Smurfit Westrock (NYSE: SW) outlines scale, segments and risks
Filing Impact
Filing Sentiment
Form Type
10-K
Smurfit Westrock plc files its annual report outlining a newly combined global leader in sustainable, paper-based packaging created by the 2024 strategic Combination of Smurfit Kappa and WestRock. The company now operates 57 paper mills and 450 converting plants across 40 countries.
North America generates 58.5% of net sales, Europe/MEA/APAC 34.8% and LATAM 6.7%. As of December 31, 2025, Smurfit Westrock employed about 97,000 people and had non-affiliate equity market value of approximately $22,371 million, with 524,253,735 ordinary shares outstanding as of February 20, 2026.
The report emphasizes vertically integrated containerboard, corrugated and consumer packaging systems, growing bag-in-box and specialty boards, and a strong sustainability agenda centered on circular, fiber-based solutions and climate-related disclosure. Extensive risk factors highlight cyclical demand, raw material and energy volatility, competition, integration risks from the Combination, regulatory exposure and cyber, labor and climate-related challenges.
Positive
- None.
Negative
- None.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended December 31 , 2025
OR
For the transition period from to
Commission File Number: 001-42161
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
N/A | ||
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒
The aggregate market value of the common equity held by non-affiliates of the registrant as of June 30, 2025 (based on the closing price per share as reported
on the New York Stock Exchange on such date), was approximately $22,371 million.
The number of shares of registrant’s ordinary shares outstanding as of the close of business on February 20, 2026 was 524,253,735 .
DOCUMENTS INCORPORATED BY REFERENCE
registrant’s definitive proxy statement to be filed pursuant to Regulation 14A in connection with the registrant’s 2026 annual general meeting of shareholders
within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates.
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TABLE OF CONTENTS
Page | |
Cautionary Note Regarding Forward-Looking Statements | 4 |
PART I | 5 |
Item 1. Business | 5 |
Item 1A. Risk Factors | 21 |
Item 1B. Unresolved Staff Comments | 42 |
Item 1C. Cybersecurity | 42 |
Item 2. Properties | 44 |
Item 3. Legal Proceedings | 46 |
Item 4. Mine Safety Disclosures | 46 |
PART II | 47 |
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 47 |
Item 6. [Reserved] | 48 |
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 49 |
Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 65 |
Item 8. Financial Statements and Supplementary Data | 68 |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 132 |
Item 9A. Controls and Procedures | 132 |
Item 9B. Other Information | 133 |
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 133 |
PART III | 134 |
Item 10. Directors, Executive Officers and Corporate Governance | 134 |
Item 11. Executive Compensation | 134 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 134 |
Item 13. Certain Relationships and Related Transactions, and Director Independence | 134 |
Item 14. Principal Accountant Fees and Services | 134 |
PART IV | 135 |
Item 15. Exhibits, Financial Statement Schedules | 135 |
Item 16. Form 10-K Summary | 143 |
Signatures | 144 |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K includes certain “forward-looking statements” (including within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
regarding, among other things, the plans, strategies, outcomes, outlooks and prospects, both business and financial, of Smurfit
Westrock, the expected benefits of the completed Combination of Smurfit Kappa and WestRock Company (including, but not limited
to, synergies as well as our scale, geographic reach and product portfolio, or impact of announced closures), and any other statements
regarding Smurfit Westrock’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows,
or future events or performance. Statements that are not historical facts, including statements about the beliefs and expectations of the
management of Smurfit Westrock, are forward-looking statements. Words such as “may”, “will”, “could”, “should”, “would”,
“anticipate”, “intend”, “estimate”, “project”, “plan”, “believe”, “expect”, “target”, “prospects”, “potential”, “commit”, “forecasts”,
“aims”, “considered”, “likely” and variations of these words and similar future or conditional expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements. While the Company believes these
expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve
known and unknown risks and uncertainties, many of which are beyond the control of the Company. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend upon future circumstances that may or may not occur.
Actual results may differ materially from the current expectations of the Company depending upon a number of factors affecting its
business, including risks associated with the integration and performance of the Company following the Combination. Risks,
uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to, the
factors discussed below under the section entitled “Risk Factors” and in subsequent filings with the Securities and Exchange
Commission (“SEC”) by the Company. Forward-looking and other statements in this document may also address the Company’s
corporate responsibility progress, plans, and initiatives (including environmental matters), and the inclusion of such statements is not
an indication that these contents are necessarily material to investors or required to be disclosed in our filings with the SEC. In
addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress
that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the
future.
The Company’s forward-looking statements speak only as of the date of this Annual Report on Form 10-K or as of the date they are
made. Neither the Company nor any of its associates or directors, officers or advisers provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any such forward-looking statements will actually occur. You are
cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory
obligations (including under the U.K. Listing Rules, the Disclosure Guidance and Transparency Rules, the U.K. Market Abuse
Regulation and other applicable regulations), the Company is under no obligation, and the Company expressly disclaims any intention
or obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or
otherwise.
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PART I
Item 1. Business
Overview
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”), one of the leading integrated corrugated packaging manufacturers in Europe, with a large-
scale pan-regional presence in Latin America, and WestRock Company (“WestRock”), one of the leaders in North America in
corrugated and consumer packaging solutions and a multinational provider of sustainable fiber-based paper and packaging solutions.
We are a global leader in sustainable, paper-based packaging with extensive scale, quality products and geographic reach and
diversity. We aim to create the ‘go-to’ packaging partner of choice, bringing together highly complementary portfolios and sets of
capabilities benefiting customers, employees and shareholders.
Background
Smurfit Westrock was incorporated and registered in Ireland on July 6, 2017, under the Irish Companies Act as a private company
limited by shares with registered number 607515, with the name “Cepheidway Limited.” On September 12, 2023, Smurfit Kappa and
WestRock announced entry into a transaction agreement pursuant to which the companies would execute a strategic combination (the
“Combination”). Prior to the Combination, Smurfit Westrock re-registered as an Irish public limited company pursuant to Part 20 of
the Companies Act 2014 of Ireland, as amended (the “Irish Companies Act”) and was renamed “Smurfit Westrock plc.” Upon
completion of the Combination, Smurfit Kappa and WestRock each became wholly-owned subsidiaries of Smurfit Westrock, and
Smurfit Westrock continued as the new holding company of the combined group of Smurfit Kappa and WestRock. As a result of the
Combination, former Smurfit Kappa shareholders and WestRock shareholders became holders of Smurfit Westrock ordinary shares.
Smurfit Westrock had no historical operations nor traded or carried out any business of its own since its incorporation until just prior
to consummation of the Combination.
Smurfit Westrock has a dual listing on the New York Stock Exchange (“NYSE”) and the equity shares (international commercial
companies secondary listing) category of the Official List of the U.K. Financial Conduct Authority (“FCA”), and Smurfit Westrock
ordinary shares trade on the NYSE and the London Stock Exchange’s main market for listed securities.
See “Note 1.1. Description of Business” and “Note 2. Acquisitions” of the Notes to Consolidated Financial Statements for additional
information related to the Combination and the accounting for the Combination.
Products
Our primary products fall into a number of categories, as further described below. Primarily, we produce paper-based packaging
products. Our vertically integrated system provides raw materials of wood or recovered fiber, which are used to manufacture various
grades of board, which are then converted into packaging products. Our main categories of packaging are corrugated containers,
manufactured from containerboard; and consumer packaging, manufactured from paperboard. We also produce other grades of board,
such as solidboard, kraft paper, and graphic board, as well as other packaging products such as solidboard packaging, paper sacks and
bag-in-box.
Containerboard and Corrugated Containers
Containerboard is the general term that describes the intermediate materials used to manufacture corrugated sheet, namely linerboard
and medium.
Linerboard is used to form the inner and outer layers of the corrugated sheet. Linerboard can be manufactured from virgin fiber
(known as “kraftliner”) or recovered paper (known as “testliner”). The recycling of old corrugated cases (“OCC”) provides the
primary source of recovered paper. In general, kraftliner is of higher quality and more versatile than testliner. Linerboard can be
surface treated to improve the printing quality through the use of white, mottled or fully bleached pulp as the top layer.
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Medium is used to form the inner layer of the corrugated sheet. It is primarily manufactured from recovered paper but can also be
manufactured from virgin fiber.
We feed linerboard and corrugating medium into a corrugator that flutes the medium to specified sizes, glues the linerboard and fluted
medium together, and slits and cuts the resulting corrugated paperboard into corrugated sheets whose dimensions fit ultimate customer
specifications, and are subsequently converted into corrugated packaging.
Corrugated packaging refers to the conversion of corrugated sheets through the production and the sale of corrugated containers and
other corrugated products including displays. Corrugated packaging is used to provide protective packaging for shipment and
distribution of food, paper, health and beauty, and other household, consumer, commercial and industrial products. Corrugated
packaging may also be graphically enhanced for retail sale, particularly in club store locations. Our corrugated packaging operations
manufactures primarily corrugated sheets, corrugated packaging and preprinted linerboard for sale to consumer and industrial products
manufacturers and corrugated box manufacturers. We produce a wide range of high-quality corrugated containers designed to protect,
ship, store, promote and display products made to our customers’ specifications.
Paperboard and Consumer Packaging
Paperboard is a general term that describes the intermediate materials used primarily to produce folding cartons and other consumer
packaging products. There are a number of different types of paperboard, that can be manufactured using virgin fiber or recovered
paper, or a recycled basestock that is laminated with kraftliner. Paperboard can be unbleached, coated or fully bleached, and
manufactured primarily using either wood or recovered fiber as a primary raw material. These are used primarily to manufacture
folding cartons and can have specialty characteristics such as grease masking and microwaveability.
Consumer packaging is used mainly as primary packaging for products, providing convenience, marketing support and protection for
products, and can consist of folding cartons, carriers and other containers. Our folding cartons are used to package items for industries
such as food, paper, beverages, dairy products, confectionery, health and beauty and other household consumer, commercial and
industrial products, primarily for retail sale. Our folding cartons are also used by our customers to attract consumer attention at the
point-of-sale. We also manufacture express mail packages for the overnight courier industry, provide inserts and labels, as well as
rigid packaging and other printed packaging products, such as transaction cards (e.g., credit, debit, etc.), brochures, product literature,
marketing materials (such as booklets, folders, inserts, cover sheets and slipcases) and grower tags and plant stakes for the
horticultural market. For the global healthcare market, we manufacture paperboard packaging for over-the-counter and prescription
drugs.
Solidboard and Solidboard Packaging
Solidboard is a layered form of paperboard. It has an outer layer of linerboard, which is laminated onto a solid layer of recycled paper,
producing a product that is heavier and more resistant to moisture and cold than corrugated containers. Solidboard is better suited for
certain more demanding packaging applications which may be exposed to wet conditions and freezing temperatures, such as the
transportation of fresh products, including fruit, vegetables, fish, meat, poultry and dairy products. Solidboard sheets are produced in
paper mills and converted into solidboard packaging in converting units.
Graphic Board
Graphic board is a heavyweight type of solidboard with distinct properties, including rigidity and stability, which makes it suitable for
processing into different applications, such as book covers, game boards, jigsaw puzzles and lever arch files, onto which sophisticated
graphics can be laminated.
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Kraft Paper and Paper Sacks
Kraft paper is a grade of paper made primarily from wood which is used in different applications, the key one being in paper sack
production, with the grade being known as sack kraft. Sack kraft is either converted into sacks for industrial use, transporting building
materials, agriculture, chemicals, minerals and animal feed, or bags subject to high quality graphics for more sophisticated packaging
end uses such as pet food and retail carrier bags. Other kraft paper has a large number of uses such as but not limited to paper bags,
wrapping, and interleaving products.
Bag-In-Box
Bag-in-box is a form of packaging where a liquid is packed in a flexible plastic film or “bag” with a tap attached, which is then
generally inserted into a corrugated container.
Geographical Footprint
We maintain operations in 40 countries, primarily in North America, Latin America and Europe, and with some operations in Asia,
Africa and Australia. In North America, we are a leader in corrugated and consumer packaging, containerboard and paperboard. In
Europe, we are one of the leading companies by production volume in corrugated packaging, containerboard and bag-in-box, and one
of the leading producers of consumer packaging. In Latin America, we are a large-scale pan-regional player in corrugated packaging
and containerboard.
We currently operate 57 paper mills (36 of which produce containerboard only, seven of which produce paperboard only, with six
producing both, five producing containerboard and another grade, one producing paperboard and another grade and two producing
kraft paper only), 450 converting plants (329 of which convert containerboard into corrugated containers, 84 of which convert
paperboard into consumer packaging or manufacture leaflets or labels for consumer packaging, five sack plants and 32 other
conversion facilities), 70 recovered fiber facilities, two wood procurement operations in Europe (which together provide raw material
for our mills in Europe), two forestry operations in Latin America, 57 distribution facilities in North America, and 30 other production
facilities carrying out other related activities. In addition, we have approximately 308,000 acres of forests and plantations, the majority
of which are owned in Latin America. These forests and plantations support mill operations in addition to propagating trees for
planting. Our footprint allows us to better serve customers in close proximity to our corrugated box plants.
Our geographic reach is organized around three segments:
•North America (including the U.S., Canada and Mexico);
•Europe, the Middle East and Africa (“MEA”) and Asia-Pacific (“APAC”); and
•Latin America (“LATAM”).
The North America, Europe, MEA and APAC and LATAM segments are each highly integrated within the segment and there are
many interdependencies within these operations. They each include a system of mills and plants that primarily produce a number of
grades of containerboard that is converted into corrugated containers within each segment, or is sold to third parties.
In addition, the North America segment also produces paperboard, kraft paper and market pulp; other paper-based packaging, such as
folding cartons, inserts, labels and displays and also engages in the assembly of displays as well as the distribution of packaging
products.
The Europe, MEA and APAC segment also produces other types of paper, such as solidboard, graphic board, sack kraft paper and
machine glazed paper (together known as kraft paper) and graphic paper; and other paper-based packaging, such as honeycomb,
solidboard packaging, folding cartons, inserts and labels; and bag-in-box packaging (the latter with operations located in Europe,
Argentina, Canada, Mexico and the U.S., but managed under the Europe, MEA and APAC segment).
The LATAM segment also comprises forestry; other types of paper, such as paperboard and kraft paper; and paper-based packaging,
such as folding cartons and paper sacks.
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Our global corporate headquarters are located in Dublin, Ireland, our North American operations are headquartered in Atlanta,
Georgia, U.S., our Europe, MEA and APAC operations are headquartered in Amsterdam, the Netherlands and our Latin American
operations are headquartered in Florida, U.S.
Business Strategy
Our business strategy combines the key strategic priorities of both Smurfit Kappa and WestRock, with a continuing focus on the
successful integration of the two businesses.
Our Vision
Our vision is to dynamically and sustainably deliver secure, superior and long-term value for all stakeholders, as one of the world’s
great companies, guided by our core values of safety, loyalty, integrity and respect. Stakeholders comprise shareholders, employees,
customers, local communities and suppliers.
•One of the World’s Great Companies. We strive to operate a globally admired business, underpinned by the following; (i)
our core values; (ii) being an employer of choice; (iii) providing a demonstrably differentiated offering to our customers; (iv)
being a leader in sustainability in the industry; and (v) being valued in excess of our peers.
•Dynamically and Sustainably Delivering. With a performance-led culture and a diverse workforce that is both driven and
engaged, we seek to seize internal and external growth opportunities by engaging in disciplined and focused capital allocation
in order to present a highly differentiated and sustainable offering to customers.
•Secure, Superior and Long-Term Value. In seeking secure and superior value creation, over the long-term, we focus on
strong cash generation, balance sheet strength with significant financial flexibility and low-cost operations, and an optimum
level of vertical integration to mitigate cyclical risk while maximizing the performance of our assets. We aim to have a team
of dedicated and engaged employees continually innovating across our product range.
Our vision guides our strategic objective of maintaining and deepening long-term customer relationships by seeking to provide
customers with innovative and differentiated sustainable packaging solutions that aim to enhance customers’ prospects of success in
their end markets.
To achieve this objective, we have identified three key areas of focus through our integrated system:
•Converting. Capitalize on differentiation to drive growth. This differentiation encompasses our paper-based packaging
offerings of corrugated and consumer packaging across our segments, along with other specialist product offerings such as
bag-in-box and paper sacks. The offerings are supported by our innovation initiatives.
•Paper. Drive the optimization of our paper system to service the growth of the downstream converting businesses, taking into
account the dynamics of the marketplace. This is a particular focus in light of the enlarged paper system that was created
through the Combination.
•Integration. Bring together the best of Smurfit Kappa and WestRock into a culturally aligned, customer-focused and
motivated organization.
Based on these focus areas, we have developed the following strategic priorities:
1.Expanding market positions through focused growth, including in particular driving the sustainability agenda;
2.Continuing focus on customer engagement and innovation to become the supplier/partner of choice for our
customers;
3.Enhancing operational excellence through the continuous upgrade of customer offerings and service;
4.Recruiting, retaining, developing and motivating the best people; and
5.Efficiently allocating capital.
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Segment Overview
A) North America Segment
Our North American operations are in the U.S., Canada and Mexico.
Sales of our North America segment accounted for 58.5% of our net sales to external customers in 2025. See “Note 3. Segment
Information” of the Notes to Consolidated Financial Statements, as well as Item 7. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations”, for additional information.
Products
We are one of the largest integrated producers of linerboard, white-top linerboard and containerboard and kraft paper in North
America (including the U.S., Canada and Mexico), and we serve primarily corrugated packaging markets. We are one of the largest
producers of paperboard in North America, and we operate both integrated virgin and recycled fiber mills. Our mill system
manufactures paper for our converting system that utilizes the paper in the manufacture and sale of packaging products to our external
packaging customers, together with sales of paper to external paper customers.
Mills
Our North America segment mill operations consist of 27 mills. Our mill operations consist of both integrated virgin and recycled
fiber mills, that produce containerboard, paperboard and specialty grades, including kraft paper and market pulp. The majority of the
output of the mill system is used in our own converting operations.
We have recycling operations in the segment whose business is conducted as a procurement function, focusing on the procurement of
low cost, high quality recycled fiber for our mill system. See Item 2. “Properties” for additional information on our annual production
capacity and types of containerboard and paperboard we manufacture, and Item 1. “Business — Sales and Marketing” for additional
information on our vertical integration.
In the year ended December 31, 2025 our containerboard mills in North America produced approximately 9.3 million tons and our
paperboard mills in North America produced approximately 3.2 million tons.
Any paper not used in our own operations is sold through our commercial paper operations, generating revenues primarily from the
sale of containerboard, paperboard and specialty grades to external customers, and we serve primarily corrugated packaging, folding
carton, food service, liquid packaging and commercial print markets. We sell our products globally to customers who value our scale,
wide range of products, and service.
Corrugated Packaging
We operate 152 corrugated packaging plants in North America. We convert corrugated sheets into corrugated products ranging from
one-color protective cartons to graphically brilliant point-of-purchase packaging. Our corrugated container plants serve local
customers and regional and large national accounts. We provide customers with innovative packaging solutions to help them promote
and sell their products. We provide structural and graphic design, engineering services and custom, proprietary and standard
automated packaging machines, offering customers turn-key installation, automation, line integration and packaging solutions. We
offer a machinery solution that creates pouches that replace single-use plastics, including bubble mailers.
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We design, manufacture and, in certain cases, pack temporary displays for sale to consumer products companies and retailers. These
displays are used as marketing tools to support new product introductions and specific product promotions in mass merchandising
stores, supermarkets, convenience stores, home improvement stores and other retail locations. We also design, manufacture and, in
some cases, pre-assemble permanent displays for these customers. We make temporary displays primarily from corrugated
paperboard. Unlike temporary displays, permanent displays are restocked with our customers’ product; therefore, they are constructed
primarily from metal, plastic, wood and other durable materials. We manufacture and distribute point-of-sale material utilizing litho,
screen and digital printing technologies. We manufacture lithographic laminated packaging for sale to our customers that require
packaging with high quality graphics and strength characteristics.
We also have 57 distribution operations that generate revenues primarily from the distribution of packaging products and three
locations that assemble display products. We distribute corrugated packaging materials and other specialty packaging products,
including stretch film, void fill, carton sealing tape and other specialty tapes, through our network of warehouses and distribution
facilities. We also provide contract packing services, such as multi-product promotional packing and product manipulation, such as
multipacks and onpacks.
We are the one of the largest manufacturers of corrugated packaging in North America, with operations in the U.S., Canada and
Mexico. In the year ended December 31, 2025 our corrugated operations in North America shipped approximately 100 billion square
feet.
Consumer Packaging
We operate 37 consumer packaging plants in North America. Our consumer packaging operations generate revenues primarily from
the sale of consumer packaging products such as folding cartons, inserts and labels. We are one of the largest manufacturers of folding
cartons in North America, with operations in the U.S., Canada and Mexico. Our customers generally use our inserts and labels to
provide customer product information either inside a secondary package (e.g., a folding carton) or affixed to the outside of a primary
package (e.g., a bottle). Folding cartons typically protect customers’ products during shipment and distribution, and employ graphics
to promote them at retail. We print, coat, die-cut and glue the cartons to customer specifications and ship finished cartons to customers
for assembling, filling and sealing. We employ a broad range of offset, flexographic, gravure, backside printing, coating and finishing
technologies, as well as iridescent, holographic, textured and dimensional effects to provide differentiated packaging products, and
support our customers with new package development, innovation and design services and package testing services.
B) Europe, MEA and APAC Segment
Our Europe, MEA and APAC segment mill operations consist of 21 mills, and includes a system of mills and box plants that primarily
produce a full line of containerboard that is converted into corrugated containers. We operate in 22 countries across western and
eastern Europe. Our main European operations are in Germany, France, the Netherlands, Italy, the U.K., Spain, Sweden and Austria.
Our Europe, MEA and APAC segment operational management manage a number of operations outside Europe, including a
corrugated plant in Morocco, Africa, a containerboard mill and corrugated plant in India, and consumer packaging operations in
China, Japan and Australia. We also manage four (non-European) facilities that manufacture bag-in-box, located in Argentina,
Canada, Mexico and the U.S. (with a fifth expected to begin operation in the U.S. in 2026) and therefore such operations are included
in the Europe, MEA and APAC segment.
Sales of our Europe, MEA and APAC segment accounted for 34.8% of our net sales to our external customers in 2025. See “Note 3.
Segment Information” of the Notes to Consolidated Financial Statements, as well as Item 7. “Management’s Discussion and Analysis
of Financial Condition and Results of Operations”, for additional information.
Products
We are one of the European leaders in terms of capacity in corrugated packaging, containerboard, consumer packaging and bag-in-
box. We also operate in several other packaging and paper market segments, such as sack kraft paper, machine glazed paper, graphic
board, solidboard, solidboard packaging and boxboard.
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Our operations in the Europe, MEA and APAC segment are highly integrated. In 2025 we were approximately 10% long on paper in
Europe, MEA and APAC as paper production exceeded containerboard that is converted into corrugated containers in our converting
plants.
Containerboard and Corrugated Containers
We operate 14 recycled containerboard mills throughout Europe (three in Germany, two in each of France, the U.K., the Netherlands
and Italy, and one in each of Spain, the Czech Republic and Serbia), as well as one in India. Our three kraftliner mills, located at Piteå
(Sweden), Facture (France), and Nettingsdorfer (Austria), are among the largest and, we believe, the lowest cost kraftliner mills in
Western Europe.
In the year ended December 31, 2025, our containerboard mills in our Europe, MEA and APAC segment produced approximately 6.4
million tons.
We are one of the leading producers of corrugated containers in Europe by capacity, with 179 production facilities (comprising
corrugated plants, sheet feeders, sheet plants and other specialized facilities). We have an extensive geographic presence in western
Europe and a growing presence in eastern and southeastern Europe. We also have a containerboard mill and corrugated conversion
facility in India. In 2025, our corrugated operations in our Europe, MEA and APAC segment shipped approximately 96.8 billion
square feet.
Consumer Packaging
We operate 40 consumer packaging plants in Europe in 12 countries which primarily manufacture folding cartons, labels and leaflets
for consumer packaging markets. We are one of the largest producers in Europe. We also have operations in China, Japan and
Australia in consumer packaging.
Other Paperboard and Other Paper
In the year ended December 31, 2025 we produced approximately 0.4 million tons of other paperboard, comprising sack kraft,
machine glazed paper and solidboard in three mills located in Germany and Spain. We are one of the leading manufacturers of both
solidboard and solidboard packaging in Europe.
Bag-in-box
We are one of the largest European manufacturers in the high growth bag-in-box market, a leading European supplier of bags for bag-
in-box packaging (primarily packaged in corrugated boxes) for the wine market, and a significant global supplier for taps for bag-in-
box packaging for the wine market. We have nine bag-in-box or tap manufacturing facilities located in France, Spain, Italy, Bulgaria,
Canada, Argentina, Mexico, and the U.S. A tenth facility is under construction in the U.S.
C) LATAM Segment
We are a leading business in containerboard and corrugated containers in Latin America.
In Latin America, we are one of the largest producers of corrugated containers and containerboard, by volume. Our largest operations
in Latin America are in Brazil and Colombia. We have operated continuously in Latin America since 1986.
Reliable third-party data on Latin America is not available and, therefore, statements in relation to our market position in Latin
America are based on management estimates.
Sales of our LATAM segment accounted for 6.7% of our net sales in 2025. See “Note 3. Segment Information” of the Notes to
Consolidated Financial Statements, as well as Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of
Operations”, for additional information.
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Products
Our LATAM segment mill operations consist of nine mills in three countries (Brazil, Colombia and Argentina) producing
containerboard, consumer packaging board and sack kraft paper, with combined productions of approximately 1.5 million tons in the
year ended December 31, 2025 (of which containerboard represented approximately 1.3 million tons).
The LATAM segment has 27 corrugated plants in eight countries – Brazil, Colombia, Argentina, the Dominican Republic, Costa Rica,
El Salvador, Peru, Chile, as well as Puerto Rico. The LATAM segment for the year ended December 31, 2025 shipped approximately
23 billion square feet of corrugated containers.
We also have folding cartons operations in Costa Rica and El Salvador and the Dominican Republic, paper sack operations in
Colombia, Ecuador, Costa Rica and the Dominican Republic, and a recycling plant in Nicaragua.
Sales and Marketing
We provide packaging products for the transportation of a diverse range of consumer and industrial goods, such as processed and fresh
food, agricultural products, beverages, industrial and consumer electronics, chemicals and pharmaceuticals, and a range of other
products, as well as higher value-added corrugated products, such as those featuring enhanced graphics used for point-of-sale displays
and consumer and shelf-ready packaging. During 2025, the majority of our products were sold to the fast-moving consumer goods
sector.
No individual customer accounted for more than 10% of our net sales in 2025. We generally manufacture our products pursuant to our
customers’ orders. We believe that we have good relationships with our customers.
A portion of our customers are considered pan-regional, and we have teams devoted to managing and servicing the requirements of
these customers. These teams work in conjunction with local operations. Another portion of our customers are multi-national accounts,
serviced in more than one country (or state, in the case of the U.S.) but not across a full region. We have also built teams to service
their requirements. The remaining customers are considered either multi-site national accounts within a single country or local
accounts, and marketing and sales activity for these customers is primarily undertaken by local businesses. Our tailored approach to
sales and marketing allows us to remain close to our customers irrespective of size while also staying updated on competitors’
offerings and local market developments.
We market our products through our own sales force. We also market a number of our products, primarily paper, through independent
sales representatives and independent distributors. We generally pay our sales personnel a combination of base salary, commissions
and annual bonus. We pay our independent sales representatives on a commission basis. Orders from our customers generally do not
have significant lead times. We discuss net sales to unaffiliated customers through our foreign operations and other financial
information in “Note 3. Segment Information” of the Notes to Consolidated Financial Statements.
A considerable portion of our converted product sales are made under customer contracts with terms ranging from one to three years.
These agreements typically provide that the customer will source a specified percentage of its total product requirements from us on an
exclusive basis, and typically allow for raw material cost movements to be passed through to end pricing.
Our marketing strategy focuses on product quality, design differentiation and high caliber customer service. Through continuous
communication with customers, our goal is to improve our service quality and proactively anticipate or respond to customers’ needs.
The marketing strategy for our mills is to profitably match the sale of appropriate paper and containerboard to the demand
requirements of both internal and external converters located within an economically reasonable shipping distance from each mill,
thereby minimizing logistics costs. Our strategy for the corrugated container and other converting plants focuses on both customized
products tailored to fit customers’ needs and high-volume sales of commodity products, such as transport packaging for predominantly
local markets. Most sales of converted products are made on the basis of short-term orders for specified volumes at market rates.
These orders are priced based on a number of factors such as currency, volume, weight, applications (printing, die-cutting and
lamination) and geographic area. We seek to maintain a broad customer base for each market to avoid customer concentration.
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Since all of our businesses operate in highly competitive industry segments, we regularly discuss sales opportunities for new business
or for renewal of existing business with customers. Our packaging products compete with packaging made from other materials,
including plastics. The primary competitive factors we face include price, design, product innovation, quality, service and
sustainability, with varying emphasis on these factors depending on the product line and customer preferences. Our machinery
solutions represent one example of how we compete by providing differentiated solutions that create value for our customers. We
believe that we compete effectively with respect to each of these factors and we obtain feedback on our performance with periodic
customer surveys, among other means.
Competition
We operate in a competitive global marketplace. The industries in which we operate are highly competitive, and no single company
dominates any of those industries. As containerboard and corrugated containers products are largely standardized products,
competition is primarily based on price.
In North America, our containerboard and paperboard operations compete with integrated and non-integrated national and regional
companies operating primarily in North America, and to a limited extent, manufacturers outside of North America. Our competitors
include large and small, vertically integrated companies and numerous smaller non-integrated companies. In the corrugated packaging
and folding carton markets, we compete with a significant number of national, regional and local packaging suppliers in North
America. In the promotional point-of-purchase display and converted paperboard products markets, we primarily compete with a
smaller number of national, regional and local companies offering highly specialized products.
In Europe, there are different types of companies operating in the vertically integrated containerboard and corrugated container
industry; some are vertically integrated, having both containerboard and corrugated container capacity, while others may be in only
one of those businesses. There are also a number of companies which have a presence in more than one country, while others operate
in a single geography. Our key competitors for containerboard and corrugated containers in western and eastern Europe are the other
leading pan-continental producers of containerboard and corrugated containers. Our key competitors for consumer packaging board
and consumer packaging are also pan-continental players.
In Latin America, our key competitors for containerboard and corrugated containers in Latin America are regional or national
companies within the countries in which we operate, as there are few pan-continental or international producers of containerboard and
corrugated containers. Our key competitors for consumer packaging board and consumer packaging are also pan-continental players.
Seasonality
While our businesses are not materially impacted by seasonality, there is some variability in demand that occurs from quarter to
quarter. Our volumes in the first half of the year are generally expected to be stronger than the second half in our North America
segment and Europe, MEA and APAC segment, while volumes in our LATAM segment are generally the opposite.
Raw Materials
The primary raw materials used by our mill operations are recycled fiber at our recycled containerboard and paperboard mills and
virgin fiber from hardwoods and softwoods at our virgin containerboard and paperboard mills. Certain of our virgin containerboard is
manufactured with some recycled fiber content.
In Europe, the principal raw materials for the recycled containerboard, recycled consumer packaging board, solidboard and graphic
board mills are various grades of recovered papers and, in particular, OCC. In Europe, we source recovered paper in a number of
different ways, which we refer to as “grip” levels, through sources we directly control or with whom we have contracts, with the
remainder being acquired primarily under spot purchases. We believe this security of supply to be a significant benefit at times when
recovered fiber is in short supply.
From a price perspective, most of our requirements in Europe are linked to official reference prices and are therefore based on market
prices.
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Our kraftliner mills and sack kraft mill require virgin fiber as their principal raw material. We purchase virgin fiber on the open market
through contractual arrangements and, in some cases, cooperate with landowners to develop forest resources. We are not reliant on any
one supplier for a substantial portion of our raw materials sourced from third parties.
Our overall fiber sourcing for all of our mills in North America is approximately 57% virgin and 43% recycled. Recycled fiber prices
and virgin fiber prices can fluctuate significantly. We source virgin fiber from third-party sources, and recycled fiber through a
combination of our own depots, long and short-term contracts and from the open market.
Our overall fiber sourcing for our mills in our Europe, MEA and APAC segment is approximately 22% virgin and 78% recycled.
Recycled fiber prices in particular can fluctuate significantly, and may not necessarily move in the same direction or quantum as in
other regions. We source virgin fiber in Europe from third-party sources, and recycled fiber through a combination of our own depots,
long and short-term contracts and on the open market.
Our overall fiber sourcing for our mills in Latin America is approximately 58% virgin and 42% recycled. Recycled prices in particular
can fluctuate significantly and vary from country to country in Latin America. We source virgin fiber primarily from our own forestry
bases in Colombia and Brazil, but also from the market. We source recycled fiber through a combination of our own depots, long and
short-term contracts and from the open market.
Containerboard and paperboard are the primary raw materials used by our corrugated and consumer packaging converting operations
in our operating segments. Our converting operations use many different grades of containerboard and paperboard. We supply
substantially all of our converting operations' needs for containerboard and paperboard from our own mills and through the use of
trade swaps with other manufacturers. These arrangements allow us to optimize our mill system and reduce freight costs. Because
there are other suppliers that produce the necessary grades of containerboard and paperboard used in our converting operations, we
believe we would be able to source significant replacement quantities from other suppliers in the event that we incur production
disruptions for recycled or virgin containerboard and paperboard.
Energy
We incur energy costs in our mill operations and the cost of natural gas, oil, electricity and purchased biomass fuel is subject to
fluctuations. In our recycled mills, we primarily use natural gas and electricity, supplemented at certain mills with fuel oil. In our
virgin fiber mills, we primarily use biomass and natural gas, supplemented at times with fuel oil, and, at a limited number of facilities,
coal, to generate steam used in the pulping and paper making processes and to generate some or all the electricity used on site. We
primarily use purchased electricity and natural gas to operate our converting facilities. We generally purchase these products from
suppliers at market or tariff rates. We use commodity contracts to hedge energy exposures. See Item 1. “Business — Governmental
Regulation — Environmental” and Item 7A. “Quantitative and Qualitative Disclosures About Market Risk — “Commodity Price
Risk” for additional information.
Transportation
We also incur costs of inbound and outbound freight in our business. Factors that influence our freight expense are distance between
shipping and delivery locations, distance from our facilities to customers and suppliers, mode of transportation (rail, truck, intermodal
and ocean) and freight rates, which are influenced by supply and demand and fuel costs. The principal markets for our products are in
North America, Europe and Latin America.
Innovation
Our approach to innovation focuses on helping customers save more, sell more, and optimize packaging solutions to improve
consumer experience.
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Our innovation model prioritizes agility for faster innovation and smarter testing, promoting global innovation with local relevance,
fostering end-to-end circular packaging innovation, and enabling quicker, better decision making with market-leading capabilities. We
emphasize local implementation and strong coordination to optimize efficiency and effectiveness across all operations and customer
interactions. To help achieve this, we have 33 interconnected customer-centric Innovation and Experience centers, strategically
positioned throughout the organization. These hubs are responsible for bringing to life a “local” approach by aligning the global vision
with local customization influenced by the culture, trends and customer needs. Additionally, our innovation teams focus on customer
focused initiatives, backed by market-leading capabilities.
We have a suite of tools to support our innovation and selling efforts. The strengths of these tools include the amount of data that has
been gathered for their use over a long period of time, and the fact that they are internally developed and are equally available to all
operations.
Demonstrating our commitment to excellence, in 2025, we won in excess of a hundred awards across a host of categories, including
design, innovation, safety, sustainability, supplier excellence, community engagement and as a top employer. Our leadership was
recognized globally and locally with Tony Smurfit being named CEO of the Year by both The Irish Times and Fastmarkets. Smurfit
Westrock was also ranked among Forbes Magazine’s Global 2000, TIME Magazine’s World’s Best Companies, and Sustainability
Magazine’s Most Sustainable Companies, as well as being named Company of the Year by Business and Finance Media Group. Our
innovation expertise and creativity were recognized with 10 WorldStar 2025 awards, five PAC Global Awards and nine Shop! OMA
Awards.
Our “Better Planet Packaging” initiative aims to develop our sustainable packaging to positively impact global supply chains, improve
our packaging environmental footprint and reduce packaging traces on the planet. Characteristics of Better Planet Packaging include:
•optimized and fit-for-purpose materials;
•reduced carbon footprint;
•designed to be recyclable and are actually recycled;
•manufactured with recycled material when possible, and sustainably sourced virgin material when needed; and
•naturally biodegradable.
To support the market in developing and implementing innovative packaging solutions more rapidly, reliably and collaboratively, we
launched our Design2Market concept in 2022. With hundreds of successful projects executed for leading brands using Design2Market
or similar concepts, our customers benefit from a streamlined testing process, reduced risk and sustainable packaging options, all
aligned with our commitment to innovation and sustainability through the Better Planet Packaging initiative.
Sustainability
Commitment to Sustainability Matters
At Smurfit Westrock we are committed to creating packaging solutions that protect what we all care about. We believe this
commitment is evident in our culture and behaviors at all levels and across all areas of our business, informing our strategic business
decisions and actions, now and into the future.
As a global leader in sustainable, paper-based packaging, we are proud to create solutions from renewable and recyclable materials,
that help deliver a better future for all. Together, we are committed to being an impactful business and supporting a greener, bluer
planet.
There is strong oversight of sustainability and related matters within the Company. The Sustainability Committee of the Company’s
Board of Directors (the “Board”) has been in place since the completion of the Combination and met on five occasions in 2025.
Climate change is a regular agenda item at Sustainability Committee meetings, where the Sustainability Committee reviews various
aspects of the Company’s climate strategy, stakeholder expectations and the evolving regulatory landscape. The Company’s chief
executive officer (the “CEO”), through his overall responsibility for the day-to-day oversight of the Company’s business and the
implementation of the Company strategy and policies, is directly responsible for actions governing sustainability, including areas such
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as climate change. He is also responsible for providing that the Company’s purpose, values and culture are instilled throughout the
Company. The CEO is also a Director of the Board.
We understand the challenges facing both our business and the planet and are committed to doing our part in resolving these critical
issues. Our ambition is to deliver sustainable growth for the benefit of all our stakeholders based on three pillars: Planet, People and
Communities, and Impactful Business.
Planet
The circular economy has long been at the core of our business. We use renewable, recyclable, and recycled materials to create
innovative, sustainable packaging solutions. As a leading consumer of recycled fiber, we play our part in the circular economy by
recycling old paper-based packaging. The virgin wood fiber we use is sourced from responsibly managed forests and all our fiber-
based manufacturing facilities have been chain of custody certified to internationally recognized standards. We work with our
customers to help them deliver on their sustainability goals.
People and Communities
Having engaged employees is critical for the success of our business. We are committed to providing an inclusive and safe place to
work for the talented people in our globally and culturally diverse organization. Our commitment also extends to all of the
communities in which we operate.
Impactful Business
Through our activities, we aim to create sustainable value for our customers, investors, employees, suppliers and the communities in
which we are privileged to operate. We innovate and partner with our customers to create packaging solutions that can replace less
sustainable materials and reduce their carbon footprint. We aim to do this with the highest ethical business standards.
Climate-Related Disclosures
We recognize the need for climate-related disclosures as part of our commitment to sustainability and responsible corporate
citizenship. We published an overview of our approach to climate risk management in the first half of 2025 as part of our 2024
sustainability report which took into consideration the recommendations of the Task Force on Climate-related Financial Disclosures.
Our sustainability report will be made available on our website in April 2026 at www.smurfitwestrock.com/sustainability. The
information contained in our sustainability reports is not incorporated by reference into this Form 10-K and should not be considered
part of this or any other report that we file with or furnish to the SEC.
Environmental Regulations
We may incur additional compliance costs and burdens resulting from the enactment of new laws and regulations aimed at reducing
carbon emissions, which could take the form of cap-and-trade, carbon taxes or a greenhouse gas (“GHG”) reduction mandate.
We may also incur higher prices for certain raw materials and fuels, including biomass and natural gas, related to the transition to a
lower-carbon economy or the enactment of GHG reduction mandates. Also, new climate rules and regulations that result in fuel
efficiency standards could increase our transportation costs.
Certain jurisdictions in which we have manufacturing facilities or other investments have already taken actions to address climate
change.
We also operate in countries or regions that have already adopted GHG emissions trading schemes such as the European Union where
we are subject to the impact on energy prices and compliance from the EU Emission Trading Scheme Directive.
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Human Capital Resources
People are our priority. Our primary objective is to provide a great place to work for all our employees guided by our commitment to
equal employment opportunity for all. We understand that our success is driven by our highly valued, motivated and diverse teams
across the world. By building a safe and inclusive work environment that empowers and inspires our global workforce, our people will
be able to thrive and grow our business. Our responsibility as an employer is to create a workplace where people can earn a fair living,
where they will be safe and can return home to their families every day, and to provide the conditions where they feel valued and
respected.
As of December 31, 2025, we employed approximately 97,000 people across the 40 countries in which we operate, of which
approximately 50,000 were in the North America segment, approximately 36,500 in our Europe, MEA and APAC segment, and
approximately 10,500 in the LATAM segment. Our businesses can be seasonal in nature which results in peaks and troughs in
employment numbers across certain sections of our workforce. These changes are managed through fair and flexible hiring practices
in accordance with applicable laws.
We have collective bargaining agreements with labor unions in various jurisdictions in which we operate which expire and are
renegotiated at various dates. We are currently in negotiations to renew or extend certain union contracts that have expired or are
expiring in the future. There are different labor unions represented across our sites and the majority of unionized employees are
covered by labor agreements as a result of either local or national negotiations in the countries concerned. The majority of our
unionized employees in the U.S. are represented by the United Steelworkers. In Europe, we are currently in the process of merging the
Smurfit Kappa and the WestRock European Works Councils. The European Works Councils were created to assist in the development
of an open two-way communication process on matters related to the business and the work environment. During 2025, we
experienced no significant work stoppages, and we believe we have satisfactory labor relations with our employees.
Safety, Health and Well-Being
We promote a strong culture of safety and well-being. The safety and well-being of our employees, contractors, and other stakeholders
is paramount to us and is a core value for Smurfit Westrock. Operating safely is a non-negotiable, and our ‘Safety for Life’ program is
active across all regions and will remain at the heart of our continuous improvement programs. We strive every day to ensure that each
of our employees return home safely.
Smurfit Westrock invests substantial time, effort, and financial resources to comply with applicable regulations and to promote a safe
workplace. In 2025, we achieved a lost time incident rate of 0.56, and a total recordable incident rate of 1.06 for the combined group,
based on the number of incidents per 200,000 work hours for employees. Beyond reporting and learning from incidents, we
proactively invest in initiatives, tools, technology and safety programs across the Group. We endeavor to ensure the right safety
conversations are happening to better control and mitigate potential risks.
An Employer of Choice
We are truly a diverse organization with approximately 97,000 employees from across the 40 countries in which we operate. We are
committed to fostering a safe, respectful and inclusive workplace where everyone has a real sense of belonging and can be their
authentic selves at work every day. We strive for a culture and a workplace where all our employees feel valued, respected, and
empowered to thrive. Our people priorities, which are designed to help us develop a sustainable business, includes a focus on
employee engagement, people development and social support to our communities.
We have a number of communications coordinators and Employee Resource Groups in each region which focus on the topics that
matter most locally. These groups have been established on a voluntary basis, are employee-led based on common interests and
backgrounds, and have executive sponsorship to help with momentum, profile and resourcing.
We are deeply committed to our communities and collaborating with them. We encourage our local teams to connect with their
communities through social and environmental initiatives. Our Open Community initiatives cover all aspects of our involvement with
our communities around the world, with hundreds of projects in flight centered on four pillars: Empowering Communities,
Encouraging Well-being, Inspiring Our Future and Protecting Our Planet.
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Culture & Engagement
Our culture is rooted in our values, which expects each employee, leader and function to live our values of safety, integrity, respect
and loyalty. We infuse our values through our ways of working and communication across the organization. In addition to engagement
and pulse surveys, in 2025 we developed and launched our first combined global employee engagement survey with over 80,000
employees participating with their feedback. We also encourage regular, live communications across the organization and host
quarterly global town halls with our senior leadership that include business updates and employee question-and-answer sessions. In
addition, regional business town halls are held on a regular basis.
Learning and Development
For employees, across all levels and businesses in our Company, our learning and development programs equip employees with the
relevant skills to be effective in their current roles and also to prepare them for the future, both within and outside of Smurfit
Westrock.
As a business with a strong track record of developing talent internally, our talent planning initiatives and programs help our business
to ensure we have the right people, with the right experience ready to progress in their careers as critical roles and talent needs arise.
Through our talent cycle of talent identification, succession planning and talent development, we have been able to ensure talent
mobility across the organization in a timely manner into key vacancies.
Through our Smurfit Westrock Learning Academy, we have a number of key management development programs which take place
annually, including Regional Graduate Programs, Advanced Management Development Program and Global Manager Program. These
serve to ensure that we retain, motivate and develop employees, allowing us to have a robust talent pipeline at all career stages. We
partner with leading academic institutions, including Harvard and INSEAD, which allow us to leverage global best practice in this
area. Since 2016 our flagship leadership development program, Open Leadership, runs in partnership with INSEAD business school
and has seen more than 500 of our senior leaders attend this year long three-module program. This investment in our leadership
community is based on the belief that business performance is linked to human behavior.
Compensation & Benefits
We believe our compensation packages provide the appropriate incentives to attract, retain and motivate our employees, and
ultimately to grow our business. Our compensation programs are designed to reinforce performance, our business growth and our
talent strategy. We provide base pay that is market relevant and competitive and that aligns with employee positions, skill levels, and
experience. In addition to base pay, we provide opportunity for employees to receive annual performance-based incentive awards for
certain jobs and job levels. Our employee benefits packages, which vary by country and region, are competitive and local market
relevant.
We continue to evolve our medical and welfare benefits programs to provide for employees’ health and well-being, including
employee assistance programs. Additionally, to foster a strong sense of accountability and ownership, and align the interests of
managers with shareholders, we grant stock-based incentives to our most senior manager levels.
We are committed to equal pay for equal work. To deliver on that commitment we conduct frequent pay analysis, global pay equity
benchmarking and job analysis, and review our pay practices annually.
Patents and Other Intellectual Property
We hold a substantial number of foreign and domestic trademarks, trademark applications, trade names, patents, patent applications
and licenses relating to our business, our products and our production processes. Our patent portfolio consists primarily of utility
patents relating to our products and manufacturing operations, including proprietary automated packaging systems. Our company
name and logo, and certain of our products and services, are protected by domestic and foreign trademarks. Our patents, trademarks
and other intellectual property rights, particularly those relating to our manufacturing operations, are important to our operations as a
whole. Our intellectual property has various expiration dates.
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Governmental Regulation
Health and Safety
Our business involves the use of heavy equipment, machinery and chemicals and requires the performance of activities that create
safety exposures. Safeguarding the health, safety and overall welfare of our team is core to how we operate and critical to attracting
and retaining the best talent, while also playing a pivotal role in realizing our business and sustainability objectives. We implement our
health and safety requirements through comprehensive safety management systems that include global policies, performance
standards, implementation tools, guidance documents, standardized forms, best practice sharing and operational learning. We seek to
reduce exposures and eliminate life-changing events through engagement, execution of targeted, results-driven activities, and
implementation of systems that promote continuous improvement.
We are subject to a broad range of foreign, federal, state and local laws and regulations relating to occupational health and safety, and
our safety program includes measures required for compliance. We have incurred, and will continue to incur, operating costs and
capital expenditures to meet our health and safety compliance requirements, as well as to continually improve our safety systems. We
believe that future compliance with occupational health and safety laws and regulations will not have a material adverse effect on our
results of operations, financial condition or cash flows.
Certain governmental authorities in locations where we do business have established asbestos standards for the workplace. Although
we do not use asbestos in manufacturing our products, asbestos containing material (“ACM”) is present in some of the facilities we
own or lease. For those facilities where ACM is present and ACM is subject to regulation, we have established procedures for properly
managing it.
Environmental
Environmental compliance requirements are a significant factor affecting our business. Our manufacturing processes involve the use
of natural resources, such as virgin wood fiber and fresh water, discharges to water, air emissions and waste handling and disposal
activities. These processes are subject to numerous federal, state, local and international environmental laws and regulations, as well as
the requirements of environmental permits and similar authorizations issued by various governmental authorities. We invested
approximately $168 million of capital expenditure during fiscal 2025 on matters relating to environmental compliance.
Available Information
Our website address is www.smurfitwestrock.com, and our investor relations website is https://investors.smurfitwestrock.com. We
promptly make available on our investor relations website, free of charge, the reports that we file or furnish with the SEC, corporate
governance information (including our Code of Conduct and Code of Ethical Conduct for Directors and Senior Financial Officers) and
select press releases. None of the information on our website is incorporated into this Annual Report on Form 10-K or any other
filings the Company makes with the SEC. We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, proxy and information statements, and amendments to reports filed or furnished pursuant to Sections 13(a), 14, and 15(d)
of the Exchange Act. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other
information regarding Smurfit Westrock and other issuers that file electronically with the SEC.
From time to time, we have used, and expect to continue using, our website as a means of disclosing material information to the public
in a broad, non-exclusionary manner, including for purposes of the SEC’s Regulation Fair Disclosure. Financial and other material
information regarding the Company is routinely posted on our website and accessible at https://investors.smurfitwestrock.com. In
order to receive notifications regarding new postings to our website, investors are encouraged to enroll on our website to receive
automatic email alerts.
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Information About Our Executive Officers
Our executive officers as of the date of this Annual Report on Form 10-K are as follows:
Anthony Smurfit, 62, serves as the President & Group Chief Executive Officer, a position he held since 2024 and as director of
Smurfit Westrock since 2023. He served as a director of Smurfit Kappa, one of our wholly-owned subsidiaries, and its predecessors
from 1989 and as Group Chief Executive Officer of Smurfit Kappa between 2015 and 2024. Prior to that, he served as Group Chief
Operations Officer of Smurfit Kappa from 2002 until 2015. He was Chief Executive of Smurfit Europe from October 1999 to 2002
prior to which he was Deputy Chief Executive of Smurfit Europe and previously Chief Executive Officer of Smurfit France.
Ken Bowles, 54, serves as the Executive Vice President & Group Chief Financial Officer, a position he held since 2024 and as
director of Smurfit Westrock since 2023. He joined a predecessor of Smurfit Kappa, one of our wholly-owned subsidiaries, in 1994
and occupied a number of finance roles in various parts of Smurfit Kappa and its predecessors. He was appointed Group Chief
Financial Officer and a director of Smurfit Kappa in 2016, prior to which he was the Group Financial Controller between 2010 and
2016. Previously, he served as Smurfit Kappa Group’s Head of Tax from 2007 to 2010, prior to which he was appointed as the
Group’s first Head of Compliance in 2004.
Laurent Sellier, 57, serves as the President & Chief Executive Officer, North America (including Mexico), a position he held since
July 5, 2024. He joined Smurfit Kappa, one of our wholly-owned subsidiaries, in 1994 as an internal auditor, and since then has
worked in several positions across Smurfit Kappa in France, the United Kingdom, Spain and the Netherlands. Mr. Sellier was
appointed Chief Executive Officer of Smurfit Kappa Americas in January 2022. Mr. Sellier was formerly the Chief Operating Officer
of the Smurfit Kappa Europe Paper and Board Division.
Saverio Mayer, 60, serves as the President & Chief Executive Officer, Europe, MEA and APAC, a position he held since July 5,
2024. He joined Smurfit Kappa, one of our wholly-owned subsidiaries, in 1986 and since then has held a number of commercial and
operational roles. Mr. Mayer was appointed Chief Executive Officer, Europe, at Smurfit Kappa in April 2017. Formerly Mr. Mayer
was Head of Pan European Sales in 1996, before taking up the position of Chief Executive Officer of Smurfit Kappa Italy in 2001. In
conjunction with his role in Italy, Mr. Mayer also served as the Chief Executive Officer of Smurfit Kappa Russia from 2007 to 2009,
Chief Executive Officer of Smurfit Kappa Poland from 2007 to 2011 and since 2011 was responsible for the Bag-in-Box (“BIB”)
Division. In September 2015, he was appointed Chief Operations Officer of Corrugated and Converting Europe and was responsible
for the operational, sales, and financial performance of the corrugated plants and BIB Division.
Alvaro Henao, 60, currently serves as the President & Chief Executive Officer, LATAM, a position he held since February 1, 2025.
Prior to this role, Mr. Henao served as the Company’s Senior Vice President of Integration, the role he has held since 2024.
Previously, over the course of 36 years, he held various positions of increased responsibility at Smurfit Kappa, one of our wholly-
owned subsidiaries. Most recently, between 2013 and 2023, he served as Chief Executive Officer, Central Cluster, at Smurfit Kappa.
Ben Garren, 64, serves as the EVP & Group General Counsel, a position he held since July 8, 2024. Prior to his current position, Mr.
Garren worked for The Coca-Cola Company, a multinational beverage corporation, for more than 24 years, during which he held a
number of senior legal roles, including most recently serving as General Counsel, International between 2018 and 2021, overseeing
legal operations for EMEA, LATAM and APAC Groups, and prior to that, he served as General Counsel, North America. Before
joining The Coca-Cola Company, Mr. Garren practiced law in New York as a litigation associate with leading law firms Baker Botts
LLP and Cravath, Swaine & Moore LLP.
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Item 1A. Risk Factors
Investing in our ordinary shares involves uncertainty and risk due to a variety of factors. You should carefully consider the risks
described below, which could have a material adverse effect on our business, financial condition, reputation, results of operations
(including revenues and profitability) and/or ordinary share price, with all of the other information included in this Annual Report on
Form 10-K. The Company may not be able to accurately predict, control or mitigate these risks. Statements in this section are based on
the Company’s beliefs and opinions regarding matters that could materially adversely affect the Company in the future and are not
representations as to whether such matters have or have not occurred previously. The risks and uncertainties described below are not
exhaustive and should not be considered a complete statement of all potential risks or uncertainties that the Company faces or may
face in the future.
Risk Factors Summary
The following summary is intended to enhance the readability and accessibility of our risk factor disclosures. We encourage you to
carefully review the full risk factors discussed below in their entirety for additional information. Some of the factors that could
adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares, include:
Market and Industry Risks
•As a leading global manufacturing business, we have been, and may be materially adversely affected by economic,
geopolitical and social factors that are beyond our control.
•We may be adversely affected by uncertainty, downturns, actions taken by competitors or other changes in the paper and
packaging industry.
•Our earnings are highly dependent on demand.
•Price fluctuations in, or shortages in the availability of, energy, transportation and raw materials could materially adversely
affect our business.
•We are exposed to significant competition in the paper and packaging industry, which may materially and adversely affect
the price and volume of products sold.
Operating Risks
•We may experience business disruptions that adversely affect our operations.
•We may fail to anticipate trends and develop or integrate new technologies or to protect intellectual property related to our
products and technologies.
•Our capital expenditures may not achieve the desired outcomes or may be completed at a higher cost than anticipated.
•We are exposed to risks related to international sales and operations.
•We could be exposed to currency exchange rate fluctuation risks.
•We may produce faulty or contaminated products due to failures in quality control measures.
•We are subject to cybersecurity risks that could threaten the confidentiality, integrity and availability of data in our systems,
and could result in disruptions to our operations.
•We may be adversely impacted by work stoppages and other labor relations matters.
•We may not be able to attract, motivate and/or retain qualified personnel, including our key personnel.
•We face challenges associated with sustainability matters, including the impact of climate change and its potential impact on
areas such as our operations and raw material availability.
•Failure by us to successfully implement strategic transformation initiatives, including those relating to information
technology infrastructure, or to achieve our mid-range or long-range targets and goals could adversely affect our business and
share price.
•If we are unsuccessful in integrating acquisitions or if disposals result in unexpected costs or liabilities, our business could be
materially and adversely affected.
•We face risks related to the Combination.
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Financial Risks
•Our growth depends on our ability to retain existing customers and attract new customers.
•Our debt could adversely affect our financial health and operating flexibility.
•Adverse credit and financial market events and conditions, as well as credit rating downgrades, could, among other things,
impede access to or increase the cost of financing.
•We have a significant amount of goodwill and other intangible assets and a write-down could materially adversely impact our
operating results.
•We have a number of pension arrangements that are currently in deficit and may require increased funding due to statutory
requirements.
•Our decision or ability to pay dividends in respect of our shares or conduct share repurchases is subject to a number of
factors, and there are no guarantees that the Company will pay dividends or maintain or increase the level of any such
dividends or that the Company will conduct share repurchases.
•Changes in existing financial accounting standards or practices may have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
Legal and Regulatory Risks
•We are subject to a wide variety of laws, regulations and other requirements that may change or may impose substantial
compliance costs.
•We are subject to a growing number of environmental and climate change laws and regulations that impose compliance
obligations and costs, and failure to comply with these laws may have a material adverse effect on our business.
•Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an
adverse effect on our reputation, business, financial condition and results of operations.
•We are subject to compliance with competition and antitrust laws and regulations in the jurisdictions in which we operate
and, from time to time, may be subject to investigations or proceedings with respect to allegations of unfair competitive
practices and similar behavior.
•We are subject to a number of laws and regulations relating to privacy, security and data protection, and failure to comply
could lead to fines and/or litigation.
•Failure to comply with applicable occupational health and safety laws and regulations may have a material adverse effect on
our business.
•The Company’s maintenance of two exchange listings may adversely affect liquidity in the market for our shares and result in
pricing differentials of our shares between the two exchanges.
•We are required to comply with the Sarbanes-Oxley Act, and we may continue to incur significant costs and devote
substantial management time towards maintaining and improving our internal controls, which may materially adversely affect
our operating results in the future.
Risks Related to Our Incorporation in Ireland
•We are incorporated in Ireland and Irish law differs from the laws in effect in the U.S. and might afford less protection to our
shareholders.
•Any attempts to acquire the Company will be subject to the Irish Takeover Panel Act 1997, Takeover Rules, 2022 (the “Irish
Takeover Rules”) and subject to the supervisory jurisdiction of the Irish Takeover Panel and the Company’s board of
directors (the “Board”) may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover attempt.
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Market and Industry Risks
As a leading global manufacturing business, we have been, and may be in the future, materially adversely affected by factors that
are beyond our control, such as economic and financial market conditions, geopolitical conflicts and other social and political
unrest or change.
Our industry has been, and may be, adversely affected by a number of factors that are beyond our control, including, but not limited
to:
•macroeconomic and business conditions, including deteriorating or volatile macroeconomic conditions and related supply and
demand dynamics, as well as inflation and deflation;
•geopolitical conflicts and other social and political unrest or change;
•sustainability, environmental regulations and trade policies and agreements;
•conditions in the financial markets, including counterparty risk, insurance carrier risk, rising interest rates, rising commodity
prices, and currency exchange rate fluctuations, which may impact price and demand for our products and the costs to finance
and operate our business;
•financial and economic uncertainties in our major international markets;
•government deficit reduction and other austerity measures in specific countries or regions, including protectionist measures
that limit international trade, could have a negative impact on manufacturing and production levels of businesses and
customers in the markets in which we operate; and
•cyber incidents and related threats to the confidentiality, integrity and availability of data in systems.
We are unable to predict the timing or rate at which economic conditions in our markets may change and the impact of such changes.
For example, if the economic climate were to experience a deterioration as a result of geopolitical events (such as an escalation in
existing wars or conflicts or the initiation of additional conflicts or hostilities), trade tensions (including the implementation of tariffs
on U.S. imports by the current U.S. Administration and potential retaliatory tariffs) and/or a pandemic, it could result in an economic
slowdown which, if sustained over any significant length of time, could have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares. In addition, changes in trade policies,
including renegotiating, or potentially terminating, existing bilateral or multilateral agreements, as well as the imposition of tariffs,
could impact demand for our products and the costs associated with operating our business, including certain of our capital
investments.
We experienced cost inflation across our business in fiscal 2023, 2024 and 2025, albeit at moderating levels since fiscal 2022.
Persistent inflation results in higher manufacturing and transportation costs, which we may not be able to recover through higher
prices charged to our customers.
Unanticipated events such as global conflicts, public health crises, extraordinary weather events, labor disputes or strikes, and cyber
incidents may cause instability in global financial and foreign exchange markets. This instability could lead to volatility in the value of
our operating and functional currencies and hinder the availability of financing from our current lenders.
Our results of operations, cash flows and financial condition, and the trading price of our ordinary shares could be further adversely
affected, perhaps materially, by any of these matters.
We may be adversely affected by uncertainty, downturns, actions taken by competitors (such as the addition of new capacity) or
other changes in the paper and packaging industry; in addition, the cyclical nature of the paper and packaging industry could
result in overcapacity and depress prices for our products.
We are highly dependent on the market dynamics of the paper and packaging industry. We could therefore be materially adversely
affected by negative developments, uncertainty, downturns and changes in the paper and packaging industry as a whole or in part, as
well as by the addition of new capacity by our competitors. A lack of investor confidence in the paper and packaging industry could
also have an adverse effect on the trading price of our ordinary shares.
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Our operating results are impacted by the paper and packaging industry’s historical cyclical investment pattern. This cyclicality arises,
in part, from the capital intensity of facilities such as paper mills (which generally continue production as long as paper prices are
sufficient to cover their marginal costs), the lead time between the planning and completion of a new mill and the fact that new
additions of containerboard and paperboard capacity tend to be large relative to the overall demand for the product. In addition, there
is the potential to convert certain other paper machines into containerboard machines, which may contribute to overcapacity.
Consequently, the industry has from time-to-time experienced periods of substantial overcapacity and there can be no assurance that
this will not reoccur. For example, we experienced market-related downtime at certain of our mills during the fourth quarter of fiscal
2025.
In the absence of sufficient economic growth to generate increased demand or the closure of facilities (either temporarily or
permanently) to mitigate the effect, new capacity can cause a period of regional overcapacity which may lead to downward pricing
pressure.
These adverse effects could be further exacerbated if producers in other regions (particularly China) experience overcapacity within
their own local and regional markets and seek to increase their levels of exports into those markets within which we operate and do so
at lower pricing levels. The effect of such activity would be to depress prices for our products and could materially adversely affect
our selling prices and profitability.
We believe that the trading price of our ordinary shares has from time to time been adversely affected in part due to the impact of
macroeconomic conditions on pricing and demand and announcements by certain of our competitors of planned additional capacity in
the European and North American containerboard markets in which we participate, as well as the subsequent implementation of
certain of those plans and the impact they will have on future supply and demand dynamics and pricing.
In addition, many of our customer contracts include price adjustment provisions based upon published indices (including those
published by Pulp and Paper Week (“PPW”)) for our products that contribute to the setting of selling prices for some of our products.
Such publications are limited surveys that may not accurately reflect changes in market conditions for our products. Changes in how
these indices are determined or maintained, or other indices are established or maintained, could adversely impact the selling prices for
these products. If published containerboard and paperboard index prices decline in a period, such changes will result in lower prices,
and likely lower profitability, for certain of our products, which could have an adverse effect on our results of operations, cash flows
and financial condition.
Our earnings are highly dependent on demand.
Because our operations generally have high fixed operating costs, and pricing movements can be triggered, at times, by imbalances
between supply and demand, our earnings are highly dependent on demand, which tends to fluctuate due to macroeconomic
conditions, dynamics in the markets we serve, and due to company- and customer-specific issues. For example, through 2024 and
2025, we experienced lower demand due to factors such as, but not limited to, uncertainty caused by challenging geopolitical and
macroeconomic conditions, certain customer inventory rebalancing and shifting consumer spending. These and other fluctuations
when they occur can lead to significant variability in our sales, results of operations and cash flow, making it difficult to predict our
financial results with certainty.
The extent of the impact of public health crises, including a pandemic, or related containment measures and government responses, are
highly uncertain and cannot be predicted, including as it relates to demand and volume for our products and could therefore adversely
affect our operational and financial performance.
Price fluctuations in, or shortages in the availability of, energy, transportation and raw materials could adversely affect our
business.
Our margins are affected by the prices that we are able to charge for our products and the costs of the raw materials we require to
make these products. Our primary raw materials are recovered fiber, particularly old corrugated containers (“OCC”), and wood fiber.
The prices for these raw materials tend to be volatile, and price fluctuations affect our margins.
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OCC and wood fiber are used in the manufacture of our paper-based packaging products and are purchased in increasingly
competitive, price-sensitive markets. OCC prices are based on market prices that have historically exhibited price and demand
cyclicality and significant price volatility over short periods and may do so again in the future. In particular, the price of OCC depends
on a variety of factors over which we have no control, including demand from outside our countries of operation, environmental and
conservation regulations, natural disasters and weather. Despite owning our own recycling depots to independently source some of our
OCC supplies, from a price perspective, OCC prices are linked to official reference prices and are therefore based on market prices.
Historically, these market prices have exhibited significant price volatility.
Prices of wood fiber are also impacted by many of these factors. A decrease in the supply of such raw materials has caused, and any
such decrease in the future can be expected to cause, higher costs. In addition, the increase in demand for products manufactured, in
whole or in part, from OCC has in the past caused an occasional supply or demand imbalance in the market for OCC. It may also
cause a significant increase in the cost of wood fiber used in the manufacture of recycled containerboard and related products. Asian
purchasers have been in the OCC market for a number of years and have become material purchasers in the sector due to significant
ongoing expansion of their recycled containerboard mills capacity. The effect of this has been to create volatility with respect to the
price of OCC. Our raw material costs are likely to continue to fluctuate based upon supply and demand characteristics.
In response to growing pressure from increased environmental awareness and the need to comply with greenhouse gas emission
targets, a number of northern European governments have sought to encourage the use of wood for energy generation purposes
through the use of subsidies. These policies create a new source of demand for wood. This has the effect of increasing the price of
wood fiber and consequently the cost of our raw materials for the production of kraftliner. If this trend continues or grows, this could
lead to further raw material price increases and could have a material adverse effect on our margins.
Many of our customer contracts contain price adjustment clauses either allowing us to pass increased costs on to our customers or
adjust prices based on an index or other mechanism. However, not all of our agreements contain these clauses and these clauses may
not in all cases be effective to fully offset our increased costs. Where we are able to raise prices there is generally a three- to six-month
lag between the time our raw material prices increase and the time we realize increased pricing from our customers.
Certain of the Company’s paper mills are subject to regulation under regulatory programs that mandate reductions in greenhouse gas
emissions, including the EU Emissions Trading Scheme, Quebec’s Regulation respecting a cap-and-trade system for greenhouse gas
emission allowances, and, in the United States, the Washington Climate Commitment Act, whereby covered businesses are issued
emissions allowances based on an annual limit or “cap” on greenhouse gas emissions and are required to have a sufficient number of
allowances to cover their annual greenhouse gas emissions. If a business’ greenhouse gas emissions exceed its available allowances, it
may be required to make capital investments or other expenditures to reduce emissions, or it may be required to buy additional
allowances on the market, at government auctions, or from other program participants. Failure to have a sufficient number of
allowances available may subject a business to penalties. As part of an energy-intensive, trade-exposed sector, the Company’s paper
mills that are subject to existing cap-and-trade regulations are entitled to receive a certain number of greenhouse gas emission
allowances at no cost to ease the energy transition. There is a risk that we will not have enough free allowances to meet our
compliance requirements. If we are required to make investments to reduce our greenhouse gas emissions, such as switching fuels to
lower carbon alternatives, or purchase allowances, these costs may not be recoverable through higher prices for our products and could
negatively affect our operations, financial condition and cash flows. Failure to meet our greenhouse gas obligations could result in
fines, penalties and potential damage to our business reputation. We also face risks that more of the Company facilities could become
subject to cap-and-trade programs or similar greenhouse gas reduction mandates in the future and that these programs or mandates
could significantly increase our energy and other input costs in these jurisdictions. Our production processes are energy intensive. If
energy prices increase in the future, this would increase our production costs, which could consequently have a material adverse effect
on our profitability.
We distribute our products primarily by truck, rail and sea. The reduced availability of trucks, rail cars or cargo ships, including as a
result of labor shortages in the transportation industry, could adversely impact our ability to distribute our products in a timely or cost-
effective manner. Higher transportation costs could make our products less competitive compared to similar or alternative products
offered by competitors.
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The failure to obtain raw materials, energy or transportation services at reasonable market prices (or the failure to pass on price
increases to customers) or a reduction in the availability of raw materials, energy or transportation services due to increased demand,
significant changes in climate or weather conditions or other factors could have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
We are exposed to significant competition in the paper and packaging industry, and if we are unable to compete effectively, our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares, could be adversely affected.
We operate in a highly competitive and fragmented industry. The paper and packaging industry is characterized by a high level of
price competition, as well as other competitive factors including innovation, design, quality and service. To the extent that any of our
competitors are more successful with respect to any key competitive factor, our business, results of operations, cash flows and
financial condition, and the trading price of our ordinary shares could be materially adversely affected. Pricing pressure could arise
from, among other things, limited demand growth in the market in question, price reductions by competitors, growth in supply from
existing competitors, entry of new competitors into the markets in which we operate, the ability of competitors to capitalize on their
economies of scale and create excess product supply, the ability of competitors to operate or successfully relocate or open production
facilities in countries where production costs are lower than those in which we operate and the introduction by our competitors of new
products, technologies and equipment, including the use of artificial intelligence and machine learning solutions.
Our products also compete, to some extent, with various other packaging materials, including products made of plastics, wood and
various types of metal. Customer shifts away from paper packaging to packaging made from other materials could adversely affect our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
Operating Risks
We may experience business disruptions that adversely affect our operations.
We depend on continuous operation of our facilities. The operations at our facilities have in the past and may in the future be
interrupted or impaired by various operating risks, including, but not limited to, risks associated with:
•catastrophic events, such as fires, floods, earthquakes, explosions, natural disasters, severe weather, including hurricanes,
tornadoes and droughts, and pandemics, or other health crises or similar occurrences;
•interruptions in the delivery of raw materials or other manufacturing inputs;
•failure of third-party service providers and/or business partners to fulfill their commitments and responsibilities in a timely
manner and in accordance with agreed upon terms;
•government regulations;
•prolonged power failures;
•unscheduled maintenance outages, including due to equipment breakdowns or failures;
•information system disruptions or failures due to any number of causes, including cyber incidents;
•violations of our permit requirements, revocation of permits, or permit modifications that impose additional or more stringent
obligations;
•releases of pollutants and hazardous substances to the environment;
•disruptions in transportation infrastructure, including roads, bridges, railroad tracks and tunnels;
•shortages of equipment or spare parts; and
•labor disputes, strikes and shortages.
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Business disruptions have impaired, and may in the future impair, our production capabilities and adversely affect our results of
operations, cash flows and financial condition, and the trading price of our ordinary shares. For example, operations at several of our
facilities located in the south and southeastern U.S. have been interrupted in recent years by hurricanes and severe winter weather,
resulting in, among other things, lost mill production. In addition, the impact of any future public health crises, including a pandemic,
or other business disruptions, on our operational and financial performance in future periods will depend on future developments,
which are highly uncertain and cannot be predicted. Our production capabilities may be disrupted if we are unable to secure sufficient
supplies of raw materials or if significant portions of our workforce are unable to work effectively as a result of a business disruption.
We have contingency plans and insurance coverage, subject to applicable deductibles or retentions, policy limits and other conditions,
that we use to seek to mitigate the impact of business disruptions; however, we may not be successful with respect to those mitigation
efforts or any claim regarding insurance coverage and, if we are successful, any amounts paid pursuant to the insurance may not be
sufficient to cover all our costs and expenses.
Smurfit Westrock has 57 paper mills of differing capacities. If operations at any key mills (those which are more complex and/or have
higher capacity) were interrupted for any significant length of time, it could have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
We may fail to anticipate trends and develop or integrate new technologies that would enable us to offer products that respond to
changing customer preferences or to protect intellectual property related to our products and technologies.
Our success depends, in part, on our ability to offer differentiated solutions, and we must continually develop and introduce new
products and services to keep pace with technological and regulatory developments and changing customer preferences. The services
and products that we offer customers may not meet their needs as their business models evolve. Also, our customers may decide to
decrease their use of our products, use alternative materials for their product packaging or forego the packaging of certain products
entirely. Regulatory developments can also significantly alter the market for our products. For example, a move to electronic
distribution of disclaimers and other paperless regimes could adversely impact our healthcare inserts and labels businesses. Similarly,
certain states and local governments have adopted laws banning single-use paper bags or charging businesses or customers fees to use
paper bags. Certain jurisdictions in which we conduct business have enacted extended producer responsibility legislation that requires
producers to assume financial accountability for the complete lifecycle of products, including associated fees on packaging. These and
similar developments could adversely impact demand for certain of our products.
Customer preferences for products and packaging formats are constantly changing based on, among other factors, lifestyle changes,
buying habits, cost, convenience, and health and sustainability concerns and perceptions. Also, there is an increasing focus among
consumers to ensure that products delivered through e-commerce are packaged efficiently. In addition, customers are increasingly
interested in the carbon footprint of our products, and future packaging developments and trends may drive further substitution. Our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares, could be adversely affected if we
fail to anticipate and address these and other trends, including by developing and offering products that respond to changing customer
preferences, or if there is any significant substitution away from paper-based packaging products.
In addition, creating or adopting new or complementary technologies and subsequently integrating them may be costly and difficult.
We have been involved in trialing new and evolving technology, but doing so may require significant investments of capital, and such
innovations are subject to long lead times and failure. Trialing such technology can take an extended period of time, with little to no
returns in the short or medium terms. We also utilize and intend to expand our use of automation, robotics and machine learning in
many of our products, including consumer-facing features, and we leverage generative artificial intelligence in our business processes.
While we believe the use of these emerging technologies can present significant benefits, they also create risks and challenges. Data
sourcing, technology, integration and process issues, bias in decision-making algorithms, concerns over intellectual property,
reputational implications if use becomes controversial, system security concerns, or the protection of privacy could impair the
adoption and acceptance of autonomous machine solutions. Additionally, if we are unable to match or surpass the advances of
artificial intelligence that our competitors implement for their products or for internal operations, our competitive position could be
impacted. Any such risks could have a material adverse effect on our business, results of operations, cash flows and financial
condition, and the trading price of our ordinary shares.
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Our success also depends, in part, upon our ability to obtain and maintain protection for certain proprietary packaging products and
packaging machine technologies used to produce our products. Failure to protect our existing intellectual property may result in the
loss of valuable legal rights. Our competitors may obtain intellectual property rights that could require us to license those rights or to
modify or cease the use or sale of certain of our technologies or products. Our patents could be invalidated, rendered unenforceable,
circumvented, challenged or licensed to others, and our pending or future patent applications may not be issued with the scope of the
claims we seek, if at all. Further, other companies may develop technologies that are similar or superior to our technologies, duplicate
our technologies or design around our patents, and steps we take to protect our technologies may not prevent misappropriation of those
technologies.
Our capital expenditures may not achieve the desired outcomes or may be completed at a higher cost than anticipated.
We operate in a capital-intensive industry and undertake expansion projects to either support growth in our business or improve the
breadth and quality of our product offerings, including investments in both mill and converting operations. Many of our capital
projects are complex, costly and/or implemented over an extended period of time. Our expenditures for capital projects could be
higher than anticipated, we may experience unanticipated business disruptions or delays in completing the projects and/or we may not
achieve the desired benefits from those projects, including as a result of a deterioration in macroeconomic conditions or in our
business, unavailability of capital equipment or related materials, delays in obtaining permits or other requisite approvals or changes in
laws and regulations. In addition, disputes between us and contractors who are involved with implementing capital projects could lead
to time-consuming and costly litigation. Any of these circumstances could adversely affect our results of operations, cash flows and
financial condition, and the trading price of our ordinary shares.
We are exposed to risks related to international sales and operations.
We operate in many different countries. As of December 31, 2025, we had operations in 40 countries. As a result, we have previously
been and remain vulnerable to risks in these countries, including:
•the imposition of tariffs, quotas, import duties or other market barriers, (including the implementation of tariffs on U.S.
imports by the current U.S. Administration and potential retaliatory tariffs), such as restrictions on repatriating cash from
foreign countries;
•responding to disruptions in existing trade agreements or increased trade tensions between countries or political and
economic unions;
•the difficulties of, and costs of complying with, a wide variety of complex and changing laws, treaties and regulations;
•increased difficulty in the collection of accounts receivable, including longer collection periods;
•inconsistent regulations and unexpected changes in legislation or regulatory requirements and increased difficulty and
expense in hiring and dismissing employees;
•the imposition of quotas relating to the composition of the employee base or the local sourcing of raw materials or other
similar quotas;
•political, economic and social unrest or instability (such as downturns or changes in economic activity due to, among other
things, regional conflicts or commodity inflation), as well as disruptions and government intervention in national economies
and social structures, including the threat of terrorism;
•geopolitical conflict;
•work stoppages, transport interruptions and difficulties in managing international operations;
•government limitations on foreign ownership or takeovers, expropriation of private sector assets or mandated price controls;
•transfer pricing and adverse tax policies; and
•adverse currency fluctuations.
We are subject to taxation in the jurisdictions where we operate. We have several ongoing audit examinations and disputes that
generally cover multiple years with various tax authorities. We base our tax returns on our interpretation of tax laws and regulations in
effect; however, governing tax bodies have in the past and may in the future disagree with certain of our tax positions, which could
result in a higher tax liability. See “Note 21. Commitments and Contingencies” of the Notes to the Consolidated Financial Statements
for discussion of an ongoing tax liability matter in Brazil.
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The occurrence of any of the foregoing could have a material adverse effect on our earnings as a result of the related delays or
increased costs in the production and delivery of products and services or otherwise disrupt the demand for our products. Any of these
circumstances could adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary
shares.
We could be exposed to currency exchange rate fluctuation risks.
We have operations in a number of countries. As such, currency movements can have a number of direct and indirect impacts on our
financial statements. Direct impacts include the translation of international operations’ local currency financial statements into U.S.
dollars and the remeasurement impact associated with non-functional currency financial assets and liabilities. Indirect impacts include
the change in competitiveness of imports into, and exports out of, the United States (and the impact on local currency pricing of
products that are traded internationally).
In addition, the relative strength or weakness of the U.S. dollar is important for the industry in which we operate because U.S.
containerboard and paperboard prices tend to influence the world market. A weak U.S. dollar over a sustained period has the potential
to result in lower imports into the United States of goods shipped in corrugated containers and, as a result, lower demand for our
containers from LATAM and Europe. A weak U.S. dollar could also result in additional competition in our European and Latin
American markets from other U.S. manufacturers that have an incentive to export more products due to increased demand for
relatively lower priced U.S. goods. Conversely, our U.S. operations could face additional competition from non-U.S. manufacturers if
a strong U.S. dollar was sustained over a long period. A strong U.S. dollar could also have the potential to reduce exports from the
United States of goods shipped in corrugated containers and, as a result, lower demand for our containers from the U.S.
We may produce faulty or contaminated products due to failures in quality control measures and systems, which could negatively
impact our business and share price.
We may fail to produce products that meet applicable safety and quality standards, which could result in adverse effects on consumer
health, litigation exposure, loss of market share and adverse reputational and financial impacts, among other potential consequences,
and we may incur substantial costs in taking appropriate corrective action (up to and including recalling products from end consumers
and reimbursing customers and/or end consumers for losses that they suffer as a result of these failures). Our failure to meet these
standards could lead to regulatory investigations, enforcement actions and/or prosecutions, and could result in adverse publicity, which
may damage our reputation. Any of these outcomes could have a material adverse effect on our business, results of operations, cash
flows and financial condition, and the trading of our ordinary shares.
We provide representations in certain of our contracts that our products are produced in accordance with customer specifications. If
the product contained in packaging manufactured by us is faulty or contaminated, the manufacturer of the product may allege that the
packaging we provided caused the fault or contamination, even if the packaging complies with contractual specifications. If our
packaging fails to meet contract specifications, we could face liability from our customers and third parties for bodily injury or other
damages. These liabilities could adversely affect our business, results of operations, cash flows and financial condition, and the trading
price of our ordinary shares.
We are subject to cybersecurity risks that could threaten the confidentiality, integrity and availability of data in our systems, and
could result in disruptions to our operations and adversely affect our operations, cash flows and financial condition.
Cybersecurity incidents could compromise our information technology or data and expose us to liability, which would cause our
business and reputation to suffer. We rely on various technologies, some of which are managed by third parties, to process, transmit
and store electronic information. In the ordinary course of our business, we collect and store sensitive data, including intellectual
property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable
information of our customers and employees, in our information technology. We also collect and store limited, non-sensitive customer
personally identifiable information. The secure processing, maintenance and transmission of this information is critical to our
operations. The current cyber threat environment presents enhanced risk for all companies, including those in our industry. The rapid
evolution and increased availability of artificial intelligence may intensify cybersecurity risks by making targeted attacks more
convincing and cybersecurity incidents more difficult to detect, contain, and mitigate.
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Despite our security measures, our information technology, and that of our third-party providers and business partners, is subject to
recurring attempts by threat actors to access information, manipulate data or disrupt operations. Information technology that we, third-
party providers and business partners use may be vulnerable to cyber-attacks or outages by common hackers, criminal groups, nation-
state organizations or social activist organizations (whose efforts may increase as a result of geopolitical events and political and social
unrest or instability around the world) due to insider threat, malfeasance or other disruptions, such as cyber-attacks, power outages,
telecommunication or utility failures, systems failures, service provider failures, natural disasters or other catastrophic events. The
significant increase in remote working and the continued expansion of the integrated supply chain increase the risks of cyber incidents
and the improper dissemination of personal or confidential information. Any such breach could compromise our information
technology and the information stored there could be accessed, publicly disclosed, lost or stolen, potentially resulting in legal claims or
proceedings and regulatory penalties. In addition, any such outage could disrupt or temporarily halt our operations resulting in reduced
productivity, staff downtime, and increased insurance premiums, as well as additional costs for attempting to recover lost information,
equipment or data, and could damage our reputation, which could have a material adverse effect on our business, results of operations,
cash flows and financial condition, and the trading price of our ordinary shares.
We may also face challenges and risks during integration of acquired businesses and operations, as we and the acquired businesses and
operations may face increased targeted attempts during this busy period. While we maintain plans and processes to prevent or mitigate
the impact of these events, these events could nonetheless result in disruptions and damage. In addition, as a result of the foregoing,
we could experience adverse publicity, loss of sales, the cost of remedial measures, including substantial legal fees, and significant
expenditures to reimburse third parties for damages, each of which could adversely impact our results of operations. Any insurance we
maintain against the risk of this type of loss may not be sufficient to cover actual losses, may not apply to the circumstances relating to
any particular loss, or may become materially more costly over time. As a result, any or all of the above events could adversely affect
our operations, cash flows and financial condition, and the trading price of our ordinary shares.
We may be adversely impacted by work stoppages and other labor relations matters.
There are different labor unions represented across our sites and a majority of our employees are covered by a collective labor
agreement as a result of either local or national negotiations in the countries concerned. Labor disputes or other problems, such as
work stoppages, or failure to successfully renegotiate the terms of any of the collective labor agreements, could lead to a substantial
interruption to our business.
In addition, our business relies on vendors, suppliers and other third parties that have union employees. Any of the matters described
above, including work stoppages or other labor relations matters affecting us or these vendors, suppliers and other third parties, as well
as future developments in relation to our business or otherwise that adversely affect relations between us and our employees, could
adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
We operate in a challenging market for talent and may not be able to attract, motivate and/or retain qualified personnel, including
our key personnel.
Our success depends on our ability to attract, motivate and retain employees with the skills necessary to understand and adapt to the
continuously developing needs of our customers. The increasing demand for qualified personnel makes it more difficult for us to
attract, motivate and retain employees with requisite skill sets, particularly employees with specialized technical and trade experience.
Changing demographics and labor work force trends also may result in a loss of knowledge and skills as more tenured and
experienced workers retire. If we are unable to attract, motivate and retain qualified personnel, or if we experience excessive turnover,
including among hourly workers, we may experience declining sales, manufacturing delays or other inefficiencies, increased
recruiting, training and relocation costs and other difficulties, and our results of operations, cash flows and financial condition, and the
trading price of our ordinary shares may be adversely impacted.
The market for both hourly workers and professional workers continued to be challenging in fiscal 2025, particularly in the U.S. The
labor environment for hourly workers remains competitive with continued instances of labor unrest, even as broader manufacturing
employment trends moderated from prior peaks. In certain locations where we operate, the demand for labor continues to exceed the
supply of labor, resulting in higher costs. Despite our focused efforts to attract, motivate and retain employees, we continue to focus
on the stabilization of attrition rates within our workforce. We also incurred higher operating costs at certain of our facilities in the
form of higher levels of overtime pay due to shift requirements and staffing challenges.
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In addition, many professional workers desire a fully remote work setting. We offer flexible working arrangements in the majority of
instances; however, we may experience higher levels of attrition within our professional workforce if these workers desire more
remote work opportunities than we are able to offer. We may also experience higher levels of attrition if employees do not perceive
the purpose and impact of their work to be rewarding or their work-life balance to be satisfactory.
We also rely on key executive and management personnel to manage our business efficiently and effectively. The loss of these
employees, combined with a challenging market for attracting and retaining employees, could adversely affect our results of
operations, cash flows and financial condition, and the trading price of our ordinary shares may also be adversely impacted.
We face challenges associated with sustainability matters, including the impact of climate change and its potential impact on areas
such as our operations and raw material availability, which could have a significant impact on our reputation, business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
We have identified multiple ways in which climate change could impact our business operations, including through extreme weather
events. Our physical assets and infrastructure, including our manufacturing operations, are subject to risks from volatile and damaging
weather events. For example, severe weather, such as hurricanes, tornadoes, other extreme storms, wildfires, and floods, have resulted
in and/or could in future periods result in lost production and/or physical damage to our facilities. Unpredictable weather patterns or
extended periods of severe weather may also result in supply chain disruptions and increased material costs. In addition, one of our
key raw materials is virgin wood fiber, the availability of which is dependent on access to and the maintenance of healthy forests,
which could be impacted by adverse weather conditions, including drought, flooding and local restrictions on water usage. Moreover,
the ability to harvest the virgin wood fiber used in our manufacturing operations may be limited, and prices for this raw material may
fluctuate, during prolonged periods of heavy rain or drought or during tree disease or insect epidemics or other environmental
conditions that may be caused by variations in climate conditions. Other climate-related business risks that we face include risks
related to the transition to a lower-carbon economy, such as increased prices for certain fuels, including natural gas; the introduction of
a carbon tax or government mandates to reduce greenhouse gas emissions; and more stringent and/or complex environmental and
other legal requirements. To the extent that severe weather or other climate-related risks materialize, and we are unprepared for them,
we may incur unexpected costs, which could adversely affect our results of operations, cash flows and financial condition, and the
trading price of our ordinary shares.
The paper manufacturing industry in which we operate is energy intensive, and government initiatives, such as the European Union
Green Deal, the European Union’s initiative to reach net zero emissions of greenhouse gases by 2050, could increase government
regulation of greenhouse gas emissions, putting further limits on our paper manufacturing operations. In addition, if efforts aimed at
transitioning to a lower carbon economy result in a transition towards the use of materials that are more suitable for reusable
packaging, demand for paper packaging may decline, while demand for alternative packaging types may increase, which could
adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
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Increased focus and activism related to sustainability matters may hinder our access to capital, as investors may reconsider their capital
investment as a result of their assessment of our sustainability practices. Customers, investors, regulators and other stakeholders are
focused on sustainability issues, including those with respect to climate change, circular economy, packaging waste, sustainable
supply chain practices, deforestation, biodiversity, land, energy and water use, diversity, equity, inclusion and belonging and other
human capital matters. This focus may result in more prescriptive reporting requirements with respect to these topics, an increased
expectation that such topics will be voluntarily disclosed by companies such as ours, and increased pressure to make commitments, set
or revise targets and take action to meet them. Concern over climate change or the use and composition of packaging materials may
also result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. These demands,
regulatory requirements, and related perceptions and preferences could cause us to incur additional costs or to make changes to our
operations to comply with such, demands, requirements and customer preferences, and a delay in our response (or the failure to
respond effectively) may lead to material adverse effects on our business, results of operations, cash flows and financial condition, and
the trading price of our ordinary shares. See also “We are subject to a growing number of environmental laws and regulations, and the
cost of compliance or the failure to comply with, and any liabilities under, current and future laws and regulations may negatively
affect our business.” Further, there can be no assurance that environmental activist groups and similar organizations will not mount
campaigns against us. On the other hand, our sustainability efforts may not be favored by certain stakeholders, whose priorities and
expectations may not align or may be opposed to one another and/or those of the Company, and there can be no assurance that our
sustainability efforts will be perceived positively, including the perception that they are not sufficiently robust, or conversely, too
costly, or not otherwise in the best interests of the Company and our shareholders, and, as a result, our investor, customer and other
stakeholder relationships could be damaged or this could lead to public scrutiny or reputational damage, which could adversely impact
our reputation, business and results of operations.
Both legacy Smurfit Kappa and WestRock previously established and publicly disclosed sustainability targets which are important to
many stakeholders, including certain investors and customers. New targets for Smurfit Westrock are expected to be published in the
second quarter of 2026 in the 2025 sustainability report. We expect to report performance relative to any such targets on an annual
basis. Failure to meet any such targets could result in negative publicity and reputational damage and could have a material adverse
effect on our business, reputation, results of operations, cash flows and financial condition, and the trading price of our ordinary
shares. If any such targets or commitments are not achieved on their projected timelines or at all, or if they are perceived negatively,
including the perception that they are not sufficiently robust or, conversely, are too costly, this would impact our reputation as well as
our relationships with investors, customers and other stakeholders. Moreover, any failure to act responsibly with respect to
sustainability issues or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or
other sustainability matters, or increased operating or manufacturing costs due to increased regulation could have a material adverse
effect on our business, reputation, operating results, financial condition and the trading price of our ordinary shares. In addition, we
may also be adversely impacted as a result of conduct by contractors, customers or suppliers that fail to meet our or our stakeholders’
sustainability standards.
Any of these risks could adversely affect our results of operations, cash flows and financial condition, and the trading price of our
ordinary shares.
Failure by us to successfully implement strategic transformation initiatives, including those relating to information technology
infrastructure, or to achieve our mid-range or long-range targets and goals could adversely affect our business and share price.
Smurfit Kappa and WestRock have throughout the years undertaken various projects relating to information technology infrastructure.
As part of integration initiatives, the Company is reviewing and evaluating its various business systems and the system strategies and
alternatives for Smurfit Westrock. The implementation of changes in business systems could represent a significant financial
undertaking and may require substantial time and attention of management and key employees. We may not be able to successfully
implement these initiatives without delays or may experience unanticipated business disruptions and/or we may not achieve the
desired benefits from such changes. Project completion dates may also change. Any of these items, along with any failure to
effectively manage data governance risks during implementation of these initiatives, could adversely affect our results of operations,
cash flows and financial condition, and the trading price of our ordinary shares.
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We continue to implement and have in the past developed and endeavored to implement a number of operating plans designed to
enhance our business. For example, during February 2026, we announced our medium-term plan (“Medium-Term Plan”) targeting an
accelerated path to growth. The anticipated benefits described in the Medium-Term Plan are based on assumptions that may prove to
be inaccurate, and a variety of factors could cause us to fail to realize some or all of the expected benefits and targets outlined in the
plan. If, for any reason, the benefits we realize, or our actual results, are less than our goals or targets, or the implementation of related
growth initiatives, strategies (including our capital allocation strategy) and/or plans adversely affect our operations or cost more or
take longer to effectuate than we expect, or if our assumptions prove inaccurate, our results of operations, cash flows and financial
condition, and share price may be materially adversely affected.
If we are unsuccessful in integrating acquisitions or if disposals result in unexpected costs or liabilities, our business could be
materially and adversely affected.
We have completed a number of mergers, acquisitions, investments and divestitures in the past, including the Combination, and we
may seek to acquire, invest in, sell or enter into transactions with additional companies in the future. See also “We face risks related to
the Combination”.
We may not be able to identify suitable targets or purchasers or successfully complete suitable transactions in the future, and future
completed transactions may not be successful.
These transactions create risks, including, but not limited to, risks associated with:
•disrupting our ongoing business, including greater than expected costs and management time and effort involved in
identifying and completing the transactions and integrating acquisitions;
•integrating acquired businesses and personnel into our business, including integrating personnel, information technology
systems and operations across different cultures and languages, and addressing the operational risks associated with these
integration activities as well as the economic, political and regulatory risks associated with specific countries;
•working with partners or other ownership structures with shared decision-making authority;
•obtaining and verifying relevant information regarding a business prior to the consummation of the transaction, including the
identification and assessment of liabilities, claims or other circumstances that could result in litigation or regulatory risk
exposure;
•obtaining required regulatory approvals and/or financing on favorable terms;
•retaining key employees, contractual relationships or customers;
•the potential impairment of assets and goodwill;
•the additional operating losses and expenses of businesses we acquire or in which we invest;
•incurring substantial indebtedness to finance an acquisition or investment;
•incurring unexpected costs or liabilities in the context of a disposal; and
•implementing controls, procedures and policies in acquired companies.
These transactions may not be successful and may adversely affect our results of operations, cash flows and financial condition, and
the trading price of our ordinary shares. Among the benefits we expect from potential, as well as completed, acquisitions and joint
ventures are synergies, cost savings, growth opportunities or access to new markets (or a combination thereof), and in the case of
divestitures, the realization of proceeds from the sale of businesses and assets to purchasers that place higher strategic value on these
businesses and assets than we do. For acquisitions, our success in realizing these benefits and the timing of realizing them depend on
the successful integration of the acquired businesses and operations with our business and operations. Even if we integrate these
businesses and operations successfully, we may not realize the full benefits we expected within the anticipated time frame, or at all,
and the benefits may be offset by unanticipated costs or delays.
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We face risks related to the Combination.
We closed the Combination between Smurfit Kappa and WestRock on July 5, 2024. Following the Combination, we targeted annual
pre-tax run-rate synergies of $400 million by the end of 2025, which we achieved, owing to integration benefits, procurement leverage
and administrative and overhead rationalization. Furthermore, as we implement commercial practices and improve our operating
efficiency through the Combination, we expect to deliver further improvements in our results. However, these further improvements
are not certain, and may not be realized fully or at all, may take longer to realize or the costs of achieving the benefits and run-rate
synergies may be more than expected. Any such risks may result in our operating costs being greater than anticipated and may reduce
the net benefits of the Combination.
For instance, we have already incurred significant costs and expect to incur additional costs in connection with integrating the
operations of legacy Smurfit Kappa and legacy WestRock. Furthermore, there can be no assurance that we will continue to
successfully integrate the two businesses. It is possible that the integration process could result in the loss of key Smurfit Kappa or
WestRock employees, the loss of customers, the disruption of either or both companies’ ongoing businesses, unexpected integration
issues, higher than expected integration costs or an overall integration process that takes longer than originally anticipated. We may
face challenges in the continued integration of the operations of Smurfit Kappa and WestRock, including without limitation:
•ongoing combination of the companies’ operations and corporate functions;
•further integrating and unifying the offerings and services available to customers;
•further identifying and eliminating redundant and underperforming functions and assets;
•reaching the potential from cross-selling corrugated and consumer-packaging products;
•further harmonizing the companies’ operating practices, internal controls and other policies, procedures and processes;
•maintaining existing agreements with customers and suppliers and avoiding delays in entering into new agreements with
prospective customers and suppliers; and
•further coordinating distribution and marketing efforts across geographically dispersed organizations;
The integration may also result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be
realized on a timely basis. As such, any of the above factors may impair our ability to realize the anticipated benefits of the
Combination and could adversely affect our results of operations, cash flows and financial condition, and the trading price of our
ordinary shares. We may not realize all of the benefits of the Combination or such benefits may take longer than anticipated or may be
lower than estimated.
Financial Risks
Our continued growth depends on our ability to retain existing customers and attract new customers.
The future growth of our business depends on our ability to retain existing customers, attract new customers as well as securing
increased purchase volumes from such existing customers and new customers. There is no assurance that customers will continue to
use our services or that we will be able to continue to attract new volumes at the same rate as we have in the past.
A customer’s use of our services may decrease for a variety of reasons, including a decrease in the customer’s own sales and volumes,
the customer’s level of satisfaction with our products and services, the expansion of business to offer new products and services, the
effectiveness of our support services, the pricing of our products and services, the pricing, range and quality of competing products or
services, the effects of global economic conditions, regulatory limitations, trust, perception and interest in the paper and packaging
industry and in our products and services. Furthermore, the complexity and costs associated with switching to a competitor may not be
significant enough to prevent a customer from switching packaging providers.
Failure by us to retain existing customers, attract new customers, and increase revenue from both new and existing customers could
have a material adverse effect on our business, results of operations, cash flows and financial condition, and the trading price of our
ordinary shares. The effort to retain customers and attract new customers may require price concessions, financial expenditures,
commitments of resources, developments of processes, and other investments and innovations.
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A number of the industries in which our customers operate have experienced consolidation in the past and may continue to do so in the
future. Such consolidation may affect our relations with our customers. In the past, when one of our customers has combined with
another, we have on occasion lost business and there can be no assurance that this will not occur again in the future. Additionally, the
ability of customers to exert pricing pressure on all suppliers, including us, has increased as their industries have consolidated and the
customers have become larger. However, our level of customer concentration may increase in the future. Such consolidation could
have a material adverse impact on our business, results of operations, cash flows and financial condition, and the trading price of our
ordinary shares.
Our debt could adversely affect our financial health and operating flexibility.
As of December 31, 2025, our total debt was $13.8 billion. Our levels of debt could restrict our operating and financial flexibility,
including:
•requiring us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our debt,
thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate
purposes;
•increasing our vulnerability to general adverse economic, industry or competitive conditions;
•limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;
•impede access to or increase the cost of additional debt or equity capital in the future;
•restricting us from making strategic acquisitions or exploiting business opportunities; and
•placing us at a competitive disadvantage compared to our competitors that have less debt.
Any of these outcomes may adversely affect our results of operations, cash flows and financial condition, and the trading price of our
ordinary shares. To the extent that we incur additional debt or such other obligations, the risk associated with our debt described above
may increase.
In addition, a portion of our debt bears interest at variable rates that are linked to changing market interest rates. Our exposure to rising
interest rates subjects us to increased debt service obligations, both with respect to existing floating rate indebtedness and the
incurrence of additional fixed or floating indebtedness during periods where such rates are in effect. Although we may hedge a portion
of our exposure to variable interest rates by entering into interest rate swaps from time to time, we cannot provide assurances that we
will do so in the future. An increase in market interest rates would increase our interest expense on our variable rate debt obligations,
which may exacerbate the risks associated with our capital structure and adversely affect our results of operations, cash flows and
financial condition, and the trading price of our ordinary shares. Restrictions imposed by certain of our existing and future indentures
and credit facilities limit or may limit our ability to take certain actions.
Adverse credit and financial market events and conditions, as well as credit rating downgrades, could, among other things, impede
access to or increase the cost of financing, which could have a material adverse impact on our business, results of operations, cash
flows and financial condition, and the trading price of our ordinary shares.
We rely on access to the credit and capital markets to finance our operations and refinance existing indebtedness. Any limitations on
our access to the credit and capital markets on satisfactory terms, or at all, could limit our liquidity, financial flexibility or cash flows
and affect our ability to execute our strategic plans, which could have a material adverse effect on our business, results of operations,
financial condition and the trading price of our ordinary shares.
Our access to the credit and capital markets is subject to a number of variables, including our results of operations, margins and
activity levels, the conditions of the global credit and capital markets, market perceptions of our creditworthiness and the ability and
willingness of lenders and investors to provide capital. In recent years, global financial markets have experienced disruptions and
general economic conditions have been volatile. During periods of financial market volatility, our access to the credit and capital
markets could be impaired, which could adversely affect our results of operations, cash flows and financial condition, and the trading
price of our ordinary shares.
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In addition, the costs and availability of financing from the credit and capital markets depends on our credit ratings. Any rating,
outlook or watch assigned to such debt securities could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s
judgment, current or future circumstances change relating to the basis of the rating, outlook or watch, such as adverse changes to the
Company’s business. Any failure to maintain investment grade credit ratings could adversely affect our future cost of funding,
liquidity or access to capital markets, which could adversely affect our results of operations, cash flows and financial condition, and
the trading price of our ordinary shares.
We have a significant amount of goodwill and other intangible assets and a write-down could materially adversely impact our
operating results.
As of December 31, 2025, we had goodwill and other intangible assets of $8.3 billion. In accordance with GAAP, we do not amortize
goodwill but rather test it annually and as otherwise required for impairment and any such impairments cannot be reversed. Similarly,
we review our other intangible assets for impairment when circumstances indicate that the carrying value may not be recoverable. The
impairment analysis requires us to analyze a number of factors and make estimates that require significant judgment. In the event that
general trading conditions and prospects deteriorate or factors underlying assumed discount rates, such as assumed long-term interest
rates, change, the determined recoverable amount of certain other intangible assets and goodwill may fall below carrying value. We
have recorded impairments in previous years. Additional impairments may occur in the future, which could adversely affect our results
of operations, cash flows and financial condition, and the trading price of our ordinary shares.
We have a number of pension arrangements that are currently in deficit and may require increased funding due to statutory
requirements.
We operate a number of pension and other long-term benefit plans throughout the world, devised in accordance with local conditions
and practice. Currently, a significant but declining proportion of our employees are members of defined benefit pension arrangements,
most of which are now closed to new entrants and future benefit accrual. The deficit of these employee benefit plans was $30 million
as of December 31, 2025.
An increase in the value of the liabilities or decrease in the value of pension plan assets may negatively affect our balance sheet and
distributable reserves, any of which could have a material adverse effect on our business, results of operations, financial condition and
the trading price of our ordinary shares. The liabilities will mainly be affected by increases in life expectancy and by changes in long-
term yields, which are used to discount the liabilities to present value. The assets will be affected by increases in long-term yields,
which will reduce the value of bond investments, and by movements in equity markets. These factors create a considerable degree of
volatility in the measurement of any pension scheme’s deficit or surplus.
There is a risk that equity and bond markets will deteriorate if the global economic climate worsens, which could negatively affect the
funded status of our post-employment defined benefit arrangements. In addition, volatility in our net balance sheet liabilities resulting
from the relative change in the value of assets and liabilities may be further enhanced by investment strategies resulting in exposure to
various classes of assets.
Existing and potential changes in statutory minimum requirements may also affect the amount and timing of funding to be paid by us.
Most funding requirements consider yields on assets such as government bonds or interbank interest rate swap curves, depending on
the basis. Although recent statutory easements in the pace of funding on these bases and increases in bond/swap yields have provided
some contribution relief to us, we may nonetheless have to pay additional contributions to meet potentially onerous statutory minimum
funding requirements in the future, which could have a material adverse effect on our business, results of operations, financial
condition and the trading price of our ordinary shares.
Our decision or ability to pay dividends in respect of our shares or conduct share repurchases is subject to a number of factors,
including the distributions of earnings to the Company by its subsidiaries, the financial condition and results of operations of the
Company, as well as the distributable reserves of the Company at the discretion of the Company’s Board, and there are no
guarantees that the Company will pay dividends or will maintain or increase the level of any such dividends or that the Company
will conduct share repurchases.
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Any determination to pay dividends to our shareholders is at the discretion of the Company’s Board and will be dependent on then-
existing conditions, including, but not limited to, our results of operations, capital investment priorities, the market price of our shares
and access to capital markets, legal requirements, industry practice, the distribution of earnings to the Company by its subsidiaries, the
financial condition, limitations under Irish law and other factors the Company deems relevant. While Smurfit Westrock has
historically paid dividends, including progressive dividends there can be no assurance that our shareholders will receive or be entitled
to dividends that are equivalent to the historical dividends, and there is no assurance as to the timing or level of future dividend
payments, if any, because these depend on, among other considerations, future earnings, capital requirements and financial condition,
legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our Board
deems relevant.
In addition, from time to time our Board may authorize share repurchase programs. The amount and timing of share repurchases are
subject to capital availability and our determination that share repurchases are in the best interest of our shareholders and are in
compliance with all respective laws and our applicable agreements. Our ability to repurchase shares will be subject to applicable
Board approval and authorization and management discretion and will depend upon, among other factors, our cash balances and
potential future requirements for strategic transactions, our results of operations, our financial condition, price and economic and
market conditions and other factors beyond our control that we may deem relevant. We can provide no assurance that we will
repurchase shares at favorable prices, if at all. We are not obligated to make any purchases and may discontinue any program at any
time.
We cannot guarantee that any share repurchase program or dividend program will be continuously active or fully consummated since
it can be discontinued, suspended or delayed at any time, or will enhance long-term shareholder value, and share repurchases or
dividends could increase the volatility of our stock prices and could diminish our cash reserves.
Changes in existing financial accounting standards or practices may have a material adverse effect on our business, results of
operations, cash flows and financial condition, and the trading price of our ordinary shares.
Changes in existing accounting rules or practices, new accounting pronouncements or rules or varying interpretations of current
accounting pronouncements could have a material adverse effect on our business, results of operations, cash flows financial condition,
and the trading price of our ordinary shares, or the manner in which we conduct our business. Further, such changes could potentially
affect our reporting of transactions completed before such changes are effective.
GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to promulgate
and interpret appropriate accounting principles. A change in these principles or interpretations could have a material adverse effect on
our business, results of operations, cash flows and financial condition, and the trading price of our ordinary shares, and could affect the
reporting of transactions completed before the announcement of a change.
Legal and Regulatory Risks
We are subject to a wide variety of laws, regulations and other requirements that may change or may impose substantial
compliance costs, and non-compliance with such laws and regulations may negatively affect our business.
We are subject to a wide variety of regional, national, state, provincial, and local laws, regulations and other requirements, including
those relating to the environment, product safety, competition, corruption, sanctions, occupational health and safety, labor and
employment, data privacy, artificial intelligence, tax and health care. These laws, regulations and other requirements may change or be
applied or interpreted in ways that will require us to modify our equipment and/or operations, subject us to enforcement risk, expose
us to reputational harm or require us to incur additional costs, including substantial compliance costs, which may adversely affect our
results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
We operate in multiple countries, and each of these countries may have bribery and anti-corruption laws and regulations, including the
U.S. Foreign Corrupt Practices Act, the Sapin II Law in France, the Bribery Act in the United Kingdom and the Criminal Justice
(Corruption Offences) Act 2018 in Ireland, some of which are potentially extra-territorial in scope. Our internal control policies and
procedures, or those of our vendors, may not adequately protect us from reckless or criminal acts committed or alleged to have been
committed by our employees, agents or vendors. Any such non-compliance with bribery and anti-corruption legislation could lead to
civil or criminal, monetary and non-monetary penalties and/or could damage reputations.
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The tax laws of Ireland and other jurisdictions in which we operate could change in the future, including through the enactment of
additional laws, the revision of existing laws, and/or developments in case law, regulations and policy changes. Any such changes
could cause a material change in our effective tax rate.
Uncertainty in the legal and regulatory regime relating to artificial intelligence may require significant resources to modify and
maintain business practices to comply with international laws and regulations, the nature of which cannot be determined at this time.
Several jurisdictions, including Europe, the U.S. federal government, and certain U.S. states, have already proposed or enacted laws,
regulations, and other requirements governing artificial intelligence. Other jurisdictions may decide to adopt similar or more restrictive
requirements. These requirements may make it harder for us to conduct our business using artificial intelligence, lead to regulatory
fines or penalties, require us to change our business practices, or require us to limit artificial intelligence usage, which may lead to
inefficiencies or competitive disadvantages.
We are subject to regulation by trade sanctions and related legislation, which have become an increasingly prevalent instrument of
foreign policy in recent years. Sanctions lists are generated by a wide variety of government agencies in countries where we do
business, and the individuals, entities and products on these lists are being modified with increasing frequency in recent years. Due to
our scale and footprint, we must monitor existing sanctions closely and exercise caution to avoid trading with any sanctioned country,
individual or organization. The penalties for non-compliance with sanctions regimes are severe; offenses for breach of sanctions
regimes can be both civil and criminal in nature. We could therefore be adversely affected by sanctions if we fail to closely monitor
compliance with sanctions regimes, which could adversely affect our results of operations, cash flows and financial condition, and the
trading price of our ordinary shares.
Furthermore, following the Combination, we are required to comply with securities laws and other laws and regulations applicable in
the U.S., the U.K. and Ireland, which resulted in considerable legal and financial compliance costs.
Ongoing and future compliance with existing and new laws and requirements has the potential to disrupt and/or burden our business
operations and may require significant expenditures, and our existing reserves for specific matters may not be adequate to cover future
costs. In particular, our manufacturing operations consume significant amounts of energy, and we may in the future incur additional or
increased capital, operating and other expenditures from changes due to new or increased climate-related and other environmental
requirements. We could also incur substantial liabilities, including fines or sanctions, enforcement actions, natural resource damages
claims, cleanup and closure costs, and third-party claims for property damage and personal injury under environmental and other laws.
Finally, the cost of compliance or the failure to comply with such laws and regulations could adversely affect our results of operations,
cash flows and financial condition, and the trading price of our ordinary shares.
We are subject to a growing number of environmental laws and regulations, and the cost of compliance or the failure to comply
with, and any liabilities under, current and future laws and regulations may negatively affect our business.
Environmental compliance requirements are a significant factor affecting our business. Our manufacturing processes involve the use
of natural resources, such as virgin wood fiber and fresh water, discharges to water, air emissions and waste handling and disposal
activities. These processes are subject to numerous international, national, regional, provincial, state and local environmental laws and
regulations, as well as the requirements of environmental permits and similar authorizations issued by various government authorities.
Complex and lengthy processes may be required to obtain and renew approvals, permits, and licenses for new, existing or modified
facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and
emergency protocols. We have incurred, and expect that we will continue to incur, significant capital, operating and other expenditures
complying with applicable environmental laws and regulations. Changes in environmental laws, as well as litigation relating to these
laws, could result in more stringent or additional environmental compliance obligations for the Company that may require additional
capital investments or increase our operating costs.
We are involved in various administrative and other proceedings relating to environmental matters that arise in the normal course of
business, and we may become involved in similar matters in the future. Although the ultimate outcome of these proceedings cannot be
predicted and we cannot at this time estimate any reasonably possible losses based on available information, we do not believe that the
currently expected outcome of any environmental proceedings and claims that are pending or threatened against us will have a
material adverse effect on our results of operations, financial condition or cash flows.
39
We also may incur significant expenditures in connection with the required remediation of environmental conditions at both currently
owned and formerly owned facilities, as well as in connection with various sites owned or operated by third parties. While we believe
that we can assert claims for indemnification of remediation expenses pursuant to rights we have under certain agreements in respect
of certain remediation sites and we have insurance coverage, subject to applicable deductibles or retentions, policy limits and other
conditions, for certain environmental matters, we may not be successful with respect to any claim regarding these insurance or
indemnification rights and, if we are successful, any amounts paid pursuant to the insurance or indemnification rights may not be
sufficient to cover all our costs and expenses. We also cannot predict whether we will be required to perform remediation projects at
other locations, and it is possible that our remediation requirements and costs could increase materially in the future and exceed
current reserves. In addition, we cannot currently determine the impact that future changes in cleanup standards or environmental
laws, regulations or enforcement practices will have on our results of operations, financial condition or cash flows. Any of these
circumstances could adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary
shares.
Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse
effect on our reputation, business, financial condition and results of operations.
Changes or proposed changes in U.S. or other countries’ trade policies may result in restrictions and economic disincentives on
international trade. Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger
retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory
measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory or consumer-driven)
either in the U.S. or in other countries could affect the trade environment. We, like many other multinational corporations, conduct a
significant amount of business that would be impacted by changes to the trade policies of the U.S. and other countries (including
governmental action related to tariffs, international trade agreements, or economic sanctions). Such changes have the potential to
adversely impact the U.S. economy or certain sectors thereof or the economy of another country in which we conduct operations, our
industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial
condition and results of operations.
We are subject to compliance with antitrust and similar legislation in the jurisdictions in which we operate.
We are subject to legislation in many of the jurisdictions in which we operate relating to unfair competitive practices and similar
behavior. From time to time, we have been subject to allegations of such practices and regulatory investigations or proceedings with
respect thereto. For example, on July 29, 2025, we were named among the defendants in a class action lawsuit filed in the U.S. District
Court for the Northern District of Illinois alleging violations of U.S. antitrust laws. Such allegations, investigations or proceedings
(irrespective of merit) may require, and have required, us to devote significant management resources to defending ourselves. In the
event that such allegations are proven, we may be subject to fines, damages awards and other expenses, and our reputation may be
harmed, which could have a material adverse effect on our business, results of operations, cash flows and financial condition, and the
trading price of our ordinary shares.
For additional information, see “Note 21. Commitments and Contingencies” of the Notes to Consolidated Financial Statements.
We are subject to a number of laws and regulations relating to privacy, security and data protection, and failure to comply with
such laws and regulations could adversely affect our business and our financial condition or lead to fines and/or litigation.
We are subject to a number of laws and regulations relating to privacy, security and data protection, including the General Data
Protection Regulation (EU 2016/679) (“GDPR”) and new and evolving privacy laws in the United States, Europe, Latin America, and
elsewhere. These laws and regulations have created individual privacy rights, imposed increased obligations on companies handling
personal data, and increased potential exposure to fines and penalties as a result of breaches of such privacy, security or data
protection laws. Additionally, new laws or regulations governing privacy, security, artificial intelligence and data protection may be
introduced which apply to us in any of the jurisdictions in which we operate. The nature and extent of any such new and/or amended
laws or regulations, and the impact they may have on us, cannot be predicted.
40
We rely on third-party service providers and our own employees and systems to collect and process personal data and to maintain our
databases, and as a result, we are exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, or damaged or
processed in breach of such privacy, security or data protection laws. These events could result in disruptions and damage, or the
misappropriation of sensitive data, and depending on their nature and scope, could lead to the compromise of confidential information,
improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes,
operational disruptions and exposure to liability. Such disruptions or misappropriations and the resulting repercussions, including
reputational damage and legal claims or proceedings, may have a material adverse effect on our business, results of operations, cash
flows and financial condition, and the trading price of our ordinary shares. See also “We are subject to cybersecurity risks that could
threaten the confidentiality, integrity and availability of data in our systems, and could result in disruptions to our operations and
adversely affect our operations, cash flows and financial condition.”
While we endeavor to comply with all applicable laws and regulations relating to privacy, security, artificial intelligence and data
protection, it is possible that such requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to
another or may conflict with other laws or our practices. That concern is particularly relevant for the GDPR, as different EU member
state regulators may differ as to their interpretation of the GDPR and the approach they may take to breaches, enforcement, complaints
or the exercise of rights to access personal data by individuals. Any perceived or actual failure by us to protect confidential data,
personal data, any material non-compliance with privacy, security or data protection laws or regulations or any general IT system
failure may harm our reputation and credibility, adversely affect our revenues, reduce our ability to attract or retain customers, result
in litigation or other actions being brought against us and the imposition of significant fines and, as a result, could have a material
adverse effect on our business, results of operations, cash flows and financial condition, and the trading price of our ordinary shares.
Failure to comply with applicable occupational health and safety laws and regulations or maintain good health and safety and
employee well-being practices in our facilities may have a material adverse effect on our business.
We are subject to a broad range of laws and regulations relating to occupational health and safety, and our safety program includes
measures required for compliance. We have incurred, and will continue to incur, operating costs and capital expenditures to meet our
health and safety obligations, as well as to continually improve our safety systems.
In addition, our business involves the use of heavy equipment, machinery and chemicals and requires the performance of activities that
create safety exposures, including the performance of relatively difficult and specialized tasks. Safeguarding the health, safety and
overall well-being of our colleagues is a top concern, critical to attracting and retaining the best talent, and plays a pivotal role in
realizing our business and sustainability objectives. We implement our health and safety requirements through a safety management
system that includes best practice sharing and operational learning. We seek to reduce exposures and eliminate serious injuries and
fatalities through engagement, execution of targeted risk reduction measures, and implementation of systems that promote continuous
improvement. Despite such efforts, a serious incident affecting the health and safety of any of our employees could occur and disrupt
our operations. There is also a risk of significant fines and penalties or litigation if a health and safety incident occurs. Furthermore,
disruption of operations caused by a major incident could have a material adverse effect on our customer relationships, business,
results of operations, financial condition and the trading price of our ordinary shares. Additionally, portions of our operations are in
areas, including those with ongoing political or geopolitical uncertainty, which could pose security risks to our employees or
operations. See also “As a leading global manufacturing business, we have been, and may be in the future, adversely affected by
factors that are beyond our control, such as economic and financial market conditions, geopolitical conflicts and other social and
political unrest or change” and “We are exposed to risks related to international sales and operations.”
The Company’s maintenance of two exchange listings may adversely affect liquidity in the market for our shares and result in
pricing differentials of our shares between the two exchanges.
Given trading in our shares on the NYSE and the London Stock Exchange (“LSE”) takes place in different currencies (U.S. dollars on
the NYSE and pounds sterling on the LSE) and at different times (resulting from different time zones, different trading hours and
different trading days for the NYSE and the LSE), the trading prices of our shares on these two exchanges may at times differ due to
these and other factors. Any decrease in the price of our ordinary shares on the NYSE could cause a decrease in the trading price of
our ordinary shares on the LSE and vice versa.
41
We are required to comply with the Sarbanes-Oxley Act, and we may continue to incur significant costs and devote substantial
management time towards maintaining and improving our internal controls, which may materially adversely affect our operating
results in the future.
In addition to complying with securities laws and other laws and regulations applicable in the U.S., the U.K. and Ireland, we are
required to comply with the internal control, evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act of
2002 (the “Sarbanes-Oxley Act”), of which we have incurred and expect to continue to incur considerable legal and financial
compliance costs. Our management is responsible for establishing, maintaining and reporting on the Company’s internal controls over
financial reporting and disclosure controls and procedures to comply with applicable requirements, including the reporting
requirements of the Sarbanes-Oxley Act. These internal controls must be designed by management to achieve the objective of
providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes and in accordance with GAAP. We are continuing to improve and refine our disclosure controls and procedures and internal
control over financial reporting to achieve this. Pursuant to Section 404(a) of the Sarbanes-Oxley Act, we are required to furnish a
report by management on the effectiveness of our internal control over financial reporting. Material weaknesses in our internal control
over financial reporting may be discovered in the future. If we are not able to comply with the requirements of Section 404, or if we or
our accounting firm further identifies deficiencies in our internal control over financial reporting that are deemed to be material
weaknesses, the market price of our ordinary shares could decline and we could be subject to lawsuits, sanctions or investigations by
regulatory authorities, which would require additional financial and management resources.
Risks Related to Our Incorporation in Ireland
We are incorporated in Ireland and Irish law differs from the laws in effect in the U.S. and might afford less protection to our
shareholders.
As an Irish company, we are governed by the Irish Companies Act. The Irish Companies Act differs in some significant, and possibly
material, respects from laws applicable to U.S. corporations and shareholders under various state corporation laws, including the
provisions relating to interested directors, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
Irish law differs from the laws in effect in the U.S., and our shareholders could have more difficulty protecting their interests than
shareholders of a corporation incorporated in a jurisdiction of the U.S. The U.S. currently does not have a treaty with Ireland providing
for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, there is some uncertainty as to
whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers
based on U.S. federal or state civil liability laws, including the civil liability provisions of the U.S. federal or state securities laws, or
hear actions against us or those persons based on those laws.
Under Irish law, the duties of directors and officers of a company are generally owed to the company only. Shareholders of Irish
companies do not generally have rights to take action against directors or officers of the company under Irish law and may only do so
in limited circumstances. Directors of an Irish company must, in exercising their powers and performing their duties, act with due care
and skill, honesty and in good faith with a view to the best interests of the company. Directors have a duty not to put themselves in a
position in which their duties to the company and their personal interests might conflict and also are under a duty to disclose any
personal interest in any contract or arrangement with the company or any of its subsidiaries. If a director or officer of an Irish company
is found to have breached his or her duties to that company, he or she could be held personally liable to the company in respect of that
breach of duty.
In addition, under Irish law, we must have authority from our shareholders to issue any shares, including shares that are part of the
Company’s authorized but unissued share capital. In addition, unless otherwise authorized by its shareholders, when an Irish company
issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing
shareholders on a pro-rata basis. If we are unable to obtain these authorizations from our shareholders or are otherwise limited by the
terms of our authorizations, our ability to issue shares under our equity compensation plans and, if applicable, to facilitate funding
acquisitions or otherwise raise capital could be adversely affected.
42
Any attempts to acquire the Company will be subject to the Irish Takeover Rules and subject to the supervisory jurisdiction of the
Irish Takeover Panel and the Board may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover
attempt.
The Company is subject to the Irish Takeover Rules, which regulate the conduct of takeovers of, and certain other relevant
transactions affecting, Irish public limited companies listed on certain stock exchanges, including the NYSE and the LSE. The Irish
Takeover Rules are administered by the Irish Takeover Panel, which has supervisory jurisdiction over such transactions. Among other
matters, the Irish Takeover Rules operate to ensure that no offer is frustrated or unfairly prejudiced and, in situations involving
multiple bidders, that there is a level playing field.
The Company is subject to the Irish Takeover Rules, under which we are not permitted to take certain actions that might “frustrate” an
offer for our ordinary shares once we receive an offer, or have reason to believe an offer is or may be imminent, without the approval
of more than 50% of our shareholders entitled to vote at a general meeting of the Company’s shareholders or the consent of the Irish
Takeover Panel. This may limit the ability of the Company’s Board to take defensive actions even if it believes that such defensive
actions would be in the Company’s best interests or the best interests of our shareholders.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy
viruses, system disruptions, ransomware, malicious software and other forms of intrusions. We utilize a multilayered, proactive
approach to identify, evaluate, mitigate and prevent potential cyber and information security threats through our cybersecurity risk
management program. Our cybersecurity risk management program is integrated into our broader Enterprise Risk Management
viewed in isolation, but are assessed, prioritized and managed in alignment with the Company’s operational, financial and strategic
risks, assisting the Company in more effectively managing interdependencies among risks and enhancing risk mitigation strategies.
There are also processes, policies, procedures, operations, technologies and systems in place within our cybersecurity risk
management program that pertain to legacy companies as a result of our Combination. Though these remain to be fully integrated as
part of the Combination, such integration will be a major focus over the year. Cybersecurity risk measures or governance described
We devote resources to protecting the security of our computer systems, software, networks, data, and other technology assets. The
Company follows cybersecurity control frameworks based on industry standards. We also employ systems and processes designed to
oversee, identify, and reduce the potential impact of a security incident originating from a third-party vendor, service provider or
customer. We have cybersecurity architecture practices in place to promote robust architecture design in our technology and to foster a
standardized security landscape. We have security operations teams that provide 24/7 monitoring of our IT environment for any
indications of compromise and incident response processes to react as necessary. In addition to our internal cybersecurity capabilities,
Company also maintains cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us
against claims related to security breaches, cybersecurity incidents and other related breaches.
We deliver cybersecurity courses and awareness training on information security to our employees with access to Company email or
devices at least annually. Additional cybersecurity trainings are made available for all employees throughout the year, including
phishing, social engineering and other cybersecurity training as well as targeted training for specific roles based on responsibilities and
risk level.
43
investigation, containment, mitigation, and recovery. These processes provide a standardized approach when responding to
cybersecurity threats or security incidents and include procedures for communication with senior management and key stakeholders,
as appropriate. Our incident response processes align with the standards of the National Institute of Standards and Technology. In the
event of an incident, the cybersecurity team assesses, among other factors, supply chain disruption, data and personal information loss,
business operations disruption, and projected cost and potential for reputational harm, with participation from senior management,
technical staff, and legal support, as appropriate. As part of the annual cybersecurity awareness training program, employees are
informed of their responsibilities to report an incident to the cybersecurity team, supporting awareness of the importance of incident
Additionally, we have business continuity processes in place. Cybersecurity threats are constantly expanding and evolving, becoming
increasingly sophisticated and complex, increasing the difficulty of detecting and defending against them and maintaining effective
security measures and protocols. Due to evolving cybersecurity threats, it has and will continue to be difficult to prevent, detect,
mitigate, and remediate cybersecurity incidents, and the Company has been and continues to be the target of cybersecurity incidents
and network disruptions. During the periods covered by this report, we believe that the risks posed by such cybersecurity threats have
not materially affected the Company and its business strategy, results of operations and financial condition, and as of the date of this
report, the Company is not aware of any material risks from cybersecurity threats that are reasonably likely to do so, however, we
cannot eliminate all risks from cybersecurity threats or provide assurances that the Company will not be materially affected by such
confidentiality, integrity and availability of data in our systems, and could result in disruptions to our operations and adversely affect
Governance
and data privacy-related risks, with the Audit Committee of the Board (the “Audit Committee”) being primarily responsible for
regularly reviews the measures implemented by the Company to identify and mitigate risks from cybersecurity threats. As part of such
reviews, the Audit Committee receives reports and presentations from members of our team responsible for overseeing the Company’s
assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations
Cybersecurity incidents that meet specified criteria for financial, operational, or otherwise relevant impact are escalated for further
review to our Cyber Disclosure Committee, comprised of senior leaders and subject matter experts representing functional areas such
as information security and legal. The Cyber Disclosure Committee will, where appropriate, report certain cybersecurity incidents to
the Board in a timely manner.
extensive knowledge and skills gained from over two decades of work experience at the Company and leads the teams responsible for
implementing, monitoring and maintaining cybersecurity and data protection practices across the Company. The CISO is supported by
a team with expertise in technical architecture and security operations; governance, risk and compliance; data protection; behavioral
change; and cyber incident response, many of whom hold cybersecurity certifications and possess deep technical knowledge and
experience.
The CISO receives reports on cybersecurity threats from internal cybersecurity sources and industry partners on an ongoing basis and
regularly review risk management measures implemented by the Company to identify and mitigate data protection and cybersecurity
risks. Our cybersecurity team works closely with the legal department to oversee compliance with regulatory and contractual security
requirements.
44
Item 2. Properties
We operate locations in North America, including the majority of U.S. states, South America, Europe, Asia, Africa and Australia. We
own our principal Group head office in Dublin, Ireland.
Our corporate offices, significant regional offices and operating facilities (including our mills) as of December 31, 2025 are
summarized below:
Number of Facilities | ||||||
Segment | Owned | Leased | Total | |||
North America | 157 | 151 | 308 | |||
Europe, MEA and APAC | 246 | 51 | 297 | |||
LATAM | 54 | 9 | 63 | |||
Corporate and significant regional offices | 1 | 5 | 6 | |||
Total (1) | 458 | 216 | 674 | |||
(1) Excludes facilities we are in the process of closing.
The tables that follow show our estimated annual production capacity in thousands of tons by mill at December 31, 2025. The capacity
reflects our current expectations, including assumptions such as product mix and basis weight. Our mill system production levels and
operating rates may vary from year to year due to changes in market and other factors, including weather-related events. We own all of
our mills. We believe that our existing production capacity is adequate to serve existing demand for our products and consider our
plants and equipment to be in good condition. At December 31, 2025, we also have approximately 308,000 acres of forests and
plantations, the majority of which are owned in Latin America in Colombia and Brazil.
45
North America segment mills - annual production capacity in thousands of tons
Location of Mill | Containerboard | Paperboard | Kraft Paper | Pulp | Total | |||||
Mahrt, AL | 1,031 | 1,031 | ||||||||
Longview, WA | 624 | 351 | 975 | |||||||
Fernandina Beach, FL | 928 | 928 | ||||||||
West Point, VA | 922 | 922 | ||||||||
Stevenson, AL | 864 | 864 | ||||||||
Covington, VA | 793 | 793 | ||||||||
Hodge, LA | 790 | 790 | ||||||||
Solvay, NY | 770 | 770 | ||||||||
Florence, SC | 733 | 733 | ||||||||
Seminole, FL | 620 | 620 | ||||||||
Evadale, TX | 55 | 531 | 586 | |||||||
Dublin, GA | 279 | 305 | 584 | |||||||
Roanoke Rapids, NC | 322 | 196 | 518 | |||||||
Demopolis, AL | 374 | 100 | 474 | |||||||
La Tuque, Quebec | 341 | 127 | 468 | |||||||
Hopewell, VA | 466 | 466 | ||||||||
Monterrey, MX | 402 | 402 | ||||||||
Cerro Gordo, MX | 259 | 88 | 347 | |||||||
Guadalajara, MX | 160 | 110 | 270 | |||||||
San Pablo, MX | 243 | 243 | ||||||||
Cowpens, SC | 234 | 234 | ||||||||
Los Reyes, MX | 158 | 158 | ||||||||
Battle Creek, MI | 150 | 150 | ||||||||
Dallas, TX | 127 | 127 | ||||||||
Missisquoi, VT | 99 | 99 | ||||||||
Stroudsburg, PA | 72 | 72 | ||||||||
San Luis Potosi, MX | 71 | 71 | ||||||||
Total North America | 9,241 | 3,502 | 852 | 100 | 13,695 |
46
Europe, MEA and APAC segment mills - annual production capacity in thousands of tons
Location of Mill | Containerboard | Paperboard | Kraft Paper | Graphic Paper | Total | |||||
Piteå, SWE | 794 | 794 | ||||||||
Roermond, NETH | 717 | 717 | ||||||||
Parenco, NETH | 441 | 248 | 689 | |||||||
Facture, FRA | 634 | 634 | ||||||||
Zulpich, GER | 573 | 573 | ||||||||
Hoya, GER | 474 | 88 | 562 | |||||||
Verzuolo, ITA | 551 | 551 | ||||||||
Nettingsdorf, AUS | 507 | 507 | ||||||||
Wrexen, GER | 259 | 88 | 347 | |||||||
Herzberg, GER | 287 | 287 | ||||||||
Saillat, FRA | 281 | 281 | ||||||||
Mengibar, SPA | 265 | 265 | ||||||||
Townsend Hook, U.K. | 259 | 259 | ||||||||
Ania, ITA | 254 | 254 | ||||||||
SSK, U.K. | 220 | 220 | ||||||||
Nervion, SPA | 176 | 176 | ||||||||
Morai, IND | 165 | 165 | ||||||||
Belgrade, SER | 132 | 132 | ||||||||
Navarra, SPA | 94 | 94 | ||||||||
Morava, CZK | 83 | 83 | ||||||||
Rethel, FRA | 72 | 72 | ||||||||
Total Europe, MEA and APAC | 6,681 | 463 | 270 | 248 | 7,662 |
LATAM segment mills - annual production capacity in thousands of tons
Location of Mill | Containerboard | Paperboard | Kraft Paper | Total | ||||
Tres Barras, BRA | 650 | 650 | ||||||
Cali, COL | 129 | 70 | 121 | 320 | ||||
Pirapetinga, BRA | 143 | 143 | ||||||
Barbosa, COL | 127 | 127 | ||||||
Bernal, ARG | 77 | 77 | ||||||
Barranquilla, COL | 77 | 77 | ||||||
Uberaba, BRA | 72 | 72 | ||||||
Coronel Suarez, ARG | 57 | 57 | ||||||
Bento, BRA | 55 | 55 | ||||||
Total LATAM | 1,387 | 70 | 121 | 1,578 |
Item 3. Legal Proceedings
The information called for by this item is incorporated herein by reference to Note 21. Commitments and Contingencies in the
accompanying Consolidated Financial Statements.
Item 4. Mine Safety Disclosures
Not applicable.
47
PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Market Information
Our ordinary shares are currently listed on the New York Stock Exchange (NYSE) under the ticker “SW” and began trading on July 8,
2024. Prior to that date, there was no public trading market for our ordinary shares on the domestic stock exchanges. Our ordinary
shares also trade under the symbol “SWR” on the London Stock Exchange.
Holders
As of February 20, 2026, there were 4,955 shareholders of record of our ordinary shares. The number of record holders of our ordinary
shares does not reflect the number of persons or entities holding their shares in “street” name through brokerage firms or other
nominee holders.
Recent Sales of Unregistered Equity Securities
None.
Issuer Purchases of Equity Securities
None.
Dividends
On February 3, 2026, the Company announced that its Board approved a quarterly dividend of $0.4523 per share on its ordinary shares
representing a $1.81 annualized dividend, or an increase of 5% from the prior dividend. The quarterly dividend is expected to be paid
on March 18, 2026 to shareholders of record at the close of business on February 17, 2026. In fiscal 2025, 2024 and 2023 the
Company paid dividends totaling $1.72, $1.89 and $1.50 per share, respectively.
In certain circumstances, as an Irish tax resident company, we may be required to deduct Irish dividend withholding tax (“DWT”)
(currently at the rate of 25%) from dividends paid to our shareholders. Shareholders residing in “relevant territories” (including
countries that are European Union member states (other than Ireland), the United States and other countries with which Ireland has a
tax treaty) may be exempted from Irish DWT. However, shareholders residing in other countries will generally be subject to Irish
DWT.
The declaration of dividends is subject to the discretion of Smurfit Westrock’s Board. Our Board is committed to continuing to pay
regular cash dividends; however, there can be no assurance as to future dividends. The Board will consider various factors when
determining whether to pay dividends, including but not limited to, Smurfit Westrock’s results of operations, capital investment
priorities, the market price of Smurfit Westrock’s ordinary shares and access to capital markets, as well as legal requirements
(including requirements relating to availability of distributable reserves), industry practice and other factors deemed relevant by the
Board. For additional information, see “Risk Factors—Any dividend payment in respect of our shares is subject to a number of
factors, including the distributions of earnings to the Company by its subsidiaries, the financial condition and results of operations of
the Company, as well as the distributable reserves of the Company and the discretion of the Company’s Board, and there are no
guarantees that the Company will pay dividends or the level of any such dividends.”
48
Performance Graph*
The following graph compares cumulative total shareholder return on the Company’s ordinary shares against the Standard & Poor’s
(“S&P”) 500 Stock Index and the Dow Jones Containers & Packaging Index from July 8, 2024 (the first day our ordinary shares began
trading on the NYSE) through December 31, 2025. The graph is indexed at $100 on July 8, 2024 for each of the Company’s ordinary
shares, the S&P 500 Stock Index and the Dow Jones Containers & Packaging Index. It also assumes that all dividends were
reinvested. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast,
future performance of our ordinary shares.
*The above performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Smurfit Westrock under the Securities Act or the
Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Equity Compensation Plan Information
See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters” below.
Item 6. [Reserved]
49
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.
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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.
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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):
Years ended December 31, | |||
2025 | 2024 | ||
Net sales | $31,179 | $21,109 | |
Cost of goods sold | (25,136) | (16,914) | |
Gross profit | 6,043 | 4,195 | |
Selling, general and administrative expenses | (3,819) | (2,737) | |
Impairment and restructuring costs | (385) | (56) | |
Transaction and integration-related expenses associated with the Combination | (120) | (395) | |
Operating profit | 1,719 | 1,007 | |
Interest expense, net | (729) | (398) | |
Pension and other postretirement non-service income (expense), net | 30 | (24) | |
Other expense, net | (61) | (25) | |
Income before income taxes | 959 | 560 | |
Income tax expense | (260) | (241) | |
Net income | 699 | 319 | |
Net income attributable to noncontrolling interests | — | — | |
Net income attributable to common shareholders | $699 | $319 | |
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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.
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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.
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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):
Years ended December 31, | |||
2025 | 2024 | ||
Net sales (aggregate):(1) | |||
North America | $18,577 | $10,092 | |
Europe, MEA and APAC | 10,893 | 9,577 | |
LATAM | 2,113 | 1,711 | |
Segment Adjusted EBITDA: | |||
North America | $2,998 | $1,610 | |
Europe, MEA and APAC | 1,618 | 1,529 | |
LATAM | 485 | 378 | |
(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.
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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.
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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.
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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 $361 million as of December 31,
2025.
Smurfit Westrock also participates in certain vendor financing and commercial card programs to support travel and entertainment
expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because the
Company receives the benefit of extended payment terms and a rebate from the financial institution that would not have otherwise
been received without the financial institution's involvement. Smurfit Westrock also has receivables securitization facilities that allows
for borrowing availability based on underlying accounts receivable eligibility and compliance with certain covenants. See “Note 15.
Debt” and “Note 22. Variable Interest Entities” of the Notes to Consolidated Financial Statements for a discussion of the receivables
securitization facilities and the amount outstanding under the Company’s vendor financing and commercial card programs.
Smurfit Westrock is a party to enforceable and legally binding contractual obligations involving commitments to make payments to
third parties. These obligations impact Smurfit Westrock’s short-term and long-term liquidity and capital resource needs. Certain
contractual obligations are reflected on Smurfit Westrock’s Consolidated Balance Sheets as of December 31, 2025, while others are
considered future obligations. Smurfit Westrock’s contractual obligations primarily consist of items such as long-term debt, including
current portion, lease obligations, purchase obligations and other obligations. See “Contractual Obligations and Commitments” for
more information.
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Cash Flow Activity
The following table contains selected financial information from Smurfit Westrock’s Consolidated Statements of Cash Flows for the
years ended December 31, 2025 and 2024 ($ in millions):
Years ended December 31, | |||
($ in millions) | |||
2025 | 2024 | ||
Net cash provided by operating activities | $3,392 | $1,483 | |
Net cash used for investing activities | $(2,143) | $(2,114) | |
Net cash (used for) provided by financing activities | $(1,298) | $607 | |
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.
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•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”.
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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).
Years ended December 31, | |||
2025 | 2024 | ||
Net income | $699 | $319 | |
Income tax expense | 260 | 241 | |
Depreciation, depletion and amortization | 2,550 | 1,464 | |
Impairment and restructuring costs | 385 | 56 | |
Transaction and integration-related expenses associated with the Combination | 120 | 395 | |
Amortization of fair value step up on inventory | — | 224 | |
Interest expense, net | 729 | 398 | |
Pension and other postretirement non-service (income) expense, net | (30) | 24 | |
Share-based compensation expense | 139 | 206 | |
Other expense, net | 61 | 25 | |
Other adjustments | 26 | 34 | |
Adjusted EBITDA | $4,939 | $3,386 | |
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.
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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).
SUMMARIZED STATEMENT OF OPERATIONS | Year ended December 31, |
2025 | |
Net sales to unrelated parties | $1,445 |
Net sales to Non-Obligor Subsidiaries | 1,162 |
Gross profit | 878 |
Interest expense, net with unrelated parties | (634) |
Interest expense, net with Non-Obligor Subsidiaries | (345) |
Net income and net income attributable to the Obligor Group | 963 |
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SUMMARIZED BALANCE SHEETS | December 31, | December 31, | |
2025 | 2024 | ||
ASSETS | |||
Current amounts due from Non-Obligor Subsidiaries | $4,571 | $4,925 | |
Other current assets | 1,207 | 1,049 | |
Total current assets | $5,778 | $5,974 | |
Non-current amounts due from Non-Obligor Subsidiaries | $3,355 | $2,848 | |
Other non-current assets | 918 | 370 | |
Total non-current assets | $4,273 | $3,218 | |
LIABILITIES | |||
Current amounts due to Non-Obligor Subsidiaries | $9,130 | $9,681 | |
Other current liabilities | 482 | 1,122 | |
Total current liabilities | $9,612 | $10,803 | |
Non-current amounts due to Non-Obligor Subsidiaries | $7,447 | $6,604 | |
Other non-current liabilities | 11,823 | 9,644 | |
Total non-current liabilities | $19,270 | $16,248 |
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
Financial Statements:
Business Combinations
From time to time, Smurfit Westrock may enter into business combinations, such as the Combination with WestRock which closed on
July 5, 2024. As described further in “Note 2. Acquisitions” to the Consolidated Financial Statements, Smurfit Westrock allocated the
$13,461 million aggregate merger consideration to the fair values of WestRock assets acquired and liabilities assumed as of the
Closing Date. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill.
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The purchase price allocation for the Merger was revised as additional information about the acquisition-date fair value of assets and
liabilities became available during the measurement period (a period not to exceed 12 months from the Closing Date). The purchase
price allocation was completed during the third quarter of fiscal 2025 after the Company completed the evaluation of the fair value of
acquired property, plant and equipment, intangible assets and certain income tax related items in addition to ensuring all other assets
and liabilities and contingencies had been identified and recorded. The acquisition method of accounting required significant estimates
and assumptions regarding the fair values of the elements of a business combination. The most significant assumptions related to the
fair value estimates of plant and machinery assets acquired as part of property, plant and equipment. The company prepared estimates
and engaged third-party valuation specialists to assist in the valuation of plant and machinery assets, which required significant
judgments and assumptions inherent in the estimates regarding items such as deriving the effective age, economic lives, residual
values and other factors, including estimating future cash flows that Smurfit Westrock expects to generate from the acquired assets.
If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and
projections used to develop these values, we could record future impairment charges. In addition, we have estimated the economic
lives of certain acquired assets, and these lives are used to calculate depreciation and amortization expense. If the Company’s
estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset
could be impaired.
See “Note 1.13. Business Combinations” and “Note 2. Acquisitions” to the Consolidated Financial Statements for Smurfit Westrock’s
accounting policy on business combinations and more information on the Combination with WestRock.
Goodwill Impairment
Smurfit Westrock reviews the carrying value of its goodwill annually during the fourth quarter, or more often if events or changes in
circumstances indicate that the carrying amount may exceed fair value as set forth in ASC 350, “Intangibles — Goodwill and Other”
(“ASC 350”). Smurfit Westrock tests goodwill for impairment at the reporting unit level. During the third quarter of 2024, following
the completion of the Combination, the Company changed its reportable segments and reassessed its reporting units. As a result of this
reassessment, the Company identified the following reporting units: (1) North America, which includes operations in the U.S. and
Canada, (2) Europe, MEA and APAC, (3) Mexico, (4) Argentina and Chile, (5) Colombia & Central Cluster, and (6) Brazil. See “Note
1.12. Goodwill and Non-current Assets” and “Note 10. Goodwill” to the Consolidated Financial Statements for Smurfit Westrock’s
accounting policy on goodwill and more information on reporting units.
During the fourth quarter of the year ended December 31, 2025, Smurfit Westrock completed its annual goodwill impairment testing
for each of the Company’s reporting units by performing a qualitative assessment. Multiple factors were evaluated to assess whether it
was more likely than not that the estimated fair value of any reporting unit was below its carrying value. These factors included, but
were not limited to, its expectations for macroeconomic conditions, industry and market considerations, and financial performance,
including planned net sales and earnings of each reporting unit. The qualitative assessment also considered changes since the last
qualitative assessment of all the Company’s reporting units, which was performed in 2024.
As a result of the qualitative assessment, Smurfit Westrock determined that it was more likely than not that the estimated fair value of
each reporting unit with goodwill exceeded its respective carrying value. Therefore, the Company determined that goodwill for each
reporting unit was not impaired and that a quantitative goodwill test was not required. See “Note 10. Goodwill” to the Consolidated
Financial Statements for further information about the Company’s annual assessment of goodwill for impairment.
Although the Company believes all relevant factors were considered in the qualitative impairment analysis to reach the conclusion that
goodwill was not impaired, significant changes in any one of the assumptions, estimates and market factors underlying Smurfit
Westrock’s fair value determinations could produce a significantly different result potentially leading to the recording of an
impairment that could have significant impacts on the results of operations and financial position of the Company. Smurfit Westrock
has not made any material changes to its impairment loss assessment methodology during the past three fiscal years.
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Accounting for Income Taxes
Smurfit Westrock’s income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits, reflect
management’s best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in
determining the consolidated income tax expense. In evaluating its ability to recover deferred tax assets and establishing or reducing a
valuation allowance in the jurisdiction from which they arise, Smurfit Westrock considers all available positive and negative evidence,
including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and the
effect of enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or
realized. A high degree of judgment is required to assess the impact of possible future outcomes on Smurfit Westrock’s current and
deferred tax positions.
As a result of this evaluation, Smurfit Westrock recorded valuation allowances of $429 million as of December 31, 2025 and
$372 million as of December 31, 2024, related to certain deferred tax assets, primarily tax loss carryforwards, where there is
uncertainty as to the ultimate realization of a benefit. Smurfit Westrock regularly reviews the recoverability of deferred tax assets for
adjustments to taxable income, changes in tax laws or interpretations thereof and tax rates, as all of these could impact its effective tax
rate.
Smurfit Westrock is subject to routine tax audits and examinations. It uses significant judgment in (i) determining whether a tax
position, based solely on its technical merits, is “more likely than not” to be sustained upon examination and (ii) measuring the tax
benefit as the largest amount of benefit that is “more likely than not” to be realized upon settlement. Smurfit Westrock does not record
any benefit for tax positions that do not meet the “more likely than not” recognition threshold at the balance sheet date. Resolutions of
current uncertain tax positions are not expected to have a material adverse effect on the effective tax rate or on cashflows. Smurfit
Westrock has a progressive dividend strategy which means that it will remit earnings from some of its overseas subsidiaries to the
parent company in Ireland. Its foreign earnings are generally taxed at rates that are higher than in Ireland and so no incremental tax
should arise there, due to the availability of foreign tax credits. However, some earnings may be subject to limited additional foreign
taxes upon repatriation. Smurfit Westrock continues to indefinitely reinvest its foreign earnings as part of its wider capital allocation
strategy. To the extent that it cannot assert indefinite reinvestment of earnings, it records a deferred tax liability on its foreign earnings
at the applicable tax rate if it is not otherwise possible to remit earnings without additional tax.
As of December 31, 2025 and 2024, Smurfit Westrock recognized a deferred tax liability of $209 million and $179 million,
respectively, on unremitted earnings, in respect of foreign income taxes or withholding taxes for expected or assumed repatriation,
respectively. As Smurfit Westrock can decide which subsidiaries should pay dividends, it does not expect that this deferred tax
liability will have a material impact on its cash flows in the foreseeable future.
The determination of the amount of unrecognized deferred tax liability related to indefinitely invested foreign earnings not subject to
additional outside basis difference taxes is not practicable. A 1% change in the effective tax rate would increase or decrease Smurfit
Westrock’s income tax expense for the year ended December 31, 2025 by $10 million.
In 2021, political agreement was reached by the OECD Inclusive Framework on a two-pillar approach to international tax reform. This
includes the commitment to introduce a minimum effective tax rate of 15% for companies with revenue above €750 million (‘Pillar
Two’). The agreement has been enacted in most of the countries where Smurfit Westrock has business activities. The law was enacted
in Ireland with an effective date January 1, 2024, and it was broadly in line with the OECD Inclusive Framework. For the year ended
December 31, 2025, a Pillar Two assessment was performed and its impact was not significant.
The Company has made accounting policy elections to account for the income tax effect(s) of U.S. Global Intangible Low-Taxed
Income (GILTI) as a period cost and to account for the income tax effect(s) of investment tax credits under the flow-through method.
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Pension Obligations
The determination of pension obligations and pension expense requires various assumptions that can significantly affect liability and
expense amounts, such as the expected long-term rate of return on plan assets, discount rates, projected future compensation increases
and mortality rates for each of Smurfit Westrock’s plans. These assumptions are determined annually in conjunction with Smurfit
Westrock’s actuary. 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 Smurfit Westrock is currently reporting based on management’s current estimates.
A 50-basis point change in the discount rate, compensation level and expected long-term rate of return on plan assets, factoring in our
corridor as appropriate, would have had the following effect on Smurfit Westrock’s pension expense for the year ended December 31,
2025, (in millions):
Defined Benefit Pension Plans | |||
50 Basis Point Increase | 50 Basis Point Decrease | ||
Discount rate | $8 | $(8) | |
Compensation level | 1 | (1) | |
Expected long-term rate of return on plan assets | (35) | 35 | |
NEW ACCOUNTING STANDARDS
See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial
Statements included elsewhere in this Annual Report on Form 10-K for a full description of recent accounting pronouncements,
including the respective expected dates of adoption and expected effects on Smurfit Westrock’s results of operations and financial
condition.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Smurfit Westrock is exposed to market risk from changes in, among other things, interest rates, foreign currency exchange rates, and
commodity prices. See “Item 1A. Risk Factors” for additional information. Smurfit Westrock aims to identify and understand these
risks and then implement strategies to manage them. When evaluating these strategies, Smurfit Westrock evaluates the fundamentals
of each market, the Company’s sensitivity to movements in pricing, and underlying accounting and business implications. The
sensitivity analyses presented below do not consider the effect of possible adverse changes in the general economy, nor do they
consider additional actions we may take to mitigate the Company’s exposure to such changes. Smurfit Westrock may not be successful
in managing these risks.
Interest Rate Risk
Smurfit Westrock is exposed to changes in interest rates on its variable rate debt. Interest rate changes generally do not affect the
market value of such debt, but do impact the amount of interest payments and, therefore, Smurfit Westrock’s future earnings and cash
flows, assuming other factors are held constant. Smurfit Westrock had fixed an average of 88% of its interest cost on borrowings over
the following 12 months at both December 31, 2025 and 2024. Holding all other variables constant, if interest rates for variable rate
borrowings increased by 1% Smurfit Westrock’s interest expense would increase, and income before taxes would decrease, by
approximately $17 million over the following 12 months for both years. Interest income on cash balances would increase by
approximately $9 million assuming a 1% increase in interest rates earned on such balances over the following 12 months for both
years.
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Foreign Exchange Risk
Smurfit Westrock manages its balance sheet having regard to the currency exposures arising from its assets being denominated in a
wide range of currencies. To this end, where foreign currency assets are funded by local borrowing, such borrowing is generally
sourced in the currency of the related assets.
Smurfit Westrock is exposed to transactional foreign exchange currency risk to the extent that there is a mismatch between the
currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of the
Smurfit Westrock group companies. Smurfit Westrock hedges a portion of its currency exposure through the use of currency swaps
and forward contracts. Smurfit Westrock’s risk management policy allows the hedging of estimated foreign currency exposure in
respect of highly probable forecast sales and purchases. As such, certain subsidiaries enter into foreign currency forward contracts to
hedge highly probable forecast foreign currency sales and purchases for which hedge accounting is applied.
Smurfit Westrock operates in markets both inside and outside of the U.S. and derived 54% and 65% of net sales for the year ended
December 31, 2025 and 2024, respectively, from outside the U.S. through international operations, some of which were transacted in
U.S. dollars. The decrease in concentration from outside the U.S. was due to the full year impact of the Combination. No single
country other than the U.S. represented more than 10% of our net sales.
Although the Company is impacted by the exchange rates of a number of currencies, its largest net assets exposures for the year ended
December 31, 2025 and 2024 included the euro, the Mexican peso, the Canadian dollar, the Brazilian real, the pound sterling, and the
Colombian peso. Strengthening of the U.S. dollar exchange rate by 1% against all other foreign currencies from the December 31,
2025 rate would reduce shareholders’ equity by approximately $114 million compared to $101 million at December 31, 2024.
Commodity Price Risk
Smurfit Westrock is exposed to commodity price risks through its dependence on recovered paper, the principal raw material used in
the manufacture of recycled containerboard and virgin fiber which is the principal raw material that Smurfit Westrock uses in the
production of a portion of the Company’s containerboard, bleached paperboard and market pulp.
The price of recovered paper is dependent on both demand and supply conditions. Demand conditions include the production of
recycled containerboard in Europe and North America and the demand for recovered paper for the production of recycled
containerboard outside of Europe, principally in Asia. Supply conditions include the rate of recovery of recovered paper, itself
dependent on historical pricing related to the cost of recovery, and some slight seasonal variations. While virgin fiber prices have
generally been more stable than recycled fiber prices, they still fluctuate, particularly due to significant changes in weather, such as
during prolonged periods of heavy rain or drought, or during housing construction slowdowns or accelerations.
The cost of producing Smurfit Westrock’s products is also sensitive to the price of energy. Smurfit Westrock’s main energy exposure
is to the cost of gas and electricity. Smurfit Westrock’s energy costs increased by 45% in the year ended December 31, 2025, when
compared to the year ended December 31, 2024, which was primarily a result of 2025 being the first full year of costs after the
Combination with WestRock. Smurfit Westrock’s energy costs increased by 25% in the year ended December 31, 2024, when
compared to the year ended December 31, 2023, as a result of the Combination with WestRock, partially offset by lower energy
market prices for legacy Smurfit Kappa operations.
The objective of our commodity exposure management is to minimize volatility in earnings due to large fluctuations in the price of
commodities. To manage commodity price risk, Smurfit Westrock may enter physical commodity contracts or financial derivative
contracts to manage risks associated with fluctuating energy costs. The timeframe for such programs can be up to three years.
We have elected to apply the normal purchase normal sales (“NPNS”) scope exception, where appropriate, for physical commodity
contracts that meet the criteria of derivatives under ASC 815, “Derivatives and Hedging” (“ASC 815”). As such, Smurfit Westrock is
not required to apply derivative accounting treatment as required by ASC 815 to these physical commodity transactions.
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Certain of our financial derivative contracts are designated as cash flow hedges, with changes in the fair value of these contracts being
accounted for in “Accumulated Other Comprehensive Loss” in Shareholders Equity. The resulting gain or loss is reclassified into
“Cost of goods sold” in the Consolidated Statements of Operations concurrently with the recognition of the commodity. Certain of our
financial derivative contracts do not qualify for hedge accounting but are effective economic hedges. As of December 31, 2025, the
fair value of financial derivatives contracts and the impact of a hypothetical 10% adverse move in market prices on the fair values are
immaterial.
68
Item 8. Financial Statements and Supplementary Data
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
SMURFIT WESTROCK PLC
Page | |
Report of Independent Registered Public Accounting Firm (Auditor Name PCAOB ID: | 69 |
Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024 | 71 |
Consolidated Statements of Operations for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 | 72 |
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 | 73 |
Consolidated Statements of Cash Flows for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 | 74 |
Consolidated Statements of Changes in Equity for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 | 75 |
Notes to Consolidated Financial Statements | 76 |
69
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Smurfit Westrock Public Limited Company:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Smurfit Westrock Public Limited Company and subsidiaries (‘the
Company’) as of December, 31, 2025, and December 31, 2024, the related consolidated statements of operations, comprehensive
income (loss), cash flows and changes in equity for each of the years in the three-year period ended December 31, 2025, and the
related notes collectively, the consolidated financial statements. We also have audited the Company’s internal control over financial
reporting as of December, 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December, 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-
year period ended December 31, 2025 in conformity with U.S. generally accepted accounting principles. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on
criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
70
Report of Independent Registered Public Accounting Firm
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Evaluation of the qualitative goodwill impairment indicator assessment
As described in Note 10 to the consolidated financial statements, the Company’s goodwill balance as of December 31, 2025 was
$7,218 million. The Company reviews the carrying value of its goodwill annually during the fourth quarter, or more often if events or
changes in circumstances indicate that the carrying amount may exceed fair value. During the fourth quarter of fiscal 2025, the
Company performed a qualitative impairment test at the reporting unit level.
We identified the selection and evaluation of qualitative goodwill impairment indicators, or qualitative factors, for the (i) North
America (including US and Canada) and (ii) Europe, MEA and APAC reporting units as a critical audit matter. Key qualitative factors
included projected gross domestic product, inflation, compound annual growth rates, recovered fiber, energy costs and the Company’s
forecasted financial performance. The key qualitative factors could have had a significant effect on the Company’s qualitative
assessment and the potential for the need to perform a quantitative goodwill impairment test. Subjective auditor judgment was
required to evaluate the key qualitative factors.
The following are the primary procedures we performed to address this critical audit matter:
•We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill
impairment assessment process, including controls related to the selection and analysis of potential qualitative factors.
•We evaluated the relevance and reliability of key qualitative factors, specifically, projected gross domestic product, inflation,
compound annual growth rate, recovered fiber and energy costs selected by the Company and assessed the reasonableness of
these qualitative factors against publicly available economic, industry and market data or actual costs as appropriate.
•We evaluated the reasonableness of the Company’s forecasted financial performance by comparing this to actual historical
financial performance reported by the respective reporting units. We challenged the key underlying assumptions (projected
revenue, energy and recovered fiber cost factors) by performing a sensitivity analysis on the Company’s forecasted financial
performance.
/s/ KPMG
We have served as the Company’s auditor since 2018.
Dublin, Ireland
February 27, 2026
71
Smurfit Westrock plc
Consolidated Balance Sheets
(in millions, except share and per share data)
December 31, 2025 | December 31, 2024 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents (amounts related to consolidated variable interest entities of $ $ | $ | $ | |
Accounts receivable, net (amounts related to consolidated variable interest entities of $ $ | |||
Inventories | |||
Other current assets | |||
Total current assets | |||
Property, plant and equipment, net | |||
Goodwill | |||
Intangibles, net | |||
Prepaid pension asset | |||
Other non-current assets (amounts related to consolidated variable interest entities of $ $ | |||
Total assets | $ | $ | |
Liabilities and Equity | |||
Current liabilities: | |||
Accounts payable | $ | $ | |
Accrued expenses | |||
Accrued compensation and benefits | |||
Current portion of debt | |||
Other current liabilities | |||
Total current liabilities | |||
Non-current debt due after one year (amounts related to consolidated variable interest entities of $ | |||
Deferred tax liabilities | |||
Pension liabilities and other postretirement benefits, net of current portion | |||
Other non-current liabilities (amounts related to consolidated variable interest entities of $ and $ | |||
Total liabilities | |||
Commitments and Contingencies (Note 21) | |||
Equity: | |||
Preferred stock, $ | |||
Common stock, $ shares outstanding at December 31, 2025 and December 31, 2024, respectively | |||
Deferred shares, € December 31, 2025 and December 31, 2024, respectively | |||
Treasury stock, at cost; December 31, 2024, respectively | ( | ( | |
Capital in excess of par value | |||
Accumulated other comprehensive loss | ( | ( | |
Retained earnings | |||
Total shareholders’ equity | |||
Noncontrolling interests | |||
Total equity | |||
Total liabilities and equity | $ | $ |
The accompanying notes are an integral part of these Consolidated Financial Statements.
72
Smurfit Westrock plc
Consolidated Statements of Operations
(in millions, except per share data)
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net sales | $ | $ | $ | ||
Cost of goods sold | ( | ( | ( | ||
Gross profit | |||||
Selling, general and administrative expenses | ( | ( | ( | ||
Impairment and restructuring costs | ( | ( | ( | ||
Transaction and integration-related expenses associated with the Combination | ( | ( | ( | ||
Operating profit | |||||
Interest expense, net | ( | ( | ( | ||
Pension and other postretirement non-service income (expense), net | ( | ( | |||
Other expense, net | ( | ( | ( | ||
Income before income taxes | |||||
Income tax expense | ( | ( | ( | ||
Net income | |||||
Net income attributable to noncontrolling interests | ( | ||||
Net income attributable to common shareholders | $ | $ | $ | ||
Basic earnings per share attributable to common shareholders | $ | $ | $ | ||
Diluted earnings per share attributable to common shareholders | $ | $ | $ | ||
The accompanying notes are an integral part of these Consolidated Financial Statements. | |||||
73
Smurfit Westrock plc
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net income | $ | $ | $ | ||
Other comprehensive income (loss), net of tax: | |||||
Foreign currency translation gain (loss) | ( | ||||
Defined benefit pension and other postretirement benefit plans | ( | ( | |||
Net (loss) gain on cash flow hedges | ( | ||||
Other comprehensive income (loss), net of tax | ( | ||||
Comprehensive income (loss) | ( | ||||
Comprehensive income attributable to noncontrolling interests | ( | ||||
Comprehensive income (loss) attributable to common shareholders | $ | $( | $ | ||
The accompanying notes are an integral part of these Consolidated Financial Statements. | |||||
74
Smurfit Westrock plc
Consolidated Statements of Cash Flows
(in millions)
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Operating activities: | |||||
Net income | $ | $ | $ | ||
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||||
Depreciation, depletion and amortization | |||||
Cash surrender value increase in excess of premiums paid | ( | ( | |||
Impairment charges | |||||
Share-based compensation expense | |||||
Deferred income tax benefit | ( | ( | ( | ||
Pension and other postretirement funding more than cost | ( | ( | ( | ||
Other | ( | ||||
Change in operating assets and liabilities, net of acquisitions and divestitures: | |||||
Accounts receivable | ( | ||||
Inventories | |||||
Other assets | ( | ( | |||
Accounts payable | ( | ( | ( | ||
Income taxes | ( | ( | ( | ||
Accrued liabilities and other | ( | ||||
Net cash provided by operating activities | |||||
Investing activities: | |||||
Capital expenditures | ( | ( | ( | ||
Cash paid for purchase of businesses, net of cash acquired | ( | ( | ( | ||
Proceeds from corporate owned life insurance | |||||
Proceeds from sale of property, plant and equipment | |||||
Other | |||||
Net cash used for investing activities | ( | ( | ( | ||
Financing activities: | |||||
Additions to debt | |||||
Repayments of debt | ( | ( | ( | ||
Debt issuance costs | ( | ( | |||
Changes in commercial paper, net | ( | ||||
Other debt (repayments) additions, net | ( | ( | |||
Repayments of finance lease liabilities | ( | ( | ( | ||
Tax paid in connection with shares withheld from employees | ( | ( | |||
Purchases of treasury stock | ( | ( | |||
Cash dividends paid to shareholders | ( | ( | ( | ||
Other | ( | ( | |||
Net cash (used for) provided by financing activities | ( | ( | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||
Increase (decrease) in cash and cash equivalents | ( | ||||
Cash and cash equivalents at January 1 | |||||
Cash and cash equivalents at December 31 | $ | $ | $ | ||
The accompanying notes are an integral part of these Consolidated Financial Statements.
75
Smurfit Westrock plc
Consolidated Statements of Changes in Equity
(in millions, except per share data)
Shares of Common Stock | Common Stock | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | Noncontrolling Interest (“NCI”) | Total | |
Balance at December 31, 2022(1) | $ | $ | $( | $ | $( | $ | $ | $ | |
Net income | — | — | — | — | — | ||||
Other comprehensive income, net of tax | — | — | — | — | — | — | |||
Share-based compensation | — | — | — | — | — | — | |||
Issuance of common stock | — | — | — | — | — | — | — | — | |
Purchases of treasury stock | — | — | — | ( | — | — | ( | — | ( |
Shares distributed by Smurfit Kappa Employee Trust | — | — | ( | — | — | — | |||
Dividends declared ($ | — | — | — | — | ( | — | ( | — | ( |
Balance at December 31, 2023 | ( | ( | |||||||
Net income | — | — | — | — | — | — | |||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | ( | — | ( |
Share-based compensation | — | — | — | — | — | — | |||
Shares distributed by Smurfit Kappa Employee Trust | — | — | ( | — | — | — | |||
Purchases of treasury stock | — | — | — | ( | — | — | ( | — | ( |
Shares of Smurfit Westrock common stock issued to WestRock shareholders and NCI assumed as a result of the Merger | — | — | — | ||||||
Converted WestRock RSUs and Options attributable to pre- Combination services | — | — | — | — | — | — | |||
Issuance of common stock net of tax paid in connection with shares withheld from employees | — | — | ( | — | ( | — | ( | ||
Reclassification from retained earnings to accumulated other comprehensive loss | — | — | — | — | ( | — | |||
Dividends declared ($ | — | — | — | ( | — | ( | — | ( | |
Balance at December 31, 2024 | ( | ( | |||||||
Net income | — | — | — | — | — | — | |||
Other comprehensive income, net of tax | — | — | — | — | — | — | |||
Share-based compensation | — | — | — | — | — | — | |||
Shares distributed by Smurfit Kappa Employee Trust | — | — | ( | — | — | — | |||
Issuance of common stock net of tax paid in connection with shares withheld from employees | — | — | ( | — | ( | — | ( | ||
Cancellation of deferred shares by Smurfit Kappa Employee Trust | — | — | — | ( | — | — | |||
Dividends declared ($ | — | — | — | ( | — | ( | — | ( | |
Balance at December 31, 2025 | $ | $ | $( | $ | $( | $ | $ | $ |
(1) Pursuant to the Transaction Agreement, on July 5, 2024 each issued ordinary share, par value €0.001 per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for one ordinary share, par value $0.001 per
share, of Smurfit Westrock (a “Smurfit Westrock Share”). The exchange of shares is reflected retroactively to the earliest period presented.
(2) Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
The accompanying notes are an integral part of these Consolidated Financial Statements.
76
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
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.
Smurfit Westrock plc is a company limited by shares that is incorporated in Ireland. We are a multinational provider of sustainable
fiber-based paper and packaging solutions. We partner with our customers to provide differentiated, sustainable paper and packaging
solutions that enhance our customers’ prospects of success in their markets. Our team members support customers around the world
from our operating and business locations in North America, South America, Europe, Asia, Africa, and Australia.
Pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction Agreement”), among Smurfit Westrock, Smurfit
Kappa Group plc (re-registered as Smurfit Kappa Group Limited) (“Smurfit Kappa”), WestRock Company (“WestRock”) and Sun
Merger Sub, LLC (“Merger Sub”) the following was completed (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme
of arrangement under the Irish Companies Act (the “Smurfit Kappa Share Exchange”) and (ii) Merger Sub merged with and into
WestRock, with WestRock continuing as the surviving entity (the “Merger” and, together with the Smurfit Kappa Share Exchange, the
“Combination”). The Combination closed on July 5, 2024 (the “Closing Date”). Upon the completion of the Combination, Smurfit
Kappa and WestRock each became wholly-owned subsidiaries of Smurfit Westrock.
Other than activities related to its formation and in anticipation of the Combination, Smurfit Westrock did not conduct any operations
from its incorporation until completion of the Combination. Given the non-operational nature of Smurfit Westrock prior to the
Combination, the Smurfit Kappa Share Exchange is not considered a business combination and does not give rise to any goodwill or
adjustments to accounting basis.
The Consolidated Financial Statements of Smurfit Westrock following the Smurfit Kappa Share Exchange are a continuation of the
financial statements of Smurfit Kappa. The comparative financial information presented in these Consolidated Financial Statements
reflect the pre-Combination carrying values of Smurfit Kappa with the legal share capital retroactively adjusted to reflect the legal
capital of Smurfit Westrock as the successor after giving effect to the Smurfit Kappa Share Exchange.
The Merger is recognized as a business combination under Accounting Standards Codification (“ASC”) 805, “Business
Combinations” (“ASC 805”). Smurfit Kappa was determined to be the accounting acquirer of WestRock. Accordingly, the financial
statements reflected in these Consolidated Financial Statements include WestRock's financial position and results of operations for the
period subsequent to the completion of the Combination on July 5, 2024.
Refer to “Note 2. Acquisitions” for additional information related to the accounting for the Combination.
The Consolidated Financial Statements have been derived from the historical accounting records of the Company and were prepared in
accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The Company’s fiscal year end is
December 31. The reporting currency is the United States dollar (“the U.S. dollar”).
The Consolidated Financial Statements include the accounts of Smurfit Westrock plc, and our wholly and partially owned subsidiaries
for which we have a controlling financial interest, including variable interest entities for which we are the primary beneficiary. We
have eliminated all intercompany accounts and transactions.
The Company consolidates entities in which it has a controlling financial interest based on either the Variable Interest Entity (“VIE”)
or voting interest model.
77
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The Company consolidates entities that are VIEs when the Company determines it is the primary beneficiary. Generally, the primary
beneficiary of a VIE is a reporting entity that has (a) the power to direct the activities that most significantly affect the VIE’s economic
performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be
significant to the VIE.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
During the year ended December 31, 2025, we changed the presentation of our debt footnote to present the unamortized fair value
adjustments, debt discounts and premiums as a single line, alongside debt issuance costs. Previously, these items were included within
the carrying amounts of each facility. Prior year amounts in “Note 15. Debt” have been reclassified to conform to the current period
presentation. This change affected presentation only and had no impact on total assets, liabilities, stockholders’ equity, net income, or
The preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and the
reported amounts of revenues and expenses during the reporting period. These estimates and the underlying assumptions affect the
amounts of assets and liabilities reported, disclosures about gain contingencies and contingent liabilities and reported amounts of
revenues and expenses, including income taxes. Such estimates include the fair value of assets acquired and assumed liabilities in a
business combination, determining goodwill and measuring impairment, income taxes and pension and other postretirement benefits.
These estimates and assumptions are based on management’s judgment. Actual results may differ from those estimates, and the
differences could be material.
We base our estimates on the current information available, our experiences and various other assumptions believed to be reasonable
under the circumstances. The process of determining significant estimates is fact specific and takes into account factors such as
historical experience, current and expected economic conditions, product mix, and in some cases, actuarial techniques. We regularly
evaluate these significant factors and make adjustments in the Consolidated Financial Statements where facts and circumstances
dictate.
Generally, we recognize revenue on a point-in-time basis when the customer takes title to the goods and assumes the risks and rewards
for the goods, which coincides with the transfer of control of our goods to the customer upon delivery. Additionally, we manufacture
certain customized products that have no alternative use to us (since they are made to specific customer specifications), and we believe
that for certain customers we have a legally enforceable right to payment for performance completed to date on these products,
including a reasonable profit. For products that meet these two criteria, we recognize revenue over time. This results in revenue
recognition prior to the date of shipment or title transfer for these products and results in the recognition of a contract asset (unbilled
receivables) with a corresponding reduction in finished goods inventory on our Consolidated Balance Sheets.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods and is derived primarily
from fixed consideration. Certain contracts may also include variable consideration, typically in the form of volume-based rebates and
early settlement discounts. If a contract with a customer includes variable consideration, we estimate the expected impact based on
historical experience and net the provisions for volume-based rebates, early settlement discounts and other adjustments against our
gross sales. We concluded this method is consistent with the most likely amount method under ASC 606, “Revenue from Contracts
with Customers” (“ASC 606”) and allows us to make the best estimate of the consideration we will be entitled to from customers.
78
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
As permitted by ASC 606, we have elected to treat costs associated with obtaining new contracts as expenses when incurred if the
amortization period of the asset we would recognize is one year or less. We do not record interest income when the difference in
timing of control transfer and customer payment is one year or less. No element of financing is deemed present as the sales are made
with credit terms consistent with market practice and are in line with normal credit terms in the entities’ country of operation.
We also account for sales and other taxes that are imposed on and concurrent with individual revenue-producing transactions between
a customer and us on a net basis which excludes the taxes from our net sales.
We account for shipping and handling activities as fulfillment costs. Accordingly, we classify shipping and handling costs, such as
freight to our customers’ destinations, as a component of cost of goods sold while amounts billed to customers are classified as a
component of net sales.
We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. The
carrying amounts of our cash and cash equivalents approximate fair market values.
Our accounts receivable balance arises from a diverse and varied customer base, across the Company’s operations and as such there is
no significant concentration of credit risk. Credit evaluations are performed on all customers over certain thresholds and all customers
are subject to continued monitoring. Credit limits are reviewed on a regular basis.
We perform an evaluation of the current expected credit losses inherent in our accounts receivable at each balance sheet date. Such an
evaluation includes consideration of historical loss experience, trends in customer payment frequency, present economic conditions
and judgment about the future financial health of our customers. Generally, credit terms associated with our receivables collection are
approximately 30 to 90 days.
We state accounts receivable at the amount owed by the customer, net of allowances for estimated credit impairment losses, returns,
early settlement discounts and rebates (when netting conditions are met). We do not discount accounts receivable because we
generally collect accounts receivable over a relatively short time. We write off receivables when they are no longer determined to be
See “Note 7. Accounts Receivable, net” for additional information on accounts receivable and allowances. See “Note 14. Fair Value
Measurement” and “Note 15. Debt” for additional information on receivables securitization facilities.
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is determined on a first-in, first-out basis
and includes expenditure incurred in acquiring the inventories and bringing them to their present location and condition.
Raw materials are valued on the basis of purchase cost on a first-in, first-out basis. For finished goods and work-in-progress, cost
includes direct materials, direct labor and attributable overheads based on normal operating capacity and excludes borrowing costs.
Net realizable value is the estimated proceeds of sale less costs to completion and any costs to be incurred in selling and distribution.
We include the cost of wood harvested from forestlands in the carrying values of raw materials.
79
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Full provision is made for all damaged, deteriorated and unusable material. The Company regularly reviews inventory quantities on-
hand for excess and obsolete inventory and, when circumstances indicate, records charges to write-down inventories to their estimated
net realizable value. Any write-down of inventory to net realizable value creates a new cost basis for that inventory. Materials and
other supplies held for use in the production of inventories are not written down below cost if the finished goods, in which they will be
We lease various real estate, including certain operating facilities, warehouses, office space and land. We also lease equipment and
vehicles.
At inception of a contract, we assess whether a contract is, or contains, a lease. A contract is, or contains, a lease, if the contract
conveys a right to control the use of an identified asset for a period of time in exchange for consideration. We recognize a right-of-use
(“ROU”) asset and a lease liability at the lease commencement date which is the date at which the asset is made available for our use.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. We categorize leases with contractual terms longer than 12 months as either operating or finance.
Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets
acquired under finance leases are recorded in “Property, plant and equipment, net.” All other leases are categorized as operating
leases.
For operating and finance leases, the lease liability is initially measured at the present value of the future lease payments at the lease
commencement date. The lease liability is subsequently measured at amortized cost using the effective-interest method. Our leases
may include options to extend or terminate the lease. These options to extend are included in the lease term when it is reasonably
certain that we will exercise that option. As the implicit rate is generally not readily determinable for our leases, we apply a portfolio
approach using an estimated incremental borrowing rate to determine the initial present value of lease payments over the lease terms
on a collateralized basis over a similar term, which is based on market and company specific information.
We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate, and apply the rate based on the
currency of the lease.
While some leases provide for variable payments, they are not included in the ROU assets and liabilities because they are not based on
an index or rate. Variable payments for real estate leases primarily relate to common area maintenance, insurance, taxes and utilities.
Variable payments for equipment, vehicles and leases within supply agreements primarily relate to usage, repairs, and maintenance.
We have made an accounting policy election to not recognize an ROU asset and liability for leases with a term of 12 months or less
unless the lease includes an option to renew or purchase the underlying asset that we are reasonably certain to exercise. In addition, the
Company has applied the practical expedient to account for the lease and non-lease components as a single lease component for all of
We record property, plant and equipment at cost less accumulated depreciation and impairment charges. Cost includes major
expenditures for improvements and replacements that extend useful lives, increase capacity, increase revenues or reduce costs, while
normal maintenance and repairs are expensed as incurred. For financial reporting purposes, we provide depreciation and amortization
primarily on a straight-line method generally over the estimated useful lives of the assets as follows:
Buildings and Building Improvements 10 - 40 years
Plant and Equipment 3 - 25 years
Leasehold improvements are depreciated over the shorter of the asset life or the lease term, generally between 3 and 15 years.
80
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The estimated residual value and the useful lives of assets are reviewed at each reporting date. The useful lives of assets could be
reduced by climate-related factors, for example, because of physical risks, obsolescence or legal restrictions. Capital expenditures will
continue to be required for ongoing projects in order to meet our climate change targets and the useful lives of future capital
expenditure may differ from current assumptions, however there are no significant changes in the estimates of useful lives during the
current financial year. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are
included in the Consolidated Statements of Operations.
Capitalization of costs in respect of constructing an asset commences when it is probable that future economic benefits associated with
the asset will flow to the Company and the cost of the asset can be measured reliably. Cost includes expenditures that are directly
attributable to the construction of the asset. Construction in progress is not depreciated and is assessed for impairment when there is an
indicator of impairment. When these assets are available for use, they are transferred out of construction in progress to the applicable
heading under property, plant and equipment.
Forestlands consist of standing timber. Timber is stated at cost less depletion. Depletion refers to the carrying value of timber that is
harvested. Costs related to acquiring, planting and growing timber and expenditure directly attributable to the timber are capitalized.
At the time of harvest, the cost of the wood harvested is included in inventories.
The amount of goodwill acquired in a business combination that is assigned to one or more reporting units as of the acquisition date is
the excess of the purchase price of the acquired businesses (or portion thereof) included in the reporting unit, over the fair value
assigned to the individual assets acquired or liabilities assumed from a market participant perspective. Goodwill is assigned to the
reporting unit(s) expected to benefit from the synergies of the combination even though other assets or liabilities of the acquired entity
may not be assigned to that reporting unit. We determine recoverability by comparing the estimated fair value of the reporting unit to
which the goodwill applies to the carrying value, including goodwill, of that reporting unit.
In accordance with ASC 350, “Intangibles – Goodwill and Other” (“ASC 350”), we review the carrying value of our goodwill
annually in the fourth quarter or more often if events or changes in circumstances indicate that the carrying amount may exceed fair
value. We test goodwill for impairment at the reporting unit level, which is an operating segment or one level below an operating
segment, referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business
for which discrete financial information is available and segment management regularly reviews the operating results of that
component. However, two or more components of an operating segment are aggregated and deemed a single reporting unit if the
components have similar economic characteristics. We determine the fair value of each reporting unit using the discounted cash flow
method or, as appropriate, a combination of the discounted cash flow method and the guideline public company method.
81
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
ASC 350 allows an optional qualitative assessment, prior to a quantitative assessment test, to determine whether it is “more likely than
not” that the fair value of a reporting unit exceeds its carrying amount. We evaluate goodwill for impairment by first performing a
qualitative assessment to determine whether a quantitative goodwill test is necessary. If the Company determines, based on qualitative
factors, that the fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment is necessary. If
based on qualitative factors, the fair value of the reporting unit may more likely than not be less than its carrying amount, a
quantitative goodwill impairment test would be required. For reporting units where the Company performs the quantitative goodwill
impairment test, an impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair
value. As part of the quantitative test, we utilize the present value of expected cash flows or, as appropriate, a combination of the
present value of expected cash flows and the guideline public company method to determine the estimated fair value of our reporting
units. This present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate
(based on a weighted average cost of capital), which represents the time value of money and the inherent risk and uncertainty of the
future cash flows. Factors that management must estimate when performing this step in the process include, among other items, sales
volume, sales prices, inflation, discount rates, exchange rates, tax rates, anticipated synergies and productivity improvements resulting
from past acquisitions, capital expenditures and continuous improvement projects. The assumptions we use to estimate future cash
flows are consistent with the assumptions that the reporting units use for internal planning purposes, which we believe would be
generally consistent with that of a market participant. If we determine that the estimated fair value of the reporting unit exceeds its
carrying amount, goodwill of the reporting unit is not impaired. If we determine that the carrying amount of the reporting unit exceeds
its estimated fair value, we measure the goodwill impairment charge based on the excess of a reporting unit’s carrying amount over its
fair value, but not in excess of the total amount of goodwill allocated to the respective reporting unit, as required under ASU 2017-04
“Simplifying the Test for Goodwill Impairment”.
The Company has capitalized certain contractual or separable intangible assets, primarily customer relationships, trade names and
trademarks, developed technology, software assets and land use rights. These intangible assets are amortized based on the expected
pattern in which the economic benefits are consumed or straight-line if the pattern was not reliably determinable. The useful lives of
intangible assets other than goodwill are finite and range from two to twenty-two years . Amortization is recognized as an expense
within “Selling, general and administrative expenses” and “Cost of goods sold” in the Consolidated Statements of Operations.
We follow the provisions included in ASC 360, “Property, Plant, and Equipment” in determining whether the carrying value of any of
our non-current assets, including ROU assets and amortizable intangibles other than goodwill, is impaired. We determine whether
indicators of impairment are present. We review non-current assets for impairment when events or changes in circumstances indicate
that the carrying amount of the non-current asset might not be recoverable. If we determine that indicators of impairment are present,
we determine whether the estimated undiscounted cash flows for the potentially impaired assets are less than the carrying value.
This requires management to estimate future cash flows through operations over the remaining useful life of the asset and its ultimate
disposition. The assumptions we use to estimate future cash flows are consistent with the assumptions we use for internal planning
purposes, updated to reflect current expectations. If our estimated undiscounted cash flows do not exceed the carrying value, we
estimate the fair value of the asset and record an impairment charge if the carrying value is greater than the fair value of the asset. We
estimate fair value using discounted cash flows, observable prices for similar assets, or other valuation techniques.
Our judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational
performance. Future events could cause us to conclude that impairment indicators exist and that assets associated with a particular
operation are impaired. Evaluating impairment also requires us to estimate future operating results and cash flows, which also require
judgment by management. Any resulting impairment loss could have a material adverse impact on our financial condition and results
of operations.
82
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
In accordance with ASC 805, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in
an acquiree at their fair values as of the date of acquisition. We measure goodwill as the excess of consideration transferred, which we
also measure at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The
acquisition method of accounting requires us to make significant estimates and assumptions regarding the fair values of the elements
of a business combination as of the date of acquisition, including the fair values of identifiable property, plant and equipment,
intangible assets, deferred tax asset valuation allowances, liabilities including those related to debt, pensions and other postretirement
plans, unrecognized tax benefits, contingent consideration and contingencies. Significant estimates and assumptions include subjective
and/or complex judgments regarding items such as discount rates, customer attrition rates, economic lives and other factors, including
estimating future cash flows that we expect to generate from the acquired assets.
The acquisition method of accounting also requires us to refine these estimates over a measurement period not to exceed one year to
reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have
affected the measurement of the amounts recognized as of that date. If we are required to adjust provisional amounts that we have
recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on
our financial condition and results of operations. If the subsequent actual results and updated projections of the underlying business
activity change compared with the assumptions and projections used to develop these values, we could record future impairment
charges. In addition, we have estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation
and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could be increased or
decreased, or the acquired asset could be impaired. Acquisition related costs are expensed as incurred.
In a business combination achieved in stages, the cost includes the acquisition date fair value of any pre-existing equity interest in the
subsidiary. When settlement of all or part of a business combination is deferred, the fair value of the deferred component is determined
by discounting the amounts payable to their present value at the date of exchange. Where a business combination agreement provides
for an adjustment to the purchase consideration which is contingent on future events, the contingent consideration is measured at fair
value. Any subsequent remeasurement of the contingent amount is recognized in the Consolidated Statements of Operations if it is
identified as a financial liability.
When we close a facility, if necessary, we recognize a write-down to reduce the carrying value of related property, plant and
equipment and lease ROU assets to their fair value and record charges for severance and other employee-related costs.
For termination costs associated with employees covered by a written or substantive plan, a liability is recorded when it is probable
that employees will be entitled to benefits and the amount can be reasonably estimated. For termination costs associated with
employees not covered by a written and broadly communicated policy covering involuntary termination benefits (severance plan), a
liability is recorded for costs to terminate employees (one-time termination benefits) when the termination plan has been approved and
committed to by management, the employees to be terminated have been identified, the termination plan benefit terms are
communicated, the employees identified in the plan have been notified and actions required to complete the plan indicate that it is
unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The timing and amount of an accrual is
dependent upon the type of benefits granted, the timing of communication and other provisions that may be provided in the benefit
plan.
If property, plant and equipment become impaired as a result of the Company’s restructuring efforts, these assets are written down to
their fair value less costs to sell, as the Company commits to dispose of them, and they are no longer in use. Depreciation is
accelerated on property, plant and equipment for the period of time the asset continues to be used until the asset ceases to be used.
For facility closures, we also generally expect to record costs for equipment and inventory relocation, facility carrying costs and costs
to terminate a lease or contract before the end of its term.
83
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Identifying and calculating the cost to exit operations requires certain assumptions to be made, the most significant of which are
anticipated future liabilities, including severance costs, contractual obligations, and the adjustments of property, plant and equipment
and lease ROU assets to their fair value. Our estimates are reasonable, considering our knowledge of the industry we operate in,
We estimate fair values in accordance with ASC 820 “Fair Value Measurement” (“ASC 820”). ASC 820 provides a framework for
measuring fair value and expands disclosures required about fair value measurements. Specifically, ASC 820 sets forth a definition of
fair value and a hierarchy prioritizing the inputs to valuation techniques. ASC 820 defines fair value as the price that would be
received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in
an orderly transaction between market participants on the measurement date. Additionally, ASC 820 defines levels within the
hierarchy based on the availability of quoted prices for identical items in active markets, similar items in active or inactive markets and
valuation techniques using observable and unobservable inputs. We incorporate credit valuation adjustments to reflect both our own
nonperformance risk and the respective counterparty’s nonperformance risk in our fair value measurements.
The hierarchy consists of:
•Level 1: fair value measurements represent exchange-traded securities, which are valued at quoted prices (unadjusted) in
active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;
•Level 2: fair value measurements are determined using input prices that are directly observable for the asset or liability or
indirectly observable through corroboration with observable market data; and
•Level 3: fair value measurements are determined using unobservable inputs, such as internally developed pricing models for
the asset or liability due to little or no market activity for the asset or liability.
Financial instruments not recognized at fair value on a recurring or non-recurring basis include cash and cash equivalents, accounts
receivable, certain other current assets, short-term debt, accounts payable, certain other current liabilities and non-current debt. With
the exception of debt with fixed interest rates, the carrying amounts of these financial instruments approximate their fair values due to
either their variable interest rates or short maturities. The fair value of debt such as debentures and various notes are based on quoted
market prices as of the balance sheet date. The fair value of the revolving credit facility approximates its carrying value due to the
nature of the repricing and interest based on variable rates. We measure the fair value of our mutual fund investments based on quoted
prices in active markets. Additionally, we measure our derivative contracts, if any, based on observable inputs such as interest rates,
We discuss fair values in more detail in “Note 14. Fair Value Measurement” and our pension and postretirement assets and liabilities
in “Note 19. Retirement Plans and Deferred Compensation Arrangements”.
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax
assets and liabilities are determined based on the differences between the financial statement carrying amount and the tax basis of
assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The tax
effects of accumulated other comprehensive income are eliminated when the circumstances upon which it is premised cease to exist.
Where applicable, the portfolio approach is utilized. All deferred tax assets and liabilities are classified as non-current in our
Consolidated Balance Sheets.
such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary
differences, projected future taxable income, tax-planning strategies, recent financial operations and carry back availability, if any. In
the event we were to determine that we would be able to realize or not realize our deferred tax assets in the future at their net recorded
amount, we would make an adjustment to the valuation allowance, which would reduce or increase income tax expense, respectively.
84
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Certain provisions of ASC 740, “Income Taxes” (“ASC 740”) provide that a “tax position that meets the more-likely-than-not
recognition threshold shall initially and subsequently be measured as the largest amount of tax benefit that is greater than 50 percent
likely of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.” We use significant
judgment in (i) determining whether a tax position, based solely on its technical merits, is more-likely- than-not to be sustained upon
examination and (ii) measuring the tax benefit as the largest amount of benefit that is greater than 50-percent likely of being realized
upon settlement. We do not record any benefit for the tax positions where we do not meet the initial recognition threshold. Income tax
positions must meet the ASC 740 recognition criteria as of the reporting date to be recognized. We recognize interest related to tax
positions in “Income tax expense” in the Consolidated Statements of Operations. We recognize penalties related to tax positions in
“Income tax expense” in the Consolidated Statements of Operations. Resolutions of tax positions could have a material adverse effect
on our cash flows or materially benefit our results of operations in future periods upon their resolution.
The Company has made an accounting policy election to account for the income tax effect(s) of U.S. Global Intangible Low-Taxed
Income (GILTI) as a period cost. The Company had made an accounting policy election to account for the income tax effect(s) of
We sponsor pension and other postretirement benefits in the U.S. and most of the other countries in which we operate. We use a
December 31 measurement date for these plans. We measure our plan assets at fair value and the obligations at the present value of the
estimated payments to plan participants. We measure the vested benefit obligation as the actuarial present value of the vested benefits
to which the employee is currently entitled but based on the employee's expected date of separation of retirement. We recognize the
net funded position of our plans as assets or liabilities in our Consolidated Balance Sheets. Estimated future payments are determined
based on assumptions. Actuarial gains and losses occur when actual experience differs from the estimates used to determine the
components of net periodic pension cost including differences between actual and expected returns on plan assets, plan remeasurement
and when certain assumptions used to determine the projected benefit obligation are updated, such as but not limited to, changes in the
discount rate and the change in the rate of compensation.
The amount of unrecognized actuarial gains and losses recognized in the current year’s operations is based on amortizing the
unrecognized gains or losses for each plan that exceed the larger of 10% of the projected benefit obligation or the fair value of plan
assets, also known as “the corridor”. The amount of unrecognized gain or loss that exceeds the corridor is amortized over the average
future service of the plan participants or the average life expectancy of inactive plan participants for plans where all or almost all the
We recognize an expense for share-based compensation plans based on the estimated fair value of the related awards. We measure
share-based compensation awards using fair value-based measurement methods determined at the grant date. The compensation
expense is recognized using the straight-line method over the requisite service period for time-based awards. For awards vesting based
on market conditions, a compensation expense is recognized whether or not the market condition is met, as long as the service
condition is met. For awards vesting based on performance conditions, compensation expense is recognized over the requisite service
period only if it is probable that the performance condition will be achieved. The Company reassesses the probability of vesting at
each reporting period and adjusts the compensation expense based on its probability assessment. The Company issues new shares of
common stock to satisfy the vesting of stock-based awards, other than for the deferred bonus plan for which treasury stock is used.
Forfeitures are estimated based on historical experience.
85
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The Consolidated Financial Statements are presented in the U.S. dollar, which is the reporting currency of the Company. We translate
the assets and liabilities of our foreign operations to U.S. dollars using end-of-period exchange rates. Changes in the carrying value of
these assets and liabilities attributable to fluctuations in exchange rates are recognized in “Foreign currency translation gain (loss)”, a
component of “Other comprehensive income (loss), net of tax”. We translate income statement activity of our foreign operations to
U.S. dollar using the average exchange rate prevailing during the period. On disposal of a foreign operation, accumulated currency
translation differences are reclassified to profit or loss as part of the overall gain or loss on disposal.
Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the foreign exchange rate at
the reporting date. Non-monetary assets and liabilities carried at cost are not subsequently retranslated. Non-monetary assets carried at
fair value are subsequently remeasured at the exchange rate at the date of valuation. Gains or losses arising on foreign currency
remeasurements are recorded within “Other expense, net” in the Consolidated Statements of Operations with the exception of
differences on foreign currency borrowings that qualify as a hedge of the Company’s net investment in foreign operations. The portion
of exchange gains or losses on foreign currency borrowings used to provide a hedge against a net investment in a foreign operation
and that is determined to be an effective hedge is recognized in “Other comprehensive income (loss), net of tax”.
We recorded a loss on foreign currency transactions of $33 million, $22 million and $52 million in the years ended December 31,
2025, 2024 and 2023, respectively.
We maintain supplier finance programs whereby we have entered into payment processing agreements with certain financial
institutions. These agreements allow participating suppliers to track payment obligations from Smurfit Westrock, and if voluntarily
elected by the supplier, to sell payment obligations from Smurfit Westrock to financial institutions at a discounted price. We are not a
party to the agreements between the participating financial institutions and the suppliers in connection with the program, and we do
not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or
provided any guarantees as part of the programs. We have no economic interest in our suppliers’ decisions to participate in the
programs. Our responsibility is limited to making payment in full to the respective financial institution according to the terms
originally negotiated with the supplier, which generally do not exceed 120 days. Smurfit Westrock or the financial institutions may
terminate the agreements upon 30 or 90 days’ notice. These obligations are classified as accounts payable within the Consolidated
Balance Sheets.
2024 were as follows:
2025 | 2024 | ||
Outstanding payment obligations at January 1 | $ | $ | |
Assumed as part of the Combination | |||
Amounts added during the period | |||
Amounts settled during the period | ( | ( | |
Outstanding payment obligations at December 31 | $ | $ |
We expense routine repair and maintenance costs as we incur them. We defer certain expenses we incur during planned major
maintenance activities and recognize the expenses ratably over the shorter of the estimated interval until the next major maintenance
activity or the life of the deferred item. This maintenance is generally performed every 12 to 24 months and has a significant impact on
our results of operations in the period performed primarily due to lost production during the maintenance period. The deferred planned
major maintenance costs are recorded as assets within “Other non-current assets” on the Consolidated Balance Sheets.
86
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except share and per share data)
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This
ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate
reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company’s annual reporting
periods beginning after December 15, 2024. Adoption is either with a prospective method or a retrospective method of transition.
Early adoption is permitted. The Company adopted this ASU in these Consolidated Financial Statements by including the required
applicable disclosures on a prospective basis. See “Note 18. Income Taxes“ for more information.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). This ASU requires new financial
statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. ASU 2024-03
will be effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.
Adoption is either with a prospective method or a retrospective method of transition. Early adoption is permitted. The Company is
currently evaluating the impact of this standard on its disclosures in the Consolidated Financial Statements.
2024 Acquisitions
As referred to in “Note 1. Description of Business and Summary of Significant Accounting Policies”, the Combination (consisting of
the Merger with WestRock and the Smurfit Kappa Share Exchange) closed on July 5, 2024. The Combination created a global
leadership position for the Company in sustainable packaging, characterized by quality, product, and geographic diversity.
Merger Consideration
reference to Smurfit Kappa’s share price of £36.56 on the Closing Date, translated to U.S. dollars using the closing exchange rate as of
that date.
Cash paid for outstanding WestRock Stock(1) | $ |
Smurfit Westrock Shares issued to WestRock Shareholders(2) | |
Converted WestRock Options and WestRock RSU Awards attributable to pre-Combination service(3) | |
Settlement of pre-existing relationships, trade and other payable and receivable balances with WestRock(4) | ( |
Aggregate Merger Consideration | $ |
(1) The cash component of the aggregate Merger Consideration is based on 258,228,403 shares of WestRock Stock multiplied by the Cash Consideration of $5.00 per
WestRock share.
(2) Value of Smurfit Westrock Shares issued is based on 258,228,403 shares of outstanding WestRock Stock resulting in the issue of 258,228,403 Smurfit Westrock
Shares at the closing share price of £36.56 on July 5, 2024, translated to U.S. dollars using the closing exchange rate of £1 to $1.2815 as of that date.
(3) Consideration for WestRock Options and WestRock restricted stock unit (“RSU”) Awards replaced with Smurfit Westrock equity awards with similar terms, and the
amount represents the consideration for their replacement. A portion of the fair value of Smurfit Westrock equity awards issued represents consideration transferred,
while the remaining portion represents the post-Combination compensation expense based on the vesting terms of the converted awards. Also included, is the
Merger Consideration in respect of WestRock Director RSU Awards, settled options held by former WestRock employees and vested and unreleased RSU awards
all of which converted into WestRock Stock immediately prior to the Closing Date.
(4) Component of Merger Consideration in respect of the settlement for no gain or loss of trade and other receivable and payable balances with WestRock as of the date
of the Merger. The Merger Consideration has been increased by the amount of the settled Smurfit Kappa receivable of $3 million in respect of sales to WestRock
and has been reduced to account for the effective settlement of accounts payable of $32 million in respect of trade and other purchases from WestRock. The
WestRock receivable and payable in respect of these inter-company transactions were not recognized as an acquired asset or assumed liability.
87
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Purchase Price Allocation
Smurfit Westrock management determined that Smurfit Kappa is the accounting acquirer in the Merger, which was accounted for
under the acquisition method of accounting for business combinations in accordance with ASC 805.
During the third quarter of 2025, based on the finalization of valuation and internal reviews, we completed the purchase price
allocation. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill.
Preliminary Allocation | Measurement Period Adjustments | Final Allocation | |||
Identifiable net assets: | |||||
Cash and cash equivalents | $ | $ | $ | ||
Accounts receivable | |||||
Inventories | |||||
Other current assets | ( | ||||
Property, plant and equipment | |||||
Intangibles | |||||
Prepaid pension asset | |||||
Other non-current assets | |||||
Accounts payable | ( | ( | |||
Accrued compensation and benefits | ( | ( | |||
Current portion of debt | ( | ( | |||
Other current liabilities | ( | ( | ( | ||
Non-current debt due after one year | ( | ( | ( | ||
Deferred tax liabilities | ( | ( | |||
Pension liabilities and other postretirement benefits, net of current portion | ( | ( | |||
Other non-current liabilities | ( | ( | ( | ||
Noncontrolling interests | ( | ( | |||
Identifiable net assets acquired as of July 5, 2024 | |||||
Goodwill arising on Merger | ( | ||||
Aggregate Merger Consideration | $ | $ | $ |
Measurement period adjustments primarily related to the adjustments in the fair values of the acquired property, plant and equipment
and other intangible assets from the third-party valuation and related impact on deferred income taxes. The measurement period
adjustments are based on facts and circumstances that existed, but were not known, as of the acquisition date.
The goodwill arising from the Merger is attributable to the workforce of the acquired business and the significant synergies expected
to arise after the Merger. Of the total goodwill recognized on the Merger, $3,949 million was allocated to the North American
segment, $203 million was allocated to the LATAM segment and $81 million was allocated to the Europe, MEA and APAC segment.
Of the total goodwill recognized, $187 million is estimated to be deductible for tax purposes.
The fair value of the assets acquired included accounts receivable of $2,374 million that were not purchased financial assets with
credit deterioration. The gross amount due under contracts was $2,429 million of which $55 million was expected to be uncollectible.
The fair value of acquired property, plant and equipment was determined primarily using the cost approach method. Due to the
specialized industrial nature of our plant and machinery assets, we have primarily applied the depreciated replacement cost method to
determine their acquisition date fair value. These valuations resulted in Level 3 non-recurring fair value measurements.
The preliminary fair values of intangible assets were generally determined using income-based methods, including the multi-period
excess earnings method, the relief from royalty method and cost saving approach.
88
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Fair Value | Weighted Average Useful Lives (in years) | ||
Customer relationships | $ | ||
Trade names and trademarks | |||
Developed technology | |||
Software assets | |||
Land use rights | |||
Intangible assets acquired | $ |
The Company incurred transaction-related (reversals) expenses associated with the Combination of $(2 ) million, $202 million and
$78 million for the years ended December 31, 2025, 2024 and 2023, respectively. These costs were associated primarily with legal and
other professional services and were recorded in transaction and integration-related expenses associated with the Combination.
Following the Combination, Smurfit Kappa funded the prepayment and cancellation of WestRock’s credit agreement with an
outstanding amount of $750 million. Waivers from lenders removing change in control provisions had previously been received for
this loan facility. The outstanding balance of the facility as of July 5, 2024 was recognized as an assumed liability. The repayment did
not form part of Merger Consideration. The repayment of the principal ($750 million) was presented as a financing cash outflow with
the payment of accrued interest ($1 million) reflected within operating activities, each in the Consolidated Statement of Cash Flows
for the year ended December 31, 2024.
Unaudited Pro Forma Combined Financial Information
December 31, 2024 and 2023, as if the Merger had occurred on January 1, 2023.
Years ended December 31, | |||
2024 | 2023 | ||
Net sales | $ | $ | |
Net income (loss) attributable to common shareholders | $ | $( | |
The unaudited pro forma combined financial information above is based on the historical financial statements of Smurfit Kappa,
WestRock, and Smurfit Westrock, and is not indicative of the results of operations that would have been achieved if the Merger had
occurred on January 1, 2023, nor is it indicative of future results. The unaudited pro forma combined financial information has been
prepared by applying the accounting policies of Smurfit Westrock and includes, where applicable, adjustments for factually
supportable items or transactions, directly attributable to the Merger.
The unaudited pro forma combined financial information reflects pro forma adjustments for the following material non-recurring
expenses directly attributable to the Merger, each reflected as of the beginning of the earliest pro forma comparative period presented:
(i) 2024 and 2023 transaction-related costs of both Smurfit Kappa and WestRock amounting to $448
related bonuses; and (ii) 2024 amortization of the fair value adjustment to acquired inventories of $224 million.
These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company
believes are reasonable to reflect the impact of the Merger on the Company’s historical financial information on a supplemental pro
forma basis. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be
achieved by the combined business.
89
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The chief operating decision maker (“CODM”) is determined to be the executive management team, comprising the Group Chief
Executive Officer and Group Chief Financial Officer. The CODM is responsible for assessing performance, allocating resources and
making strategic decisions.
We have identified three
i.North America, which includes operations in the U.S., Canada and Mexico.
ii.Europe, the Middle East and Africa (“MEA”) and Asia-Pacific (“APAC”).
iii.Latin America (“LATAM”), which includes operations in Central America and Caribbean, Argentina, Brazil, Chile, Colombia,
Ecuador and Peru.
Our operating segments are consistent with our internal management structure and no operating segments have been aggregated for
disclosure purposes.
In the identification of the operating and reportable segments, we considered the level of integration of our different businesses as well
as our objective to develop long-term customer relationships by providing customers with differentiated packaging solutions that
enhance the customer’s prospects of success in their end markets.
The North America, Europe, MEA and APAC and LATAM segments are each highly integrated within the segment and there are
many interdependencies within these operations. They each include a system of mills and plants that primarily produce a number of
grades of containerboard that is converted into corrugated containers within each segment, or is sold to third parties.
In addition, the North America segment also produces paperboard, kraft paper and market pulp; other paper-based packaging, such as
folding cartons, inserts, labels and displays and also engages in the assembly of displays as well as the distribution of packaging
products.
The Europe, MEA and APAC segment also produces other types of paper, such as solidboard, graphic board, sack kraft paper and
machine glazed paper (together known as kraft paper) and graphic paper; and other paper-based packaging, such as honeycomb,
solidboard packaging, folding cartons, inserts and labels; and bag-in-box packaging (the latter with operations located in Europe,
Argentina, Canada, Mexico and the U.S., but managed under the Europe, MEA and APAC segment).
The LATAM segment also comprises forestry; other types of paper, such as paperboard and kraft paper; and paper-based packaging,
such as folding cartons and paper sacks.
Inter-segment transfers or transactions are entered into under normal commercial terms and conditions on an arm’s length basis.
The accounting policies of the reportable segments are the same as those described in “Note 1. Description of Business and Summary
of Significant Accounting Policies.”
90
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
We operate in 40 countries worldwide. The table below reflects financial data of our operations for each of the past three years:
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net sales (unaffiliated customers) | |||||
Ireland (country of domicile) | $ | $ | $ | ||
U.S. | |||||
Mexico | |||||
Germany | |||||
France | |||||
Other Americas | |||||
Other Europe, MEA and APAC | |||||
Total | $ | $ | $ | ||
Our net sales are derived almost entirely from the sale of goods and are disclosed based on the location of production.
No one customer represents greater than 10% of our net sales.
December 31, | |||
2025 | 2024 | ||
Long-lived assets(1) | |||
Ireland (country of domicile) | $ | $ | |
U.S. | |||
Other Americas | |||
Other Europe, MEA and APAC | |||
Total | $ | $ | |
(1) Long-lived assets include “Operating lease right-of-use assets” and “Property, plant and equipment, net” and are disclosed based on their location.
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 CODM uses Adjusted EBITDA for each segment predominantly: to forecast and assess the performance of the segments,
individually and comparatively; to set pricing strategies for the segments; and to make decisions about the allocation of operating and
capital resources to each segment strategically, in the annual budget and in the quarterly forecasting process. The CODM considers
budget, or forecast, -to-actual variances on a quarterly and annual basis for segment Adjusted EBITDA to inform these decisions.
Significant segment expenses are segment cost of goods sold and segment selling, general and administrative expenses. Segment cost
of goods sold primarily include raw materials, direct labor and plant overhead costs. Segment selling, general and administrative
expenses primarily include compensation and benefits, external professional fees and other operating costs. Both segment cost of
goods sold and segment selling, general and administrative expenses exclude certain adjustments that management believes are not
indicative of the operating results of the business.
91
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Year ended December 31, 2025 | North America | Europe, MEA and APAC | LATAM | Total | |||
Net sales (unaffiliated customers) | $ | $ | $ | $ | |||
Add net sales (intersegment) | |||||||
Net sales (aggregate) | |||||||
Less segment expenses: | |||||||
Segment cost of goods sold | ( | ( | ( | ||||
Segment selling, general and administrative expenses | ( | ( | ( | ||||
( | ( | ( | ( | ||||
Segment Adjusted EBITDA | $ | $ | $ | $ | |||
Unallocated corporate costs | ( | ||||||
Depreciation, depletion and amortization | ( | ||||||
Impairment and restructuring costs | ( | ||||||
Transaction and integration-related expenses associated with the Combination | ( | ||||||
Interest expense, net | ( | ||||||
Pension and other postretirement non-service income, net | |||||||
Share-based compensation expense | ( | ||||||
Other expense, net | ( | ||||||
Other adjustments | ( | ||||||
Income before income taxes | $ |
Other adjustments in the table above include losses at closed facilities of $26 million.
92
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Year ended December 31, 2024 | North America | Europe, MEA and APAC | LATAM | Total | |||
Net sales (unaffiliated customers) | $ | $ | $ | $ | |||
Add net sales (intersegment) | |||||||
Net sales (aggregate) | |||||||
Less segment expenses: | |||||||
Segment cost of goods sold | ( | ( | ( | ||||
Segment selling, general and administrative expenses | ( | ( | ( | ||||
( | ( | ( | ( | ||||
Segment Adjusted EBITDA | $ | $ | $ | $ | |||
Unallocated corporate costs | ( | ||||||
Depreciation, depletion and amortization | ( | ||||||
Impairment and restructuring costs | ( | ||||||
Transaction and integration-related expenses associated with the Combination | ( | ||||||
Amortization of fair value step up on inventory | ( | ||||||
Interest expense, net | ( | ||||||
Pension and other postretirement non-service expense, net | ( | ||||||
Share-based compensation expense | ( | ||||||
Other expense, net | ( | ||||||
Other adjustments | ( | ||||||
Income before income taxes | $ |
Other adjustments in the table above include a non-recurring, non-cash currency translation adjustment in Argentina of $42 million
and losses at closed facilities of $10 million partially offset by a reimbursement of a fine from the Italian Competition Authority of
$18 million.
93
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Year ended December 31, 2023 | North America | Europe, MEA and APAC | LATAM | Total | |||
Net sales (unaffiliated customers) | $ | $ | $ | $ | |||
Add net sales (intersegment) | |||||||
Net sales (aggregate) | |||||||
Less segment expenses: | |||||||
Segment cost of goods sold | ( | ( | ( | ||||
Segment selling, general and administrative expenses | ( | ( | ( | ||||
( | ( | ( | ( | ||||
Segment Adjusted EBITDA | $ | $ | $ | $ | |||
Unallocated corporate costs | ( | ||||||
Depreciation, depletion and amortization | ( | ||||||
Impairment and restructuring costs | ( | ||||||
Transaction and integration-related expenses associated with the Combination | ( | ||||||
Interest expense, net | ( | ||||||
Pension and other postretirement non-service expense, net | ( | ||||||
Share-based compensation expense | ( | ||||||
Other expense, net | ( | ||||||
Income before income taxes | $ |
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Capital expenditures: | |||||
North America | $ | $ | $ | ||
Europe, MEA and APAC | |||||
LATAM | |||||
Total per reportable segments | |||||
Corporate | |||||
Total capital expenditures | $ | $ | $ | ||
December 31, | |||
2025 | 2024 | ||
Assets: | |||
North America | $ | $ | |
Europe, MEA and APAC | |||
LATAM | |||
Total reportable segments | |||
Corporate(1) | |||
Total assets | $ | $ | |
(1) Corporate assets are composed primarily of Cash and cash equivalents and Recoverable or refundable income taxes.
94
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Disaggregated Revenue
ASC 606 requires that we disaggregate revenue from contracts with customers into categories that depict how the nature, amount,
timing and uncertainty of revenue and cash flows are affected by economic factors.
ended December 31, 2025, 2024 and 2023. Net sales are attributed to segments based on the location of production.
Year ended December 31, 2025 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Year ended December 31, 2024 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Year ended December 31, 2023 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Packaging revenue is derived mainly from the sale of corrugated and consumer packaging products. The remainder of packaging
revenue is composed of bag-in-box, packaging solutions and other paper-based packaging products.
Revenue Contract Balances
Contract assets relate to the manufacture of certain products that have no alternative use to us, with right to payment for performance
completed to date on these products, including a reasonable profit. Contract assets are reduced when the customer takes title to the
goods and assumes the risks and rewards for the goods. Contract liabilities represent obligations to transfer goods or services to a
customer for which we have received consideration and are reduced once control of the goods is transferred to the customer.
On the Consolidated Balance Sheets, contract assets reported within “Other current assets” were $170 million and $197 million at
December 31, 2025 and December 31, 2024, respectively, and contract liabilities reported within “Other current liabilities” were
$6 million and $5 million at December 31, 2025 and December 31, 2024, respectively.
95
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Impairment charges | $ | $ | $ | ||
Restructuring costs | |||||
Impairment and restructuring costs | $ | $ | $ | ||
Impairment Charges
The components of impairment charges are as follows:
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Impairment of property, plant and equipment | $ | $ | $ | ||
Impairment of other assets | |||||
Total impairment charges | $ | $ | $ | ||
These impairment charges are recognized in the Consolidated Statements of Operations caption “Impairment and restructuring costs”.
2024 and 2023 is as follows:
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
North America | $ | $ | $ | ||
Europe, MEA and APAC | |||||
LATAM | |||||
Total impairment charges recognized for property, plant and equipment | $ | $ | $ | ||
Of the total impairment charges, $177 million for the year ended December 31, 2025, were triggered by the announcement on April
30, 2025, that the Company would permanently close its coated recycled board mill in St. Paul, Minnesota, U.S. and discontinue
production at its containerboard mill in Forney, Texas, U.S. (the “Mill Closures”). We stopped production at these two
June 2025 and May 2025, respectively. Additionally, the Company announced it had initiated consultations with local works councils
in Germany with a view to permanently closing two converting facilities there (together with the Mill Closures, the “April 2025
Announced Closures”). In the third quarter of 2025, we reached agreements with the local work councils in Germany and ceased
production at those two converting facilities in the fourth quarter of 2025.
Following our decision to permanently close the above facilities, the Company assessed the recoverability of the associated long-lived
assets being property, plant and equipment in accordance with ASC 360. The fair value of the property, plant and equipment assets
was determined based on their estimated selling price in an orderly transaction between market participants at the measurement date.
As a result of this assessment, $160 million for the year ended December 31, 2025 was recognized for impairment charges of the
property, plant and equipment of the facilities affected by the April 2025 announcement. The remainder of the impairment charges
recognized related to spare parts included in inventories in these facilities.
96
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Restructuring Costs
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
North America | $ | $ | $ | ||
Europe, MEA and APAC | |||||
LATAM | |||||
Total restructuring costs | $ | $ | $ | ||
The table below sets forth restructuring costs by type incurred:
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Severance charges | $ | $ | $ | ||
Other costs | |||||
Total restructuring costs | $ | $ | $ | ||
Of the total restructuring costs, $65 million for the year ended December 31, 2025 relates to the April 2025 Announced Closures.
current liabilities" in the Company's Consolidated Balance Sheets:
Severance charges | Other costs | Total | |||
Balance at December 31, 2024 | $ | $ | $ | ||
Charges for the period | |||||
Payments | ( | ( | ( | ||
Balance at December 31, 2025 | $ | $ | $ |
The majority of these charges will be paid within 12 months of the reporting date. The Company expects to recognize future additional
charges of $34 million associated with the April 2025 Announced Closures through 2026.
The remaining restructuring costs and related restructuring accruals relate to individual restructuring actions which are individually
and cumulatively immaterial.
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Transaction-related reversals (expenses) associated with the Combination | $ | $( | $( | ||
Integration-related (expenses) associated with the Combination | ( | ( | |||
Total transaction and integration-related expenses associated with the Combination | $( | $( | $( | ||
97
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Transaction-related Expenses Associated with the Combination
Transaction-related expenses associated with the Combination comprise of banking and financing related expenses as well as legal and
other professional services which are directly attributable to the Combination and retention payments that are contractually committed
to and associated with the successful completion of the Combination.
Integration-related Expenses Associated with the Combination
We incur integration expenses post-acquisition that reflect work performed to facilitate merger and acquisition integration and
December 31, | |||
2025 | 2024 | ||
Gross accounts receivable | $ | $ | |
Less: Allowances | ( | ( | |
Accounts receivable | $ | $ | |
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Balance at January 1 | $ | $ | $ | ||
Charges to net sales and selling, general and administrative expenses | |||||
Deductions | ( | ( | ( | ||
Write offs | ( | ( | ( | ||
Balance at December 31 | $ | $ | $ | ||
Allowances include the reserves for allowance for estimated credit impairment losses, returns, early settlement discounts and rebates
(where netting requirements are met).
December 31, | |||
2025 | 2024 | ||
Finished goods | $ | $ | |
Work-in-progress | |||
Raw materials | |||
Consumables and spare parts | |||
Inventories | $ | $ | |
98
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
December 31, | |||
2025 | 2024 | ||
Land and buildings | $ | $ | |
Plant and equipment | |||
Construction-in-progress | |||
Finance lease right-of-use assets | |||
Property, plant and equipment at cost, excluding forestlands | |||
Less: Accumulated depreciation and impairment | ( | ( | |
Property, plant and equipment, net, excluding forestlands | |||
Forestlands, net of depletion | |||
Property, plant and equipment, net | $ | $ | |
Depreciation and depletion expense for the years ended December 31, 2025, 2024 and 2023 was $2,402 million, $1,363 million and
$528 million, respectively and is recognized within “Cost of goods sold” and “Selling, general and administrative expenses” in the
Consolidated Statements of Operations.
Non-cash additions to property, plant and equipment included within accounts payable were $518 million, $384 million and
$235 million at December 31, 2025, 2024 and 2023, respectively.
Refer to “Note 5. Impairment and Restructuring Costs” for details of the impairment charges recognized for property, plant and
equipment.
North America | Europe, MEA and APAC | LATAM | Total | ||||
Balance as of December 31, 2023 | $ | $ | $ | $ | |||
Acquisitions and acquisitions adjustments | |||||||
Translation adjustment | ( | ( | ( | ( | |||
Balance as of December 31, 2024 | |||||||
Acquisitions and acquisitions adjustments | ( | ( | |||||
Translation adjustment | |||||||
Balance as of December 31, 2025 | $ | $ | $ | $ |
Further information on acquisitions is included in “Note 2. Acquisitions”.
During the fourth quarter of 2025 and 2024, the Company performed qualitative impairment tests and determined it was more likely
than not that the fair value of all reporting units was greater than their carrying amount. Accordingly, the Company concluded that a
quantitative impairment test was not necessary, and that goodwill was not impaired.
Accumulated goodwill impairment losses at December 31, 2025 amount to $274 million comprising $222 million in Europe, MEA
and APAC and $52 million in LATAM. At December 31, 2024, the accumulated goodwill impairment losses were $242 million
comprising $198 million in Europe, MEA and APAC and $44 million in LATAM. At December 31, 2023, the accumulated goodwill
impairment losses were $264 million comprising $209 million in Europe, MEA and APAC and $55 million in LATAM. Movements
in the period relate to foreign currency translation adjustments.
99
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
December 31, | |||||||
2025 | 2024 | ||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||
Customer relationships | $ | $( | $ | $( | |||
Trade names and trademarks | ( | ( | |||||
Developed technology | ( | ( | |||||
Software assets | ( | ( | |||||
Land use rights | |||||||
Total | $ | $( | $ | $( | |||
Intangible asset amortization expense was $148 million, $101 million and $52 million during the years ended December 31, 2025,
2024 and 2023, respectively.
Year ended December 31, | Total | |
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 |
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Interest expense | $( | $( | $( | ||
Interest income | |||||
Interest expense, net | $( | $( | $( | ||
Total cash paid for interest, net of interest received was $701 million, $396 million and $146 million for the years ended December 31,
2025, 2024 and 2023, respectively. Of this, capitalized interest paid was $24 million, $22 million and $10 million for the years ended
December 31, 2025, 2024 and 2023, respectively.
100
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Components of Lease Costs
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Operating lease costs | $( | $( | $( | ||
Variable and short-term lease costs | ( | ( | ( | ||
Finance lease cost: | |||||
Amortization of lease assets | ( | ( | ( | ||
Interest on lease liabilities | ( | ( | ( | ||
Total lease costs | $( | $( | $( | ||
Supplemental Consolidated Balance Sheets Information Related to Leases
Balance Sheet Location | December 31, | ||||
2025 | 2024 | ||||
Operating leases: | |||||
Operating lease right-of-use assets | Other non-current assets | $ | $ | ||
Current operating lease liabilities | Other current liabilities | $ | $ | ||
Non-current operating lease liabilities | Other non-current liabilities | ||||
Total operating lease liabilities | $ | $ | |||
Finance leases: | |||||
Property, plant and equipment | Property, plant and equipment, net | $ | $ | ||
Accumulated amortization | ( | ( | |||
Property, plant and equipment, net | $ | $ | |||
Current finance lease liabilities | Current portion of debt | $ | $ | ||
Non-current finance lease liabilities | Non-current debt due after one year | ||||
Total finance lease liabilities | $ | $ | |||
Lease Term and Discount Rate
December 31, | |||
2025 | 2024 | ||
Weighted average remaining lease term: | |||
Operating leases | |||
Finance leases | |||
Weighted average discount rate: | |||
Operating leases | |||
Finance leases | |||
101
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Supplemental Cash Flow Information Related to Leases
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows related to operating leases | $ | $ | $ | ||
Operating cash flows related to finance leases | |||||
Financing cash flows related to finance leases | |||||
Leased assets obtained in exchange for lease liabilities: | |||||
Operating leases | $ | $ | $ | ||
Finance leases | $ | $ | $ | ||
Maturity of Lease Liabilities
lease liabilities and finance lease liabilities recorded on the Consolidated Balance Sheets at December 31, 2025:
Year ended December 31, | Operating Leases | Finance Leases | Total | |||
2026 | $ | $ | $ | |||
2027 | ||||||
2028 | ||||||
2029 | ||||||
2030 | ||||||
Thereafter | ||||||
Total lease payments | $ | $ | $ | |||
Less: Interest | ( | ( | ( | |||
Present value of future lease payments | $ | $ | $ |
102
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The fair values of the Company's financial assets and financial liabilities listed below reflect the amounts that would be received to sell
the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date (exit price).
The Company's non-derivative financial instruments primarily include cash and cash equivalents, trade and other receivables, certain
other current assets, trade and other payables, certain other current liabilities, short-term debt and non-current debt, all of whose
carrying values approximates fair value (with the exception of debt with fixed interest rates). Fair value disclosures are classified
based on the fair value hierarchy. See “Note 1. Description of Business and Summary of Significant Accounting Policies,” for
information about the Company's fair value hierarchy.
2 in the fair value hierarchy) were as follows:
December 31, | |||||||
2025 | 2024 | ||||||
Book Value | Fair Value | Book Value | Fair Value | ||||
Debt with fixed interest rates | $ | $ | $ | $ | |||
The fair value of the Company's debt with fixed interest rates is based on quoted market prices. With the exception of debt with fixed
interest rates, the carrying amounts of all other debt instruments approximate their fair values. The variable nature and repricing dates
of the receivables securitization facilities and the revolving credit facility result in carrying values approximating their fair values.
Both the revolving credit facility and the receivables securitization facilities are classified as Level 2 in the fair value hierarchy.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
summarizes the fair value of these instruments, which are measured at fair value on a recurring basis, by level, within the fair value
hierarchy:
Level 1 | Level 2 | ||||||
December 31, | December 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Assets | |||||||
Other Investments: | |||||||
Listed | $ | $ | $ | $ | |||
Unlisted | |||||||
Derivatives in cash flow hedging relationships | |||||||
Derivatives not designated as hedging instruments | |||||||
Assets measured at fair value | $ | $ | $ | $ | |||
Liabilities | |||||||
Derivatives in cash flow hedging relationships | $ | $ | $ | $ | |||
Derivatives not designated as hedging instruments | |||||||
Liabilities measured at fair value | $ | $ | $ | $ | |||
There were no assets or liabilities, which are measured at fair value on a recurring basis, classified as Level 3 in the fair value
hierarchy for the periods presented.
103
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The fair value of listed financial assets is determined by reference to their bid price at the reporting date. Unlisted financial assets are
valued using recognized valuation techniques for the underlying security including discounted cash flows and similar unlisted equity
valuation models.
The fair value of foreign currency forwards, cross currency swaps and energy hedging contracts is based on their listed market price, if
available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual
forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on
government bonds).
The fair value of natural gas commodity derivatives is estimated based on observable inputs such as commodity future prices.
For derivative financial instruments that are not designated as accounting hedges, the entire change in fair value of the financial
instrument is reported immediately in current period earnings.
Assets and Liabilities Measured and Recorded at Fair Value on a Non-recurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities
at fair value on a non-recurring basis. This includes assets acquired and liabilities assumed as a result of business combinations or non-
monetary exchanges, situations where events or changes in circumstances indicate the carrying value may not be recoverable, or when
they are deemed to be other than temporarily impaired. These assets include property, plant, and equipment, goodwill and other
intangible assets, assets and disposal groups held for sale and other non-current assets. The fair values of these assets are determined,
when applicable, based on valuation techniques using the best information available, and may include quoted market prices,
observable price for similar assets, market comparables, and discounted cash flow projections. These non-recurring fair value
measurements are considered to be Level 3 in the fair value hierarchy.
For more details on the measurement of assets acquired and liabilities assumed as part of business combinations refer to “Note 2.
Acquisitions”. For more details on the remeasurement of assets in connection to impairments recorded in the year refer to “Note 5.
Impairment and Restructuring Costs”.
Accounts Receivable Monetization Agreements
Available to the Company is a $700 million accounts receivable monetization facility to sell to a third-party financial institution all of
the short-term trade receivables generated from certain customer trade accounts. On September 12, 2025, we amended this agreement
to extend the maturity date by one year to September 15, 2026. This facility (the “Monetization Agreement”) has Coöperatieve
Rabobank U.A., New York Branch, as purchaser, (“Rabobank”). The terms of the Monetization Agreement limit the balance of
receivables sold to the amount available to fund such receivables sold, thereby eliminating the receivable for proceeds from the
financial institution at any transfer date. Transfers under the Monetization Agreement meet the requirements to be accounted for as
sales in accordance with guidance in ASC 860, “Transfers and Servicing” (“ASC 860”). We pay a monthly yield on investment to
Rabobank at a rate equal to adjusted Term SOFR plus a margin on the outstanding amount of Rabobank’s investment. The Company
also has a similar $100 million bilateral facility with Sumitomo Mitsui Banking Corporation, New York Branch as purchaser. On
December 4, 2025, we amended this agreement to extend the maturity date by one year to December 2026 and to reduce the facility
size from $110 million to $100 million.
The customers from these facilities are not included in the receivables securitization facilities, as discussed in more detail in “Note 15.
Debt” and “Note 22. Variable Interest Entities”.
104
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
and December 31, 2024:
Years ended December 31, | |||
2025 | 2024 | ||
Receivable from financial institutions at January 1 | $ | $ | |
Receivables sold to the financial institutions and derecognized | ( | ( | |
Receivables collected by financial institutions | |||
Cash (payments) proceeds (to) from financial institutions | ( | ||
Receivable from financial institutions at December 31 | $ | $ | |
The activity for the comparative year is for the period following the Combination. Receivables sold under these accounts receivable
monetization agreements as of the balance sheet date were $659 million (December 31, 2024: $725 million).
Cash proceeds or payments related to the receivables sold are included in “Net cash provided by operating activities” in the
Consolidated Statements of Cash Flows in the “Accounts receivable” line item. The expense related to the sale of receivables was
$38 million (December 31, 2024, for the post-Combination period: $23 million). The expense recorded may vary depending on current
rates and levels of receivables sold and is recorded in “Other expense, net” in the Consolidated Statements of Operations. Although the
sales are made without recourse, we maintain continuing involvement with the receivables sold as we provide collections services
related to the transferred assets. The associated servicing liability is not material given the high credit quality of the customers
105
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
December 31, | |||||||
2025 | 2024 | ||||||
Amount | Weighted average interest rate | Amount | Weighted average interest rate | ||||
$ | $ | $ | |||||
$ | |||||||
$ | |||||||
€ | |||||||
$ | |||||||
$ | |||||||
$ | |||||||
€ | |||||||
€ | |||||||
€ | |||||||
$ | |||||||
$ | |||||||
$ | |||||||
€ | |||||||
$ | |||||||
$ | |||||||
€ | |||||||
$ | |||||||
€ | |||||||
$ | |||||||
$ | |||||||
$ | |||||||
€ | |||||||
$ | |||||||
$ | |||||||
$ | |||||||
Commercial paper | |||||||
Vendor financing and commercial card programs | |||||||
Farm credit facility | |||||||
Other bank loans | |||||||
Finance lease obligations | |||||||
Total debt, excluding fair value adjustments, bond discounts and debt issuance costs | |||||||
Unamortized fair value adjustments, bond discounts and debt issuance costs | ( | ( | |||||
Total debt | |||||||
Less: Current portion of debt | ( | ( | |||||
Non-current debt due after one year | $ | $ | |||||
As of December 31, 2025, we have senior notes in issuance with a total par value of $11,448 million (December 31, 2024:
$11,340 million), of which $3,169 million are denominated in euro (December 31, 2024: $3,069 million) and $8,279 million are
denominated in U.S. dollars (December 31, 2024: $8,271 million).
The weighted average interest rate for short-term debt was 3.3 % and 5.1 % as of December 31, 2025, and 2024, respectively.
106
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
thereafter are as follows:
Year ended December 31, | Total | |
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
2031 and thereafter | ||
Unamortized fair value adjustments, bond discounts and debt issuance costs | ( | |
Total | $ |
See “Note 13. Leases” for the aggregate maturities of finance lease obligations for the succeeding five years and thereafter.
2025 | 2024 | ||
Within one year | $ | $ | |
Between one and two years | |||
More than two years |
The undrawn commitments above pertain to the revolving credit facility and the receivables securitization facilities, which are further
explained below. The commitment fees on the revolving credit facility and receivables securitization facilities were immaterial for the
years ended December 31, 2025, and 2024.
During the years ended December 31, 2025, 2024 and 2023, amortization of debt issuance costs charged to interest expense were
$12 million, $10 million and $7 million, respectively.
At December 31, 2025 the borrowings which were designated as net investment hedges had a carrying value of $49 million
(December 31, 2024: $49 million). There has been no ineffectiveness recognized in relation to these hedges in the current or prior
financial years.
The carrying amount of our debt includes a fair value adjustment related to debt assumed through mergers and acquisitions. The value
of the debt assumed upon the Combination (inclusive of the adjustment) was $8,725 million. At December 31, 2025, the unamortized
fair value adjustment was $22 million, which will be amortized over a weighted average remaining life of 7 years.
At December 31, 2025, all of our debt was unsecured with the exception of our receivables securitization facilities and finance lease
obligations.
The senior notes are unsecured, unsubordinated obligations that rank equally in right of payment with all of our existing and future
unsecured, unsubordinated obligations. The senior notes are effectively subordinated to any of our existing and future secured debt to
the extent of the value of the assets securing such debt and to the obligations of our non-debtor/guarantor subsidiaries.
107
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Senior Notes Issued and Redeemed
2025
On April 3, 2025, the Company and certain of its direct and indirect wholly-owned subsidiaries (the “Obligor Group”) filed with the
United States Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4, with respect to concurrent
offers to exchange up to $2,750 million principal amount of unregistered senior unsecured notes previously issued by Smurfit Kappa
Treasury Unlimited Company on April 3, 2024 and guaranteed by other members of the Obligor Group and up to $850 million
principal amount of unregistered senior unsecured notes previously issued by Smurfit Westrock Financing Designated Activity
Company on November 26, 2024 and guaranteed by the other members of the Obligor Group (collectively, the “Original Notes”), in
each case for registered notes of equal principal amount issued by the same obligors with the same interest and maturity dates and
coupons and guaranteed by the same members of the Obligor Group (the “New Notes”). The Form S-4 became effective on April 23,
2025 and the exchange offers commenced on that same date. The terms of the New Notes are identical in all material respects to the
Original Notes except that the New Notes do not have any transfer restrictions, registration rights or additional interest provisions. The
exchange offers expired at 5:00 p.m. New York City time, on May 21, 2025 (the “Expiration Date”) and resulted in approximately
$3,588 million aggregate principal amount of the Original Notes (99.66 % of the original principal amount) being validly tendered and
not validly withdrawn, for exchange for the New Notes. The Obligor Group accepted all of the Original Notes which were validly
tendered and not validly withdrawn as of the Expiration Date and has issued a like principal amount of New Notes in exchange for
such Original Notes. No new proceeds were received by the Obligor Group in connection with the exchange offer.
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 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 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 SEC 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 of the above 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 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.
We recorded a $2 million and $14 million loss on extinguishment upon repayment of the €750 million 1.500 % senior notes due 2027
and the $500 million 3.375 % senior notes due 2027, respectively.
108
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
2024
On April 3, 2024, Smurfit Kappa Treasury (a wholly-owned subsidiary of Smurfit Westrock plc) completed an offering in the
aggregate principal amount of $2,750 million of senior unsecured green notes in three series, comprised of the following: $750 million
aggregate principal amount of 5.200 % senior green notes due 2030 (the “2030 Notes”), $1,000 million aggregate principal amount of
due 2054 (the “2054 Notes” and, together with the 2030 Notes and 2034 Notes, the “Notes” or the “Financing”) (such offering, the
“April Notes Offering”).
The proceeds from the April Notes Offering have been used to fund the cash portion of the Combination consideration and related
fees, for general corporate purposes including repayment of indebtedness and to finance or refinance eligible green projects in
accordance with Smurfit Westrock's Green Finance Framework.
On August 12, 2024, we redeemed €250 million aggregate principal amount of our 2.750 % senior notes due February 2025. We
funded this redemption by drawing on our receivables securitization facilities. No gain or loss on extinguishment of debt was
recorded.
On September 17, 2024, we discharged $600 million aggregate principal amount of our 3.750 % senior notes due March 2025. We
funded this discharge using a portion of the proceeds from our April Notes Offering. We recorded a $4 million loss on extinguishment
of debt.
On November 26, 2024, we issued $850 million aggregate principal amount of 5.418 % senior green notes due 2035, with interest
payable semi-annually in arrears, beginning on July 15, 2025. On November 27, 2024, we also issued €600 million aggregate principal
amount of 3.454 % senior green notes due 2032 and €600 million aggregate principal amount of 3.807 % senior green notes due 2036,
both with interest payable annually in arrears. These senior green notes (the “November 2024 Notes”) can be redeemed, at par in
whole or in part, within three months to their maturity, in accordance with the respective indentures.
We used the net proceeds of the above November 2024 Notes (i) to redeem the outstanding €1,000 million in aggregate principal
amount of 2.875 % senior notes due 2026, in full at the applicable redemption price set forth in the applicable indenture, (ii) to redeem
the outstanding $750 million in aggregate principal amount of 4.650 % senior notes due 2026, in full at the applicable redemption price
set forth in the applicable indenture, and (iii) for general corporate purposes, including the repayment of indebtedness. We used an
amount equivalent to the proceeds of these November 2024 Notes to finance or refinance a portfolio of eligible green projects in
accordance with our Green Finance Framework.
We recorded a $7 million and $2 million loss on extinguishment at repayment of the $750 million 4.650 % senior notes due 2026 and
the €1,000 million 2.875 % senior notes due 2026, respectively.
Revolving Credit Facility
The Company has a Revolving Credit Facility (“RCF”) with certain lenders and Wells Fargo Bank, National Association, as agent,
that provides for a multi-currency revolving loan facility in an aggregate principal amount of $4,500 million, including a swingline
sub-facility in an aggregate principal amount of $500 million.
109
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Loans under the RCF may be drawn in U.S. dollars, euro, pounds sterling, Swiss francs, Japanese yen, Swedish kronor and Canadian
dollars, with a borrower (or the obligors’ agent on behalf of a borrower) selecting the currency of a loan under the RCF. Borrowings
under the RCF bear interest at rates based upon an underlying reference rate, plus a margin determined in accordance with a ratings-
based pricing grid. Reference rates include SOFR for U.S. dollars, EURIBOR for euro, SONIA for pounds sterling, STIBOR for
Swedish kronor and SARON for Swiss francs. Unused revolving commitments under the RCF will accrue a commitment fee equal to
a percentage of the applicable interest rate margin. The RCF also requires the payment of a utilization fee calculated on outstanding
revolving loans, based on the utilization rate of the RCF. The RCF had an initial term of five years from its commencement date (June
28, 2024), which may be extended on two occasions by up to an aggregate of two years . In June 2025, the Company exercised the first
extension option, extending the maturity date to June 28, 2030. The RCF is unsecured. The RCF includes customary terms and
conditions for investment grade borrowers. There are no financial covenants. As of December 31, 2025, there were no amounts
outstanding under the facility.
Farm Credit Facility
A credit agreement (the “Farm Credit Facility Agreement”) is in place with CoBank, ACB, as administrative agent. The Farm Credit
Facility Agreement provides for a senior unsecured term loan facility in an aggregate principal amount of $600 million and matures in
July 2029. The carrying value of this facility at December 31, 2025, was $600 million.
At our option, loans issued under the Farm Credit Facility Agreement will bear interest at either Term SOFR or an alternative base
rate, in each case plus an applicable interest rate margin that will fluctuate between 1.650 % per annum and 2.275 % per annum (for
Term SOFR loans) or between 0.650 % per annum and 1.275 % per annum (for alternative base rate loans), based upon the Company’s
corporate credit ratings (as defined in the Farm Credit Facility Agreement). In addition, Term SOFR loans will be subject to a credit
spread adjustment equal to 0.1 % per annum.
Receivables Securitization Facilities
The Group’s liquidity facilities include two euro denominated trade receivables securitization programs of up to €330 million of
committed financings in aggregate which are due to mature in December 2029 and one U.S. dollar denominated trade receivables
securitization program of up to $700 million of committed financings which is due to mature in June 2027.
As of December 31, 2025, the gross amount of receivables collateralizing the euro denominated trade receivables programs was
€749 million (December 31, 2024: €739 million). At December 31, 2025, maximum available borrowings, when excluding amounts
drawn under these programs, were $13 million (December 31, 2024: $338 million).
As of December 31, 2025, the gross amount of receivables collateralizing the U.S. dollar denominated trade receivables program was
$1,043 million (December 31, 2024: $1,077 million). At December 31, 2025, maximum available borrowings, when excluding
amounts drawn under these programs, were $47 million (December 31, 2024: $241 million).
We have continuing involvement with the underlying receivables as we provide credit and collection services pursuant to the
underlying agreement.
Borrowing availability under these facilities is based on the eligible underlying accounts receivable and compliance with certain
covenants. The agreements governing the receivables securitization facilities contain restrictions, including, among others, on the
creation of certain liens on the underlying collateral. Interest rates are based on prevailing market rates plus a program fee.
The sale of the securitized receivables under our securitization programs does not meet the requirements for derecognition under ASC
860. As a result, the securitized receivables continue to be shown on the face of the Consolidated Balance Sheets, and the notes issued
to fund the purchase of these receivables are shown as borrowings with attributable interest expense recognized over the life of the
related transaction.
Given the short-term nature of the securitized receivables and the variable floating rates, the carrying amount of the securitized
receivables and the associated liabilities reported on the Consolidated Balance Sheets is estimated to approximate fair value.
110
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Commercial Paper
The Company, through its wholly-owned subsidiary WRKCo Inc. as the issuer, maintains an unsecured commercial paper program.
Under the program, we may issue senior short-term unsecured commercial paper notes in an aggregate principal amount at any time
not to exceed $1,000 million with up to 397 -day maturities. The program has no expiration date and can be terminated by either the
agent or us with not less than 30 days’ notice. The $1,000 million commercial paper program is supported by the $4,500 million RCF
with a separate $500 million swingline sublimit which allows for same-day drawing in U.S. dollar. The amount of commercial paper
outstanding does not reduce available capacity under the RCF. Commercial paper borrowings may vary during the period, largely as a
result of fluctuations in funding requirements.
Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. At December 31, 2025,
$155 million was issued (December 31, 2024: $546 million). The weighted average interest rate pertaining to this facility was 4.0 % as
of that date (December 31, 2024: 4.8 %).
Common Stock
Subject to the articles of association of the Company, the holders of ordinary shares are entitled to share in any dividends in proportion
to the number of shares held by them and are entitled to one vote for every share held by them.
Preferred Stock
The holders of the Series A Preferred Stock are entitled in priority to any payments of dividends on any other class of shares in the
Company to be paid annually on a fixed non-cumulative preferential dividend rate of 8 % per annum. On a return of assets, whether on
liquidation or otherwise, the Series A Preferred Stock entitle the holder to repayment of the capital paid up on those shares (including
any share premium) in priority to any repayment of capital to the holders of any other shares. The holder of the Series A Preferred
Stock is not entitled to any further participation in the assets or profits of the Company and is not entitled to receive notice of, attend,
speak or vote at any general meeting of the Company.
Deferred Shares
Holders of deferred shares have no right to receive notice of, attend, speak, or vote at any general meetings of the Company. Deferred
shares do not carry the right to receive dividends. Any deferred shares that are issued will rank in priority below the ordinary shares
with respect to liquidation rights and such entitlement will be limited to the repayment of the amount paid up or credited as paid up on
the deferred shares.
Treasury Stock
This represents common stock assumed by the Smurfit Kappa Employee Trust under the terms of the Deferred Bonus Plan. For the
avoidance of doubt, ‘treasury stock’ shall not be construed to have the same meaning as treasury shares under section 109 of the Irish
Companies Act.
111
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except share and per share data)
Share-based compensation expense relates primarily to awards granted under the Deferred Bonus Plan (“DBP”) and the Performance
Share Plan (“PSP”) as well as Performance Share Units (“PSUs”) and Restricted Stock Units (“RSUs”). Share-based compensation
expense recognized in the Consolidated Statements of Operations is as follows:
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Deferred Bonus Plan | $ | $ | $ | ||
Performance Share Plan | |||||
Performance Share Units | |||||
Restricted Stock Units | |||||
Total share-based compensation expense | $ | $ | $ | ||
Income tax benefit related to share-based compensation expense | $ | $ | $ | ||
Social charges relating to equity settled share-based payments for the years ended December 31, 2025, 2024 and 2023, were
$2 million, $6 million and $2 million, respectively.
The following note disclosure details the legacy Smurfit Kappa plans (the Deferred Bonus Plan and the Performance Share Plan), the
conversion of the legacy Westrock RSU and PSU awards due to the Combination and also the Smurfit Westrock 2024 Long Term
Incentive Plan (“LTIP”).
Deferred Bonus Plan
The DBP is a legacy Smurfit Kappa plan. No new awards were issued under the DBP from 2025 onwards. The number of shares
awarded under the DBP during the years ended December 31, 2024 and 2023, were 651,648 and 764,182 , respectively.
During the years ended December 31, 2025, 2024 and 2023, 586,113 , 523,972 , and 483,801 shares vested having a fair value of
$32 million, $21 million, and $18 million, respectively.
As of December 31, 2025, the unrecognized compensation expense related to the DBP was $12 million, which will be recognized over
the remaining weighted average vesting period of 1.2 years.
Performance Share Plan
The PSP is a legacy Smurfit Kappa plan. No new awards were issued under the PSP during 2025. The number of shares awarded
under the PSP during the years ended December 31, 2024 and 2023 were 1,700,922 , and 2,003,416 , respectively.
During the years ended December 31, 2025, 2024 and 2023, 1,414,298 , 742,163 and 1,322,030 shares vested having a fair value of
$77 million, $30 million and $50 million, respectively.
As of December 31, 2025, the unrecognized compensation expense related to the PSP was $33 million, which will be recognized over
the remaining weighted average vesting period of 1.1 years.
112
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except share and per share data)
Modification of Performance Share Plan Awards due to the Combination
In connection with the Combination, certain outstanding PSP awards were modified, including the conversion of Smurfit Kappa
awards into Smurfit Westrock awards and changes to performance and vesting conditions. As a result, modification accounting was
required for certain awards under ASC 718, “Compensation—Stock Compensation”. These modifications were accounted for as Type
1 probable-to-probable modifications. The total incremental fair value associated with these modifications was $106 million. Certain
of the modified awards remain outstanding as of December 31, 2025.
Long-Term Incentive Plan
On July 5, 2024, immediately prior to the Combination, the Board adopted the LTIP, pursuant to which Smurfit Westrock plc may
grant RSUs, PSUs, stock options, including incentive stock options, stock appreciation rights, share awards, which may be subject to
performance-based and/or time-based vesting conditions, and cash bonus incentives to eligible employees (including Named
Executive Officers), directors and consultants/independent contractors. The key purpose of the LTIP is to retain key executives and to
align the interests of our executives with the achievement of sustainable long-term growth and performance.
The LTIP authorizes granting of 26,000,000 shares to employees. As of December 31, 2025, there were 21,464,470 shares available to
be granted under this plan, assuming the PSUs previously granted vest at maximum.
Performance Share Units granted under the LTIP
During the year, the Company granted PSUs under the LTIP. Awards will vest after a three-year performance period to the extent to
which the performance conditions have been met. The performance targets assigned to the PSU awards are set by the Smurfit
Westrock Compensation Committee on the granting of awards at the start of each three-year cycle.
For the PSU awards granted in 2025, the actual number of shares that will vest under the PSU is dependent on the performance
conditions of the Company’s Cumulative Adjusted Earnings per Share (“EPS”), Average Return on Capital Employed (“ROCE”) and
Total Shareholder Return relative to a peer group (“rTSR”) measured over a three-year performance period. Participants can earn
between 0 % and 200 % based on the achievement of these performance conditions. PSU performance conditions will be reviewed at
the end of the three-year performance period and the PSU shares awarded will vest depending upon the extent to which these
performance conditions have been satisfied and the participants’ continued service through to the vesting date.
For PSU awards granted in 2024, the performance period for these awards began on July 8, 2024, and ends on December 31, 2026.
The number of shares that will ultimately vest are based on a rTSR condition, where a participant can earn between 0 % and 200 %.
Number of shares | Weighted average grant date fair value | ||
Outstanding at January 1 | $ | ||
Granted | |||
Forfeited | ( | ||
Vested | ( | ||
Outstanding at December 31 | $ |
113
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except share and per share data)
The fair values assigned to the EPS and ROCE components of the PSU awards are equivalent to the closing price of the Company’s
shares on the grant date. The fair value assigned to the portion of awards which are subject to rTSR performance was calculated as of
the grant date using the Monte Carlo simulation model. The grant date fair value for the rTSR portion of the awards was $48.77 for
2025 (year ended December 31, 2024: $50.07 ). The Monte Carlo simulation takes into account peer group total shareholder return and
volatilities together with the following assumptions:
2025 | 2024 | ||
Risk-free interest rate | |||
Expected volatility | |||
Expected term (years) |
For the awards granted in 2025, the expected volatility rate applied by the Company was based on a blended volatility that used
implied volatility and the historical adjusted daily stock prices that were time weighted based on post-acquisition prices of Smurfit
Westrock and a Company selected peer group. For a term of 0.68 years, the volatility of Smurfit Westrock was used. The term of 0.68
years was calculated as the time from the transaction date (July 5, 2024) to the grant date. For the remaining term of 2.12 years, a
volatility calculation was used based on the implied volatility as of the valuation date of March 11, 2025 and the historical adjusted
daily stock prices using the selected peer group companies for the 2.12 years prior to July 5, 2024.
For the awards granted in 2024, in order to account for the Combination, the expected volatility rate applied was based on a blended
volatility that used historical adjusted daily stock prices that were time weighted based on pre- and post-acquisition prices of Smurfit
Kappa, WestRock, and Smurfit Westrock. For a term of 0.08 years, historical volatility of Smurfit Westrock was used (which was
calculated as the time from the transaction date of July 5, 2024, to the grant date of August 2, 2024). For the remaining term of 2.33
years, a market capitalization weighted volatility was used for Smurfit Kappa and WestRock as of the transaction date.
For the awards granted in 2025 and 2024, the risk-free interest rate is based on the U.S. Treasury Rate Yield Curve, adjusted to
approximate zero coupon yields using the “bootstrap” technique, over a period equal to the expected term.
During the year ended December 31, 2024, no shares vested.
As of December 31, 2025, unrecognized compensation expense related to the awards was $27 million, which will be recognized over
the remaining weighted average vesting period of 2.0 years.
Restricted Stock Units
As part of the Combination described in "Note 2. Acquisitions", the Company replaced outstanding legacy WestRock RSUs and PSUs
held by current employees with Smurfit Westrock RSUs and a cash award equal to $5.00 per share, with all replacement awards
retaining their original vesting conditions. WestRock director RSUs vested immediately upon the change in control and were settled in
July 2024.
During the year, the Company granted RSUs under the LTIP. Awards will vest after a 3 -year service period subject to the participants’
continued service through to the vesting date.
to Smurfit Westrock RSU awards during the year ended December 31, 2025:
114
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except share and per share data)
Number of shares | Weighted average grant date fair value | ||
Outstanding at January 1 | $ | ||
Granted | |||
Forfeited | ( | ||
Vested | ( | ||
Outstanding at December 31 | $ |
During the years ended December 31, 2025 and 2024, 1,821,776 and 1,695,195 shares vested, respectively having a fair value of
$92 million and $75 million, respectively. As of December 31, 2025 unrecognized compensation expense related to the awards was
$42 million which will be recognized over the remaining weighted average vesting period of 1.8 years.
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Income before income taxes: | |||||
Domestic (Ireland) | $ | $ | $ | ||
Foreign (U.S.) | ( | ( | ( | ||
Foreign (Other) | |||||
Total income before income taxes | $ | $ | $ | ||
Income tax expense consists of the following components: | |||||
Current tax expense (net of investment tax credits of $ | |||||
Domestic (Ireland) | $ | $ | $ | ||
Foreign (U.S., Federal & State) | |||||
Foreign (Other) | |||||
Total current tax expense | $ | $ | $ | ||
Deferred tax expense (benefit): | |||||
Domestic (Ireland) | $( | $ | $ | ||
Foreign (U.S., Federal & State) | ( | ( | |||
Foreign (Other) | ( | ( | ( | ||
Total deferred tax benefit | ( | ( | ( | ||
Total income tax expense | $ | $ | $ | ||
Total income tax expense consists of the following components: | |||||
Domestic (Ireland) | $ | $ | $ | ||
Foreign (U.S., Federal & State) | ( | ( | |||
Foreign (Other) | |||||
Total income tax expense | $ | $ | $ | ||
115
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
tax rate of 12.5 % (the primary rate of our country of domicile) to income before income taxes for the year ended December 31, 2025 is
as follows:
Year ended December 31, | |||
2025 | |||
Income before income taxes | $ | ||
Ireland corporate tax rate | |||
Foreign tax effects | |||
United States | |||
Statutory tax rate difference between United States and Ireland | ( | ( | |
State and local taxes, net of federal benefit | ( | ( | |
Change in valuation allowances | |||
Effects of cross border tax laws - GILTI | |||
Effects of cross border tax laws - Subpart F | |||
Nontaxable company-owned life insurance (COLI) | ( | ( | |
R&D tax credits | ( | ( | |
Other | |||
Mexico | |||
Statutory tax rate difference between Mexico and Ireland | |||
Tax benefits associated with inflation deductions | ( | ( | |
Other | |||
Brazil | |||
Statutory tax rate difference between Brazil and Ireland | |||
Other | ( | ( | |
France | |||
Statutory tax rate difference between France and Ireland | |||
Corporate surtax | |||
Other | |||
Spain | |||
Statutory tax rate difference between Spain and Ireland | |||
Other | ( | ( | |
Colombia | |||
Statutory tax rate difference between Colombia and Ireland | |||
Other | ( | ( | |
Germany | |||
Local corporate trade tax | ( | ( | |
Other | |||
Netherlands | |||
Tax expense from foreign currency exchange transactions | |||
Austria | |||
Statutory tax rate difference between Austria and Ireland | |||
Other | |||
Sweden | |||
Statutory tax rate difference between Sweden and Ireland | |||
Other | |||
Other foreign jurisdictions | |||
Nontaxable or nondeductible items | |||
Nondeductible interest expense | |||
Changes in unrecognized tax benefits | ( | ( | |
Other | |||
Corporate earnings subject to Ireland | |||
Other | |||
Effective tax rate | $ | ||
116
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
The differences between income tax expense and the amount computed by applying the Republic of Ireland statutory trading income
tax rate of 12.5
Years ended December 31, | |||
2024 | 2023 | ||
Income before income taxes | $ | $ | |
Income before income taxes multiplied by the statutory income tax rate | |||
Effects of: | |||
Income subject to different rates of tax | |||
Change related to outside basis difference in foreign subsidiaries | |||
Change in valuation allowance | ( | ||
Uncertain tax positions | |||
U.S. state and local taxes | ( | ||
Ireland non-deductible interest | |||
Non-deductible U.S. executive compensation | |||
Non-deductible transaction costs | |||
Other items | ( | ( | |
Income tax expense | $ | $ | |
December 31, | |||
2025 | 2024 | ||
Deferred tax assets: | |||
Pension liabilities and other postretirement benefits | $ | $ | |
Carryforwards | |||
Lease liabilities | |||
Accrued expenses | |||
Stock-based compensation | |||
Other | |||
Total | |||
Deferred tax liabilities: | |||
Property, plant and equipment | ( | ( | |
Investments in subsidiaries | ( | ( | |
Prepaid pension asset | ( | ( | |
Intangibles | ( | ( | |
Inventory reserves | ( | ( | |
Other non-current assets | ( | ( | |
Other | ( | ( | |
Total | ( | ( | |
Valuation allowances | ( | ( | |
Net deferred tax liability | $( | $( | |
117
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
At December 31, 2025, we had net operating loss carryforwards of $2,432 million. Of these net operating losses, $1,392 million expire
between 2026 and 2044 and $1,040 million of losses carryforward indefinitely. At December 31, 2025, we also had other
carryforwards of $116 million of tax credit carryforwards. Of these tax credits, $89 million expire between 2030 and 2035 and
$27 million of tax credits carry forward indefinitely.
2025 | 2024 | 2023 | |||
Balance at January 1 | $ | $ | $ | ||
Increases through continuing operations | |||||
Reductions through continuing operations | ( | ( | ( | ||
Net change in the valuation allowance through continuing operations | ( | ||||
Valuation allowances assumed as part of the Combination | |||||
Net change in the valuation allowance | ( | ||||
Balance at December 31 | $ | $ | $ |
We consider a portion of earnings from certain foreign subsidiaries as subject to repatriation and have recognized deferred taxes
accordingly. However, we consider that all other outside basis differences from all other foreign subsidiaries to be indefinitely
reinvested. Accordingly, we have not provided for any deferred taxes for amounts that would be due upon recovery of those
investments.
In the event of a distribution in the form of dividends or dispositions of the subsidiaries, we may be subject to incremental foreign tax,
subject to an adjustment for foreign tax credits, withholding taxes or income taxes payable to the foreign jurisdictions. As of
December 31, 2025, the determination of the amount of unrecognized deferred tax liability related to investments in foreign
subsidiaries that are indefinitely reinvested is not practicable.
2025 | 2024 | 2023 | |||
Balance at January 1 | $ | $ | $ | ||
Additions for tax positions taken in current year | |||||
Unrecognized tax benefits acquired as part of the Combination | |||||
Additions for tax positions taken in prior years | |||||
Reductions for tax positions taken in prior years | ( | ||||
Reductions due to settlements | ( | ( | |||
Currency translation adjustments | ( | ||||
Reductions as a result of a lapse of the applicable statute of limitations | ( | ( | ( | ||
Balance at December 31 | $ | $ | $ |
As of December 31, 2025 and 2024, the total amount of unrecognized tax benefits was $480 million and $472 million, respectively,
exclusive of interest and penalties. Of these balances, as of December 31, 2025 and 2024, if all unrecognized tax benefits recorded
were to prevail, $402 million and $429 million, respectively, would benefit the effective tax rate.
For interest and penalties related to income taxes, we recognized a tax benefit of $7 million in the year ended December 31, 2025 and
a tax expense of $8 million and $1 million in the years ended December 31, 2024 and 2023, respectively. As of December 31, 2025,
and 2024, we have liabilities of $151 million and $127 million, respectively, related to estimated interest and penalties for income
taxes.
See “Note 21. Commitments and Contingencies — Brazil Tax Liability” for additional information.
118
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
We file tax returns in Ireland and foreign jurisdictions. With limited exceptions, we are no longer subject to income tax examinations
by tax authorities for years prior to 2016.
During the years ended December 31, 2025, 2024 and 2023, cash paid for income taxes, net of refunds, was $521 million,
$383 million and $439 million, respectively.
Year ended December 31, | |
2025 | |
Domestic | |
Ireland | $ |
Foreign | |
Netherlands | |
Mexico | |
France | |
Colombia | |
United States, Federal | |
Brazil | |
Sweden | |
Spain | |
Austria | |
Other | |
Total Foreign | |
Total income tax paid, net of refunds | $ |
We operate both defined benefit and defined contribution pension plans as well as other postretirement benefit plans throughout our
operations in accordance with local conditions and practice. The majority of plans are of the defined benefit type and are funded by
payments to separately administered funds. Other postretirement benefits in the Company are not material and as such the disclosures
below relate to defined benefit plans only.
In connection with the Combination, Smurfit Kappa acquired the existing employee benefit plans of WestRock. At the time of the
acquisition, the projected benefit obligation in respect of the acquired pension and postretirement benefits amounted to $4,930 million
and plan assets of $5,164 million.
The Company reports more than 95 % of its benefit obligations by order of size in the U.S., the U.K., the Netherlands, Canada,
Germany, and Ireland.
The pension funds are governed by a board of trustees or similar institutes. The funding requirements are agreed between the
Company, the trustees and the relevant regulators on country or state level in the U.S., the U.K., the Netherlands, Canada, and Ireland.
119
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Defined Benefit Pension Plans | |||||||
U.S. Plans | Non-U.S. Plans | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Change in projected benefit obligation: | |||||||
Benefit obligation at January 1 | $ | $ | $ | $ | |||
Service cost | |||||||
Interest cost | |||||||
Plan amendments | ( | ||||||
Actuarial loss (gain) | ( | ( | ( | ||||
Benefits paid | ( | ( | ( | ( | |||
Plan participant contributions | |||||||
Curtailments | ( | ( | |||||
Settlements | ( | ( | |||||
Acquisitions | |||||||
Other items | ( | ||||||
Foreign currency rate changes | ( | ||||||
Benefit obligation at December 31 | $ | $ | $ | $ | |||
Change in plan assets: | |||||||
Fair value of plan assets at January 1 | $ | $ | $ | $ | |||
Actual gain on plan assets | |||||||
Employer contributions | |||||||
Plan participant contributions | |||||||
Benefits paid | ( | ( | ( | ( | |||
Settlements | ( | ( | |||||
Acquisitions | |||||||
Other items | ( | ||||||
Foreign currency rate changes | ( | ||||||
Fair value of plan assets at December 31 | $ | $ | $ | $ | |||
Funded status at December 31 | $ | $ | $( | $( | |||
Amounts recognized in the Consolidated Balance Sheets: | |||||||
Non-current assets | $ | $ | $ | $ | |||
Current liabilities | ( | ( | ( | ( | |||
Non-current liabilities | ( | ( | ( | ( | |||
Funded status at December 31 | $ | $ | $( | $( | |||
Accumulated Benefit Obligation | $ | $ | $ | $ | |||
The net actuarial gain or loss in benefit obligation for the U.S. Plans and Non-U.S. Plans is generally driven by a change in discount
rates and to a lesser degree the rate of compensation change in the Non-U.S. Plans.
120
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Defined Benefit Pension Plans | |||||||
U.S. Plans | Non-U.S. Plans | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net actuarial loss | $ | $ | $ | $ | |||
Prior service cost (credit) | ( | ( | |||||
Total accumulated other comprehensive loss | $ | $ | $ | $ | |||
the fair value of their respective plan assets on December 31:
Defined Benefit Pension Plans | |||||||
U.S. Plans | Non-U.S. Plans | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Plans with projected benefit obligations in excess of plan assets: | |||||||
Projected benefit obligation | $ | $ | $ | $ | |||
Accumulated benefit obligation | |||||||
Fair value of plan assets | |||||||
Plans with accumulated benefit obligations in excess of plan assets: | |||||||
Accumulated benefit obligation | $ | $ | $ | $ | |||
Fair value of plan assets | |||||||
ended December 31:
Defined Benefit Pension Plans | |||||||||||
U.S. Plans | Non-U.S. Plans | ||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||
Interest cost | |||||||||||
Expected return on assets | ( | ( | ( | ( | ( | ( | |||||
Amortization of: | |||||||||||
Net actuarial (gain) loss | ( | ||||||||||
Prior service credit | ( | ( | ( | ||||||||
Curtailment gain | ( | ( | |||||||||
Settlement loss | |||||||||||
Net periodic benefit (income) cost | $( | $( | $( | $ | $ | $ | |||||
Service cost is included within Cost of goods sold and Selling, general and administrative expenses while all other cost components
are recorded within Pension and other postretirement non-service income (expense), net.
In the year ended December 31, 2025, a loss of $126 million was recognized related to Defined Benefit Pension Plans, in Consolidated
other comprehensive income (loss) (December 31, 2024: gain of $105 million, year ended December 31, 2023: loss of $59 million).
For the detail of the components of other comprehensive income movements, refer to “Note 24. Accumulated Other Comprehensive
Loss”.
121
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Actuarial Assumptions
Defined Benefit Pension Plans | |||||||
U.S. Plans | Non-U.S. Plans | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Discount rate | |||||||
Rate of compensation increase | |||||||
Interest crediting rates | |||||||
Weighted-average assumptions used in the calculation of defined benefit plan expense for the years ended December 31:
Defined Benefit Pension Plans | |||||||||||
U.S. Plans | Non-U.S. Plans | ||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||
Discount rate | |||||||||||
Rate of compensation increase | |||||||||||
Expected long-term rate of return on plan assets | |||||||||||
Interest crediting rates | |||||||||||
At December 31, 2025, the discount rates for both the U.S. and Non-U.S. defined benefit pension plans were determined based on a
yield curve developed by our actuary.
We typically review our expected long-term rate of return on plan assets periodically through an asset allocation study with either our
actuary or investment advisor. Our expected rates of return in 2025 are based on an analysis of our long-term expected rate of return
and our current asset allocation.
Our Investment Policies and Strategies
Our investment policies and strategies guide and direct how the funds are managed for the pension plans we sponsor.
The Trustees of all our funded plans all use a fiduciary manager to implement the investment policy appropriate for each plan and
there is an Investment Committee for each of these plans. The investment strategy varies by local legislative requirements, funded
status and maturity of the plan. Periodic reviews are made of both investment policy objectives and investment manager performance.
The Company has continued to implement a diversified and strategic investment approach for its various pension plans, aimed at
ensuring long-term financial stability and growth. The strategy focuses on balancing risk and return by investing in a mix of equities,
fixed-income securities, alternative assets and property. The diversified portfolios have been designed to withstand market volatility
while maximizing returns to meet the future obligations of our pension plan beneficiaries. Through regular monitoring and
adjustments, we aim to achieve consistent, risk-adjusted performance to safeguard the financial security of our employees’ retirement
funds.
Derivatives, including swaps, forward and future contracts may be used as asset class substitutes or for hedging or other risk
management purposes. All the plans hold highly diversified investment portfolios that are not reliant on any single named stocks or
specific parts of the market.
122
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Valuation of Our Plan Assets
Pension assets are stated at fair value or net asset value (“NAV”). Fair value is based on the amount that would be received to sell an
asset or paid to settle a liability, in an orderly transaction between market participants at the reporting date. We consider both
observable and unobservable inputs that reflect assumptions applied by market participants when setting the exit price of an asset or
liability in an orderly transaction within the principal market for that asset or liability.
We typically review our expected long-term rate of return on plan assets periodically through an asset allocation study with either our
actuary or investment advisor. We value the pension plan assets based upon the observability of exit pricing inputs and classify
pension plan assets based upon the lowest level input that is significant to the fair value measurement of the pension plan assets in
their entirety.
Defined Benefit Pension Plans | |||
U.S. Plans | Non-U.S. Plans | ||
2025 | 2025 | ||
Equities | |||
Fixed Income | |||
Real Estate | |||
Other (incl. Liability-Driven Investments (“LDI”)) | |||
Fair Value Measurement
The guidance for fair value measurements and disclosure sets out a fair value hierarchy that group fair value measurement inputs into
the three classifications outlined in the table below. Transfers between levels are recognized at the end of the reporting period.
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability reflecting the reporting entity’s own assumptions or external inputs from
inactive markets.
123
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
31:
Defined Benefit Pension Plans | |||||||||||
U.S. Plans | |||||||||||
2025 | 2024 | ||||||||||
Asset Class | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Total | |||||
Cash | $ | $ | $ | $ | $ | $ | |||||
Equity | |||||||||||
Government Bonds | |||||||||||
Corporate Bonds | |||||||||||
Other (incl. LDI) | |||||||||||
Total assets measured using fair value hierarchy | $ | $ | $ | $ | $ | $ | |||||
Assets measured at NAV | |||||||||||
Total assets | $ | $ | |||||||||
There were no assets within the U.S. plans valued using level 3 inputs at December 31, 2025 or 2024.
Defined Benefit Pension Plans | |||||||||||||||
Non-U.S. Plans | |||||||||||||||
2025 | 2024 | ||||||||||||||
Asset Class | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||
Cash | $ | $ | $ | $ | $ | $ | $ | $ | |||||||
Equity | |||||||||||||||
Government Bonds | |||||||||||||||
Corporate Bonds | |||||||||||||||
Other (incl. LDI) | ( | ||||||||||||||
Total assets measured using fair value hierarchy | $ | $ | $ | $ | $ | $ | $ | $ | |||||||
Assets measured at NAV | |||||||||||||||
Total assets | $ | $ | |||||||||||||
124
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
NAV Measurement
Commingled fund investments are valued at the NAV per share multiplied by the number of shares held.
We maintain holdings in certain private equity partnerships and private real estate investments for which a liquid secondary market
does not exist. Both types of investment are commingled. Valuation techniques, such as discounted cash flow and market-based
comparable analyses, are used to determine fair value of these private investments. Unobservable inputs used for the discounted cash
flow technique include projected future cash flows and the discount rate used to calculate present value. For private equity
partnerships, unobservable inputs used for the market-based comparisons technique include earnings before interest, taxes,
depreciation and amortization multiples in other comparable third-party transactions, price to earnings ratios, liquidity, current
operating results, as well as input from general partners and other pertinent information. Private equity investments have been valued
using NAV as a practical expedient. For private real estate investments, unobservable inputs used for the market-based comparison
technique include a combination of third-party appraisals, replacement cost, and comparable market prices.
Equity-related investments are hedged equity investments in a commingled fund that consist primarily of equity indexed investments
which are hedged by options and also hold collateral in the form of short-term treasury securities. Equity-related investments have
been valued using NAV as a practical expedient.
Pension Plan Contributions and Benefit Payments
Established funding standards govern the funding requirements for our qualified and approved pensions in various jurisdictions. We
fund the benefit payments of our non-qualified or unfunded plans as benefit payments come due.
During 2026, based on estimated year-end asset values and projection of plan liabilities we expect to make contributions and/or benefit
payments of: $49 million for our non-qualified or unfunded plans and $77 million for our qualified or funded plans.
Year ended December 31, | Defined Benefit Pension Plans | |
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
2031-2035 |
Defined Contribution Plans
We have 401(k) plans that cover certain U.S. salaried, union and non-union hourly employees, generally subject to an initial waiting
period. The 401(k) plans permit participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal
Revenue Code. At December 31, 2025, our contributions may be up to 7.5 % for U.S. salaried and non-union hourly employees,
consisting of a match of up to 5 % and an automatic employer contribution of 2.5 %.
Outside the U.S., the Company operates various defined contribution plans for its employees in line with local market practice and the
tax and legal rules in the jurisdictions in which they operate.
The expense for defined contribution pension plans for the years ended December 31, 2025, 2024 and 2023, was $268 million,
$170 million, and $79 million, respectively. The increase in the expense for the year ended December 31, 2025 was due to the full
year impact of the Combination.
125
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Deferred Compensation Arrangements
We have financial assets related to supplemental retirement savings plans (“Supplemental Plans”) that are carried at cash surrender
value. These Supplemental Plans are non-qualified deferred compensation plans where participants’ accounts are credited with
investment gains and losses in accordance with their investment election or elections. The investment alternatives under the
Supplemental Plans are generally similar to investment alternatives available under 401(k) plans. Assets and liabilities held in respect
of these Supplemental Plans were carried at $203 million and $158 million, respectively, as of December 31, 2025 (December 31,
2024: $185 million and $168 million, respectively).
Years ended December 31, | |||||
2025 | 2024 | 2023 | |||
Numerator: | |||||
Net income attributable to common shareholders | $ | $ | $ | ||
Denominator: | |||||
Basic weighted average shares outstanding | |||||
Effect of dilutive share options | |||||
Diluted weighted average shares outstanding | |||||
Basic earnings per share attributable to common shareholders | $ | $ | $ | ||
Diluted earnings per share attributable to common shareholders | $ | $ | $ | ||
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. These comprise of restricted stock units, performance stock units and performance
shares issued under the Company’s long-term incentive plans. Details of these plans are set out in “Note 17. Share-based
Compensation”.
For the years ended December 31, 2025, 2024 and 2023, respectively, there were no
compensation awards excluded from the diluted earnings per share computation because the effect would have been antidilutive.
We have financial commitments and obligations that arise in the ordinary course of our business. These include debt (discussed in
“Note 15. Debt”), lease obligations (discussed in “Note 13. Leases”), pension liabilities (discussed in “Note 19. Retirement Plans and
Deferred Compensation Arrangements”) and capital commitments, purchase commitments and certain legal proceedings are discussed
below.
Capital Commitments
Estimated costs for future purchases of Property, plant and equipment that we are obligated to purchase as of December 31, 2025, are
$1,149 million.
126
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Purchase Commitments
capital commitments disclosed above. These obligations relate to various purchase agreements for items such as minimum amounts of
energy, supplies (including fiber, wood, and chemicals), transport and software licensing over periods generally ranging from one year
to seven years. Some of the amounts are based on management’s estimates and assumptions about these obligations, including their
duration, the possibility of renewal, anticipated actions by third parties, and other factors. Because these estimates and assumptions are
necessarily subjective, our actual payments may vary from those reflected in the table. Total purchase commitments are as follows:
Year ended December 31, | Total | |
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total | $ |
Brazil Tax Liability
Our subsidiary, WestRock, is challenging claims by the Brazil Federal Revenue Department that we underpaid taxes as a result of
amortization of goodwill generated by the 2002 merger of two of its Brazilian subsidiaries. The matter has proceeded through the
Brazil Administrative Council of Tax Appeals (“CARF”) principally in two proceedings, covering tax years 2003 to 2008 and 2009 to
2012. WestRock was assessed additional taxes, penalties, and interest in both CARF proceedings. In the proceeding for the tax years
2003 to 2008, WestRock was also assessed penalties and interest for fraud, but WestRock won the fraud claim in the proceeding for
the tax years 2009 to 2012. WestRock subsequently filed two lawsuits in Brazilian federal courts seeking annulment of the adverse
CARF decisions. In February 2025, the federal court adjudicating the WestRock challenge to CARF's decision against WestRock for
the 2003 and 2008 period issued a ruling in favor of WestRock nullifying the financial assessments in that case. The decision of the
federal court was appealed by the tax authorities.
We assert that we have no liability in these matters. The total amount in dispute in the two cases before CARF and in the annulment
actions relating to the claimed tax deficiency was R$790 million ($144 million) as of December 31, 2025, including various penalties
and interest. Resolution of the tax positions could have a material adverse effect on our cash flows and results of operations or
materially benefit our results of operations in future periods depending upon their ultimate resolution.
Asbestos-Related Litigation
We have been named as a defendant in asbestos-related personal injury litigation, primarily in relation to the historical operations of
certain companies acquired by the Company. To date, the costs resulting from the litigation, including settlement costs, have not been
significant. We accrue for the estimated value of pending claims and litigation costs using historical claims information, as well as the
estimated value of future claims based on our historical claims experience. As of December 31, 2025, there were approximately 720
such lawsuits. We believe that we have substantial insurance coverage, subject to applicable deductibles and policy limits, with respect
to asbestos claims. We also believe we have valid defenses to these asbestos-related personal injury claims and intend to continue to
contest these matters vigorously. Should the Company’s litigation profile change substantially, or if there are adverse developments in
applicable law, it is possible that the Company could incur significantly more costs resolving these cases. We record asbestos-related
insurance recoveries that are deemed probable. In assessing the probability of insurance recovery, we make judgments concerning
insurance coverage that we believe are reasonable and consistent with our historical dealings and our knowledge of any pertinent
solvency issues surrounding the insurers. The Company currently does not expect the resolution of pending asbestos litigation and
proceedings to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. As of
December 31, 2025, the Company had estimated liabilities in respect of these matters of $82 million and estimated insurance
recoveries of $50 million.
127
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Environmental Contingencies
The Company is subject to a variety of environmental laws and regulations.
The Company has recorded aggregate accruals of $67 million and $14 million on an undiscounted basis at December 31, 2025 and
2024, respectively, relating to environmental matters including remediation of environmental conditions in connection with some of
our current or former facilities, as well as third-party owned sites. The change in liability from 2024 to 2025 primarily reflects an
adjustment to the provisional amount recognized in the Combination with an offsetting credit to goodwill.
Liabilities recorded for environmental contingencies are estimates of the probable costs based upon available information and these
estimates may change. However, the Company does not believe that its potential environmental obligations will have a material
adverse effect upon its liquidity, results of operations, or financial condition.
Italian Competition Authority Investigation
In August 2019, the Italian Competition Authority (the “AGCM”) notified approximately 30 companies, of which Smurfit Kappa
Italia, a subsidiary of Smurfit Westrock, was one, that an investigation had found the companies to have engaged in anti-competitive
practices, in relation to which the AGCM levied a fine of approximately $138 million on Smurfit Kappa Italia, which was paid in
2021.
In October 2019, Smurfit Kappa Italia appealed the AGCM’s decision to the First Administrative Court of Appeal (TAR Lazio),
however Smurfit Kappa Italia was later notified that this appeal had been unsuccessful. In September 2021, Smurfit Kappa Italia filed
a further appeal to the Council of State which published its ruling in February 2023. While some grounds of appeal were dismissed,
the Council of State upheld Smurfit Kappa Italia’s arguments regarding the quantification of the fine. As a result, the AGCM was
directed to recalculate Smurfit Kappa Italia’s fine. On March 7, 2024, the AGCM notified Smurfit Kappa Italia that its fine had been
reduced by approximately $18 million. Smurfit Kappa Italia has appealed the amount of this reduction and a decision on that appeal is
expected in the second quarter of 2026.
Separate to these proceedings regarding the fine, in May 2023, Smurfit Kappa Italia filed an application with the Council of State for
revocation of the February 2023 ruling to the extent that it failed to consider certain pleas that had been raised by Smurfit Kappa Italia
on appeal. That application was rejected in July 2025.
After publication of the AGCM’s August 2019 decision, a number of purchasers of corrugated sheets and boxes initiated litigation
proceedings against Smurfit Kappa companies, alleging that they were harmed by the alleged anti-competitive practices and seeking
damages. In addition, other parties have threatened litigation against Smurfit Westrock seeking damages (either specified or
unspecified). The Company believes it has significant defenses to the damages claims and intends to vigorously defend the current and
any future litigation.
International Arbitration Against Venezuela
Smurfit Kappa, which is now a subsidiary of Smurfit Westrock, announced in 2018 that due to the Government of Venezuela’s
measures, Smurfit Kappa no longer exercised control over the business of Smurfit Kappa Carton de Venezuela. Smurfit Kappa’s
Venezuelan operations were therefore deconsolidated in the third quarter of 2018. Later that year, Smurfit Kappa’s wholly-owned
subsidiary, Smurfit Holdings BV, filed an international arbitration claim against the Bolivarian Republic of Venezuela before the
World Bank’s International Center for Settlement of Investment Disputes (“ICSID”) seeking compensation for Venezuela’s unlawful
seizure of its Venezuelan business as well as for other arbitrary, inconsistent and disproportionate State measures that destroyed the
value of its investments in Venezuela. Following the exchange of written submissions, an oral hearing was held in September 2022 in
Paris.
128
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
On August 28, 2024, upon the completion of its deliberations, the arbitral tribunal issued an award granting Smurfit Holdings BV,
then a wholly-owned subsidiary of Smurfit Westrock, compensation in excess of $469 million, plus legal costs of $5 million, plus
interest from May 31, 2024, until the date of payment (the “Award”). In September 2024, Smurfit Holdings BV initiated proceedings
against the Bolivarian Republic of Venezuela to enforce the Award. In December 2024, the Bolivarian Republic of Venezuela applied
to ICSID to annul the Award. An Annulment Committee has been formed by ICSID to decide on this application and an oral hearing
has been scheduled for March 2026.
U.S. Antitrust Violations Class Action
On July 29, 2025, Smurfit Westrock plc, Smurfit Kappa North America LLC, WestRock CP, LLC and seven other industry
participants were named as defendants in a class action lawsuit filed in the U.S. District Court for the Northern District of Illinois
alleging violations of U.S. antitrust laws. The lawsuit alleges violations of Sections 1 and 3 of the Sherman Act, asserting that the
defendants conspired to fix, raise and maintain supracompetitive prices for containerboard sheets, linerboard sheets, and finished
packaging products made from containerboard and/or linerboard in the United States. The complaint seeks damages, including treble
damages under the Clayton Act, pre- and post-judgment interest, injunctive relief and litigation expenses and attorneys’ fees. The
Company believes that it has substantial defenses and intends to vigorously defend against the lawsuit. While the Company is
currently unable to determine the ultimate outcome of this matter or estimate the range of potential loss due to the early stage of this
proceeding, it is possible that an adverse outcome could have a material impact on its financial condition, results of operations, or cash
flows. On October 17, 2025, the plaintiff voluntarily dismissed Smurfit Westrock plc from the lawsuit without prejudice to seek to
rejoin it at a later date. The Company’s subsidiaries Smurfit Kappa North America LLC and WestRock CP, LLC remain defendants in
the lawsuit. On January 20, 2026, the Company completed briefing the court on its motion to dismiss the complaint, which was filed
on October 20, 2025. The Company expects the court to rule on the motion to dismiss in 2026.
Other Litigation
We are a defendant in a number of other lawsuits and claims arising out of the conduct of our business. While the ultimate results of
such suits or other proceedings against us cannot be predicted as of the date of this Annual Report on Form 10-K, we believe the
resolution of these other matters will not have a material adverse effect on our results of operations, financial condition or cash flows.
Trade Receivables Securitization Arrangements
The Company is a party to arrangements involving securitization of its trade receivables. The arrangements required the establishment
of certain special purpose entities namely Smurfit Kappa International Receivables DAC, Smurfit Kappa Receivables plc and Smurfit
Kappa European Packaging DAC (a subsidiary of Smurfit Kappa Receivables plc). The sole purpose of the securitization entities is the
raising of finance for the Company using the receivables generated by certain operating entities, as collateral. All entities are
considered to be VIEs.
The Company is the primary beneficiary of Smurfit Kappa International Receivables DAC, Smurfit Kappa European Packaging DAC
and Smurfit Kappa Receivables plc, through various financing arrangements and due to the fact that it is responsible for the entities’
most significant economic activities.
The carrying values of the restricted asset and limited recourse liability as of December 31, 2025 were $874 million and $374 million
respectively (December 31, 2024: $765 million and $5 million respectively).
Timber Note Receivable Securitization Arrangement
The Company is also a party to an arrangement involving securitization of its note receivable. Pursuant to the sale of forestlands in
2007, a special purpose entity (“SPE”) namely MeadWestvaco Timber Notes Holding, LLC (“MWV TN”) received an installment
note receivable in the amount of $398 million (“Timber Note”). Using this installment note as collateral, the SPE received proceeds
under secured financing agreements, which is recorded as a non-recourse liability.
129
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Using the Timber Note as collateral, MWV TN received $338 million in proceeds under a secured financing agreement with a bank.
Under the terms of the agreement, the liability from this transaction is non-recourse to the Company and is payable from the Timber
Note proceeds upon its maturity in October 2027. As a result, the Timber Note is not available to satisfy any obligations of the
Company. MWV TN can elect to prepay at any time the liability in whole or in part, however, given that the Timber Note is not
prepayable, MWV TN expects to repay the liability at maturity from the Timber Note proceeds.
The Company is the primary beneficiary of MWV TN through various financing arrangements and due to the fact that it is responsible
for the entity’s most significant economic activities. This entity is considered to be a VIE.
The carrying values of the restricted asset and non-recourse liability as of December 31, 2025 ($391 million and $335 million,
respectively) and as of December 31, 2024 ($387 million and $333 million, respectively) approximate their fair values due to their
floating rates. The fair values of the restricted assets and non-recourse liabilities are classified as level 2 within the fair value
hierarchy.
In addition to the vehicles outlined above, the Company also consolidates a smaller VIE, not considered material for separate
disclosure.
table:
December 31, | |||
2025 | 2024 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ | $ | |
Accounts receivable | |||
Inventories | |||
Other current assets | |||
Non-current assets: | |||
Property, plant and equipment, net | |||
Other non-current assets | |||
Total assets | $ | $ | |
Liabilities | |||
Current liabilities: | |||
Accounts payable | $ | $ | |
Current portion of debt | |||
Other current liabilities | |||
Non-current liabilities: | |||
Non-current debt due after one year | |||
Other non-current liabilities | |||
Total liabilities | $ | $ | |
We sell products to and receive services from affiliated entities. These transactions are undertaken and settled at normal trading terms.
No guarantees are given or received by either party. Related party balances and transactions were not material for any period
presented.
130
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
2025, 2024 and 2023:
Foreign Currency Translation | Cash Flow Hedges | Defined Benefit Pension and Other Postretirement Benefit Plans | Other Adjustments(1) | Total(2) | |
Balance at December 31, 2022 | $ | $ | $ | $( | $ |
Other comprehensive (income) loss | ( | ( | ( | ||
Balance at December 31, 2023 | $ | $ | $ | $( | $ |
Other comprehensive loss (income) | ( | ||||
Reclassification from retained earnings | ( | ( | |||
Balance at December 31, 2024 | $ | $ | $ | $( | $ |
Other comprehensive (income) loss | ( | ( | |||
Balance at December 31, 2025 | $ | $ | $ | $( | $ |
(1) This relates to a reverse acquisition reserve which arose on the creation of a new parent of the Company prior to the United Kingdom and Ireland listings.
(2) All amounts are net of tax and noncontrolling interest.
December 31, 2025, 2024 and 2023, is as follows:
Years ended December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | |||
Foreign currency translation gain (loss) | $ | $ | $ | $( | $ | $( | $ | $ | $ | ||
Defined benefit pension and other postretirement benefit plans: | |||||||||||
Net actuarial (loss) gain arising during year | ( | ( | ( | ( | ( | ||||||
Amortization and settlement recognition of net actuarial loss | ( | ( | ( | ||||||||
Prior service (cost) credit arising during year | ( | ( | ( | ( | ( | ||||||
Amortization of prior service credit | ( | ( | ( | ( | ( | ( | |||||
Foreign currency (loss) gain - pensions | ( | ( | ( | ( | |||||||
Changes in fair value of cash flow hedges | ( | ( | |||||||||
Consolidated other comprehensive income (loss) | ( | ( | ( | ||||||||
Other comprehensive loss (income) attributable to noncontrolling interests | |||||||||||
Other comprehensive income (loss) attributable to common shareholders | $ | $ | $ | $( | $( | $( | $ | $ | $ | ||
131
Smurfit Westrock plc
Notes to Consolidated Financial Statements
(in millions, except per share data)
Dividend Approval
On February 3, 2026, the Company announced that its Board of Directors approved a quarterly dividend of $0.4523 per share on its
ordinary shares. The quarterly dividend of $0.4523 per ordinary share is payable on March 18, 2026 to shareholders of record at the
close of business on February 17, 2026.
132
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Smurfit Westrock’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the
Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures are designed by the Company
to ensure that it records, processes, summarizes and reports in a timely manner the information it must disclose in reports that it files
with or submits to the SEC. Anthony Smurfit, President & Group Chief Executive Officer, and Ken Bowles, Executive Vice President
& Group Chief Financial Officer, reviewed and participated in management’s evaluation of the disclosure controls and procedures.
Based on this evaluation, Anthony Smurfit, President & Group Chief Executive Officer, and Ken Bowles, Executive Vice President &
Group Chief Financial Officer, concluded that as of the end of the period covered by this Annual Report on Form 10-K, Smurfit
Westrock’s disclosure controls and procedures were effective, and the previously reported material weakness described below has
been remediated.
Remediated Material Weakness in Internal Control over Financial Reporting
A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting such that there
is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a
timely basis.
Smurfit Westrock’s management had previously identified and reported a material weakness relating to the company’s selection and
development of control activities intended to mitigate the risks to achieving its objectives. This related to certain processes and
controls principally at historical Smurfit Kappa that were not subject to the requirements of Section 404 of SOX prior to the
Combination between Smurfit Kappa and Westrock discussed elsewhere in this Annual Report.
This material weakness was the result of:
•A lack of formalization of an existing control process for documenting evidence of management review and performance of
control procedures, including the level of precision in the execution of controls and procedures to ascertain completeness and
accuracy of information produced by the Company.
•Existing controls related to the preparation and review of manual journal entries not designed to adequately mitigate the
associated risks.
•The need to augment General IT Controls, specifically as they pertain to (i) logical access controls to ensure appropriate
segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to
appropriate Company personnel and (ii) program change management controls to ensure that information technology
program and data changes affecting financial IT applications and underlying accounting records are identified, tested,
authorized and implemented appropriately.
Remediation Plan
In response to the material weakness, we designed and implemented remediation measures whereby we:
•designed and implemented policies and guidance related to the operation of controls; complemented by training of control
operators, with a specific focus on the priority areas documented in the remediation plan;
•developed appropriate controls over the review of manual journal entries - automated approval workflows for manual journal
entries were implemented at relevant material locations, as well as an additional risk-based interim manual control; and
•enhanced and expanded the general IT processes and controls across the organization which included strengthening user and
privileged access controls as well as change management controls.
Testing to validate the effectiveness of these remediation efforts was conducted over a sustained period in 2025 and confirmed that the
material weakness was remediated as of December 31, 2025.
133
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule
13a-15(f) of the 1934 Act. Management has assessed the effectiveness of our internal control over financial reporting as of December
31, 2025 based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. As a result of this assessment, management concluded that as of the end of the period
covered by this Annual Report on Form 10-K, Smurfit Westrock maintained effective internal control over financial reporting, and the
previously reported material weakness has been remediated. The effectiveness of our internal control over financial reporting as of
December 31, 2025 has been audited by KPMG, an independent registered public accounting firm, as stated in their report, which is
included in Part II, Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
Other than the changes that resulted from the integration following the Combination and remediation actions described above, there
has been no change in Smurfit Westrock’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the three months ended December 31, 2025 that has materially affected, or is reasonably
likely to materially affect, Smurfit Westrock’s internal control over financial reporting.
Item 9B. Other Information
Trading Plan(s)
During the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1 under the Exchange
Act) adopted terminated
are defined in Item 408 of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
134
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The Company’s Code of Conduct (the “Code of Conduct”), is applicable to all employees, including the principal executive officer,
principal financial officer, principal accounting officer, and controller, and all directors. The Company’s Code of Ethical Conduct for
Directors and Senior Financial Officers (the “Code of Ethics”), is applicable to our directors and its Senior Financial Officers, that is,
its principal executive officer (“CEO”), its principal financial officer, and its principal accounting officer, as well as any other senior
executive or senior financial officers who may be specifically designated from time to time by the CEO (the Code of Conduct and the
Code of Ethics together, the “Codes”). The Codes are available at https://www.smurfitwestrock.com/about/corporate-governance/
policies. To the extent required by the rules of the SEC or the NYSE, Smurfit Westrock intends to disclose amendments to and
waivers of the Codes applicable to executive officers and directors, if any, on that website within four business days following the date
of any such amendment or waiver.
Additional information responsive to this Item is incorporated herein by reference to our definitive proxy statement with respect to our
2026 annual general meeting of shareholders to be filed with the SEC within 120 days after the end of our fiscal year covered by this
Annual Report on Form 10-K.
Item 11. Executive Compensation
Information responsive to this Item is incorporated herein by reference to our definitive proxy statement with respect to our 2026
annual general meeting of shareholders to be filed with the SEC within 120 days after the end of our fiscal year covered by this
Annual Report on Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Information responsive to this Item is incorporated herein by reference to our definitive proxy statement with respect to our 2026
annual general meeting of shareholders to be filed with the SEC within 120 days after the end of our fiscal year covered by this
Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information responsive to this Item is incorporated herein by reference to our definitive proxy statement with respect to our 2026
annual general meeting of shareholders to be filed with the SEC within 120 days after the end of our fiscal year covered by this
Annual Report on Form 10-K.
Item 14. Principal Accountant Fees and Services
Information responsive to this Item is incorporated herein by reference to our definitive proxy statement with respect to our 2026
annual general meeting of shareholders to be filed with the SEC within 120 days after the end of our fiscal year covered by this
Annual Report on Form 10-K.
135
PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of this Annual Report on Form 10-K:
(a)(1) Financial Statements
The financial statements required by this item are listed in Item 8, “Financial Statements and Supplementary Data”.
(a)(2) Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown
in the financial statements or the notes thereto.
(a)(3) Exhibit Index
The following is a list of exhibits filed as part of this Annual Report on Form 10-K or are incorporated herein by reference:
Exhibit Number | Description of Exhibit | ||
3.1 | Amended Constitution of Smurfit Westrock plc (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.1 | 2021 Indenture, by and among SKT, the guarantors party thereto and Deutsche Trustee Company Limited, as trustee, dated as of September 22, 2021 (incorporated by reference to Exhibit 4.12 of the Company’s Current Report on Form 8- K filed on July 8, 2024). | ||
4.2 | First Supplemental Indenture to 2021 Indenture, by and among SKT, the guarantors party thereto and Deutsche Trustee Company Limited, as trustee, dated as of October 5, 2023 (incorporated by reference to Exhibit 4.13 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.3 | Second Supplemental Indenture to 2021 Indenture, by and among SKT, the Smurfit Bond Debt New Guarantors, and Deutsche Trustee Company Limited, as trustee, dated as of July 5, 2024 (incorporated by reference to Exhibit 4.14 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.4† | Third Supplemental Indenture to 2021 Indenture, by and among SKT, the new guarantor party thereto, and Deutsche Trustee Company Limited, as trustee, dated as of November 21, 2024. | ||
4.5 | 2024 Indenture, by and among SKT, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, dated as of April 3, 2024 (incorporated by reference to Exhibit 4.15 of the Company’s Current Report on Form 8- K filed on July 8, 2024). | ||
4.6 | First Supplemental Indenture to 2024 Indenture, by and among SKT, the Smurfit Bond Debt New Guarantors, and Deutsche Bank Trust Company Americas, as trustee, dated as of July 5, 2024 (incorporated by reference to Exhibit 4.16 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.7 | Second Supplemental Indenture to 2024 Indenture, by and among SKT, the new guarantor party thereto and Deutsche Bank Trust Company Americas, as trustee, dated as of November 21, 2024 (incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-4 filed on April 3, 2025). | ||
136
4.8 | Indenture, dated August 24, 2017, by and among WRKCo Inc. (“WRKCo”), MeadWestvaco Corporation (“MWV”), WestRock RKT Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to WRKCo’s Current Report on Form 8-K (File No. 001-37484) filed with the Securities and Exchange Commission on August 24, 2017). | ||
4.9 | Second Supplemental Indenture, dated as of March 6, 2018, to the Indenture dated as of August 24, 2017, by and among WRKCo, MWV, WestRock RKT Company and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the $600 million aggregate principal amount of 3.750% senior notes due 2025 and $600 million aggregate principal amount of 4.000% senior notes due 2028 of WestRock (incorporated by reference to Exhibit 4.1 to WRKCo’s Current Report on Form 8-K (File No. 001-37484) filed with the Securities and Exchange Commission on March 6, 2018). | ||
4.10 | Third Supplemental Indenture, dated as of November 2, 2018, to the Indenture dated as of August 24, 2017, among WRKCo, WestRock RKT Company, MWV and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.7 to WRKCo’s Current Report on Form 8-K (File No. 001-37484) filed with the Securities and Exchange Commission on November 5, 2018). | ||
4.11 | Fourth Supplemental Indenture, dated as of September 22, 2023, to the Indenture dated as of August 24, 2017, among WRKCo, WestRock, WestRock RKT Company, MWV and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1(e) to WestRock’s Annual Report on Form 10-K (File No. 001-38736) filed with the Securities and Exchange Commission on November 17, 2023). | ||
4.12 | Fifth Supplemental Indenture, dated as of September 26, 2023, to the Indenture dated as of August 24, 2017, between WRKCo and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1(f) to WestRock’s Annual Report on Form 10-K (File No. 001-38736) filed with the Securities and Exchange Commission on November 17, 2023). | ||
4.13 | Sixth Supplemental Indenture, dated as of July 5, 2024, to the Indenture dated as of August 24, 2017, among WRKCo, WestRock, MWV, WestRock RKT, LLC, the WestRock Bond Debt New Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.23 of the Company’s Current Report on Form 8- K filed on July 8, 2024). | ||
4.14† | Seventh Supplemental Indenture, dated as of November 21, 2024, to the Indenture dated as of August 24, 2017, among WRKCo, the existing guarantors party thereto, the new guarantor party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee. | ||
4.15 | Indenture, dated as of December 3, 2018, by and among WRKCo, WestRock, MWV, RKT, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 of WestRock’s Current Report on Form 8-K filed on December 3, 2018). | ||
4.16 | First Supplemental Indenture, dated as of December 3, 2018, to the Indenture dated as of December 3, 2018, by and among WRKCo, WestRock, MWV, RKT and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 of WestRock’s Current Report on Form 8-K filed on December 3, 2018). | ||
4.17 | Second Supplemental Indenture, dated as of May 20, 2019, to the Indenture dated as of December 3, 2018, by and among WRKCo, WestRock, MWV, RKT and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 of WestRock’s Current Report on Form 8-K filed on May 20, 2019). | ||
137
4.18 | Third Supplemental Indenture, dated as of June 3, 2020, to the Indenture dated as of December 3, 2018, by and among WRKCo, WestRock, MWV, RKT and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 of WestRock’s Current Report on Form 8-K filed on June 3, 2020). | ||
4.19 | Fourth Supplemental Indenture, dated as of September 22, 2023, to the Indenture dated as of December 3, 2018, by and among WRKCo, WestRock, MWV, RKT and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1(e) of WestRock’s Annual Report on Form 10-K filed on November 17, 2023). | ||
4.20 | Fifth Supplemental Indenture, dated as of July 5, 2024, to the Indenture dated as of December 3, 2018, among WRKCo, WestRock, MWV, WestRock RKT, LLC, the WestRock Bond Debt New Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.29 of the Company’s Current Report on Form 8- K filed on July 8, 2024). | ||
4.21† | Sixth Supplemental Indenture, dated as of November 21, 2024, to the Indenture dated as of December 3, 2018, among WRKCo, the existing guarantors party thereto, the new guarantor party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee. | ||
4.22 | Form of Indenture, dated as of March 1, 1983, between MWV (formerly Westvaco Corporation) and The Bank of New York (formerly Irving Trust Company), as trustee (incorporated by reference to Exhibit 2 of Westvaco Corporation’s Registration Statement on Form 8-A filed on January 24, 1984). | ||
4.23 | First Supplemental Indenture, dated as of January 31, 2002, to the Indenture dated as of March 1, 1983, by and among MWV (as successor-in-interest to Westvaco Corporation and The Mead Corporation) and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 of MeadWestvaco Corporation’s Current Report on Form 8-K filed on February 1, 2002). | ||
4.24 | Second Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of March 1, 1983, between MWV (as successor-in-interest to MeadWestvaco Corporation) and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 of MeadWestvaco Corporation’s Current Report on Form 8-K filed on January 7, 2003). | ||
4.25 | Third Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of March 1, 1983, between MWV (as successor-in-interest to MeadWestvaco Corporation) and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.4 of WRKCo’s Current Report on Form 8-K filed on July 2, 2015). | ||
4.26 | Fourth Supplemental Indenture, dated as of November 2, 2018, to the Indenture dated as of March 1, 1983, between MWV and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.4 of WRKCo’s Current Report on Form 8-K filed on November 5, 2018). | ||
4.27 | Fifth Supplemental Indenture, dated as of July 5, 2024, to the Indenture dated as of March 1, 1983, among MWV, the WestRock Bond Debt New Guarantors and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.35 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.28† | Sixth Supplemental Indenture, dated as of November 21, 2024, to the Indenture dated as of March 1, 1983, among MWV, the new guarantor party thereto and The Bank of New York Mellon, as trustee. | ||
4.29 | Indenture, dated as of February 1, 1993, between MWV (as successor-in-interest to The Mead Corporation) and The First National Bank of Chicago, as trustee (incorporated by reference to Exhibit 4.vv of MeadWestvaco Corporation’s Annual Report on Form 10-K for the period ended December 31, 2001). |
138
4.30 | First Supplemental Indenture, dated as of January 31, 2002, to the Indenture dated as of February 1, 1993, between The Mead Corporation, MWV (as successor-in-interest to MeadWestvaco Corporation and Westvaco Corporation) and Bank One Trust Company, NA, as trustee (incorporated by reference to Exhibit 4.3 of MeadWestvaco Corporation’s Current Report on Form 8-K filed on February 1, 2002). | ||
4.31 | Second Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of February 1, 1993, between MW Custom Papers, Inc. and Bank One Trust Company, NA, as trustee (incorporated by reference to Exhibit 4.4 of MeadWestvaco Corporation’s Current Report on Form 8-K filed on January 7, 2003). | ||
4.32 | Third Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of February 1, 1993, between MWV (as successor-in-interest to MeadWestvaco Corporation) and Bank One Trust Company, NA, as trustee (incorporated by reference to Exhibit 4.5 of MeadWestvaco Corporation’s Current Report on Form 8-K filed on January 7, 2003). | ||
4.33 | Fourth Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of February 1, 1993, between MWV (as successor-in-interest to MeadWestvaco Corporation) and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.5 of WRKCo’s Current Report on Form 8-K filed on July 2, 2015). | ||
4.34 | Fifth Supplemental Indenture, dated as of November 2, 2018, to the Indenture dated as of February 1, 1993, between MWV and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.5 of WRKCo’s Current Report on Form 8-K filed on November 5, 2018). | ||
4.35 | Sixth Supplemental Indenture, dated as of July 5, 2024, to the Indenture dated as of February 1, 1993, among MWV, the WestRock Bond Debt New Guarantors and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.42 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.36† | Seventh Supplemental Indenture, dated as of November 21, 2024, to the Indenture dated as of February 1, 1993, among MWV, the new guarantor party thereto and The Bank of New York Mellon, as trustee. | ||
4.37 | Indenture, dated as of April 2, 2002, by and among MWV (as successor-in-interest to MeadWestvaco Corporation, Westvaco Corporation and The Mead Corporation) and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(a) of MeadWestvaco Corporation’s Current Report on Form 8-K filed on April 2, 2002). | ||
4.38 | First Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of April 2, 2002, between MWV (as successor-in-interest to MeadWestvaco Corporation) and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.6 of WRKCo’s Current Report on Form 8-K filed on July 2, 2015). | ||
4.39 | Second Supplemental Indenture, dated as of November 2, 2018, to the Indenture dated as of April 2, 2002, between MWV and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.6 of WRKCo’s Current Report on Form 8-K filed on November 5, 2018). | ||
4.40 | Third Supplemental Indenture, dated as of July 5, 2024, to the Indenture dated as of April 2, 2002, among MWV, the WestRock Bond Debt New Guarantors and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.46 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
4.41† | Fourth Supplemental Indenture, dated as of November 21, 2024, to the Indenture dated as of April 2, 2002, among MWV, the new guarantor party thereto and The Bank of New York Mellon, as trustee. | ||
139
4.42 | Indenture, dated as of November 26, 2024, among Smurfit Westrock Financing Designated Activity Company, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, paying agent, transfer agent and registrar (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on November 27, 2024). | ||
4.43 | Indenture, dated as of November 27, 2024, among Smurfit Kappa Treasury Unlimited Company, the guarantors party thereto, Deutsche Trustee Company Limited, as trustee, Deutsche Bank AG, London Branch, as paying agent and transfer agent, and Deutsche Bank Luxembourg S.A., as registrar (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on November 27, 2024). | ||
4.44 | Indenture, dated as of November 21, 2025, among Smurfit Westrock plc, Smurfit Westrock Financing Designated Activity Company, Smurfit Kappa Treasury Unlimited Company, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, paying agent, transfer agent and registrar (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on November 24, 2025). | ||
4.45 | USD Officers’ Certificate, dated November 21, 2025, signed by two Officers of Smurfit Westrock Financing Designated Activity Company and two Officers of each Guarantor (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on November 24, 2025). | ||
4.46 | EUR Officers’ Certificate, dated November 24, 2025, signed by two Officers of Smurfit Kappa Treasury Unlimited Company and two Officers of each Guarantor (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed on November 24, 2025). | ||
4.47 | Description of Smurfit Westrock plc’s Securities (incorporated by reference to Exhibit 4.49 of the Company’s Annual Report on Form 10-K filed March 7, 2025). | ||
10.1 | Form of Deed of Indemnification (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.2# | Form of Indemnification Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.3 | New Credit Agreement, dated as of June 28, 2024, by and among Smurfit Kappa, as guarantor, Smurfit Kappa Investments Limited, as obligor’s agent and guarantor, SKT, as borrower (with respect to the New Credit Agreement) and guarantor, and SKA, as borrower and guarantor, and certain other subsidiaries of Smurfit Kappa from time to time party thereto as guarantors, the lenders party thereto and Wells Fargo Bank, National Association, as agent (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.4+ | Agreement for the Purchasing and Servicing of Receivables, dated as of September 11, 2023, among WestRock Company, various WestRock Company subsidiaries, and Coöperatieve Rabobank, U.A. (incorporated by reference to Exhibit 10.16 of the WestRock (File No. 001-38736) Annual Report on Form 10-K for the year ended September 30, 2023, filed on November 17, 2023). | ||
10.5+ | First Amendment to Purchasing and Servicing of Receivables, dated as of September 13, 2024, among WestRock Company, various WestRock Company subsidiaries, and Coöperatieve Rabobank, U.A. (incorporated by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024). | ||
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10.6+ | Second Amendment to Purchasing and Servicing of Receivables, dated as of September 12, 2025, among WestRock Company, various WestRock Company subsidiaries, and Coöperatieve Rabobank, U.A. (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025). | ||
10.7 | Accession Letter, dated as of July 2, 2024, between Smurfit US Holdings and Smurfit Kappa Investments Limited, a private limited company incorporated under the laws of Ireland (“SKI”) (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.8 | Accession Letter, dated as of July 2, 2024, between WestRock and SKI (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.9 | Accession Letter, dated as of July 2, 2024, between WRKCo and SKI (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.10 | Accession Letter, dated as of July 2, 2024, between MWV and SKI (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.11 | Accession Letter, dated as of July 2, 2024, between WestRock RKT, LLC and SKI (incorporated by reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.12 | Accession Letter, dated as of July 2, 2024, between Smurfit Westrock and SKI (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.13 | Second CoBank Amendment, dated as of July 1, 2024, by and among WestRock, the CoBank Credit Facility Borrower and certain other subsidiaries of WestRock from time to time party thereto, Smurfit Westrock, Smurfit Kappa and certain subsidiaries of Smurfit Kappa, as guarantors, the lenders from time to time party thereto and CoBank, ACB, as administrative agent (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.14^ | Omnibus Amendment No. 3, dated as of July 5, 2024, by and among WestRock, Smurfit Westrock, WFI, certain other subsidiaries of WestRock, as originators, WestRock Converting, LLC, as servicer, Rabo, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.8 of WestRock’s Current Report on Form 8-K filed on July 9, 2024). | ||
10.15# | Smurfit Westrock 2024 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.14 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.16# | Form of PSU Award Agreement (2024 Award) under the Smurfit Westrock plc 2024 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.15 of the Company’s Quarterly Report on Form 10-Q filed on November 8, 2024). | ||
10.17# | Form of RSU Award Agreement (Non-Executive Directors) under the Smurfit Westrock plc 2024 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.16 of the Company’s Quarterly Report on Form 10-Q filed on November 8, 2024). | ||
10.18# | Smurfit Westrock Annual Short-Term Incentive Plan (incorporated by reference to Exhibit 10.15 of the Company’s Current Report on Form 8-K filed on July 8, 2024). |
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10.19# | Smurfit Kappa 2018 Performance Share Plan (incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 filed on July 16, 2024). | ||
10.20# | Form of PSP Award Certificate under the Smurfit Kappa 2018 Performance Share Plan (incorporated by reference to Exhibit 10.19 of the Company’s Quarterly Report on Form 10-Q filed on November 8, 2024). | ||
10.21# | Smurfit Kappa 2018 Deferred Bonus Plan and Form of DBP Award Certificate (incorporated by reference to Exhibit 10.20 of the Company’s Quarterly Report on Form 10-Q filed on November 8, 2024). | ||
10.22# | WestRock Company 2020 Incentive Stock Plan (incorporated by reference to Exhibit 10.44 of WestRock Company’s Annual Report on Form 10-K for the year ended September 30, 2020). | ||
10.23# | Amendment No. 1 to WestRock Company 2020 Incentive Stock Plan (incorporated by reference from Exhibit A to WestRock Company’s Definitive Proxy Statement filed on December 13, 2021). | ||
10.24# | WestRock Company Form of Annual Stock Grant Award Letter for Executive Officers (incorporated by reference to Exhibit 10.2 of WestRock Company’s Quarterly Report on Form 10-Q filed on May 5, 2023). | ||
10.25# | Form of Stock Grant Award Letter for Executive Officers under the WestRock Company 2020 Incentive Stock Plan (incorporated by reference to Exhibit 10.24 of the Company’s Quarterly Report on Form 10-Q filed on November 8, 2024). | ||
10.26# | Form of Restricted Stock Unit Award Letter under the WestRock Company 2020 Incentive Stock Plan (incorporated by reference to Exhibit 10.25 of the Company’s Quarterly Report on Form 10-Q filed on November 8, 2024). | ||
10.27# | WestRock Company Amended and Restated 2016 Incentive Stock Plan (incorporated by reference to pages B-1 to B-14 of WestRock Company’s Definitive Proxy Statement for the 2018 Annual Meeting of Stockholders, filed with the Commission on December 19, 2017). | ||
10.28# | KapStone Paper and Packaging 2016 Incentive Plan (incorporated by reference to Annex A to KapStone Paper and Packaging Corporation’s Definitive Proxy Statement for the 2016 Annual Meeting of Shareholders filed with the SEC on March 28, 2016). | ||
10.29# | KapStone Paper and Packaging 2014 Incentive Plan (incorporated by reference to Annex A to KapStone Paper and Packaging Corporation’s Definitive Proxy Statement for the 2014 Annual Meeting of Shareholders filed with the SEC on April 1, 2014). | ||
10.30# | Smurfit Westrock Executive Severance Plan (incorporated by reference to Exhibit 10.16 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.31# | Service Contract between Smurfit Kappa Services Limited and Ken Bowles, dated July 5, 2024 (incorporated by reference to Exhibit 10.17 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.32# | Service Contract between Smurfit Kappa Services Limited and Anthony Smurfit, dated July 5, 2024 (incorporated by reference to Exhibit 10.18 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
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10.33# | Service Contract between Smurfit Kappa Italia S.p.A. and Saverio Mayer, dated July 5, 2024 (incorporated by reference to Exhibit 10.19 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.34# | Offer Letter between Smurfit Westrock and Laurent Sellier, dated July 5, 2024 (incorporated by reference to Exhibit 10.20 of the Company’s Current Report on Form 8-K filed on July 8, 2024). | ||
10.35 | Form of Amended and Restated Dealer Agreement, dated as of November 21, 2024, among WRKCo Inc., the guarantors party thereto and the dealer party thereto (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on November 27, 2024). | ||
10.36# | Offer Letter between Smurfit Westrock and Ben Garren, dated June 27, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025). | ||
10.37# | Form of PSU Award Agreement (Employee) under the Smurfit Westrock plc 2024 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025). | ||
10.38# | Form of RSU Award Agreement (Employee) under the Smurfit Westrock plc 2024 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025). | ||
10.39# | WestRock Company 2016 Deferred Compensation Plan for Non-Employee Directors (as amended)(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025). | ||
19.1 | Smurfit Westrock plc Securities and Insider Trading Policy (incorporated by reference to Exhibit 19.1 of the Company’s Annual Report on Form 10-K filed March 7, 2025). | ||
21† | Subsidiaries of the Registrant. | ||
22† | List of Guarantor Subsidiaries and Issuers of Guaranteed Securities. | ||
23† | Consent of KPMG, Independent Registered Public Accounting Firm. | ||
24 | Power of Attorney (included on signature page). | ||
31.1† | Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2† | Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32†* | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
97 | Smurfit Westrock plc Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 of the Company’s Annual Report on Form 10-K filed March 7, 2025). | ||
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101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.** | ||
101.SCH | Inline XBRL Taxonomy Extension Schema.** | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase.** | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Document.** | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase.** | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase.** | ||
104 | Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
† | Filed or furnished herewith. |
* | The certification furnished in Exhibit 32 hereto is deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. |
** | Submitted electronically herewith. |
+ | Certain identified information has been excluded from this exhibit because it is not material and is of the type that the Company treats as private or confidential. |
^ | Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. |
# | Management contract or compensatory plan or arrangement. |
Item 16. Form 10-K Summary
None.
144
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Smurfit Westrock plc | ||
Dated: February 27, 2026 | /s/ Anthony Smurfit | |
Name: | Anthony Smurfit | |
Title: | President & Group Chief Executive Officer | |
(Principal Executive Officer) | ||
145
SIGNATURES
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Anthony
Smurfit, Ken Bowles or Irene Page, or any of them, his or her attorneys-in-fact, for such person in any and all capacities, to sign any
amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys-in-fact, or
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature | Title | Date | ||
/s/ Anthony Smurfit | President & Group Chief Executive Officer and Director | February 27, 2026 | ||
Anthony Smurfit | (Principal Executive Officer) | |||
/s/ Ken Bowles | Executive Vice President & Group Chief Financial Officer and Director | February 27, 2026 | ||
Ken Bowles | (Principal Financial Officer) | |||
/s/ Irene Page | Chief Accounting Officer | February 27, 2026 | ||
Irene Page | (Principal Accounting Officer) | |||
/s/ Irial Finan | Director | February 27, 2026 | ||
Irial Finan | ||||
/s/ Kaisa Hietala | Director | February 27, 2026 | ||
Kaisa Hietala | ||||
/s/ Colleen F. Arnold | Director | February 27, 2026 | ||
Colleen F. Arnold | ||||
/s/ Timothy J. Bernlohr | Director | February 27, 2026 | ||
Timothy J. Bernlohr | ||||
/s/ Carole L. Brown | Director | February 27, 2026 | ||
Carole L. Brown | ||||
/s/ Terrell K. Crews | Director | February 27, 2026 | ||
Terrell K. Crews | ||||
/s/ Carol Fairweather | Director | February 27, 2026 | ||
Carol Fairweather | ||||
/s/ Mary Lynn Ferguson-McHugh | Director | February 27, 2026 | ||
Mary Lynn Ferguson-McHugh | ||||
146
SIGNATURES
/s/ Suzan F. Harrison | Director | February 27, 2026 | ||
Suzan F. Harrison | ||||
/s/ Lourdes Melgar | Director | February 27, 2026 | ||
Lourdes Melgar | ||||
/s/ Jørgen Buhl Rasmussen | Director | February 27, 2026 | ||
Jørgen Buhl Rasmussen | ||||
/s/ Alan D. Wilson | Director | February 27, 2026 | ||
Alan D. Wilson |
FAQ
What is Smurfit Westrock (SW) and how was it formed?
Smurfit Westrock is a global leader in sustainable, paper-based packaging. It was created in 2024 through the strategic Combination of Smurfit Kappa and WestRock, making both former groups wholly owned subsidiaries and establishing a dual listing on the NYSE and London Stock Exchange.
How large is Smurfit Westrock’s global footprint according to this 10-K?
Smurfit Westrock operates in 40 countries with 57 paper mills, 450 converting plants, 70 recovered fiber facilities and 57 distribution sites. The company also manages about 308,000 acres of forests and plantations, primarily in Latin America, supporting its vertically integrated fiber-based packaging operations.
How are Smurfit Westrock’s sales distributed across segments?
In 2025, North America generated 58.5% of net sales, Europe/MEA/APAC contributed 34.8%, and LATAM 6.7%. Each segment is highly integrated, combining mills and converting plants to supply containerboard, corrugated containers, consumer packaging and specialty products to regional and global customers.
What sustainability and climate initiatives does Smurfit Westrock highlight?
Smurfit Westrock stresses circular, paper-based packaging, responsible fiber sourcing and recycling through its Better Planet Packaging initiative. It has a Board Sustainability Committee, published climate risk management aligned with TCFD recommendations, and plans further disclosure in its sustainability report, focusing on Planet, People and Impactful Business pillars.
How many people does Smurfit Westrock employ and where?
As of December 31, 2025, Smurfit Westrock employed approximately 97,000 people. Around 50,000 are in North America, 36,500 in Europe/MEA/APAC and 10,500 in LATAM. The company emphasizes safety, inclusion, training and global leadership programs to attract, develop and retain talent across its operations.
What key risks to Smurfit Westrock’s business are described?
The filing cites cyclical demand, raw material and energy price volatility, intense competition, potential overcapacity, integration risks from the Combination, regulatory and environmental exposure, cybersecurity threats, labor issues and macroeconomic or geopolitical instability as factors that could materially affect results, cash flows and share price.
Smurfit WestRock PLC
NYSE:SW
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Feb 11, 2026
Smurfit Westrock Medium-Term Investor Update
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Smurfit Westrock Declares Quarterly Dividend
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Feb 27, 2026
[8-K] Smurfit Westrock plc Reports Material Event
Feb 19, 2026
[144] Smurfit Westrock plc SEC Filing