During the first quarter of 2026, the Company decided to discontinue its project to build automated roll warehouses at its Kalamazoo, Michigan and Texarkana, Texas paperboard manufacturing facilities. This decision reflects a shift in operational priorities and the Company's focus on optimizing capital deployment and cost-management efforts. As a result of the cancellation of this project, the Company incurred charges of $40 million within Corporate and Other related to the write-off of assets, which were primarily equipment, site preparation and engineering costs for this project. The costs associated with this project are included in the table below for the three months ended March 31, 2026.

Also during the first quarter of 2026, the Company implemented additional cost and production optimization initiatives following its review of support functions and other expenses. These initiatives were incremental to the measures taken in the fourth quarter of 2025. The Company incurred $18 million within Corporate and Other of charges in the first quarter of 2026, primarily for severance, in addition to the $6 million incurred in the fourth quarter of 2025. These charges are included in the table below for the three months ended March 31, 2026.

During the three months ended March 31, 2026, the Company recognized a $13 million charge within the International Paperboard Packaging reportable segment to adjust certain held for sale assets to their estimated fair value. Current Assets and Current Liabilities on the Condensed Consolidated Balance Sheets include $19 million and $6 million, respectively, primarily related to multiple paperboard manufacturing and packaging facilities and other related assets that met the held for sale criteria as of March 31, 2026. Current Assets on the Condensed Consolidated Balance Sheets include $10 million primarily related to multiple paperboard manufacturing and packaging facilities that met the held for sale criteria as of December 31, 2025.

In the fourth quarter of 2025, the Company commenced operations of its new recycled paperboard manufacturing facility located in Waco, Texas. From the project's announcement through completion, the Company incurred $55 million of start-up charges within Corporate and Other. No start-up charges were incurred in 2026 or after the facility became operational in the fourth quarter of 2025. For the three months ended March 31, 2025, the Company incurred $7 million of start-up charges, which is included in the table below.

In connection with the Waco project, the Company closed its Middletown, Ohio recycled paperboard manufacturing facility in May 2025 and its East Angus, Québec recycled paperboard manufacturing facility in December 2025 to consolidate production into fewer, more efficient locations. The costs associated with these exit activities are included in Corporate and Other, are included in the table below for the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2025, the Company incurred charges of $4 million for accelerated depreciation, which is included in the table below.

During 2024, the Company decided to close multiple packaging facilities. Production from these facilities has been consolidated into other existing packaging facilities. The costs associated with these exit activities are included in Americas Paperboard Packaging and International Paperboard Packaging reportable segments and are included in the table below for the three months ended March 31, 2026 and 2025. During three months ended March 31, 2026, the Company recognized a gain of $4 million on the sale of an exited property, which is also included in the table below.


		Three Months Ended March 31,
In millions	Location in Statement of Operations	2026		2025
Asset Write-Offs and Start-Up Costs(a)	Business Combinations, Exit Activities and Other Special Items, Net	$	55	$	12
Severance Costs and Other(b)	Business Combinations, Exit Activities and Other Special Items, Net	18		2
Accelerated Depreciation	Cost of Sales	—		4
Total		$	73	$	18

(a) Costs incurred include non-cash write-offs for items such as machinery, supplies and inventory, offset by the net gain recognized on the sale of an exited property.

(b) Costs incurred include activities for post-employment benefits, retention bonuses, incentives and professional services (see Note 1. Business Combinations, Exit Activities and Other Special Charges, Net).

(b) Includes approximately $8 million of payments related to the closure of the Company's East Angus, Québec recycled paperboard manufacturing facility in December 2025 and approximately $3 million of payments related to other severance and benefits costs included in Corporate and Other.