Packaging Corp of America (NYSE: PKG) plans Wallula shutdown with $205M restructuring

Rhea-AI Filing Summary

Packaging Corporation of America approved a plan to permanently shut down the No. 2 paper machine and kraft pulping facilities at its Wallula, Washington containerboard mill, while continuing to run the No. 3 paper machine and recycled pulping operations. The shutdown is expected to be completed by the end of the first quarter of 2026.

The company estimates total pre-tax restructuring charges of $205 million, largely recorded in the fourth quarter of 2025 and first quarter of 2026. This includes about $165 million of non-cash impairment and accelerated depreciation and $40 million of cash charges related to contract termination, severance, and other items. The plan is expected to reduce headcount by approximately 200 positions, reflecting a significant downsizing at the Wallula site.

Positive

• None.

Negative

• $205 million in pre-tax restructuring charges, including $40 million of cash costs, will weigh on reported results in late 2025 and early 2026.
• Permanent shutdown of key Wallula mill assets and elimination of approximately 200 positions reflect a significant contraction in that facility’s operations.

Insights

Industrial equities analyst

PKG is taking a sizable restructuring hit to shut legacy capacity at Wallula.

Packaging Corporation of America plans to permanently close the No. 2 paper machine and kraft pulping facilities at its Wallula, Washington mill while maintaining the No. 3 paper machine and recycled pulping. This targets specific containerboard capacity rather than an entire site exit.

The company expects pre-tax restructuring charges of $205 million, with about $165 million as non-cash impairment and accelerated depreciation and $40 million as cash costs for contract termination, severance, and other items. Most of these charges will be recorded in Q4 2025 and Q1 2026, so near-term reported earnings will be meaningfully affected by one-time items.

The plan includes eliminating roughly 200 positions, indicating a material workforce reduction at Wallula. Future financial disclosures for Q4 2025 and Q1 2026 will show how these restructuring charges flow through operating income and whether ongoing operations at the No. 3 machine and recycled pulping facilities stabilize profitability at the mill.

PACKAGING CORP OF AMERICA false 0000075677 0000075677 2025-12-03 2025-12-03

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 3, 2025

Packaging Corporation of America

(Exact name of registrant as specified in its charter)

Delaware		1-15399		36-4277050
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1 N. Field Court, Lake Forest, Illinois 60045

(Address of Principal Executive Offices, including Zip Code)

(847) 482-3000

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2 (b))

☐ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		PKG		New York Stock Exchange

Item 2.05. Costs Associated with Exit or Disposal Activities.

On December 3, 2025, Packaging Corporation of America (the “Company”) approved and announced a plan to permanently shut down the No. 2 paper machine and kraft pulping facilities at its Wallula, Washington containerboard mill. The Company will continue to operate the No. 3 paper machine and recycled pulping facilities at the mill. These actions are expected to be completed by the end of the first quarter of 2026.

The Company estimates that these actions will result in pre-tax restructuring charges of $205 million, substantially all of which will be recorded in the fourth quarter of 2025 and first quarter of 2026. These charges include approximately $165 million of non-cash impairment and accelerated depreciation charges and $40 million of cash charges for contract termination, severance, and other charges. The Company expects a reduction in headcount of approximately 200 positions.

The press release making such announcement is filed herewith as Exhibit 99.1 and incorporated by reference into this Item 2.05.

Item 2.06. Material Impairments.

The disclosure included under Item 2.05 is incorporated by reference into this Item 2.06.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

		99.1		Press Release issued on December 3, 2025
		104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

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

PACKAGING CORPORATION OF AMERICA
				(Registrant)
		By:		/s/ Kent A. Pflederer
				Executive Vice President and Chief Financial Officer

Date: December 4, 2025

FAQ

What restructuring action did Packaging Corporation of America (PKG) announce?

Packaging Corporation of America approved a plan to permanently shut down the No. 2 paper machine and kraft pulping facilities at its Wallula, Washington containerboard mill, while continuing to operate the No. 3 paper machine and recycled pulping facilities.

How much will PKG’s Wallula restructuring charges total?

The company estimates total pre-tax restructuring charges of $205 million, largely recognized in the fourth quarter of 2025 and first quarter of 2026.

What portion of PKG’s restructuring charges are non-cash versus cash?

Approximately $165 million of the restructuring charges are non-cash impairment and accelerated depreciation, and about $40 million are cash charges for contract termination, severance, and other items.

How many jobs will be affected by PKG’s Wallula mill changes?

Packaging Corporation of America expects a reduction in headcount of approximately 200 positions in connection with the Wallula mill restructuring.

When will PKG complete the shutdown of the Wallula kraft pulping facilities?

The company expects the shutdown of the No. 2 paper machine and kraft pulping facilities at Wallula to be completed by the end of the first quarter of 2026.

Will any operations continue at PKG’s Wallula, Washington mill?

Yes. Packaging Corporation of America will continue to operate the No. 3 paper machine and recycled pulping facilities at the Wallula containerboard mill.