Smurfit Westrock plc (SW)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in

conjunction with Smurfit Westrock’s Unaudited Condensed Consolidated Financial Statements and their related notes included

elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and their related notes for the

year ended December 31, 2025, as well as the information under the heading “Management’s Discussion and Analysis of the

Financial Condition and Results of Operations” that were disclosed in the Form 10-K for the year ended December 31, 2025, as filed

with the U.S. Securities and Exchange Commission (the “SEC”) on February 27, 2026 (the “2025 Form 10-K”). This discussion

contains forward-looking statements that involve risks and uncertainties. Smurfit Westrock’s future results could differ materially

from the results discussed below. More information regarding these risks and uncertainties and other important factors that could

cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in

Part I, Item 1A. in the 2025 Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. Please

also refer to the section above entitled “Cautionary Note Regarding Forward-Looking Statements” for additional information.

Unless the context otherwise requires, or unless indicated otherwise, “we”, “us”, “our”, “Smurfit Westrock” and “the Company”

refer to the business of Smurfit Westrock plc, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries.

OVERVIEW

Smurfit Westrock is one of the world's largest integrated manufacturers of paper-based packaging products in terms of volumes and

sales, with operations in North America, South America, Europe, Asia, Africa, and Australia. Smurfit Westrock partners with its

customers to provide differentiated, sustainable paper and packaging solutions that enhance its customers’ prospects of success in their

markets. For additional information, see “Part I, Item 1. Business” included in the Company’s Annual Report on Form 10-K.

EXECUTIVE SUMMARY

Smurfit Westrock’s net sales increased by $56 million, to $7,712 million in the three months ended March 31, 2026, from

$7,656 million in the three months ended March 31, 2025. This increase was primarily due to a net positive foreign currency impact

that was largely offset by a negative volume impact.

Net income attributable to common shareholders decreased by $319 million. The decrease in the three months ended March 31, 2026

was primarily due to higher cost of goods sold, including accelerated depreciation for machine closures. We were also impacted by

lower volumes, economic downtime, adverse weather and higher freight costs. In the three months ended March 31, 2026, we

incurred higher impairment and restructuring costs, and lower transaction and integration-related expenses associated with the

Combination.

Net cash provided by operating activities decreased by $31 million, to $204 million in the three months ended March 31, 2026, from

$235 million in the three months ended March 31, 2025, primarily due to a $188 million decrease in net income adjusted for non-cash

items, primarily including depreciation, depletion and amortization, impairment of assets, cash surrender value increase in excess of

premiums paid, share-based compensation expense, deferred income tax benefit, and pension and other postretirement funding more

than cost. Changes in operating assets and liabilities were a benefit of $157 million compared to the prior year period. During the three

months ended March 31, 2026, Smurfit Westrock invested $624 million in capital expenditures. The Company’s net cash inflow from

changes in debt was $517 million, and it paid $237 million of cash dividends to shareholders. See the section entitled “Liquidity and

Capital Resources” below for additional information.

Refer to “Results of Operations” and “Segment Information” for a detailed review of Smurfit Westrock’s performance.

26

SIGNIFICANT FACTORS AND TRENDS AFFECTING SMURFIT WESTROCK’S RESULTS

Smurfit Westrock’s operations have been, and will continue to be, affected by many factors, some of which are beyond the Company’s

control. Smurfit Westrock’s net sales are primarily derived from the sale of containerboard, corrugated containers, paperboard,

consumer packaging, and other paper-based packaging products. As such, Smurfit Westrock’s net sales during any period are largely

influenced by volumes, prices and costs of the corrugated containers and consumer packaging products that Smurfit Westrock sells

during that period.

Volumes

In general, demand for corrugated containers and consumer packaging is closely correlated with overall economic growth and activity.

It also directionally correlates with levels of industrial production and is impacted by the trends affecting the choice of medium (paper,

plastic, glass, metal, or wood) used in the packaging of these products. As a result, demand is driven by the need for: (i) packaging

products for consumer and industrial goods, (ii) higher value-added corrugated products used for point-of-sale displays and consumer

and shelf-ready packaging, and (iii) packaging of pharmaceutical products and the growth of related industries. Normal patterns of

demand growth can be disrupted by other macroeconomic trends, including inflation, pandemics (such as the COVID-19 pandemic

and related lockdowns), and global economic factors such as a recession and geopolitical developments (including tariffs or other

trade restrictions), among others.

Consumer patterns also play a significant role in demand for corrugated packaging and consumer packaging. In recent years, shifting

consumer behaviors have accelerated, particularly with the rise of e-commerce and increased awareness of unsustainable packaging

solutions. These trends have, to date, been beneficial for paper-based packaging, which is typically made from renewable, recyclable

materials. Changing demographics can also influence demand trends in the pharmaceutical industry, a major user of consumer

packaging.

Our volumes may also be impacted in certain periods by scheduled or unscheduled maintenance, particularly in our mill system, as

well as economic downtime as we match our supply with customer demand.

Prices and Costs

Prices of corrugated containers and consumer packaging are primarily a function of the cyclical nature of Smurfit Westrock’s industry,

capacity and competition in the markets it operates in, prevailing raw material prices, and other operating costs, such as energy,

chemicals, and transportation, overlaying supply and demand balances.

As paper costs generally represent a large portion of the cash cost of production for corrugated containers or consumer packaging,

containerboard price movements tend to impact the prices of corrugated containers, and paperboard price movements tend to impact

the prices of consumer packaging. In turn, the cost of paper is influenced by movements in the price of its major raw materials—wood

or recycled paper—along with other supply and demand factors. Smurfit Westrock’s production processes are energy-intensive,

making production costs also sensitive to the price of energy (primarily gas and electricity), which have historically been volatile.

Other key cost drivers include employee benefit expenses, largely determined by workforce size, and shipping and handling costs,

which are generally affected by fuel prices and overall labor inflation.

While many of Smurfit Westrock’s customer contracts include price adjustment clauses that allow cost increases to be passed on to

customers, these clauses may not in all cases be effective to offset rising costs. Additionally, for corrugated and consumer packaging

products, even when Smurfit Westrock is able to implement price increases, there is typically a three- to six-month lag between raw

material price hikes and the realization of higher pricing from customers.

Foreign Currency Effects

Smurfit Westrock operates in multiple countries across North America, South America, Europe, Asia, Africa, and Australia. As a

result, currency fluctuations can have both direct and indirect impacts on its financial statements, which are presented in U.S. dollars.

Refer to “Results of Operations” and “Segment Information” for information on the impact of foreign currency.

27

RESULTS OF OPERATIONS

The following table summarizes Smurfit Westrock’s consolidated results for the periods presented ($ in millions):

Results of operations for the three months ended March 31, 2026, compared to the three months ended March 31, 2025

Net Sales

Net sales increased by $56 million, to $7,712 million in the three months ended March 31, 2026, from $7,656 million in the three

months ended March 31, 2025. This increase was primarily due to a $316 million net positive foreign currency impact that was largely

offset by a $256 million impact of lower volumes.

See “Segment Information” below for more detail on Smurfit Westrock’s segment results.

Cost of Goods Sold

Cost of goods sold increased by $365 million, to $6,444 million in the three months ended March 31, 2026, from $6,079 million in the

three months ended March 31, 2025. The increase in cost of goods sold was primarily due to a $277 million net negative foreign

currency impact, $74 million of economic downtime, $70 million of accelerated depreciation costs for machine closures, a $65 million

impact of adverse weather and $48 million of higher freight costs, partially offset by the impact of lower volumes of $208 million.

Selling, General and Administrative (“SG&A”) Expenses

SG&A expenses decreased by $12 million, to $961 million in the three months ended March 31, 2026, from $973 million in the three

months ended March 31, 2025. The decrease in SG&A expenses was primarily due to lower employee compensation.

28

Impairment and Restructuring Costs

Impairment and restructuring costs increased by $39 million, to $54 million in the three months ended March 31, 2026, from

$15 million in the three months ended March 31, 2025. In the three months ended March 31, 2026, impairment and restructuring costs

consisted of $35 million of impairment charges and $19 million of restructuring costs. In the three months ended March 31, 2025,

impairment and restructuring costs consisted of $15 million of restructuring costs. The costs were primarily associated with

previously announced facility and machine closures, including asset impairments, severance and other costs.

Transaction and Integration-related Expenses Associated with the Combination

The Company incurred transaction and integration-related expenses associated with the Combination of $— million and $36 million in

the three mo

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF

OPERATIONS OF SMURFIT WESTROCK

The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in

conjunction with Smurfit Westrock’s audited Consolidated Financial Statements and their related notes for the year ended

December 31, 2025 and our audited Consolidated Financial Statements and their related notes for the year ended December 31,

2024. This discussion contains forward-looking statements that involve risks and uncertainties. Smurfit Westrock’s future results could

differ materially from the results discussed below. Factors that could cause or contribute to such differences include, but are not

limited to, those identified below and those discussed in the Item 1A. Risk Factors. Please refer to the section above entitled

“Cautionary Note Regarding Forward-Looking Statements" for additional information.

Smurfit Kappa was determined to be the accounting acquirer in the Combination; therefore, the historical consolidated financial

statements of Smurfit Kappa for periods prior to the Combination were also considered to be the historical financial statements of the

Company. Unless otherwise specified or the context otherwise requires, all references to the “Company” and “Smurfit Kappa” refer

to Smurfit Kappa Group plc and its subsidiaries and their operations when referring to periods prior to the closing of the

Combination, and references to the “Company” and “Smurfit Westrock” refer to the combined company, Smurfit Westrock and its

subsidiaries, including, among others, Smurfit Kappa and WestRock, when referring to periods after the Combination.

OVERVIEW

Smurfit Westrock is one of the world's largest integrated manufacturers of paper-based packaging products in terms of volumes and

sales, with operations in North America, South America, Europe, Asia, Africa, and Australia. Smurfit Westrock partners with its

customers to provide differentiated, sustainable paper and packaging solutions that enhance its customers’ prospects of success in their

markets.

Transaction Agreement and Combination with WestRock

Smurfit Westrock was created in July 2024 as a strategic combination between Smurfit Kappa Group plc (re-registered as Smurfit

Kappa Group Limited) (“Smurfit Kappa”) and WestRock Company (“WestRock”). The Combination closed on July 5, 2024. Upon

completion of the Combination, Smurfit Kappa and WestRock each became wholly-owned subsidiaries of Smurfit Westrock. As noted

above, Smurfit Kappa was determined to be the accounting acquirer of WestRock. Accordingly, the financial statements reflected in

these Consolidated Financial Statements and the discussions below include WestRock's financial position and results of operations for

the period subsequent to the completion of the Combination on July 5, 2024. Consequently, the results reported for the twelve months

ended December 31, 2024 do not include WestRock’s financial results for the first five days of July or any prior periods. Therefore, in

fiscal 2025 acquired WestRock operations were included for an incremental six months and five days compared to fiscal 2024.

Refer to “Note 2. Acquisitions” of the Consolidated Financial Statements for additional information related to the Combination and

the accounting for the Combination.

Following the completion of the Combination, Smurfit Westrock reassessed the Company’s reportable segments due to changes in

organizational structure and how the Company’s chief operating decision maker (“CODM”) makes key operating decisions, allocates

resources and assesses the performance of the business. Accordingly, Smurfit Westrock began to manage the combined business as

three reportable segments: (1) North America, (2) Europe, MEA and APAC, and (3) LATAM. Refer to “Note 3. Segment

Information” of the Consolidated Financial Statements for further discussion of the Company’s segment reporting structure.

A detailed discussion of the fiscal 2025 year-over-year changes can be found below and a detailed discussion of fiscal 2024 year-over-

year changes can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in

our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

50

EXECUTIVE SUMMARY

Smurfit Westrock’s net sales increased by $10,070 million, to $31,179 million in the year ended December 31, 2025, from

$21,109 million in the year ended December 31, 2024. This increase was primarily due to the impact of $9,845 million related to the

acquisition of WestRock. Excluding the impact of this acquisition, net sales increased by $225 million primarily resulting from a

$487 million positive impact due to a higher selling price mix and a $452 million net positive foreign currency impact, partially offset

by a negative volume impact of $716 million. See “Segment Information” below for more detail on Smurfit Westrock’s segment

results.

Net income attributable to common shareholders increased by $380 million, to $699 million in the year ended December 31, 2025,

from $319 million in the year ended December 31, 2024. The increase was primarily due to the operations acquired in the

Combination. In the year ended December 31, 2025, the positive impact of the acquired operations was partially offset by increased

interest expense, net, post Combination, and we incurred increased impairment and restructuring costs. In the year ended

December 31, 2024, we incurred higher transaction and integration-related expenses associated with the Combination and a charge of

$224 million for the amortization of the fair value step up on inventory recognized on WestRock’s inventory acquired. See “Note 5.

Impairment and Restructuring Costs” and “Note 6. Transaction and Integration-related Expenses Associated with the Combination” of

the Consolidated Financial Statements for additional information. Refer to “Results of Operations” and “Segment Information” for a

detailed review of Smurfit Westrock’s performance.

Net cash provided by operating activities increased by $1,909 million, to $3,392 million in the year ended December 31, 2025, from

$1,483 million in the year ended December 31, 2024, primarily due to a $1,489 million increase in net income adjusted for non-cash

items, primarily including depreciation, depletion and amortization, impairment charges, cash surrender value increase in excess of

premiums paid, share-based compensation expense, deferred income tax benefit, and pension and other postretirement funding more

than cost. The increase in net cash provided by operating activities also included a $420 million decrease in the cash outflows from

changes in operating assets and liabilities. During the year ended December 31, 2025, Smurfit Westrock invested $2,192 million in

capital expenditures. The Company’s net cash outflow from changes in debt was $304 million, and it paid $900 million of cash

dividends to shareholders. See the section entitled “Liquidity and Capital Resources” below for additional information.

SIGNIFICANT FACTORS AND TRENDS AFFECTING SMURFIT WESTROCK’S RESULTS

Smurfit Westrock’s operations have been, and will continue to be, affected by many factors, some of which are beyond the Company’s

control. Smurfit Westrock’s net sales are primarily derived from the sale of containerboard, corrugated containers, paperboard,

consumer packaging, and other paper-based packaging products. As such, Smurfit Westrock’s net sales during any period are largely

influenced by volumes, prices and costs of the corrugated containers and consumer packaging products that Smurfit Westrock sells

during that period.

Volumes

In general, demand for corrugated containers and consumer packaging is closely correlated with overall economic growth and activity.

It also directionally correlates with levels of industrial production and is impacted by the trends affecting the choice of medium (paper,

plastic, glass, metal, or wood) used in the packaging of these products. As a result, demand is driven by the need for: (i) packaging

products for consumer and industrial goods, (ii) higher value-added corrugated products used for point-of-sale displays and consumer

and shelf-ready packaging, and (iii) packaging of pharmaceutical products and the growth of related industries. Normal patterns of

demand growth can be disrupted by other macroeconomic trends, including inflation, pandemics (such as the COVID-19 pandemic

and related lockdowns), and global economic factors such as a recession and geopolitical developments (including tariffs or other

trade restrictions), among others.

Consumer patterns also play a significant role in demand for corrugated packaging and consumer packaging. In recent years, shifting

consumer behaviors have accelerated, particularly with the rise of e-commerce and increased awareness of unsustainable packaging

solutions. These trends have, to date, been beneficial for paper-based packaging, which is typically made from renewable, recyclable

materials. Changing demographics can also influence demand trends in the pharmaceutical industry, a major user of consumer

packaging.

51

Our volumes may also be impacted in certain periods by scheduled or unscheduled maintenance, particularly in our mill system, as

well as economic downtime as we match our supply with customer demand.

Prices and Costs

Prices of corrugated containers and consumer packaging are primarily a function of the cyclical nature of Smurfit Westrock’s industry,

capacity and competition in the markets it operates in, prevailing raw material prices, and other operating costs, such as energy,

chemicals, and transportation, overlaying supply and demand balances.

As paper costs generally represent a large portion of the cash cost of production for corrugated containers or consumer packaging,

containerboard price movements tend to impact the prices of corrugated containers, and paperboard price movements tend to impact

the prices of consumer packaging. In turn, the cost of paper is influenced by movements in the price of its major raw materials—wood

or recycled paper—along with other supply and demand factors. Smurfit Westrock’s production processes are energy-intensive,

making production costs also sensitive to the price of energy (primarily gas and electricity), which have historically been volatile.

Other key cost drivers include employee benefit expenses, largely determined by workforce size, and shipping and handling costs,

which are generally affected by fuel prices and overall labor inflation.

While many of Smurfit Westrock’s customer contracts include price adjustment clauses that allow cost increases to be passed on to

customers, these clauses may not in all cases be effective to offset rising costs. Additionally, for corrugated and consumer packaging

products, even when Smurfit Westrock is able to implement price increases, there is typically a three- to six-month lag between raw

material price hikes and the realization of higher pricing from customers.

Foreign Currency Effects

Smurfit Westrock operates in multiple countries across North America, South America, Europe, Asia, Africa, and Australia. As a

result, currency fluctuations can have both direct and indirect impacts on its financial statements, which are presented in U.S. dollars.

RESULTS OF OPERATIONS

The following table summarizes Smurfit Westrock’s consolidated results for the years ended December 31, 2025 and December 31,

2024 ($ in millions):

52

Results of operations for the year ended December 31, 2025, compared to the year ended December 31, 2024

Net Sales

Net sales increased by $10,070 million, to $31,179 million in the year ended December 31, 2025, from $21,109 million in the year

ended December 31, 2024. This increase was primarily due to the impact of $9,845 million related to the acquisition of WestRock.

Excluding the impact of this acquisition, net sales increased by $225 million primarily resulting from a $487 million positive impact

due to a higher selling price mix and a $452 million net positive foreign currency impact, partially offset by a negative volume impact

of $716 million. See “Segment Information” below for more detail on Smurfit Westrock’s segment results.

Cost of Goods Sold

Cost of goods sold increased by $8,222 million, to $25,136 million in the year ended December 31, 2025, from $16,914 million in the

year ended December 31, 2024. The increase in cost of goods sold was primarily due to the impact of the acquisition of WestRock of

$8,240 million. Excluding the impact of this acquisition for the incremental period consolidated in the current year, cost of goods sold

decreased by $18 million. The decrease was primarily driven by the impact of lower volumes and the prior year $224 million

amortization of the fair value step up on inventory recognized on WestRock’s inventory acquired. These items were largely offset by

higher costs in the current year, including increased economic downtime, higher depreciation, depletion and amortization expense,

higher energy costs, as well as a net negative foreign currency impact.

Selling, General and Administrative (“SG&A”) Expenses

SG&A expenses increased by $1,082 million, to $3,819 million in the year ended December 31, 2025, from $2,737 million in the year

ended December 31, 2024. The increase in SG&A expenses of $1,082 million was primarily due to additional SG&A expenses of

$1,126 million related to the acquisition of WestRock. Excluding the impact of this acquisition, SG&A decreased by $44 million

primarily due to lower share-based payment expense, partially offset by higher depreciation, depletion and amortization expense.

Impairment and Restructuring Costs

Impairment and restructuring costs increased by $329 million, to $385 million in the year ended December 31, 2025, from $56 million

in the year ended December 31, 2024. In the year ended December 31, 2025, impairment and restructuring costs consisted of

$246 million of impairment charges and $139 million of restructuring costs. In the year ended December 31, 2024, impairment and

restructuring costs consisted of $24 million of impairment charges and $32 million of restructuring costs. The increase in impairment

and restructuring costs was primarily due to our announced plan to permanently close our coated recycled paperboard mill in St. Paul,

Minnesota, U.S., discontinue production at our containerboard mill in Forney, Texas, U.S., and costs associated with two converting

facilities in Germany that ceased production in the fourth quarter of 2025. We stopped production at these two U.S. mills in June 2025

and May 2025, respectively.

See “Note 5. Impairment and Restructuring Costs” of the Consolidated Financial Statements for additional information.

Transaction and Integration-related Expenses Associated with the Combination

The Company incurred transaction and integration-related expenses associated with the Combination of $120 million and $395 million

in the years ended December 31, 2025 and 2024, respectively. In the year ended December 31, 2025, transaction and integration-

related expenses associated with the Combination consisted primarily of integration-related expenses associated with the Combination

of $122 million. In the year ended December 31, 2024, transaction and integration-related expenses consisted of transaction-related

expenses of $202 million and $193 million of integration-related expenses associated with the Combination.

53

Transaction-related costs associated with the Combination were comprised of banking and financing related costs as well as legal and

other professional services which were directly attributable to the Combination and retention payments that were contractually

committed to and associated with the successful completion of the Combination. We incur integration expenses post-acquisition that

reflect work performed to facilitate merger and acquisition integration and primarily consist of professional services and personnel and

related expenses, such as work associated with information systems.

Pension and Other Postretirement Non-Service Income (Expense), Net

Pension and other postretirement non-service income (expense), net increased by $54 million, to income of $30 million in the year

ended December 31, 2025, from $24 million of expense in the year ended December 31, 2024. This increase was primarily due to a

$164 million increase in the expected return on assets primarily due to acquired defined benefit pension assets in connection with the

Combination and a decrease in net settlement loss of $17 million, partially offset by an increase in interest costs of $132 million

primarily due to acquired defined benefit pension liabilities in connection with the Combination.

Interest Expense, Net

Interest expense, net increased by $331 million to $729 million in the year ended December 31, 2025, from $398 million in the year

ended December 31, 2024. This increase was primarily due to the increased interest expense as a result of the acquisition of

WestRock.

See “Note 2. Acquisitions” and “Note 15. Debt” of the Consolidated Financial Statements for additional information on debt assumed

and debt issued in connection with the Combination.

Other Expense, Net

Other expense, net increased by $36 million, to a net expense of $61 million in the year ended December 31, 2025, from a net

expense of $25 million in the year ended December 31, 2024. This increase was primarily due to a $15 million increase in the

expense recorded in connection with the sale of receivables under an accounts receivable monetization program acquired as a result of

the Combination and a $10 million net negative impact from foreign currency translation of monetary assets and liabilities.

Income Tax Expense

Income tax expense was $260 million in the year ended December 31, 2025, compared to $241 million in the year ended

December 31, 2024. The effective tax rates for the twelve months ended December 31, 2025 and 2024 were 27.1% and 43.0%,

respectively. See “Note 18. Income Taxes” of the Consolidated Financial Statements for additional income tax information.

On July 4, 2025, U.S. tax legislation was enacted that included a broad range of tax reform provisions affecting businesses, including

extending and modifying certain existing international and domestic provisions. The financial statement impacts were considered in

the third quarter, with no discrete period tax impacts arising from the change in tax law. Impacts from the legislation are either not

applicable or immaterial to the financial statements. Certain changes may impact current or future cash tax obligations, but are not

anticipated to impact the total tax expense.

SEGMENT INFORMATION

Smurfit Westrock has identified its operating segments based on how the CODM makes key operating decisions, allocates resources

and assesses performance of the Company’s business. These operating segments are as follows: (i) North America, which includes

operations in the U.S., Canada and Mexico, (ii) Europe, MEA and APAC and (iii) LATAM, which includes operations in Central

America and the Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador and Peru. No operating segments have been aggregated for

disclosure purposes.

54

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis, but

exclude certain central costs such as corporate costs, including executive costs, and costs of Smurfit Westrock’s legal, company

secretarial, pension administration, tax, treasury and controlling functions and other administrative costs. Segment profitability is

measured based on Adjusted EBITDA, defined as income before income taxes, unallocated corporate costs, depreciation, depletion

and amortization, interest expense, net, pension and other postretirement non-service income (expense), net, share-based compensation

expense, other expense, net, impairment and restructuring costs, transaction and integration-related expenses associated with the

Combination, amortization of fair value step up on inventory and other specific items that management believes are not indicative of

the ongoing operating results of the business.

The following table contains selected financial information for Smurfit Westrock’s segments for the years ended December 31, 2025

and 2024 ($ in millions):

(1) Net sales before intersegment eliminations.

The year ended December 31, 2025, compared to the year ended December 31, 2024

North America Segment

Net Sales

Net sales before intersegment eliminations for the North America segment increased by $8,485 million, to $18,577 million in the year

ended December 31, 2025, from $10,092 million in the year ended December 31, 2024. This increase was primarily due to the positive

impact of $8,877 million from the impact of the acquisition of WestRock. Excluding the impact of this acquisition, net sales before

intersegment eliminations decreased by $392 million primarily due to a $690 million impact of lower volumes, partially offset by a

$311 million impact from a higher sales price mix.

Adjusted EBITDA

Adjusted EBITDA for the North America segment increased by $1,388 million, to $2,998 million in the year ended December 31,

2025, from $1,610 million in the year ended December 31, 2024. This increase was primarily due to the positive impact of

$1,446 million from the impact of the acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA decreased

by $58 million primarily due to higher costs of $244 million and lower volumes of $126 million, partially offset by a higher selling

price mix of $311 million. The higher costs of $244 million were mainly due to the impact of increased economic downtime along

with higher energy costs.

55

Europe, MEA and APAC Segment

Net Sales

Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $1,316 million, to $10,893 million

in the year ended December 31, 2025, from $9,577 million in the year ended December 31, 2024. This increase was primarily due to

the impact of $808 million which related to the impact of the acquisition of WestRock. Excluding the impact of this acquisition, net

sales before intersegment eliminations increased by $508 million primarily due to a net positive foreign currency impact of

$462 million primarily due to the strengthening of the euro against the U.S. dollar, a higher selling price mix of $102 million, partially

offset by a negative volume impact of $56 million.

Adjusted EBITDA

Adjusted EBITDA for the Europe, MEA and APAC segment increased by $89 million, to $1,618 million in the year ended

December 31, 2025, from $1,529 million in the year ended December 31, 2024. There was an $84 million positive impact from the

acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA increased by $5 million primarily due to a

higher selling price mix impact of $102 million and net positive foreign currency impact of $63 million, which were partially offset by

higher costs of $150 million, mainly driven by higher energy and labor costs.

LATAM Segment

Net Sales

Net sales before intersegment eliminations for the LATAM segment increased by $402 million, to $2,113 million in the year ended

December 31, 2025, from $1,711 million in the year ended December 31, 2024. This increase was primarily due to the positive impact

of $375 million from the acquisition of WestRock. Excluding this acquisition, net sales before intersegment eliminations increased by

$27 million primarily due to a higher selling price mix of $71 million, partially offset by a negative volume impact of $35 million.

Adjusted EBITDA

Adjusted EBITDA for the LATAM segment increased by $107 million, to $485 million in the year ended December 31, 2025, from

$378 million in the year ended December 31, 2024. This increase was primarily due to the positive impact of $117 million from the

acquisition of WestRock. Excluding this acquisition, Adjusted EBITDA decreased by $10 million primarily due to higher costs of

$86 million, partly offset by a higher selling price mix of $71 million.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

Smurfit Westrock’s primary sources of liquidity are the cash flows generated from its operations, its commercial paper program, and

committed credit lines. The uncommitted commercial paper program is supported by the $4,500 million revolving loan facility with a

separate swingline sub-facility which allows for same-day drawing in U.S. dollar. The revolving credit facility had an original term of

five years, with two one-year extension options. In June 2025, the first extension was exercised, extending the maturity date to June

28, 2030. The amount of commercial paper outstanding does not reduce available capacity under the revolving loan facility. The

primary uses of this liquidity are to fund Smurfit Westrock’s day-to-day operations, capital expenditures, debt service, dividends and

other investment activity, including acquisitions.

As of December 31, 2025, Smurfit Westrock held cash and cash equivalents of $892 million, of which $273 million were held in euro,

$328 million were held in U.S. dollars and $291 million were held in other currencies. At December 31, 2025, the Company had

$4,560 million in undrawn committed facilities available under the revolving loan facility and receivables securitization facilities. The

weighted average period until maturity of undrawn committed facilities was 4.5 years as of December 31, 2025. Combined with cash

and cash equivalents of $892 million, the Company had $5,452 million of available liquidity.

56

On November 20, 2025 we redeemed the outstanding $292 million in aggregate principal amount of 7.500% senior debentures due

2025 in full at par. We funded this redemption using existing liquidity. No gain or loss on extinguishment of debt was recorded.

On November 21, 2025, Smurfit Westrock Financing Designated Activity Company (“SWF”), a designated activity company

incorporated under the laws of Ireland and a wholly-owned direct subsidiary of Smurfit Westrock plc (“Smurfit Westrock”), issued

$800 million aggregate principal amount of its 5.185% senior green notes due 2036 (the “USD Notes”), with interest payable semi-

annually in arrears, beginning on July 15, 2026. On November 24, 2025, Smurfit Kappa Treasury Unlimited Company (“SKT” and,

together with SWF, the “Issuers”), a public unlimited company incorporated under the laws of Ireland and a wholly-owned indirect

subsidiary of Smurfit Westrock, issued €500 million aggregate principal amount of its 3.489% senior green notes due 2031 (the “EUR

Notes” and, together with the USD Notes, the “November 2025 Notes”), with interest payable annually in arrears. These November

2025 Notes can be redeemed, at par in whole or in part, within three months to their maturity, in accordance with the respective

indentures. The November 2025 Notes have been registered under the U.S. Securities Act of 1933, as amended, pursuant to a

registration statement (the “Registration Statement”) on Form S-3ASR (No. 333-291446) filed with the U.S. Securities and Exchange

Commission on November 12, 2025. The November 2025 Notes were sold pursuant to a base prospectus, dated November 12, 2025,

forming a part of the Registration Statement, and separate preliminary and final prospectus supplements with respect to the USD

Notes, dated November 17, 2025, and the EUR Notes, dated November 18, 2025.

We used the net proceeds from the offerings of the November 2025 Notes (i) to redeem the outstanding €750 million in aggregate

principal amount of 1.500% senior notes due 2027 issued by SKT (the “SKT 2027 Notes”) in full at the applicable redemption price

set forth in the indenture governing the SKT 2027 Notes, (ii) to redeem the outstanding $500 million in aggregate principal amount of

3.375% senior notes due 2027 issued by WRKCo Inc. (the “WRKCo 2027 Notes”) in full at the applicable redemption price set forth

in the indenture governing the WRKCo 2027 Notes, and (iii) for general corporate purposes, including the repayment of other

indebtedness. We also used an amount equivalent to the proceeds of the November 2025 Notes to finance or refinance a portfolio of

eligible green projects in accordance with our Green Finance Framework, which we may, in the future, update in line with

developments in the market.

On November 18, 2025, WRKCo Inc. distributed a conditional notice of redemption to the holders of the WRKCo 2027 Notes. The

WRKCo 2027 Notes were redeemed on December 4, 2025. On November 19, 2025, SKT distributed a conditional notice of

redemption to the holders of the SKT 2027 Notes. The SKT 2027 Notes were redeemed on December 2, 2025. We recorded a

$16 million loss on extinguishment of debt in connection with these redemptions.

As of December 31, 2025, Smurfit Westrock had $13,773 million of total debt. As of December 31, 2025, the carrying amount of

current debt was $346 million. In the twelve months ended December 31, 2025, total debt increased by $178 million. Excluding

changes in carrying value, such as translation adjustments and amortization moves, borrowings decreased by $304 million. The

carrying amount of the Company’s debt includes a fair value adjustment related to debt assumed through mergers and acquisitions.

Included within the carrying value of Smurfit Westrock’s borrowings as of December 31, 2025 are unamortized fair value

adjustments, bond discounts and debt issuance costs of $94 million, including an unamortized fair value market adjustment of

$22 million, all of which will be recognized in interest expense in Smurfit Westrock’s Consolidated Statements of Operations using

the effective interest rate method over the remaining life of the borrowings. See “Note 2. Acquisitions” and “Note 15. Debt” of the

Consolidated Financial Statements for a discussion of debt assumed and debt issued in connection with the Combination, as well as

additional debt-related information, including bond issuances and repayments.

The Company believes that the cash flows generated from its operations, cash on hand, its commercial paper program, available

borrowings under its committed credit lines and available capital through access to capital markets will be adequate to meet the

Company's liquidity and capital requirements, including payments of any declared dividends, for the next 12 months and for the

foreseeable future.

Smurfit Westrock uses a variety of working capital management strategies including supply chain financing (“SCF”) programs,

vendor financing and commercial card programs, monetization facilities where we sell short-term receivables to a group of third-party

financial institutions and receivables securitization facilities. The programs are described below.

57

The Company engages in certain customer-based SCF programs to accelerate the receipt of payment for outstanding accounts

receivables from certain customers. Certain costs of these programs are borne by the customer or the Company. Receivables

transferred under these customer-based SCF programs generally meet the requirements to be accounted for as sales in accordance with

guidance under Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing” (“ASC 860”), resulting in derecognition

of such receivables from the Company’s Consolidated Balance Sheets. Receivables involved with these customer-based SCF programs

may vary from period to period, and were 6% of the Company’s accounts receivable balance at December 31, 2025. In addition,

Smurfit Westrock has monetization facilities that sell to third-party financial institutions all of the short-term receivables generated

from certain customer trade accounts. See “Note 14. Fair Value Measurement” of the Consolidated Financial Statements for a

discussion of the Company’s monetization facilities.

Smurfit Westrock’s working capital management strategy includes working with its suppliers to revisit terms and conditions, including

the extension of payment terms. The Company’s current payment terms with the majority of its suppliers generally range from payable

upon receipt to 120 days and vary for items such as the availability of cash discounts. The Company does not believe its payment

terms will be shortened significantly in the near future, and does not expect its net cash provided by operating activities to be

significantly impacted by additional extensions of payment terms. Certain financial institutions offer voluntary SCF programs that

enable the Company’s suppliers, at their sole discretion, to sell their receivables from Smurfit Westrock to the financial institutions on

a non-recourse basis at a rate that leverages the Company’s credit rating and thus might be more beneficial to the Company’s

suppliers. Smurfit Westrock and its suppliers agree on commercial terms for the goods and services procured, including prices,

quantities and payment terms, regardless of whether the supplier elects to participate in SCF programs. The suppliers sell Smurfit

Westrock goods or services and issue the associated invoices based on the agreed-upon contractual terms. The due dates of the

invoices are not extended due to the supplier’s participation in SCF programs. Smurfit Westrock suppliers, at their sole discretion if

they choose to participate in a SCF program, determine which invoices, if any, they want to sell to the financial institutions. No

guarantees are provided by the Company under SCF programs, and it has no economic interest in a supplier’s decision to participate in

the SCF program. Therefore, amounts due to the Company’s suppliers that elect to participate in SCF programs are included in the

“Accounts payable” line item in the Company’s Consolidated Balance Sheets and the activity is reflected in “Net cash provided by

operating activities” in the Company’s Consolidated Statements of Cash Flows. Based on correspondence with the financial

institutions that are involved with Smurfit Westrock’s two primary SCF programs, while the amount suppliers elect to sell to the

financial institutions varies from period to period, the amount generally averages 10%-14% of the Company’s accounts payable

balance. The outstanding payment obligations to financial institutions under these programs were $361 million as of December 31,

2025.

Smurfit Westrock also participates in certain vendor financing and commercial card programs to support travel and entertainment

expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because the

Company receives the benefit of extended payment terms and a rebate from the financial institution that would not have otherwise

been received without the financial institution's involvement. Smurfit Westrock also has receivables securitization facilities that allows

for borrowing availability based on underlying accounts receivable eligibility and compliance with certain covenants. See “Note 15.

Debt” and “Note 22. Variable Interest Entities” of the Notes to Consolidated Financial Statements for a discussion of the receivables

securitization facilities and the amount outstanding under the Company’s vendor financing and commercial card programs.

Smurfit Westrock is a party to enforceable and legally binding contractual obligations involving commitments to make payments to

third parties. These obligations impact Smurfit Westrock’s short-term and long-term liquidity and capital resource needs. Certain

contractual obligations are reflected on Smurfit Westrock’s Consolidated Balance Sheets as of December 31, 2025, while others are

considered future obligations. Smurfit Westrock’s contractual obligations primarily consist of items such as long-term debt, including

current portion, lease obligations, purchase obligations and other obligations. See “Contractual Obligations and Commitments” for

more information.

58

Cash Flow Activity

The following table contains selected financial information from Smurfit Westrock’s Consolidated Statements of Cash Flows for the

years ended December 31, 2025 and 2024 ($ in millions):

Net cash provided by operating activities increased by $1,909 million, or 129%, to $3,392 million in the year ended December 31,

2025 from $1,483 million in the year ended December 31, 2024, primarily due to a $1,489 million increase in net income adjusted for

non-cash items, primarily including depreciation, depletion and amortization, impairment charges, cash surrender value increase in

excess of premiums paid, share-based compensation expense, deferred income tax benefit, and pension and other postretirement

funding more than cost. The increase in net cash provided by operating activities also included a $420 million decrease in the cash

outflows from changes in operating assets and liabilities. The decrease in the cash outflows from changes in operating assets and

liabilities was inclusive of cash payments to financial institutions of $66 million in connection with the Company’s accounts

receivable monetization agreements in the year ended December 31, 2025, compared to cash proceeds of $62 million in the prior year

period. See “Note 14. Fair Value Measurement” of the Consolidated Financial Statements for additional information.

Net cash used for investing activities of $2,143 million in the year ended December 31, 2025 consisted primarily of capital

expenditures of $2,192 million partially offset by proceeds from corporate owned life insurance and other items. Net cash used for

investing activities of $2,114 million in the year ended December 31, 2024 consisted primarily of capital expenditures of

$1,466 million and cash paid for purchase of businesses, net of cash acquired of $719 million, partially offset by proceeds from sale of

property, plant and equipment of $61 million.

Net cash used for financing activities of $1,298 million in the year ended December 31, 2025 consisted primarily of cash outflows

from cash dividends paid to shareholders of $900 million, a net decrease in debt of $304 million, tax paid in connection with shares

withheld from employees of $69 million and debt issuance costs of $20 million. Net cash provided by financing activities of

$607 million in the year ended December 31, 2024 consisted primarily of cash inflows from a net increase in debt of $1,367 million,

partially offset by cash outflows from cash dividends paid to shareholders of $650 million, debt issuance costs of $63 million,

purchases of treasury stock of $27 million, and tax paid in connection with shares withheld from employees of $26 million.

Contractual Obligations and Commitments

Smurfit Westrock is a party to enforceable and legally binding contractual obligations involving commitments to make payments to

third parties. These obligations impact Smurfit Westrock’s short-term and long-term liquidity and capital resource needs. Certain

contractual obligations are reflected on Smurfit Westrock’s Consolidated Balance Sheets as of December 31, 2025, while others are

considered future obligations. Smurfit Westrock’s primary cash requirements from contractual obligations and commitments include:

•Debt obligations. See “Note 15. Debt,” of the Notes to the Consolidated Financial Statements included elsewhere in this

Annual Report on Form 10-K for more information on Smurfit Westrock’s debt obligations and timing of expected future

payments.

•Operating and finance leases. See “Note 13. Leases,” of the Notes to the Consolidated Financial Statements included

elsewhere in this Annual Report on Form 10-K for more information on Smurfit Westrock’s operating and finance lease

obligations and timing of expected future payments.

•Pension liabilities. See “Note 19. Retirement Plans and Deferred Compensation Arrangements,” of the Notes to the

Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for more information on Smurfit

Westrock’s pension liabilities and the timing of expected future benefit payments under its defined benefit pension plans.

59

•Capital commitments. See “Note 21. Commitments and Contingencies,” of the Notes to the Consolidated Financial

Statements included elsewhere in this Annual Report on Form 10-K for more information on Smurfit Westrock’s future

spending for property, plant and equipment that Smurfit Westrock is obligated to purchase.

•Purchase commitments. See “Note 21. Commitments and Contingencies,” of the Notes to the Consolidated Financial

Statements included elsewhere in this Annual Report on Form 10-K for more information on Smurfit Westrock’s purchase

commitments and the timing of the expected future payments.

Off-Balance Sheet Arrangements

As of December 31, 2025, Smurfit Westrock did not have any off-balance sheet arrangements.

NON-GAAP FINANCIAL MEASURE

Definitions

Non-GAAP Financial Measure

Smurfit Westrock reports its financial results in accordance with generally accepted accounting principles in the U.S. (“GAAP”).

However, management believes “Adjusted EBITDA”, a non-GAAP financial measure as discussed below, provides Smurfit

Westrock’s Board of Directors, investors, potential investors, securities analysts and others with additional meaningful financial

information that should be considered when assessing its ongoing performance relative to other periods because it adjusts out non-

recurring items that management believes are not indicative of the ongoing results of the business. Smurfit Westrock management also

uses this non-GAAP financial measure in making financial, operating and planning decisions, and in evaluating company

performance. Non-GAAP financial measures are not intended to be considered in isolation of or as a substitute for, or superior to,

financial information prepared and presented in accordance with GAAP and should be viewed in addition to, and not as an alternative

for, the GAAP results. The non-GAAP financial measure Smurfit Westrock presents may differ from similarly captioned measures

presented by other companies.

Adjusted EBITDA

Smurfit Westrock uses the non-GAAP financial measure “Adjusted EBITDA” to evaluate its overall performance. The composition of

Adjusted EBITDA is not addressed or prescribed by GAAP. Smurfit Westrock defines Adjusted EBITDA as net income before

income tax expense, depreciation, depletion and amortization, interest expense, net, pension and other postretirement non-service

income (expense), net, share-based compensation expense, other expense, net, impairment and restructuring costs, transaction and

integration-related expenses associated with the Combination, amortization of fair value step up on inventory and other specific items

that management believes are not indicative of the ongoing operating results of the business.

Management believes that the most directly comparable GAAP measure to Adjusted EBITDA is “Net income”.

60

Set forth below is a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net income, the most directly comparable

GAAP measure, for the periods indicated ($ in millions).

See “Note 3. Segment Information” of the Consolidated Financial Statements for additional information regarding “Other

adjustments” in the table above.

GUARANTOR SUMMARIZED FINANCIAL INFORMATION

On April 3, 2024, SKT completed a private offering of $750 million aggregate principal amount of 5.200% senior green notes due

2030, $1,000 million aggregate principal amount of 5.438% senior green notes due 2034 and $1,000 million aggregate principal

amount of 5.777% senior green notes due 2054, which we refer to as the “Original SKT Notes”, and on November 26, 2024, SWF

completed a private offering of $850 million aggregate principal amount of 5.418% senior green notes due 2035, which we refer to as

the “Original SWF Notes” (and, together with the Original SKT Notes, the “Original Notes”). As part of those offerings, the Issuers

and the Guarantors (as hereinafter defined) of the Original Notes entered into registration rights agreements with the initial purchasers

thereof in which we agreed to use commercially reasonable efforts to complete exchange offers for such Original Notes in compliance

with applicable securities laws. In connection with the registration rights agreements, on May 23, 2025, following an exchange offer

process, certain holders of the Original Notes, exchanged their notes for newly issued registered notes (the “New Notes”). The New

Notes are substantially identical to the Original Notes, except that the New Notes are registered under the United States Securities Act

of 1933, as amended, and will not have any transfer restrictions, registration rights or additional interest provisions.

As outlined above in the section entitled “Liquidity and Capital Resources”, on November 21, 2025, SWF issued $800 million

aggregate principal amount of 5.185% senior green notes due 2036, and on November 24, 2025 SKT issued €500 million aggregate

principal amount of 3.489% senior green notes due 2031. These notes have been registered under the U.S. Securities Act of 1933, as

amended.

61

The Guarantees

The Original Notes, the New Notes and the November 2025 Notes are subject to any limitations under applicable law, fully and

unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of Smurfit Westrock plc and the following

wholly-owned subsidiaries of Smurfit Westrock plc (the “Subsidiary Guarantors”): Smurfit Kappa Group Limited, Smurfit Kappa

Investments Limited, Smurfit Kappa Acquisitions Unlimited Company, Smurfit Kappa Treasury Funding Designated Activity

Company, Smurfit International B.V., Smurfit WestRock US Holdings Corporation, WestRock Company, WRKCo Inc., WestRock

MWV, LLC and WestRock RKT, LLC. In addition, SWF fully and unconditionally guarantees SKT’s obligations under the Original

Notes, the New Notes and the November 2025 Notes, and SKT fully and unconditionally guarantees SWF’s obligations under the

Original Notes, the New Notes and the November 2025 Notes. SKT and SWF are both wholly-owned subsidiaries of Smurfit

Westrock plc. Smurfit Westrock plc and the Subsidiary Guarantors are collectively referred to herein as the “Guarantors”, and the

Issuers and the Guarantors are collectively referred to herein as the “Obligor Group”.

Operations are conducted almost entirely through Smurfit Westrock plc’s subsidiaries other than the Issuers and the Subsidiary

Guarantors. Accordingly, the Obligor Group’s cash flow and ability to service its debt are dependent upon the earnings of Smurfit

Westrock plc’s other non-obligor subsidiaries (the “Non-Obligor Subsidiaries”) and the distribution of those earnings to the Obligor

Group, whether by dividends, loans or otherwise. Holders of the New Notes and November 2025 Notes have a direct claim only

against the Obligor Group.

Basis of Preparation of the Summarized Financial Information

The tables below present summarized financial information provided in conformity with Rule 13-01 of the SEC’s Regulation S-X. The

summarized financial information of the Obligor Group is presented on a combined basis, excluding intercompany balances and

transactions between entities in the Obligor Group. The Obligor Group’s investment balances in Non-Obligor Subsidiaries have been

excluded. The Obligor Group’s amounts due from, amounts due to, and transactions with Non-Obligor Subsidiaries have been

presented separately. The summarized financial information below should be read in conjunction with the Company’s Consolidated

Financial Statements contained herein, as the summarized financial information may not necessarily be indicative of the results of

operations or financial position had the subsidiaries operated as independent entities ($ in millions).

62

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Smurfit Westrock has prepared the accompanying Consolidated Financial Statements in conformity with GAAP, which requires

management to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported. Significant accounting

policies are described in “Note 1. Description of Business and Summary of Significant Accounting Policies” in the accompanying

Consolidated Financial Statements.

These critical accounting policies are both important to the portrayal of Smurfit Westrock’s financial condition and results of

operations and require some of management’s most subjective and complex judgments. The accounting for these matters involves the

making of estimates based on current facts, circumstances and assumptions that, in management’s judgment, could change in a manner

that would materially affect management’s future estimates with respect to such matters and, accordingly, could cause Smurfit

Westrock’s future reported financial condition and results of operations to differ materially from those that it is currently reporting

based on management’s current estimates.

Smurfit Westrock believes the following are critical accounting policies and estimates used in the preparation of its Consolidated