the same period in 2006.

    Sales in the Consumer Packaging segment were up year-over-year in the
third quarter due to acquisitions and the favorable impact of foreign currency
translation, partially offset by slight volume declines in rigid paper
containers, flexible packaging, and ends and closures. Price declines in
flexible packaging, resulting from recent bids and competitive pressure, had a
negative impact on sales in the segment, but were mostly offset by increased
prices in rigid packaging and ends and closures. Base operating profit
declined in the third quarter due to the reduced volumes and a negative
price/cost relationship in flexible packaging and rigid paper containers, and
a legal settlement of a product claim. Partially offsetting these negative
items were productivity improvements and the impact of acquisitions.

    Tubes and Cores/Paper

    The Tubes and Cores/Paper segment includes the following products:
high-performance paper and composite paperboard tubes and cores; fiber-based
construction tubes and forms; recycled paperboard, linerboard, recovered paper
and other recycled materials.

    Third quarter 2007 sales for the Tubes and Cores/Paper segment were $434
million, up 12 percent, compared with $387 million in the same period in 2006.
Third quarter base operating profit for this segment increased to $43.4
million, compared with $42.8 million in the same period in 2006.

    Sales rose on higher selling prices, acquisitions and the favorable
impact of foreign currency translation. Base operating profit benefited from
productivity improvements and acquisitions, partially offset by volume
declines, primarily in North American tubes and cores, an unfavorable shift in
the mix of certain businesses and higher raw material costs.

    Packaging Services

    The Packaging Services segment includes the following products and
services: designing, manufacturing, assembling, packing and distributing
temporary, semipermanent and permanent point-of-purchase displays; brand
artwork management; and supply chain management services including contract
packing, fulfillment and scalable service centers.

    Third quarter 2007 sales for the Packaging Services segment increased 9
percent to $132 million, compared with $122 million in the same period in
2006. Base operating profit for this segment was $10.9 million, up 16 percent,
over the $9.4 million earned in the third quarter of 2006.

    Sales in the Packaging Services segment benefited from higher volume in
both point-of-purchase displays and service center operations along with the
impact of favorable foreign currency translation. Base operating profit for
the third quarter increased due to volume and productivity improvements,
partially offset by lower sales prices for point-of-purchase displays, related
to the outcome of recent bidding activity.

    All Other Sonoco

    All Other Sonoco includes businesses that are not aggregated in a
reportable segment and include the following products: wooden, metal and
composite wire and cable reels, molded and extruded plastics, custom-designed
protective packaging and paper amenities such as coasters and glass covers.

    Third quarter 2007 sales in All Other Sonoco were $94 million, just
slightly better than the $93 million reported in the same period in 2006. Base
operating profit for the third quarter was $13.5 million, up 7 percent,
compared with $12.6 million reported in the same period in 2006.

    Sales in All Other Sonoco were up slightly during the third quarter as a
result of higher selling prices and favorable foreign currency rates which
were largely offset by modestly lower volume in wire and cable reels and
molded and extruded plastics. Base operating profit in All Other Sonoco
increased due to productivity improvements and a positive price/cost
relationship, partially offset by increased operating costs.

    Corporate

    Depreciation and amortization expense for the third quarter of 2007 was
$48.1 million, compared with $44.3 million in the same period in 2006. Net
interest expense for the third quarter of 2007 increased to $14.1 million,
compared with $10.7 million during the same period in 2006. The increase was
due to higher debt levels and, to a lesser extent, higher effective interest
rates for commercial paper during the second half of the quarter.

    Rather than income tax expense, the Company reported a net income tax
benefit of $2 million for the third quarter of 2007 primarily due to the
release of reserves as discussed previously. Year-to-date, the Company's
effective tax rate was 20.8 percent, compared with 31.2 percent in the same
period in 2006. The year-over-year decrease in the effective tax rate was due
primarily to the release of tax reserves and improved international results.

    Conference Call Webcast

    Sonoco will host its regular quarterly conference call today, Friday,
October 19, 2007, at 11 a.m. Eastern time, to review third quarter 2007
financial results. The live conference call can be accessed in a "listen only"
mode via the Internet at http://www.sonoco.com/, under the "Latest News"
section. A telephonic replay of the call will be available starting at 2 p.m.
Eastern time to U.S. callers at 877/660-6853 and international callers at
+201/612-7415. The replay passcode for both U.S. and international calls is
account number 286 and conference ID number 256043. The archived telephone
call will be available through October 29, 2007. The call also will be
archived on the Investor Information section of Sonoco's Web site through
February 1, 2008.

    About Sonoco

    Founded in 1899, Sonoco is a $3.7 billion global manufacturer of
industrial and consumer products and provider of packaging services, with more
than 330 operations in 35 countries, serving customers in some 85 nations. For
more information on the Company, visit our Web site at http://www.sonoco.com/.

    Forward-looking Statements

    Statements included herein that are not historical in nature, are
intended to be, and are hereby identified as "forward-looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities and
Exchange Act of 1934, as amended. The words "estimate," "project," "intend,"
"expect," "believe," "consider," "plan," "anticipate," "objective," "goal,"
"guidance" and similar expressions identify forward-looking statements.
Forward-looking statements include, but are not limited to, statements
regarding offsetting high raw material costs, improved productivity and cost
containment, adequacy of income tax provisions, refinancing of debt, adequacy
of cash flows, anticipated amounts and uses of cash flows, effects of
acquisitions and dispositions, adequacy of provisions for environmental
liabilities, financial strategies and the results expected from them,
continued payments of dividends, stock repurchases and producing improvements
in earnings.

    These forward-looking statements are based on current expectations,
estimates and projections about our industry, management's beliefs and
assumptions made by management. Such information includes, without limitation,
discussions as to guidance and other estimates, expectations, beliefs, plans,
strategies and objectives concerning our future financial and operating
performance. These statements are not guarantees of future performance and are
subject to risks, uncertainties and assumptions that are difficult to predict.

    Therefore, actual results may differ materially from those expressed or
forecasted in such forward-looking statements. The risks and uncertainties
include, without limitation:

    Availability and pricing of raw materials

    --  Success of new product development and introduction

    --  Ability to maintain or increase productivity levels and contain or
reduce costs

    --  International, national and local economic and market conditions

    --  Fluctuations of obligations and earnings of pension and
postretirement benefit plans

    --  Ability to maintain market share

    --  Pricing pressures and demand for products

    --  Continued strength of our paperboard-based tubes and cores and
composite can operations

    --  Anticipated results of restructuring activities

    --  Resolution of income tax contingencies

    --  Ability to successfully integrate newly acquired businesses into the
Company's operations

    --  Currency stability and the rate of growth in foreign markets

    --  Use of financial instruments to hedge foreign currency, interest rate
and commodity price risk

    --  Liability for and anticipated costs of environmental remediation

    --  Actions of government agencies and changes in laws and regulations
affecting the Company

    --  Loss of consumer confidence

    --  Economic disruptions resulting from terrorist activities

    The Company undertakes no obligation to publicly update or revise
forward-looking statements, whether as a result of new information, future
events or otherwise.

    Additional information concerning some of the factors that could cause
materially different results is included in the Company's reports on forms
10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. Such
reports are available from the Securities and Exchange Commission's public
reference facilities and its Web site, http://www.sec.gov/, the Company's
investor relations department and the Company's Web site,
http://www.sonoco.com.

    References to our Web Site Address

    References to our Web site address and domain names throughout this
release are for informational purposes only, or to fulfill specific disclosure
requirements of the Securities and Exchange Commission's rules or the New York
Stock Exchange Listing Standards. These references are not intended to, and do
not, incorporate the contents of our Web sites by reference into this release.

    
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
              (Dollars and shares in thousands except per share)

                             THREE MONTHS ENDED      NINE MONTHS ENDED
                            --------------------- ------------------------
                             September  September  September    September
                                30,        24,        30,          24,
                               2007       2006       2007         2006
                            ----------- --------- -----------  -----------
    Sales                   $1,029,764  $931,522  $2,979,874   $2,667,301
    Cost of sales              842,485   749,954   2,417,357    2,155,531
    Selling, general and
     administrative expenses    96,881    88,777     306,390      258,777
    Restructuring/Asset
     Impairment Charges         17,401     1,064      27,496        5,983
                            ----------- --------- -----------  -----------
    Income before interest
     and taxes                  72,997    91,727     228,631      247,010
    Interest expense            16,188    12,542      45,261       38,659
    Interest income             (2,134)   (1,801)     (6,959)      (4,548)
                            ----------- --------- -----------  -----------
    Income before income
     taxes                      58,943    80,986     190,329      212,899
    Provision for income
     taxes                      (2,029)   23,191      39,541       66,487
                            ----------- --------- -----------  -----------
    Income before equity in
     earnings of
     affiliates/minority
     interest in
     subsidiaries               60,972    57,795     150,788      146,412
    Equity in earnings of
    affiliates/minority
    interest in subsidiaries     3,561     3,296       9,200        9,165
                            ----------- --------- -----------  -----------
    Net income              $   64,533  $ 61,091  $  159,988   $  155,577
                            ----------- --------- -----------  -----------

    Average shares
     outstanding - diluted     101,859   101,011     102,243      101,176

    Diluted earnings per
     share                  $     0.63  $   0.60  $     1.56   $     1.54
                            ----------- --------- -----------  -----------
    Dividends per common
     share                  $     0.26  $   0.24  $     0.76   $     0.71
                            ----------- --------- -----------  -----------



                  FINANCIAL SEGMENT INFORMATION (Unaudited)
                            (Dollars in thousands)

                             THREE MONTHS ENDED      NINE MONTHS ENDED
                            --------------------- ------------------------
                             September  September  September    September
                                30,        24,        30,          24,
                               2007       2006       2007         2006
                            ----------- --------- -----------  -----------
    Net Sales
     Consumer Packaging     $  369,472  $328,649  $1,051,178   $  954,488
     Tubes and Cores/Paper     433,686   387,477   1,268,300    1,112,626
     Packaging Services        132,445   122,014     377,787      325,579
     All Other Sonoco           94,161    93,382     282,609      274,608
                            ----------- --------- -----------  -----------
     Consolidated           $1,029,764  $931,522  $2,979,874   $2,667,301
                            ----------- --------- -----------  -----------

    Income Before Income
     Taxes:
     Consumer Packaging -
      Operating Profit      $   23,696  $ 27,998  $   75,781   $   80,154
     Tubes and Cores/Paper -
      Operating Profit          42,339    42,817     106,036      107,557
     Packaging Services -
      Operating Profit          10,924     9,424      33,869       27,122
     All Other Sonoco -
      Operating Profit          13,439    12,552      40,441       38,160
     Restructuring/Asset
      Impairment Charges       (17,401)   (1,064)    (27,496)      (5,983)
     Interest, net             (14,054)  (10,741)    (38,302)     (34,111)
                            ----------- --------- -----------  -----------
     Consolidated           $   58,943  $ 80,986  $  190,329   $  212,899
                            ----------- --------- -----------  -----------



              CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
                            (Dollars in thousands)

                                                   September    December
                                                       30,         31,
                                                      2007        2006
                                                  ------------ -----------
    Assets
    Current Assets:
     Cash and cash equivalents                    $   80,854   $   86,498
     Trade accounts receivable                       549,385      459,022
     Other receivables                                36,619       33,287
     Inventories                                     338,776      303,848
     Prepaid expenses and deferred taxes             107,393       60,143
                                                  -----------  -----------
                                                   1,113,027      942,798
    Property, plant and equipment, net             1,096,047    1,019,594
    Goodwill                                         817,878      667,288
    Other intangible assets                          141,575       95,885
    Other assets                                     192,301      191,113
                                                  -----------  -----------
                                                  $3,360,828   $2,916,678
                                                  -----------  -----------
    Liabilities and Shareholders' Equity
    Current Liabilities:
     Payable to suppliers and others              $  675,001   $  601,243
     Notes payable and current portion of long-
      term debt                                       59,269       51,903
     Accrued taxes                                     8,386        6,678
                                                  -----------  -----------
                                                     742,656      659,824
     Long-term debt                                  916,275      712,089
     Pension and other postretirement benefits       226,142      209,363
    Deferred income taxes and other                  142,453      116,334
    Shareholders' equity                           1,333,302    1,219,068
                                                  -----------  -----------
                                                  $3,360,828   $2,916,678
                                                  -----------  -----------


    Definition and Reconciliation of Non-GAAP Financial Measures
    The Company's results determined in accordance with U.S. generally
     accepted accounting principles (GAAP) are referred to as "as
     reported" results. Some of the information presented in the press
     release reflects the Company's "as reported" results adjusted to
     exclude amounts related to restructuring initiatives, asset
     impairment charges, environmental charges and certain non-recurring
     or infrequent and unusual items. These adjustments result in the non-
     GAAP financial measures referred to in this press release as "Base
     Earnings", "Base Earnings per Diluted Share" and "Base Operating
     Profit."

    These non-GAAP measures are not in accordance with, or an alternative
     for, generally accepted accounting principles and may be different
     from non-GAAP measures used by other companies. In addition, these
     non-GAAP measures are not based on any comprehensive set of
     accounting rules or principles. Sonoco continues to provide all
     information required by GAAP, but it believes that evaluating its
     ongoing operating results may not be as useful if an investor or
     other user is limited to reviewing only GAAP financial measures.
     Accordingly, Sonoco uses these non-GAAP financial measures for
     internal planning and forecasting purposes, to evaluate its ongoing
     operations, and to evaluate the ultimate performance of each business
     unit against budget all the way up through the evaluation of the
     Chief Executive Officer's performance by the Board of Directors. In
     addition, these same non-GAAP measures are used in determining
     incentive compensation for the entire management team and in
     providing earnings guidance to the investing community.

    Sonoco management does not, nor does it suggest that investors should,
     consider these non-GAAP financial measures in isolation from, or as a
     substitute for, financial information prepared in accordance with
     GAAP. Sonoco presents these non-GAAP financial measures to provide
     users information to evaluate Sonoco's operating results in a manner
     similar to how management evaluates business performance. Material
     limitations associated with the use of such measures are that they do
     not reflect all period costs included in operating expenses and may
     not reflect financial results that are comparable to financial
     results of other companies that present similar costs differently.
     Furthermore, the calculations of these non-GAAP measures are based on
     subjective determinations of management regarding the nature and
     classification of events and circumstances that the investor may find
     material and view differently. To compensate for these limitations,
     management believes that it is useful in understanding and analyzing
     the results of the business to review both GAAP information that
     includes the impact of restructuring and asset impairment charges,
     other non-recurring or infrequent and unusual items, and the non-GAAP
     measures that exclude them. Whenever Sonoco uses a non-GAAP financial
     measure, it provides a reconciliation of the non-GAAP financial
     measure to the most closely applicable GAAP financial measure.
     Investors are encouraged to review the related GAAP financial
     measures and the reconciliation of these non-GAAP financial measures
     to their most directly comparable GAAP financial measures as detailed
     below.


     Reconciliation of GAAP(1) to Non-GAAP Financial Measures (Unaudited)
                 (Dollars in millions, except per share data)


    Base Earnings Per Diluted Share (2)              THREE MONTHS ENDED
    -----------------------------------           ------------------------
                                                   September   September
                                                       30,         24,
    (Unaudited)                                       2007        2006
    ---------------------------------------------------------- -----------
    Diluted Earnings Per Share, as
     reported (GAAP)                              $     0.63   $     0.60
     Adjusted for:
      Restructuring charges, net of tax (4)             0.02         0.01
      Asset Impairment, net of tax                      0.10
      Environmental reserve, net of tax                 0.01
      Release of tax reserves                          (0.12)           -
                                                  -----------  -----------
      Base Earnings Per Share (Non-GAAP)          $     0.64   $     0.61
                                                  -----------  -----------

                                                     NINE MONTHS ENDED
                                                  ------------------------
                                                   September   September
                                                       30,         24,
    (Unaudited)                                       2007        2006
    ---------------------------------------------------------- -----------
    Diluted Earnings Per Share, as
     reported (GAAP)                              $     1.56   $     1.54
     Adjusted for:
      Restructuring charges, net of tax (4)             0.10         0.03
      Asset Impairment, net of tax                      0.10
      Environmental reserve, net of tax                 0.12
      Release of tax reserves                          (0.12)           -
                                                  -----------  -----------
      Base Earnings Per Share (Non-GAAP)          $     1.76   $     1.57
                                                  -----------  -----------


    Base Earnings (3)                                THREE MONTHS ENDED
    ------------------------------------          ------------------------
                                                   September   September
                                                       30,         24,
    (Unaudited)                                       2007        2006
    ----------------------------------------------------------------------
    Net Income, as reported (GAAP)                $     64.5   $     61.1
     Adjusted for:
      Restructuring charges, net of tax (4)              1.6          0.6
      Asset Impairment, net of tax                       9.9
      Environmental reserve, net of tax                  0.6
      Release of tax reserves                          (11.8)           -
                                                  -----------  -----------
      Base Earnings (Non-GAAP)                    $     64.8   $     61.7
                                                  -----------  -----------

                                                     NINE MONTHS ENDED
                                                  ------------------------
                                                   September   September
                                                       30,         24,
    (Unaudited)                                       2007        2006
    ----------------------------------------------------------------------
    Net Income, as reported (GAAP)                $    160.0   $    155.6
     Adjusted for:
      Restructuring charges, net of tax (4)              9.2          3.5
      Asset Impairment, net of tax                       9.9
      Environmental reserve, net of tax                 12.4
      Release of tax reserves                          (11.8)           -
                                                  -----------  -----------
      Base Earnings (Non-GAAP)                    $    179.7   $    159.1
                                                  -----------  -----------


    Base Operating Profit (5)                        Three Months Ended
    ------------------------------------          ------------------------
                                                   September   September
                                                       30,         24,
    (Unaudited)                                       2007        2006
    ----------------------------------------------------------------------
    Consumer Packaging - Base Operating Profit    $     23.7   $     28.0
    Tubes and Cores/Paper - Base Operating Profit       43.4         42.8
    Packaging Services - Base Operating Profit          10.9          9.4
    All Other Sonoco - Base Operating Profit            13.5         12.6
                                                  -----------  -----------
     Base Operating Profit                              91.5         92.8

    Restructuring charges (4)                           (2.3)        (1.1)
    Asset Impairment                                   (15.1)
    Environmental reserve                               (1.1)           -
    Interest, net                                      (14.1)       (10.7)
                                                  -----------  -----------
     Income before income taxes (GAAP)            $     58.9   $     81.0
                                                  -----------  -----------

                                                     NINE MONTHS ENDED
                                                  ------------------------
                                                   September    September
                                                      30,          24,
    (Unaudited)                                      2007         2006
    ----------------------------------------------------------------------
    Consumer Packaging - Base Operating Profit    $     75.8   $     80.1
    Tubes and Cores/Paper - Base Operating Profit      127.1        107.6
    Packaging Services - Base Operating Profit          33.9         27.1
    All Other Sonoco - Base Operating Profit            40.4         38.2
                                                  -----------  -----------
     Base Operating Profit                        $    277.2   $    253.0
                                                  -----------  -----------

    Restructuring charges (4)                          (12.4)        (6.0)
    Asset Impairment                                   (15.1)
    Environmental reserve                              (21.1)           -
    Interest, net                                      (38.3)       (34.1)
                                                  -----------  -----------
     Income before income taxes (GAAP)            $    190.3   $    212.9
                                                  -----------  -----------


    (1) Generally Accepted Accounting Principles

    (2) Base Earnings Per Diluted Share is a non-GAAP financial measure of
     diluted earnings per share which excludes the impact of restructuring
     and asset impairment charges and certain other non-recurring or
     infrequent and unusual items. Management believes that these
     exclusions result in a measure of operating income that reflects the
     core profitability of our business and can be used by management to
     assess operating performance.

    (3) Base Earnings is a non-GAAP financial measure of net income, which
     excludes the impact of restructuring and asset impairment charges and
     certain other non-recurring or infrequent and unusual items.
     Management believes that these exclusions result in a measure of
     operating income that reflects the core profitability of our business
     and can be used by management to assess operating performance.

    (4) Restructuring charges are a recurring item as Sonoco's
     restructuring programs usually require several years to fully
     implement and the Company is continually seeking to take actions that
     could enhance its efficiency. Accordingly, these charges are subject
     to significant fluctuations from period to period due to the varying
     levels of restructuring activity and the inherent imprecision in the
     estimates used to recognize the impairment of assets and the wide
     variety of costs and taxes associated with severance and termination
     benefits in the countries in which the restructuring actions occur.

    (5) Base Operating Profit is a non-GAAP financial measure of income
     before taxes, which excludes net interest expense, the impact of
     restructuring and asset impairment charges and certain other non-
     recurring or infrequent and unusual items. Management believes that
     these exclusions result in a measure of operating income that
     reflects the core profitability of our business and can be used by
     management to assess operating performance.
    

    

      minority interest in subsidiaries
    




For further information:

For further information: Sonoco Roger Schrum, 843-339-6018
www.sonoco.com roger.schrum@sonoco.com

Organization Profile

Sonoco

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