PKG · 10-Q · 2026Q2 · Full report
Interest Rate Environment
PACKAGING CORP OF AMERICA · 2026-08-07 · Importance 38 · Surprise 24 · Contradicted
Net interest expense increased by $40 million in the first six months of 2026, primarily because PCA incurred higher financing costs for the Greif Acquisition and earned less interest income on lower cash balances. Approximately 75% of PCA’s debt carries fixed interest rates. Management estimates that a one-percentage-point increase in rates on variable-rate debt would increase annual interest expense and reduce pretax income by approximately $10 million.
Key facts
- Approximately 75% of PCA’s debt has fixed interest rates; a one percent increase in interest rates related to variable-rate debt would have increased interest expense and decreased income before taxes by approximately $10 million annually. source
- Interest expense, net for the three months ended June 30, 2026 was $33.3 million, an increase of $20.2 million compared to $13.1 million for the three months ended June 30, 2025. source
- Interest expense, net for the six months ended June 30, 2026 increased $40.0 million to $66.0 million compared to $26.0 million in the same period in 2025. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| net_income | negative | realized | -1.6% | Interest expense, net for the six months ended June 30, 2026 increased $40.0 million to $66.0 million compared to $26.0 million in the… |
| net_income | negative | realized | -0.8% | Interest expense, net for the three months ended June 30, 2026 was $33.3 million, an increase of $20.2 million compared to $13.1 million… |
| net_income | negative | contingent | -0.1% | Approximately 75% of PCA’s debt has fixed interest rates; a one percent increase in interest rates related to variable-rate debt would… |