1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-11261
SONOCO PRODUCTS COMPANY
INCORPORATED UNDER THE LAWS I.R.S. EMPLOYER IDENTIFICATION
OF SOUTH CAROLINA NO. 57-0248420
POST OFFICE BOX 160
HARTSVILLE, SOUTH CAROLINA 29551-0160
TELEPHONE: 843-383-7000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of exchange on which registered No par value common
stock New York Stock Exchange, Inc. Series A Cumulative Preferred Stock New York
Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting common stock held by nonaffiliates of the
registrant (based on the New York Stock Exchange closing price) on March 4,
2001, was $1,953,434,262. Registrant does not have any non-voting common stock
outstanding.
As of March 4, 2001, there were 95,165,265 shares of no par value common stock
outstanding.
Documents Incorporated by Reference
Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 2000, are incorporated by reference in Parts I and II;
portions of the Proxy Statement for the annual meeting of shareholders
to be held on April 18, 2001, are incorporated by reference in Part
III.
2
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART I
ITEM 1 BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS - The Company is a South
Carolina corporation founded in Hartsville, South Carolina
in 1899 as the Southern Novelty Company. The name was
subsequently changed to Sonoco Products Company. The
following items from the 2000 Annual Report to
Shareholders (the "2000 Annual Report") are incorporated
herein by reference: Management's Discussion and Analysis
on pages 25 - 33, and Notes 2 and 4 to the Consolidated
Financial Statements on pages 38 - 39.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS - Note 19 to
the Consolidated Financial Statements on page 45 of the
2000 Annual Report is incorporated herein by reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS - The operations reviews
on pages 9 - 17 and Management's Discussion & Analysis on
pages 25 - 33 of the 2000 Annual Report are incorporated
herein by reference.
The principal raw materials used by the Company are
recovered paper, paperboard, metal, and plastic resins.
Recovered paper used in the manufacture of paperboard is
purchased either directly from suppliers near
manufacturing operations or through the Company's
subsidiary, Paper Stock Dealers, Inc. Other raw materials
are purchased from a number of outside sources. The
Company considers the supply and availability of raw
materials to be adequate to meet its needs.
Most customer orders are manufactured with a lead time of
three weeks or less. Therefore, the amount of backlog
orders at December 31, 2000 and 1999 were not material.
The Company expects all backlog orders at December 31,
2000 to be shipped during 2001.
As of December 31, 2000, the Company had approximately
17,450 employees.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS AND EXPORT SALES - Note 19 to the Consolidated
Financial Statements on page 45 of the 2000 Annual Report
and the information about market risk on page 30 of the
2000 Annual Report are incorporated herein by reference.
(e) EXECUTIVE OFFICERS OF THE REGISTRANT - Certain information
with respect to persons who are, or may be deemed to be,
executive officers of the Company is set forth under the
caption "Executive Officers" on pages 50 - 51 of the 2000
Annual Report and is incorporated herein by reference.
ITEM 2 PROPERTIES - The information about properties owned and leased
by the Company on page 31 of Management's Discussion &
Analysis of the 2000 Annual Report is incorporated herein by
reference.
ITEM 3 LEGAL PROCEEDINGS - Note 16 to the Consolidated Financial
Statements on pages 44 - 45 of the 2000 Annual Report is
incorporated herein by reference.
In February 2000, Sonoco received a favorable ruling from the
Denver District Court in a trade secrets case against a
competitor and a former employee. The ruling awarded Sonoco
approximately $4.7 million in actual damages and $2.3 million
in punitive damages. The ruling has been appealed;
accordingly, the award has not yet been reflected in Sonoco's
financial statements.
-2-
3
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART I (CONTINUED)
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER - None.
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS - The following items from the 2000 Annual
Report are herein incorporated by reference: the information
relating to market price and cash dividends under Selected
Quarterly Financial Data on page 24, and the information
relating to cash dividends in the Management's Discussion &
Analysis on page 30. The Company's common stock is traded on
the New York Stock Exchange under the stock symbol "SON". At
December 31, 2000, there were approximately 45,200 shareholder
accounts.
ITEM 6 SELECTED FINANCIAL DATA - The Selected Eleven-Year Financial
Data provided on pages 46 - 47 of the 2000 Annual Report are
incorporated herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Management's Discussion & Analysis
on pages 25 - 33 of the 2000 Annual Report is incorporated
herein by reference.
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- The information set forth under the caption "Risk
Management" on pages 30 -31 of Management's Discussion &
Analysis of the 2000 Annual Report is incorporated herein by
reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - The following
items provided in the 2000 Annual Report are incorporated
herein by reference: the Selected Quarterly Financial Data on
page 24; the Consolidated Financial Statements and Notes to
the Consolidated Financial Statements on pages 34 - 45; and
the Report of Independent Accountants on page 49.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE - None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - The
sections entitled "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" as shown on pages 5
- 9 and page 31, respectively, of the Company's definitive
Proxy Statement, set forth information with respect to the
directors of the Company and compliance with Section 16(a) of
the Securities Exchange Act of 1934 and are incorporated
herein by reference. Information about executive officers of
the Company is set forth under Item 1(e) of this Report on
Form 10-K.
ITEM 11 EXECUTIVE COMPENSATION - Information with respect to the
compensation of directors and certain executive officers as
shown on pages 22 - 28 of the Company's definitive Proxy
Statement under the captions "Summary Compensation Table",
"Long-Term Incentive Plans - Awards in Last Fiscal Year",
"Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values", "Option Grants in Last Fiscal Year", "Pension
Table", "Directors' Compensation", and "Compensation Committee
Interlocks and Insider Participation", is incorporated herein
by reference.
-3-
4
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART III (CONTINUED)
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- Information with respect to the beneficial ownership of the
Company's Common Stock by management and others as shown on
pages 14 - 16 of the Company's definitive Proxy Statement
under the captions "Security Ownership of Certain Beneficial
Owners" and "Security Ownership of Management" is incorporated
herein by reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - The following
items contained in the Company's definitive Proxy Statement
are incorporated herein by reference: the sections titled
"Compensation Committee Interlocks and Insider Participation"
on page 28; and "Transactions with Management" on pages 28 -
30.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) 1. Financial Statements: Consolidated Balance Sheets as of December 31,
2000 and 1999; Consolidated Statements of Operations for the years
ended December 31, 2000, 1999 and 1998; Consolidated Statements of
Changes in Shareholders' Equity for the years ended December 31, 2000,
1999 and 1998; and Consolidated Statements of Cash Flows for the years
ended December 31, 2000, 1999 and 1998.
2. Financial Statement Schedules: All schedules are omitted because
they are not required, are not applicable or the required
information is given in the financial statements or notes thereto.
3. Exhibits
3-1 Articles of Incorporation (incorporated by reference to the
Registrant's Form 10-Q for the quarter ended June 27, 1999)
3-2 By-Laws (incorporated by reference to the Registrant's Form
10-Q for the quarter ended June 27, 1999)
4 Instruments Defining the Rights of Securities Holders,
including Indentures (incorporated by reference to the
Registrant's Forms S-3 (File Numbers 33-40538, 33-50501, and
33-50503))
10-1 1983 Sonoco Products Company Key Employee Stock Option Plan
(incorporated by reference to the Registrant's Form S-8 dated
September 4, 1985)
10-2 1991 Sonoco Products Company Key Employee Stock Plan
(incorporated by reference to the Registrant's Form S-8 dated
June 7, 1995)
10-3 Sonoco Products Company 1996 Non-Employee Directors' Stock
Plan (incorporated by reference to the Registrant's Form S-8
dated September 25, 1996)
10-4 Sonoco Products Company Employee Savings and Stock Ownership
Plan (incorporated by reference to the Registrant's Form S-8
dated November 27, 1989)
10-5 Sonoco Products Company Centennial Shares Plan (incorporated
by reference to the Registrant's Form S-8 dated December 30,
1998)
10-6 Agreement and Mutual Release between Registrant and Peter C.
Browning, dated July 21, 2000 (incorporated by reference to
the Registrant's Form 10-Q for the quarter ended October 1,
2000)
13 2000 Annual Report to Shareholders (portions incorporated by
reference)
21 Subsidiaries of the Registrant
-4-
5
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
PART IV (CONTINUED)
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
23 Consent of Independent Accountants
99-1 Proxy Statement, filed in conjunction with annual
shareholders' meeting scheduled for April 18, 2001 (previously
filed)
99-2 Form 11-K Annual Report - 1991 Sonoco Products Company Key
Employee Stock Option Plan
(b) Reports on Form 8-K: The Company filed no reports on Form 8-K during
the fourth quarter of 2000.
-5-
6
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this 30th day of
March 2001.
SONOCO PRODUCTS COMPANY
/s/ Harris E. DeLoach, Jr.
-------------------------------------
Harris E. DeLoach, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the following persons on behalf of the Registrant and
in the capacities indicated on this 30th day of March 2001.
/s/ F. T. Hill, Jr.
-------------------------------------
F. T. Hill, Jr.
Vice President and
Chief Financial Officer
-6-
7
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
SIGNATURES, CONTINUED
- ----------
/s/ C. W. Coker Director (Chairman)
- --------------------------------
C. W. Coker
/s/ H. E. DeLoach, Jr. President, Chief Executive Officer and
- ------------------------------ Director
H. E. DeLoach, Jr.
/s/ C. J. Bradshaw Director
- -------------------------------
C. J. Bradshaw
/s/ R. J. Brown Director
- ---------------------------------
R. J. Brown
/s/ F. L. H. Coker Director
- --------------------------------
F. L. H. Coker
/s/ J. L. Coker Director
- ----------------------------------
J. L. Coker
/s/ T. C. Coxe, III Director
- -------------------------------
T. C. Coxe, III
/s/ A. T. Dickson Director
- -----------------------------------
A. T. Dickson
/s/ P. Fulton Director
- ------------------------------------
P. Fulton
/s/ B. L. M. Kasriel Director
- -------------------------------
B. L. M. Kasriel
/s/ E. H. Lawton, Jr. Director
- -------------------------------
E. H. Lawton, Jr.
/s/ H. L. McColl, Jr. Director
- --------------------------------
H. L. McColl, Jr.
/s/ T. E. Whiddon Director
- -------------------------------
T. E. Whiddon
/s/ D. D. Young Director
- --------------------------------
D. D. Young
-7-
8
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
3-1 Articles of Incorporation (incorporated by reference to the
Registrant's Form 10-Q for the quarter ended June 27, 1999)
3-2 By-Laws (incorporated by reference to the Registrant's Form
10-Q for the quarter ended June 27, 1999)
4 Instruments Defining the Rights of Securities Holders,
including Indentures (incorporated by reference to the
Registrant's Forms S-3 (File Numbers 33-40538, 33-50501, and
33-50503))
10-1 1983 Sonoco Products Company Key Employee Stock Option Plan
(incorporated by reference to the Registrant's Form S-8 dated
September 4, 1985)
10-2 1991 Sonoco Products Company Key Employee Stock Plan
(incorporated by reference to the Registrant's Form S-8 dated
June 7, 1995)
10-3 Sonoco Products Company 1996 Non-Employee Directors' Stock
Plan (incorporated by reference to the Registrant's Form S-8
dated September 25, 1996)
10-4 Sonoco Products Company Employee Savings and Stock Ownership
Plan (incorporated by reference to the Registrant's Form S-8
dated November 27, 1989)
10-5 Sonoco Products Company Centennial Shares Plan (incorporated
by reference to the Registrant's Form S-8 dated December 30,
1998)
10-6 Agreement and Mutual Release between Registrant and Peter C.
Browning, dated July 21, 2000 (incorporated by reference to
the Registrant's Form 10-Q for the quarter ended October 1,
2000)
13 2000 Annual Report to Shareholders (portions incorporated by
reference)
21 Subsidiaries of the Registrant
23 Consent of Independent Accountants
99-1 Proxy Statement, filed in conjunction with annual
shareholders' meeting scheduled for April 18, 2001 (previously
filed)
99-2 Form 11-K Annual Report - 1991 Sonoco Products Company Key
Employee Stock Option Plan
-8-