SW six‑month net income $356M; April 2025 mill closures prompt impairments
Rhea-AI Filing Summary
Smurfit Westrock plc (SW) Q2 2025 highlights: The Combination closed July 5, 2024; net sales were $7,940 million for Q2 and $15,596 million for the six months ended June 30, 2025. Q2 reported a net loss of $26 million (basic EPS $(0.05)), while six-month net income was $356 million (EPS $0.68). Adjusted EBITDA (segment) totaled $1,247 million for Q2 and $2,536 million for six months. Impairment and restructuring charges were $280 million in Q2 ($184 million impairment, $96 million restructuring), largely tied to the April 30, 2025 announced closures.
Liquidity and balance sheet: Cash $778 million; operating cash flow for six months $1,064 million; capital expenditures $999 million; total assets $45,746 million; total liabilities $27,422 million; non-current debt $13,329 million. Dividends paid totaled $450 million for the six months. The purchase price allocation increased goodwill by $51 million to date.
Positive
- Combination closed July 5, 2024, creating a materially larger combined company with Smurfit Kappa shareholders owning ~50.3% and WestRock shareholders ~49.7%.
- Strong reported scale: Q2 net sales $7,940 million and six-month net sales $15,596 million, with segment Adjusted EBITDA of $1,247 million (Q2) and $2,536 million (six months).
- Operating cash flow: Net cash provided by operating activities was $1,064 million for the six months ended June 30, 2025.
- Investing to support capacity: Capital expenditures of $999 million in the six months signal substantial reinvestment into operations.
Negative
- Q2 GAAP loss: Net loss of $26 million and basic EPS of $(0.05) for the three months ended June 30, 2025.
- Impairment and restructuring: $280 million in Q2 (including $184 million impairment) primarily from April 2025 announced closures; an additional $45 million of charges expected through 2026.
- Elevated interest expense and leverage: Interest expense, net $182 million in Q2 ($349 million six months) and non-current debt of $13,329 million as of June 30, 2025.
- Cash decline and dividend outflow: Cash and equivalents decreased to $778 million; cash dividends paid totaled $450 million in the six-month period.
Insights
TL;DR: Combination rapidly scaled revenues and EBITDA but Q2 shows one-time impairments and higher interest costs, producing a small GAAP loss.
The Combination completed July 5, 2024 materially increased reported scale: Q2 net sales of $7.94 billion versus $2.97 billion prior-year quarter and six-month sales of $15.60 billion versus $5.90 billion. Segment Adjusted EBITDA rose to $1,247 million for Q2. However, GAAP results reflect $280 million of impairment and restructuring charges tied to announced closures, producing a Q2 net loss of $26 million. Interest expense rose materially (net interest expense $182 million Q2; $349 million six months), and leverage remains significant with non-current debt of $13.33 billion. This is impactful and merits close monitoring of synergy delivery, deleveraging and integration costs.
TL;DR: April 2025 facility closure program drove meaningful impairment and restructuring charges; further charges of $45 million are expected through 2026.
The April 30, 2025 announced closures triggered $176 million of impairments related to specific U.S. mills and related inventory, and restructuring costs recognized were $96 million in Q2 with $54 million attributable to those closures. Management expects an additional $45 million of charges related to these actions through 2026. These items are recorded within impairment and restructuring costs with majority expected to be paid within 12 months, affecting near-term cash outflows and operational capacity in affected regions.
FAQ
What were Smurfit Westrock (SW) net sales for Q2 2025?
Net sales were $7,940 million for the three months ended June 30, 2025.
Did Smurfit Westrock report a profit or loss in Q2 2025 (SW)?
Q2 reported a net loss of $26 million (basic EPS $(0.05)); six-month net income was $356 million (EPS $0.68).
What caused the impairment and restructuring charges in Smurfit Westrock's Q2 2025 results?
$280 million of impairment and restructuring costs in Q2 include $184 million of impairment (largely from April 30, 2025 announced mill and facility closures) and $96 million of restructuring costs.
How much cash flow and capital expenditure did Smurfit Westrock report for the six months ended June 30, 2025?
Net cash provided by operating activities was $1,064 million and capital expenditures were $999 million for the six months ended June 30, 2025.
What is Smurfit Westrock's (SW) debt position as of June 30, 2025?
Non-current debt due after one year was $13,329 million and total liabilities were $27,422 million as of June 30, 2025.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended June 30, 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 | ||
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.
Large accelerated filer | ☐ | 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 31, 2025, the registrant had 522,125,044 ordinary shares, nominal value $0.001 per share, issued and outstanding.
2
TABLE OF CONTENTS
Page | |
EXPLANATORY NOTE | 3 |
PART I - FINANCIAL INFORMATION | 6 |
Item 1. Financial Statements | 6 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 38 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 54 |
Item 4. Controls and Procedures | 54 |
PART II - OTHER INFORMATION | 56 |
Item 1. Legal Proceedings | 56 |
Item 1A. Risk Factors | 56 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 56 |
Item 3. Defaults Upon Senior Securities | 56 |
Item 4. Mine Safety Disclosures | 56 |
Item 5. Other Information | 56 |
Item 6. Exhibits | 57 |
Signatures | 58 |
3
EXPLANATORY NOTE
On April 26, 2024, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement
on Form S-4 (file number 333-278185), as amended (as supplemented by the prospectus filed with the SEC on April 26, 2024, the
“Registration Statement”), of Smurfit WestRock Limited, formerly known as Cepheidway Limited and re-registered as an Irish public
limited company and renamed Smurfit Westrock plc (the “Company” or “Smurfit Westrock”), to register ordinary shares of $0.001
each in the capital of Smurfit Westrock (the “Smurfit Westrock Shares”) to be issued to the holders of shares of common stock of
WestRock Company (“WestRock”), pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction
Agreement”), among Smurfit Westrock, Smurfit Kappa Group plc (“Smurfit Kappa”), WestRock and Sun Merger Sub, LLC (“Merger
Sub”) pursuant to which (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme of arrangement under the Companies Act
2014 of Ireland (as amended) and (ii) Merger Sub merged with and into WestRock, (the “Merger” and, together with the Smurfit
Kappa Share Exchange, the “Combination”). The Combination closed on July 5, 2024. A detailed description of the terms of the
Combination is included in the Registration Statement. Upon the completion of the Combination on July 5, 2024, Smurfit Kappa and
WestRock each became wholly owned subsidiaries of Smurfit Westrock with Smurfit Kappa shareholders owning approximately
50.3% and WestRock shareholders owning approximately 49.7%. Prior to the closing of the Combination, Smurfit Westrock had no
operations other than activities related to its formation and the Combination. 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 are presented as the historical financial statements of the Company. Unless otherwise indicated or the context otherwise
requires, references in this Quarterly Report on Form 10-Q to “Smurfit Westrock,” the “Company,” “our Company,” “we,” “our,” and
“us,” and the like terms, refer to the business and operations of Smurfit Kappa and its wholly-owned subsidiaries, which prior to July
5, 2024, did not include WestRock, when referring to the periods prior to the closing of the Combination, and refer to the combined
company (Smurfit Westrock, including, among others, its subsidiaries Smurfit Kappa and WestRock) when referring to the periods
after the Combination.
This Quarterly Report on Form 10-Q is being filed with respect to the interim quarterly period ended June 30, 2025. Accordingly, the
disclosures herein, including the financial statements and related Management’s Discussion and Analysis, describe the business,
financial condition, results of operations, liquidity and capital resources of Smurfit Westrock following the Combination, except as
expressly provided herein. For prior periods, the disclosures herein reflect the financials of Smurfit Kappa, except as expressly
provided herein.
4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q 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. Forward-looking and other statements in this Quarterly Report on Form 10-Q 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.
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”, “estimate” 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.
Important factors that could cause actual results to differ materially from plans, estimates or expectations include: changes in demand
environment; our ability to deliver on our closure plan and associated efforts; our future cash payments associated with these
initiatives; potential future cost savings associated with such initiatives; the amount of charges and the timing of such charges or
actions described herein; potential future impairment charges; accuracy of assumptions associated with the charges; economic,
competitive and market conditions generally, including macroeconomic uncertainty, customer inventory rebalancing, the impact of
inflation and increases in energy, raw materials, shipping, labor and capital equipment costs; geo-economic fragmentation and
protectionism such as tariffs, trade wars or similar governmental actions affecting the flows of goods, services or currency (including
the implementation of tariffs by the U.S. federal government and reciprocal tariffs and other protectionist or retaliatory measures
governments in Europe, Asia, and other countries have taken or may take in response); the impact of public health crises, such as
pandemics and epidemics and any related company or governmental policies and actions to protect the health and safety of individuals
or governmental policies or actions to maintain the functioning of national or global economies and markets; reduced supply of raw
materials, energy and transportation, including from supply chain disruptions and labor shortages; developments related to pricing
cycles and volumes; intense competition; the ability of the Company to successfully recover from a disaster or other business
continuity problem due to a hurricane, flood, earthquake, terrorist attack, war, pandemic, security breach, cyber-attack, power loss,
telecommunications failure or other natural or man-made events, including the ability to function remotely during long-term
disruptions; the Company’s ability to respond to changing customer preferences and to protect intellectual property; the amount and
timing of the Company’s capital expenditures; risks related to international sales and operations; failures in the Company’s quality
control measures and systems resulting in faulty or contaminated products; cybersecurity risks, including threats to the confidentiality,
integrity and availability of data in the Company’s systems; works stoppages and other labor disputes; the Company’s ability to
establish and maintain effective internal controls over financial reporting in accordance with Sarbanes Oxley Act of 2002, as amended,
and remediate any weaknesses in controls and processes; the Company’s ability to retain or hire key personnel; risks related to
sustainability matters, including climate change and scarce resources, as well as the Company’s ability to comply with changing
environmental laws and regulations; the Company’s ability to successfully implement strategic transformation initiatives; results and
impacts of acquisitions by the Company; the Company’s significant levels of indebtedness; the impact of the Combination on the
Company’s credit ratings; the potential impairment of assets and goodwill; the availability of sufficient cash to distribute dividends to
the Company’s shareholders in line with current expectations; the scope, costs, timing and impact of any restructuring of operations
and corporate and tax structure; evolving legal, regulatory and tax regimes; changes in economic, financial, political and regulatory
conditions in Ireland, the United Kingdom, the United States and elsewhere, and other factors that contribute to uncertainty and
volatility, natural and man-made disasters, civil unrest, geopolitical uncertainty, and conditions that may result from legislative,
regulatory, trade and policy changes associated with the current or subsequent Irish, U.S. or UK administrations; loss contingencies or
5
legal proceedings instituted, threatened, future or pending against the Company, including with respect to antitrust related matters;
actions by third parties, including government agencies; the Company’s ability to promptly and effectively integrate Smurfit Kappa’s
and WestRock’s businesses; the Company’s ability to achieve the synergies and value creation contemplated by the Combination; the
Company’s ability to meet expectations regarding the accounting and tax treatments of the Combination, including the risk that the
Internal Revenue Service may assert that the Company should be treated as a U.S. corporation or be subject to certain unfavorable
U.S. federal income tax rules under Section 7874 of the Internal Revenue Code of 1986, as amended, as a result of the Combination;
other factors such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of
regulators and other factors such as changes in the political, social and regulatory framework in which the Company’s group operates
or in economic or technological trends or conditions, and other risks set forth under the heading “Risk Factors” in Part I, Item 1A. in
the 2024 Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q.
The Company’s forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q 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 UK Listing Rules, the Disclosure Guidance and Transparency Rules, the UK 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.
6
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF
SMURFIT WESTROCK PLC
Page | |
Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 | 7 |
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and June 30, 2024 | 8 |
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and June 30, 2024 | 9 |
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and June 30, 2024 | 10 |
Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2025 and June 30, 2024 | 11 |
Notes to the Condensed Consolidated Financial Statements | 13 |
7
Smurfit Westrock plc
Condensed Consolidated Balance Sheets (Unaudited)
(in millions, except share data)
June 30, 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 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 $ million and $ | |||
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 16) | |||
Equity: | |||
Preferred stock; $ | |||
Common stock; $ shares outstanding at June 30, 2025 and December 31, 2024, respectively | |||
Deferred shares; € 2025 and December 31, 2024, respectively | |||
Treasury stock; at cost; 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 Unaudited Condensed Consolidated Financial Statements.
8
Smurfit Westrock plc
Condensed Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
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 | |||||||
Pension and other postretirement non-service income (expense), net | ( | ( | |||||
Interest expense, net | ( | ( | ( | ( | |||
Other (expense) income, net | ( | ( | |||||
Income before income taxes | |||||||
Income tax expense | ( | ( | ( | ( | |||
Net (loss) income | ( | ||||||
Net income attributable to noncontrolling interests | ( | ||||||
Net (loss) income attributable to common shareholders | $( | $ | $ | $ | |||
Basic (loss) earnings per share attributable to common shareholders | $( | $ | $ | $ | |||
Diluted (loss) earnings per share attributable to common shareholders | $( | $ | $ | $ | |||
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements. | |||||||
9
Smurfit Westrock plc
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(in millions)
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net (loss) income | $( | $ | $ | $ | |||
Other comprehensive income (loss), net of tax: | |||||||
Foreign currency translation gain (loss) | ( | ( | |||||
Defined benefit pension and other postretirement benefit plans adjustments | ( | ( | |||||
Net (loss) gain on cash flow hedging derivatives | ( | ( | |||||
Other comprehensive income (loss), net of tax | ( | ( | |||||
Comprehensive income | |||||||
Comprehensive income attributable to noncontrolling interests | ( | ||||||
Comprehensive income attributable to common shareholders | $ | $ | $ | $ | |||
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements. | |||||||
10
Smurfit Westrock plc
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)
Six months ended June 30, | |||
2025 | 2024 | ||
Operating activities: | |||
Net income | $ | $ | |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | |||
Impairment charges | |||
Cash surrender value increase in excess of premiums paid | ( | ||
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 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, 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 | ( | ||
(Decrease) increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of period | |||
Cash and cash equivalents at end of period | $ | $ | |
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
11
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
The following table presents a summary of the changes in equity for the three months ended June 30, 2025:
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 | Total | |
Balance at March 31, 2025 | $ | $ | $( | $ | $( | $ | $ | $ | |
Net loss | — | — | — | — | ( | — | ( | ( | |
Other comprehensive income, net of tax | — | — | — | — | — | — | |||
Share-based compensation | — | — | — | — | — | — | |||
Issuance of common stock net of tax paid in connection with shares withheld from employees | — | — | — | — | ( | — | ( | — | ( |
Dividends declared ($ | — | — | — | ( | — | ( | — | ( | |
Balance at June 30, 2025 | $ | $ | $( | $ | $( | $ | $ | $ |
(1) Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
The following table presents a summary of the changes in equity for the three months ended June 30, 2024:
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 | Total | |
Balance at March 31, 2024(1) | $ | $ | $( | $ | $( | $ | $ | $ | |
Net income | — | — | — | — | — | — | |||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | ( | — | ( |
Share-based compensation | — | — | — | — | — | — | |||
Dividends declared ($ | — | — | — | — | ( | — | ( | — | ( |
Balance at June 30, 2024 | $ | $ | $( | $ | $( | $ | $ | $ |
(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.
12
Smurfit Westrock plc
Condensed Consolidated Statements of Changes in Equity (Unaudited)
(in millions, except per share data)
The following table presents a summary of the changes in equity for the six months ended June 30, 2025:
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 | Total | |
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 June 30, 2025 | $ | $ | $ | $( | $ | $( | $ | $ | $ |
(1) Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
The following table presents a summary of the changes in equity for the six months ended June 30, 2024:
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 | Total | |
Balance at December 31, 2023(1) | $ | $ | $( | $ | $( | $ | $ | $ | |
Net income | — | — | — | — | — | — | |||
Other comprehensive loss, net of tax | — | — | — | — | — | ( | ( | — | ( |
Share-based compensation | — | — | — | — | — | — | |||
Shares distributed by Smurfit Kappa Employee Trust | — | — | ( | — | — | — | |||
Purchases of treasury stock | — | — | — | ( | — | — | ( | — | ( |
Issuance of common stock | — | — | — | — | — | — | — | ||
Dividends declared ($ | — | — | — | — | ( | — | ( | — | ( |
Balance at June 30, 2024 | $ | $ | $( | $ | $( | $ | $ | $ |
(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.
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
13
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(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.
We derived the Condensed Consolidated Balance Sheet at December 31, 2024 from the audited consolidated financial statements
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Consolidated Financial
Statements”). In the opinion of management, all normal recurring adjustments necessary for a fair statement of the Condensed
Consolidated Financial Statements have been included for the interim periods reported.
The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting
principles generally accepted in the U.S. (“GAAP”) for interim financial information and with Article 10 of Regulation S-X of the
Securities and Exchange Commission (“SEC”). Accordingly, they omit certain notes and other information from the 2024
Consolidated Financial Statements. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with
the 2024 Consolidated Financial Statements. The results for the three and six months ended June 30, 2025 are not necessarily
indicative of results that may be expected for the full year.
The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make
certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated
Financial Statements, disclosures about gain contingencies and contingent liabilities and the reported amounts of revenues and
expenses, including income taxes during the reporting period. 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 Condensed Consolidated Financial Statements where facts and
circumstances dictate.
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.
14
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
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 Condensed
Consolidated Balance Sheets.
The outstanding payment obligations to financial institutions under these programs were $375 million and $450 million as of June 30,
There have been no changes to the Company’s significant accounting policies as described in “Note 1. Description of Business and
Summary of Significant Accounting Policies” in the 2024 Consolidated Financial Statements, other than as noted below.
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 right-of-use (“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.
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,
15
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
During the six months ended June 30, 2025, there were no newly issued or newly applicable accounting pronouncements adopted that
had, or are expected to have, a material impact on the Condensed Consolidated Financial Statements.
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 new disclosures (as required) will be included in the consolidated financial statements included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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.
16
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Transaction agreement with WestRock Company
Pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction Agreement”), among Smurfit Westrock, Smurfit
Kappa Group plc (“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 Companies Act 2014 of
Ireland (as amended) (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”). The aggregate merger consideration was $13,461 million.
The purchase price allocation for the Merger is preliminary and is subject to revision as additional information about the acquisition-
date fair value of assets and liabilities becomes available. The allocation of the purchase price with respect to the Merger is based upon
management’s estimates of and assumptions related to the fair values of WestRock assets acquired and liabilities assumed as of the
Closing Date. In the period since the 2024 Consolidated Financial Statements, the preliminary purchase price allocation to the fair
value of the assets acquired and liabilities assumed has changed resulting in an increase in the related goodwill of $51 million. The
Company has reflected the measurement period adjustments to date in the period in which the adjustments were identified, and will
continue to reflect measurement period adjustments, if any, in the period in which the adjustments are identified. The Company will
finalize the accounting for the Merger within the measurement period (a period not to exceed 12 months from the Closing Date).
Unaudited Pro Forma Combined Financial Information
months ended June 30, 2024, as if the Merger had occurred on January 1, 2023.
Three months ended | Six months ended | ||
June 30, 2024 | June 30, 2024 | ||
Net sales | $ | $ | |
Net income 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 the following
factually supportable items or transactions, directly attributable to the Merger: (i) elimination of intercompany activity; (ii)
incremental depreciation expense from the preliminary fair value adjustments to property, plant and equipment; (iii) amortization
expense from the preliminary fair value adjustments to acquired intangible assets; (iv) incremental stock-based compensation expense
associated with the Merger; (v) interest expense for acquisition financing and the amortization of the fair value adjustment to debt
assumed; (vi) removal of pension and other postretirement amortization expense resulting from the fair value adjustment to acquired
WestRock pension and other post-employment benefit assets and liabilities; (vii) changes to align accounting policies; and (viii)
associated tax-related impacts of adjustments.
The unaudited pro forma combined financial information also reflects a pro forma adjustment to remove $58 million and $113 million
of non-recurring transaction-related costs recorded during the three and six months ended June 30, 2024 of both Smurfit Kappa and
Westrock directly attributable to the Merger and to reflect these in 2023, as if the Merger had occurred on January 1, 2023.
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.
For more details related to the transaction with WestRock, refer to “Note 2. Acquisitions” of the 2024 Consolidated Financial
Statements.
17
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
We report our financial results of operations in the following 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 the Caribbean, Argentina, Brazil, Chile, Colombia,
Ecuador and Peru.
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) income, net, amortization of fair value step up on inventory, transaction and
integration-related expenses associated with the Combination, impairment and restructuring costs and other specific items that
management believes are not indicative of the ongoing operating results of the business.
The chief operating decision maker (“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 sales and segment selling, general and administrative expenses. Segment cost of
sales primarily includes 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 sales and
segment selling, general and administrative expenses exclude certain adjustments that management believes are not indicative of the
operating results of the business.
18
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
3. Segment Information - continued
Three months ended June 30, 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 $12 million.
Three months ended June 30, 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 | ( | ||||||
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 income, net | |||||||
Income before income taxes | $ |
19
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
3. Segment Information - continued
Six months ended June 30, 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 $14 million.
Six months ended June 30, 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 | ( | ||||||
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 adjustments | |||||||
Income before income taxes | $ |
Other adjustments in the table above include a reimbursement of a fine from the Italian Competition Authority of $18 million.
20
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
3. Segment Information - continued
Six months ended June 30, | |||
2025 | 2024 | ||
Capital expenditures: | |||
North America | $ | $ | |
Europe, MEA and APAC | |||
LATAM | |||
Total reportable segments | $ | $ | |
Corporate | |||
Total capital expenditures | $ | $ | |
Total assets by segment were:
June 30, | 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 Property, plant and equipment, net, Deferred tax assets, Recoverable or refundable
Disaggregated Revenue
ASC 606, “Revenue from Contracts with Customers”, 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.
six months ended June 30, 2025 and 2024. Net sales are attributed to segments based on the location of production.
Three months ended June 30, 2025 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
21
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
4. Revenue Recognition - continued
Three months ended June 30, 2024 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Six months ended June 30, 2025 | |||||||
North America | Europe, MEA and APAC | LATAM | Total | ||||
Revenue by product: | |||||||
Paper | $ | $ | $ | $ | |||
Packaging | |||||||
Total | $ | $ | $ | $ | |||
Six months ended June 30, 2024 | |||||||
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.
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.
Condensed Consolidated Balance Sheets.
Contract Assets (Short-Term) | Contract Liabilities (Short-Term) | ||
Balance at December 31, 2024 | $ | $ | |
Decrease | ( | ||
Balance at June 30, 2025 | $ | $ |
22
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Impairment charges | $ | $ | $ | $ | |||
Restructuring costs | |||||||
Impairment and restructuring costs | $ | $ | $ | $ | |||
Impairment Charges
The components of impairment charges are as follows:
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Impairment of property, plant and equipment | $ | $ | $ | $ | |||
Impairment of other assets | |||||||
Impairment charges | $ | $ | $ | $ | |||
These impairment charges are recognized in the Condensed Consolidated Statements of Operations caption “Impairment and
restructuring costs”.
Of the total impairment charges, $176 million of these were triggered by the announcement on April 30, 2025, whereby the Company
announced it would permanently close the Company’s coated recycled board mill in St. Paul, Minnesota, U.S., discontinue production
at its containerboard mill in Forney, Texas, U.S. (the “Mill Closures”) and 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”). These mills in the U.S. had ceased production by June 30, 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, “Property, Plant, and Equipment.”
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, an impairment charge of $159 million was recognized for the property, plant and equipment of the
facilities affected by the April 2025 announcement. An impairment charge of $17 million was recognized in relation to spare parts
included in inventories in these facilities.
Restructuring Costs
The segmental split of the restructuring costs of $96 million for the three months ended June 30, 2025 shown in the table above is as
follows:
•$43 million was recognized in the North America segment
•$50 million was recognized in the Europe, MEA and APAC segment
•$3 million was recognized in the LATAM segment.
The segmental split of the restructuring costs of $111 million for the six months ended June 30, 2025 shown in the table above is as
follows:
•$54 million was recognized in the North America segment
•$54 million was recognized in the Europe, MEA and APAC segment
•$3 million was recognized in the LATAM segment.
23
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
5. Impairment and Restructuring Costs - continued
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Severance charges | $ | $ | $ | $ | |||
Other costs | — | — | — | ||||
Restructuring costs | $ | $ | $ | $ | |||
Of the total restructuring costs, $54
Closures. The Company expects to recognize future additional charges of $45 million associated with the April 2025 Announced
Closures through 2026. These restructuring costs are recorded in “Other current liabilities” in the Condensed Consolidated Balance
Sheets. The majority of these charges will be paid within 12 months of the reporting date.
The remaining restructuring costs relate to individual restructuring actions which are individually and cumulatively immaterial.
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Transaction-related expenses associated with the Combination | $ | $( | $ | $( | |||
Integration-related expenses associated with the Combination | ( | ( | |||||
Total transaction and integration-related expenses associated with the Combination | $( | $( | $( | $( | |||
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
primarily consist of professional services and personnel and related expenses, such as work associated with information systems. We
consider transaction and integration expenses to be corporate expenses regardless of the segment or segments involved in the
transaction.
24
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
June 30, | December 31, | ||
2025 | 2024 | ||
Gross accounts receivable | $ | $ | |
Less: Allowances | ( | ( | |
Accounts receivable, net | $ | $ |
Allowances include the reserves for allowance for estimated credit impairment losses, returns, early settlement discounts and rebates
June 30, | December 31, | ||
2025 | 2024 | ||
Finished goods | $ | $ | |
Work-in-progress | |||
Raw materials | |||
Consumables and spare parts | |||
Inventories | $ | $ |
June 30, | 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 three months ended June 30, 2025 and 2024 was $575 million and $149 million,
respectively and for the six months ended June 30, 2025 and 2024, was $1,144 million and $285 million, respectively. This is
recognized within “Cost of goods sold” and “Selling, general and administrative expenses” in the Condensed Consolidated Statements
of Operations.
Non-cash additions to property, plant and equipment included within accounts payable were $289 million and $384 million at June 30,
2025 and at December 31, 2024, respectively.
25
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
9. Property, Plant and Equipment, net - continued
Of the $167
2025, $156 11
segment. Refer to “Note 5. Impairment and Restructuring Costs” for details of the impairment charges recognized.
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Interest expense | $( | $( | $( | $( | |||
Interest income | |||||||
Interest expense, net | $( | $( | $( | $( | |||
Total cash paid for interest, net of interest received was $283 million and $14 million for the six months ended June 30, 2025 and
2024, respectively. Of this, capitalized interest paid was $16 million and $2 million for the six months ended June 30, 2025 and 2024,
respectively.
2 in the fair value hierarchy) were as follows:
June 30, 2025 | December 31, 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 their 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.
26
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
11. Fair Value Measurement - continued
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 | ||||||
June 30, | December 31, | June 30, | 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.
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.
We have financial instruments related to supplemental retirement savings plans (“Supplemental Plans”) that are recognized at fair
value. These Supplemental Plans are nonqualified 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 $171 million, respectively, as of June 30, 2025 (December 31, 2024:
$185 million and $168 million, respectively).
27
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
11. Fair Value Measurement - continued
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
(including restructuring efforts), 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 affecting the period
balances, refer to “Note 2. Acquisitions”.
Accounts Receivable Monetization Agreements
Receivable from financial institutions at December 31, 2024 | $ |
Receivables sold to the financial institutions and derecognized | ( |
Receivables collected by financial institutions | |
Cash payments to financial institutions | ( |
Receivable from financial institutions at June 30, 2025 | $ |
Receivables sold under these accounts receivable monetization agreements as of the balance sheet date were approximately
$713 million.
Cash proceeds or payments related to the receivables sold are included in “Net cash provided by operating activities” in the Condensed
Consolidated Statements of Cash Flows in the “Accounts receivable” line item. The expense related to the sale of receivables was $10
million and $20 million for the three and six months ended June 30, 2025, respectively. The expense recorded may vary depending on
current rates and levels of receivables sold and is recorded in “Other (expense) income, net” in the Condensed 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
28
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
June 30, | December 31, | ||
2025 | 2024 | ||
$ | $ | $ | |
$ | |||
$ | |||
€ | |||
$ | |||
$ | |||
€ | |||
€ | |||
€ | |||
$ | |||
$ | |||
$ | |||
$ | |||
$ | |||
$ | |||
€ | |||
€ | |||
$ | |||
$ | |||
$ | |||
€ | |||
$ | |||
$ | |||
$ | |||
Commercial paper | |||
Vendor financing and commercial card programs | |||
Term loan facilities | |||
Bank loans | |||
Finance lease obligations | |||
Bank overdrafts | |||
Total debt, excluding debt issuance costs | |||
Debt issuance costs | ( | ( | |
Total debt | |||
Less: Current portion of debt | ( | ( | |
Non-current debt due after one year | $ | $ |
For the terms attached to the senior notes, the revolving credit facility, the term loans and the commercial paper programs, refer to the
narrative included in “Note 14. Debt” of the 2024 Consolidated Financial Statements. The carrying amount of borrowings which are
designated as net investment hedges, as outlined therein, has not changed materially and no ineffectiveness was recognized in the
period.
The revolving credit facility had an original term of five years , with two one-year extension options. In June 2025, the Group
exercised the first extension option, extending the maturity date to June 28, 2030.
At June 30, 2025, all of our debt was unsecured with the exception of our receivables securitization facilities and finance lease
obligations.
29
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
12. Debt - continued
Senior Notes Issued and Redeemed
There were no new issuances or redemptions during the period in relation to the senior notes.
On April 3, 2025, the Company and certain of its direct and indirect wholly owned subsidiaries (the “Obligor Group”) filed with 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 (see “Note 2. Acquisitions” of the 2024 Consolidated Financial Statements) 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.
Receivables Securitization Facilities
We have three trade receivables securitization programs. The first program has a facility size of €100 million and is scheduled to
mature in December 2029. The second program has a facility size of €230 million and is scheduled to mature in December 2029. The
third program has a facility size of $700 million and is scheduled to mature in June 2027. We have continuing involvement with the
underlying receivables as we provide credit and collection services pursuant to the underlying agreements. For the terms attached to
these programs, refer to the narrative included in “Note 14. Debt” of the 2024 Consolidated Financial Statements.
As of June 30, 2025, the gross amount of receivables collateralizing the €100 million 2029 trade receivables securitization program
was €333 million (December 31, 2024: €318 million). As of June 30, 2025, the facility was fully utilized (December 31, 2024:
$104 million maximum available borrowings, excluding amounts utilized under this facility).
As of June 30, 2025, the gross amount of receivables collateralizing the €230 million 2029 trade receivables securitization program
was €428 million (December 31, 2024: €421 million). As of June 30, 2025, maximum available borrowings, excluding amounts
utilized, were $94 million (December 31, 2024: $234 million).
As of June 30, 2025, the gross amount of receivables collateralizing the maximum available borrowings of the $700 million 2027
program was $1,117 million (December 31, 2024: $1,077 million). As of June 30, 2025, maximum available borrowings were $700
million (December 31, 2024: $676 million). As of June 30, 2025, amounts available for borrowing under this facility (excluding
The effective tax rate for the three and six months ended June 30, 2025 was 144.8 % and 20.5 %, respectively. For the three months
ended June 30, 2025, the effective tax rate was primarily impacted by (i) tax expense associated with an increase in unrecognized tax
benefits of $13 million, (ii) losses during the period that have not been recognized due to uncertainty regarding their future realization,
and (iii) certain non-deductible expenses and other non-recurring items.
30
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
13. Income Taxes - continued
For the six months ended June 30, 2025, the effective tax rate was primarily impacted by (i) the tax benefit associated with the
resolution of $72 million of unrecognized tax benefits (due to the lapse of the statute of limitations), along with the release of $24
million of accrued interest and penalties associated with the unrecognized tax benefits, (ii) tax expense associated with an increase in
unrecognized tax benefits of $13 million, (iii) losses during the period that have not been recognized due to uncertainty regarding their
future realization, (iv) the geographical mix of where earnings are generated, and (v) certain non-deductible expenses and other non-
recurring items.
The effective tax rate for the three and six months ended June 30, 2024 was 29.4 % and 28.9 %, respectively. The effective tax rates
were impacted by (i) the geographical mix of income in jurisdictions subject to tax at different tax rates, (ii) the tax effects of
transaction expenses associated with the Combination, which were generally not deductible for tax, partially offset by (iii) non-
recurring income not subject to tax, (iv) a reduction in tax on unremitted foreign earnings, and (v) other non-recurring items.
During the six months ended June 30, 2025 and June 30, 2024, cash paid for income taxes, net of refunds, was $210 million and $79
million, respectively.
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 Company is currently evaluating the impact of
Defined Benefit Pension Plans | Defined Benefit Pension Plans | ||||||||||||||
U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||
Service cost | $ | $ | $ | $ | $ | $ | $ | $ | |||||||
Interest cost | |||||||||||||||
Expected return on assets | ( | ( | ( | ( | ( | ( | ( | ||||||||
Amortization of: | |||||||||||||||
Net actuarial loss | |||||||||||||||
Prior service credit | ( | ||||||||||||||
Settlement loss | |||||||||||||||
Net periodic benefit (income) cost | $( | $ | $ | $ | $( | $ | $ | $ | |||||||
Other Postretirement Benefit Plans | Other Postretirement Benefit Plans | ||||||
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Service cost | $ | $ | $ | $ | |||
Interest cost | |||||||
Net periodic benefit cost | $ | $ | $ | $ | |||
Service cost is included within “Cost of goods sold” and “Selling, general and administrative expenses” while all other components
are recorded within “Pension and other postretirement non-service income (expense), net”.
31
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
14. Retirement Plans - continued
Pension Plan Contributions and Benefit Payments
Established funding standards govern the funding requirements for our qualified and approved pension plans in various jurisdictions.
We fund the benefit payments of our non-qualified or unfunded plans as benefit payments come due.
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Defined Benefit Pension Plans Contributions | $ | $ | $ | $ | |||
Other Postretirement Benefit Plans Contributions | |||||||
Multiemployer Plans
As a result of the acquisition of WestRock, we participate in several multiemployer pension plans (“MEPP” or “MEPPs”) that provide
retirement benefits to certain union employees in accordance with various collective bargaining agreements and WestRock has
participated in other MEPPs in the past. The multiemployer plan expense was immaterial for the three and six months ended June 30,
2025. In the normal course of business, we evaluate our potential exposure to MEPPs, including potential withdrawal liabilities.
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Numerator: | |||||||
Net (loss) income attributable to common shareholders | $( | $ | $ | $ | |||
Denominator: | |||||||
Basic weighted average shares outstanding | |||||||
Effect of dilutive share options | |||||||
Diluted weighted average shares outstanding | |||||||
Basic (loss) earnings per share attributable to common shareholders | $( | $ | $ | $ | |||
Diluted (loss) 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 restricted stock units, performance stock units and performance
shares issued under the Company’s long-term incentive plans.
32
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions)
15. Earnings Per Share - continued
the effect would have been antidilutive:
Shares | |||||||
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Performance stock units | |||||||
Restricted stock units | |||||||
Total antidilutive shares | |||||||
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$770 million ($142 million) as of June 30, 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 that have been 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 June 30, 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 June 30, 2025, the Company had estimated liabilities in respect of these matters of $81 million and
estimated insurance recoveries of $50 million.
33
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
16. Commitments and Contingencies - continued
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 later in 2025.
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.
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 since been formed by ICSID to decide on this application.
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 Quarterly Report on Form 10-Q, 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.
34
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
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 Variable Interest Entities (“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 June 30, 2025 ($892 million and $294 million,
respectively) and as of December 31, 2024 ($765 million and $5 million, respectively) approximate their fair values due to the short-
term nature of the securitized assets and the floating rates of the liabilities.
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.
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 June 30, 2025 ($389 million and $334 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.
Green Power Solutions
Green Power Solutions of Georgia, LLC (“GPS”) is a joint venture providing steam to the Company and electricity to a third party
client. The Company owns a 48 % interest in GPS and the majority of the debt issued through the entity SP Fiber Holdings Inc. (“SP
Fiber”), a 100 % owned subsidiary. Based on the commercial and financial relationships in force between SP Fiber and GPS, it has
been determined that the SP Fiber has a controlling financial interest in and is the primary beneficiary of GPS. The vehicle held
unrestricted cash of $3 million and $2 million as of June 30, 2025 and December 31, 2024, respectively.
35
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
17. Variable Interest Entities - continued
the following table:
June 30, | December 31, | ||
2025 | 2024 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ | $ | |
Accounts receivable | |||
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 | $ | $ |
2025 and 2024:
Foreign Currency Translation | Cash Flow Hedges | Defined Benefit Pension and Postretirement Plans | Other Reserves(1) | Total(2) | |
Balance at March 31, 2024 | $ | $ | $ | $( | $ |
Other comprehensive loss (income) | ( | ( | |||
Balance at June 30, 2024 | $ | $ | $ | $( | $ |
Balance at March 31, 2025 | $ | $ | $ | $( | $ |
Other comprehensive (income) loss | ( | ( | |||
Balance at June 30, 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.
36
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
18. Accumulated Other Comprehensive Loss - continued
The tables below summarize the changes in accumulated other comprehensive loss by component for the six months ended June 30,
2025 and 2024:
Foreign Currency Translation | Cash Flow Hedges | Defined Benefit Pension and Postretirement Plans | Other Reserves(1) | Total(2) | |
Balance at December 31, 2023 | $ | $ | $ | $( | $ |
Other comprehensive loss (income) | ( | ( | |||
Balance at June 30, 2024 | $ | $ | $ | $( | $ |
Balance at December 31, 2024 | $ | $ | $ | $( | $ |
Other comprehensive (income) loss | ( | ( | |||
Balance at June 30, 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.
June 30, 2025, and 2024, is as follows:
Three months ended June 30, | |||||||
2025 | 2024 | ||||||
Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | ||
Foreign currency translation gain (loss) | $ | $ | $ | $( | $ | $( | |
Defined benefit pension and other post-retirement benefit plans: | |||||||
Net actuarial loss arising during period | ( | ( | |||||
Amortization and settlement recognition of net actuarial loss | ( | ( | |||||
Prior service cost arising during period | ( | ( | |||||
Foreign currency (loss) gain - pensions | ( | ( | |||||
Derivatives: | |||||||
Changes in fair value of cash flow hedges | ( | ( | |||||
Consolidated other comprehensive income (loss) | ( | ( | ( | ||||
Less: Other comprehensive (income) loss attributable to noncontrolling interests | |||||||
Other comprehensive income (loss) attributable to common shareholders | $ | $ | $ | $( | $( | $( | |
37
Smurfit Westrock plc
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(in millions, except per share data)
18. Accumulated Other Comprehensive Loss - continued
A summary of the components of other comprehensive income (loss), including noncontrolling interest, for the six months ended
June 30, 2025, and 2024, is as follows:
Six months ended June 30, | |||||||
2025 | 2024 | ||||||
Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | ||
Foreign currency translation gain (loss) | $ | $ | $ | $( | $ | $( | |
Defined benefit pension and other post-retirement benefit plans: | |||||||
Net actuarial loss arising during period | ( | ( | ( | ( | |||
Amortization and settlement recognition of net actuarial loss | ( | ( | |||||
Prior service cost arising during period | ( | ( | |||||
Amortization of prior service credit | ( | ( | |||||
Foreign currency (loss) gain - pensions | ( | ( | |||||
Derivatives: | |||||||
Changes in fair value of cash flow hedges | ( | ( | |||||
Consolidated other comprehensive income (loss) | ( | ( | ( | ||||
Less: Other comprehensive (income) loss attributable to noncontrolling interests | |||||||
Other comprehensive income (loss) attributable to common shareholders | $ | $ | $ | $( | $( | $( | |
Legal Proceedings
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.
Dividend Approval
On July 30, 2025, the Company announced that its Board approved a quarterly dividend of $0.4308 per share on its ordinary shares.
The quarterly dividend of $0.4308 per ordinary share is payable September 18, 2025 to shareholders of record at the close of business
on August 15, 2025.
38
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of Smurfit Westrock’s financial condition and results of operations should be read in
conjunction with Smurfit Westrock’s Unaudited Condensed Consolidated Financial Statements and their related notes included
elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and their related notes for the
year ended December 31, 2024, as well as the information under the heading “Management’s Discussion and Analysis of the
Financial Condition and Results of Operations” that were disclosed in the Form 10-K for the year ended December 31, 2024, as filed
with the U.S. Securities and Exchange Commission (the “SEC”) on March 7, 2025 (the “2024 Form 10-K”). This discussion contains
forward-looking statements that involve risks and uncertainties. Smurfit Westrock’s future results could differ materially from the
results discussed below. More information regarding these risks and uncertainties and other important factors that could cause actual
results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item
1A. in the 2024 Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. Please also refer to
the section above entitled “Cautionary Note Regarding Forward-Looking Statements” for additional information.
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. For additional information, see “Part I, Item 1. Business” included in the Company’s Annual Report on Form 10-K.
Transaction Agreement and Combination with WestRock
As described in “Note 2. Acquisitions” of the Condensed Consolidated Financial Statements, the Combination closed on July 5, 2024.
The consolidated financial statements of Smurfit Westrock following the Smurfit Kappa Share Exchange are a continuation of the
financial statements of Smurfit Kappa and therefore, the historical consolidated financial information for periods prior to the
Combination, including the comparatives presented, reflect the pre-Combination carrying values of Smurfit Kappa except for the
retrospective adjustment to reflect the Company’s legal share capital as the successor after giving effect to the Smurfit Kappa Share
Exchange.
Refer to “Note 2. Acquisitions” of the Condensed Consolidated Financial Statements for additional information related to the
accounting for the Combination.
39
Recent Developments
Capacity Reduction and Facility Closures
On April 30, 2025, we filed an 8-K that announced our plan to permanently close our coated recycled paperboard (“CRB”) mill in St.
Paul, Minnesota, U.S. and discontinue production at our containerboard mill in Forney, Texas, U.S. We stopped production at these
two mills in June 2025 and May 2025, respectively. The mill closures reduced our capacity by over 500,000 tons. The Company has
also initiated consultations with local works councils in Germany with a view to permanently closing two converting facilities there.
The mill closures and two converting facility closures are not expected to have a significant impact on our net sales as we aim to
match our supply with customer demand. See “Note 5. Impairment and Restructuring Costs” of the Condensed Consolidated Financial
Statements for additional information. Excluding associated impairment and restructuring costs, the elimination of corresponding fixed
costs is anticipated to increase overall profitability.
EXECUTIVE SUMMARY
Smurfit Westrock’s net sales increased by $4,971 million, to $7,940 million in the three months ended June 30, 2025, from $2,969
million in the three months ended June 30, 2024. Net sales increased by $9,697 million, to $15,596 million in the six months ended
June 30, 2025, from $5,899 million in the six months ended June 30, 2024. As described in “Results of Operations” below, the
increase in both periods was primarily due to the acquisition of WestRock which contributed $4,839 million in the three months ended
June 30, 2025 and $9,575 million in the six months ended June 30, 2025.
Net (loss) income attributable to common shareholders decreased by $160 million, due to a loss of $28 million in the three months
ended June 30, 2025, from income of $132 million in the three months ended June 30, 2024. Net (loss) income attributable to common
shareholders increased by $33 million, to income of $356 million in the six months ended June 30, 2025, from income of $323 million
in the six months ended June 30, 2024. The decrease in the three months ended June 30, 2025 was primarily due to impairment and
restructuring costs, and the increase in the six months ended June 30, 2025, was primarily due to the acquisition of Westrock, with the
positive impact of the Combination partially offset by higher interest expense and higher impairment and restructuring costs. See
“Note 5. Impairment and Restructuring Costs” of the Condensed Consolidated Financial Statements for additional information.
Net cash provided by operating activities increased by $682 million, to $1,064 million in the six months ended June 30, 2025, from
$382 million in the six months ended June 30, 2024, primarily due to a $988 million increase in net income adjusted for non-cash
items, 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 income adjusted for non-cash items was partially offset by the $306 million increase in the cash outflows from
changes in operating assets and liabilities primarily driven by increased accounts receivables including higher selling prices. During
the six months ended June 30, 2025, Smurfit Westrock invested $999 million in capital expenditures. The Company’s net cash inflow
from changes in debt was $318 million, and it paid $450 million of cash dividends to shareholders. See the section entitled “Liquidity
and Capital Resources” below for additional information.
Refer to “Results of Operations” for a detailed review of Smurfit Westrock’s performance.
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.
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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 and geopolitical developments (including tariffs or other trade restrictions), among
others. For instance, current U.S. tariff policies have introduced uncertainty and may negatively impact demand from the Company’s
customers and overall volumes.
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.
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. 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.
41
RESULTS OF OPERATIONS
The following table summarizes Smurfit Westrock’s consolidated results for the periods presented ($ in millions):
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net sales | $7,940 | $2,969 | $15,596 | $5,899 | |||
Cost of goods sold | (6,425) | (2,276) | (12,504) | (4,496) | |||
Gross profit | 1,515 | 693 | 3,092 | 1,403 | |||
Selling, general and administrative expenses | (963) | (389) | (1,936) | (769) | |||
Impairment and restructuring costs | (280) | — | (295) | — | |||
Transaction and integration-related expenses associated with the Combination | (21) | (60) | (57) | (83) | |||
Operating profit | 251 | 244 | 804 | 551 | |||
Pension and other postretirement non-service income (expense), net | 7 | (29) | 16 | (39) | |||
Interest expense, net | (182) | (33) | (349) | (58) | |||
Other (expense) income, net | (18) | 5 | (23) | — | |||
Income before income taxes | 58 | 187 | 448 | 454 | |||
Income tax expense | (84) | (55) | (92) | (131) | |||
Net (loss) income | (26) | 132 | 356 | 323 | |||
Net income attributable to noncontrolling interests | (2) | — | — | — | |||
Net (loss) income attributable to common shareholders | $(28) | $132 | $356 | $323 | |||
Results of operations for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024
Net Sales
Net sales increased by $4,971 million, to $7,940 million in the three months ended June 30, 2025, from $2,969 million in the three
months ended June 30, 2024. This increase was primarily due to the impact of $4,839 million related to the acquisition of WestRock.
Excluding the impact of this acquisition, net sales increased by $132 million primarily resulting from a $122 million net positive
foreign currency impact and a positive impact of $25 million due to a higher selling price mix, partly offset by a negative volume
impact of $15 million.
Net sales increased by $9,697 million, to $15,596 million in the six months ended June 30, 2025, from $5,899 million in the six
months ended June 30, 2024. This increase was primarily due to the impact of $9,575 million related to the acquisition of WestRock.
Excluding the impact of this acquisition, net sales increased by $122 million primarily resulting from a $234 million positive impact
due to a higher selling price mix, partly offset by a negative volume impact of $58 million and a $53 million net negative foreign
currency impact.
See “Segment Information” below for more detail on Smurfit Westrock’s segment results.
Cost of Goods Sold
Cost of goods sold increased by $4,149 million, to $6,425 million in the three months ended June 30, 2025, from $2,276 million in the
three months ended June 30, 2024. The increase in cost of goods sold was primarily due to the impact of the acquisition of WestRock
of $4,081 million. Excluding the impact of this acquisition, cost of goods sold increased by $68 million primarily due to net negative
foreign currency movements and higher input prices.
42
Cost of goods sold increased by $8,008 million, to $12,504 million in the six months ended June 30, 2025, from $4,496 million in the
six months ended June 30, 2024. The increase in cost of goods sold was primarily due to the impact of the acquisition of WestRock of
$8,011 million.
Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses increased by $574 million, to $963 million in the three months ended June 30, 2025, from $389 million in the three
months ended June 30, 2024. The increase in SG&A expenses was primarily due to additional SG&A expenses of $541 million related
to the acquisition of WestRock.
SG&A expenses increased by $1,167 million, to $1,936 million in the six months ended June 30, 2025, from $769 million in the six
months ended June 30, 2024. The increase in SG&A expenses was primarily due to additional SG&A expenses of $1,096 million
related to the acquisition of WestRock.
Impairment and Restructuring Costs
Impairment and restructuring costs increased by $280 million, to $280 million in the three months ended June 30, 2025, from $—
million in the three months ended June 30, 2024. The increase in impairment and restructuring costs was primarily due to our
announced plan to permanently close our CRB 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 are in the process of closing.
Impairment and restructuring costs increased by $295 million, to $295 million in the six months ended June 30, 2025, from $—
million in the six months ended June 30, 2024. Similarly, the increase in impairment and restructuring costs was primarily due to our
announced plan to permanently close our CRB 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 are in the process of closing.
See “Note 5. Impairment and Restructuring Costs” of the Condensed 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 $21 million and $60 million in
the three months ended June 30, 2025 and 2024, respectively. In the three months ended June 30, 2025, transaction and integration-
related expenses consisted primarily of $23 million of integration-related expenses associated with the Combination. In the three
months ended June 30, 2024, transaction and integration-related expenses consisted solely of $60 million of transaction-related
expenses associated with the Combination.
The Company incurred transaction and integration-related expenses associated with the Combination of $57 million and $83 million in
the six months ended June 30, 2025 and 2024, respectively. In the six months ended June 30, 2025, transaction and integration-related
expenses consisted solely of integration-related expenses associated with the Combination of $57 million. In the six months ended
June 30, 2024, transaction and integration-related expenses consisted solely of transaction-related expenses associated with the
Combination of $83 million.
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.
See “Note 6. Transaction and Integration-related Expenses Associated with the Combination” of the Condensed Consolidated
Financial Statements for additional information.
43
Pension and Other Postretirement Non-Service Income (Expense), Net
Pension and other postretirement non-service income (expense), net decreased by $36 million, to income of $7 million in the three
months ended June 30, 2025, from expense of $29 million in the three months ended June 30, 2024. This decrease was primarily due
to an $83 million increase in the expected return on assets primarily due to acquired pension assets in connection with the
Combination and a decrease in net settlement loss of $19 million, partially offset by an increase in interest costs of $68 million
primarily due to acquired pension liabilities in connection with the Combination.
Pension and other postretirement non-service income (expense), net decreased by $55 million, to income of $16 million in the six
months ended June 30, 2025, from expense of $39 million in the six months ended June 30, 2024. This decrease was primarily due to
a $163 million increase in the expected return on assets primarily due to acquired pension assets in connection with the Combination
and a decrease in net settlement loss of $19 million, partially offset by an increase in interest costs of $132 million primarily due to
acquired pension liabilities in connection with the Combination.
Interest Expense, Net
Interest expense, net increased by $149 million to $182 million in the three months ended June 30, 2025, from $33 million in the three
months ended June 30, 2024. The increase was primarily the result of interest on debt assumed and debt issued in connection with the
Combination.
Interest expense, net increased by $291 million to $349 million in the six months ended June 30, 2025, from $58 million in the six
months ended June 30, 2024. The increase was primarily the result of interest on debt assumed and debt issued in connection with the
Combination.
See “Note 2. Acquisitions” and “Note 14. Debt” of the 2024 Consolidated Financial Statements for additional information on the debt
assumed and debt issued in connection with the Combination.
Other (Expense) Income, Net
Other (expense) income, net increased by $23 million to expense of $18 million in the three months ended June 30, 2025, from income
of $5 million in the three months ended June 30, 2024 primarily due to an $11 million net negative impact from foreign currency
translation of monetary assets and liabilities and a $10 million expense recorded in the three months ended June 30, 2025 in
connection with the sale of receivables under an accounts receivable monetization program acquired as a result of the Combination.
Other (expense) income, net increased by $23 million to expense of $23 million in the six months ended June 30, 2025, from $—
million in the six months ended June 30, 2024 primarily due to a $20 million expense recorded in the six months ended June 30, 2025
in connection with the sale of receivables under an accounts receivable monetization program acquired as a result of the Combination
and a $5 million net negative impact from foreign currency translation of monetary assets and liabilities.
Income Tax Expense
Income tax expense was $84 million in the three months ended June 30, 2025, compared to an income tax expense of $55 million in
the three months ended June 30, 2024. The effective tax rate for the three months ended June 30, 2025, was 144.8%, while the
effective tax rate for the three months ended June 30, 2024, was 29.4%.
Income tax expense was $92 million in the six months ended June 30, 2025, compared to an income tax expense of $131 million in the
six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025, was 20.5%, while the effective tax rate
for the six months ended June 30, 2024, was 28.9%.
See “Note 13. Income Taxes” of the Condensed Consolidated Financial Statements for the primary factors impacting our effective tax
rates.
44
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 Company is currently evaluating the impact of
the new legislation but does not expect it will have a material impact on its results of operations.
45
SEGMENT INFORMATION
Smurfit Westrock has identified three operating segments based on how the CODM makes key operating decisions, allocates resources
and assesses the 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.
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) income, net, amortization of fair value step up on inventory, transaction and integration-related expenses
associated with the Combination, impairment and restructuring costs 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 periods presented ($ in millions):
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net sales (aggregate):(1) | |||||||
North America | $4,755 | $438 | $9,424 | $850 | |||
Europe, MEA and APAC | 2,778 | 2,211 | 5,360 | 4,405 | |||
LATAM | 518 | 340 | 1,031 | 681 | |||
Segment Adjusted EBITDA: | |||||||
North America | $752 | $61 | $1,537 | $120 | |||
Europe, MEA and APAC | 372 | 362 | 761 | 747 | |||
LATAM | 123 | 87 | 238 | 141 | |||
(1) Net sales before intersegment eliminations
46
The three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024
North America Segment
Net Sales
Net sales before intersegment eliminations for the North America segment increased by $4,317 million, to $4,755 million in the three
months ended June 30, 2025, from $438 million in the three months ended June 30, 2024. This increase was primarily due to the
positive impact of $4,354 million from the acquisition of WestRock.
Net sales before intersegment eliminations for the North America segment increased by $8,574 million, to $9,424 million in the six
months ended June 30, 2025, from $850 million in the six months ended June 30, 2024. This increase was primarily due to the positive
impact of $8,630 million from the acquisition of WestRock.
Adjusted EBITDA
Adjusted EBITDA for the North America segment increased by $691 million, to $752 million in the three months ended June 30,
2025, from $61 million in the three months ended June 30, 2024. This increase was primarily due to the positive impact of $690
million from the acquisition of WestRock.
Adjusted EBITDA for the North America segment increased by $1,417 million, to $1,537 million in the six months ended June 30,
2025, from $120 million in the six months ended June 30, 2024. This increase was primarily due to the positive impact of $1,408
million from the acquisition of WestRock.
Europe, MEA and APAC Segment
Net Sales
Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $567 million, to $2,778 million in
the three months ended June 30, 2025, from $2,211 million in the three months ended June 30, 2024. This increase was primarily due
to the impact of $407 million which related to the acquisition of WestRock. Excluding the impact of this acquisition, net sales before
intersegment eliminations increased by $160 million primarily due to a net positive foreign currency impact of $120 million due to the
strengthening of the euro against the U.S. dollar and a $16 million impact of higher selling price mix.
Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $955 million, to $5,360 million in
the six months ended June 30, 2025, from $4,405 million in the six months ended June 30, 2024. This increase was primarily due to
the impact of $785 million which related to the acquisition of WestRock. Excluding the impact of this acquisition, net sales before
intersegment eliminations increased by $170 million primarily due to a higher selling price mix of $154 million along with a net
positive foreign currency impact of $39 million, mainly due to the strengthening of the euro against the U.S. dollar, partly offset by a
negative volume impact of $33 million.
Adjusted EBITDA
Adjusted EBITDA for the Europe, MEA and APAC segment increased by $10 million, to $372 million in the three months ended
June 30, 2025, from $362 million in the three months ended June 30, 2024. There was a $44 million positive impact from the
acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA decreased by $34 million mainly due to higher
input prices of $58 million, partly offset by a higher selling price mix impact of $16 million.
Adjusted EBITDA for the Europe, MEA and APAC segment increased by $14 million, to $761 million in the six months ended
June 30, 2025, from $747 million in the six months ended June 30, 2024. There was an $81 million positive impact from the
acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA decreased by $67 million mainly due to higher
input prices of $224 million, partly offset by a higher selling price mix impact of $154 million.
47
LATAM Segment
Net Sales
Net sales before intersegment eliminations for the LATAM segment increased by $178 million, to $518 million in the three months
ended June 30, 2025, from $340 million in the three months ended June 30, 2024. This increase was primarily due to the positive
impact of $186 million from the acquisition of WestRock.
Net sales before intersegment eliminations for the LATAM segment increased by $350 million, to $1,031 million in the six months
ended June 30, 2025, from $681 million in the six months ended June 30, 2024. This increase was primarily due to the positive impact
of $363 million from the acquisition of WestRock.
Adjusted EBITDA
Adjusted EBITDA for the LATAM segment increased by $36 million, to $123 million in the three months ended June 30, 2025, from
$87 million in the three months ended June 30, 2024. This increase was primarily due to the positive impact of $61 million from the
acquisition of WestRock.
Adjusted EBITDA for the LATAM segment increased by $97 million, to $238 million in the six months ended June 30, 2025, from
$141 million in the six months ended June 30, 2024. This increase was primarily due to the positive impact of $115 million from the
acquisition of WestRock.
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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 Group exercised the first extension option, 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 June 30, 2025, Smurfit Westrock held cash and cash equivalents of $778 million, of which $334 million were held in euro, $186
million were held in U.S. dollars and $258 million were held in other currencies. At June 30, 2025, the Company had $4,744 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 4.9 years as of June 30, 2025. Combined with cash and cash
equivalents of $778 million, the Company had $5,522 million of available liquidity.
As of June 30, 2025, Smurfit Westrock had $14,425 million of debt, excluding debt issuance costs. As of June 30, 2025, the carrying
amount of current debt was $1,034 million. In the six months ended June 30, 2025, total debt increased $768 million, $318 million of
which was due to a net increase in borrowings and the remainder was primarily due to translation adjustments. The carrying amount of
the Company’s debt includes a fair value adjustment related to debt assumed through mergers and acquisitions. At June 30, 2025, the
unamortized fair value market adjustment was $42 million. Included within the carrying value of Smurfit Westrock’s borrowings as of
June 30, 2025 are deferred debt issuance costs of $62 million, of which $8 million is current, all of which will be recognized in interest
expense in Smurfit Westrock’s Condensed Consolidated Statements of Operations using the effective interest rate method over the
remaining life of the borrowings. See “Note 12. Debt” of the Condensed Consolidated Financial Statements for a discussion of the
Company’s additional debt-related information.
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.
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 “Transfers and Servicing” (“ASC 860”), resulting in derecognition of such receivables from the Company’s
Condensed Consolidated Balance Sheets. Receivables involved with these customer-based SCF programs constitute approximately 5%
of the Company’s accounts receivable balance at June 30, 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 11. Fair
Value Measurement” of the Condensed Consolidated Financial Statements for a discussion of the Company’s monetization facilities.
49
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 we procure, 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 Condensed Consolidated Balance Sheets and the activity is reflected in “Net cash
provided by operating activities” in the Company’s Condensed 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 approximately 11-14% of the
Company’s accounts payable balance. The outstanding payment obligations to financial institutions under these programs were $375
million as of June 30, 2025.
Smurfit Westrock also participates in certain vendor financing and commercial card programs to support travel and entertainment
expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because the
Company receives the benefit of extended payment terms and a rebate from the financial institution that would not have otherwise
been received without the financial institution's involvement. Smurfit Westrock also has receivables securitization facilities that allows
for borrowing availability based on underlying accounts receivable eligibility and compliance with certain covenants. See “Note 12.
Debt” and “Note 17. Variable Interest Entities” of the Condensed Consolidated Financial Statements for a discussion of the
receivables securitization facilities and the amount outstanding under the Company’s vendor financing and commercial card programs.
50
Cash Flow Activity
The following table contains selected financial information from Smurfit Westrock’s Condensed Consolidated Statements of Cash
Flows for the periods presented ($ in millions):
Six months ended June 30, | ||
2025 | 2024 | |
Net cash provided by operating activities | $1,064 | $382 |
Net cash used for investing activities | $(996) | $(410) |
Net cash (used for) provided by financing activities | $(204) | $2,382 |
Net cash provided by operating activities increased by $682 million to $1,064 million in the six months ended June 30, 2025 from
$382 million in the six months ended June 30, 2024, primarily due to a $988 million increase in net income adjusted for non-cash
items, 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 income adjusted for non-cash items was partially offset by the $306 million increase in the cash outflows from
changes in operating assets and liabilities primarily driven by increased accounts receivables including higher selling prices. The
increase in the cash outflows from changes in operating assets and liabilities was inclusive of cash payments to financial institutions of
$12 million in connection with the Company’s accounts receivable monetization agreements. See “Note 11. Fair Value Measurement”
of the Condensed Consolidated Financial Statements for additional information.
Net cash used for investing activities of $996 million in the six months ended June 30, 2025 consisted primarily of capital
expenditures of $999 million. Net cash used for investing activities of $410 million in the six months ended June 30, 2024 consisted
primarily of capital expenditures of $385 million.
Net cash used for financing activities of $204 million in the six months ended June 30, 2025 consisted primarily of cash outflows from
cash dividends paid to shareholders of $450 million, tax paid in connection with shares withheld from employees of $67 million and
debt issuance costs of $6 million, partially offset by a net increase in debt of $318 million. Net cash provided by financing activities of
$2,382 million in the six months ended June 30, 2024 consisted of cash inflows from a net increase in debt of $2,774 million, partially
offset by cash outflows from dividends paid to shareholders of $335 million, debt issuance costs of $29 million and purchases of
treasury stock of $27 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 Condensed Consolidated Balance Sheets as of June 30, 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.
There have been no material changes to the contractual obligations and commitments disclosed in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of the Form 10-K for the fiscal year ended December 31, 2024.
Off-Balance Sheet Arrangements
As of June 30, 2025, Smurfit Westrock did not have any off-balance sheet arrangements.
51
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 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 (loss) 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) income, net, amortization of fair value step up on
inventory, transaction and integration-related expenses associated with the Combination, impairment and restructuring costs 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 (loss) income”.
Set forth below is a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net (loss) income, the most directly
comparable GAAP measure, for the periods presented ($ in millions).
Three months ended June 30, | Six months ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net (loss) income | $(26) | $132 | $356 | $323 | |||
Income tax expense | 84 | 55 | 92 | 131 | |||
Depreciation, depletion and amortization | 613 | 160 | 1,216 | 308 | |||
Impairment and restructuring costs | 280 | — | 295 | — | |||
Transaction and integration-related expenses associated with the Combination | 21 | 60 | 57 | 83 | |||
Interest expense, net | 182 | 33 | 349 | 58 | |||
Pension and other postretirement non-service (income) expense, net | (7) | 29 | (16) | 39 | |||
Share-based compensation expense | 36 | 16 | 79 | 31 | |||
Other expense (income), net | 18 | (5) | 23 | — | |||
Other adjustments | 12 | — | 14 | (18) | |||
Adjusted EBITDA | $1,213 | $480 | $2,465 | $955 | |||
Other adjustments in the table above include losses at closed facilities of $12 million and $14 million for the three and six months
ended June 30, 2025, respectively. For the six months ended June 30, 2024, Other adjustments include a reimbursement of a fine from
the Italian Competition Authority of $18 million.
52
GUARANTOR SUMMARIZED FINANCIAL INFORMATION
On April 3, 2024, Smurfit Kappa Treasury Unlimited Company (“SKT”) completed a private offering of $750 million aggregate
principal amount of 5.200% Senior Notes due 2030, $1,000 million aggregate principal amount of 5.438% Senior Notes due 2034 and
$1,000 million aggregate principal amount of 5.777% Senior Notes due 2054, which we refer to as the “Original SKT Notes”, and on
November 26, 2024, Smurfit Westrock Financing Designated Activity Company (“SWF” and together with SKT, the “Issuers”)
completed a private offering of $850 million aggregate principal amount of 5.418% Senior 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.
The Guarantees
The Original Notes and the New 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 plc, 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 and the New Notes, and SKT fully
and unconditionally guarantees SWF’s obligations under the Original Notes and the New 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, including the New Notes, 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 have a direct claim only against
the Obligor Group.
Basis of Preparation of the Summarized Financial Information
The tables below are 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 Condensed
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).
53
SUMMARIZED STATEMENT OF OPERATIONS | Six months ended June 30, |
2025 | |
Net sales to unrelated parties | $743 |
Net sales to non-Guarantor Subsidiaries | 625 |
Gross profit | 491 |
Interest expense, net with unrelated parties | (308) |
Interest expense, net with non-Guarantor Subsidiaries | (173) |
Net income and net income attributable to the Obligor Group | 457 |
SUMMARIZED BALANCE SHEETS | June 30, | December 31, | |
2025 | 2024 | ||
ASSETS | |||
Current amounts due from non-Guarantor Subsidiaries | $5,459 | $4,925 | |
Other current assets | 854 | 1,049 | |
Total current assets | $6,313 | $5,974 | |
Non-current amounts due from non-Guarantor Subsidiaries | $2,855 | $2,848 | |
Other non-current assets | 385 | 370 | |
Total non-current assets | $3,240 | $3,218 | |
LIABILITIES | |||
Current amounts due to non-Guarantor Subsidiaries | $7,964 | $9,681 | |
Other current liabilities | 1,162 | 1,122 | |
Total current liabilities | $9,126 | $10,803 | |
Non-current amounts due to non-Guarantor Subsidiaries | $6,626 | $6,604 | |
Other non-current liabilities | 11,683 | 9,644 | |
Total non-current liabilities | $18,309 | $16,248 |
54
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes during the six months ended June 30, 2025 to Smurfit Westrock’s critical accounting policies
and estimates as identified in Smurfit Westrock’s Annual Report on Form 10-K for the year ended December 31, 2024.
NEW ACCOUNTING STANDARDS
See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Condensed Consolidated Financial
Statements 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 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in Smurfit Westrock’s exposure to market risk as identified in Smurfit Westrock’s Annual
Report on Form 10-K for the year ended December 31, 2024.
Item 4. 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 Quarterly
Report on Form 10-Q. 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 Quarterly Report on Form 10-Q, Smurfit
Westrock’s disclosure controls and procedures were not effective as a result of the material weakness in our internal control over
financial reporting described below.
Previously Reported 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.
As discussed elsewhere in this Quarterly Report on Form 10-Q, on July 5, 2024, we completed the Combination between Smurfit
Kappa and WestRock. Prior to the Combination, Smurfit Kappa, as a public limited company incorporated in Ireland and listed on the
London Stock Exchange and on the Euronext Dublin Market, was not subject to Section 404 of the Sarbanes Oxley Act of 2002
(“SOX”), while WestRock, as a U.S. publicly traded company incorporated in Delaware and listed on the New York Stock Exchange,
was subject to Section 404 of SOX. Upon the completion of the Combination, Smurfit Kappa and WestRock became wholly-owned
subsidiaries of Smurfit Westrock.
As a result of the Combination, Smurfit Westrock’s management is in the process of integrating Smurfit Kappa and WestRock’s
legacy internal control frameworks. In connection with Smurfit Westrock’s assessment of its internal control over financial reporting
for the purposes of complying with Section 302 of SOX, we 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 relates 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.
55
This material weakness resulted in:
•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.
Notwithstanding the identified material weakness, management believes that the Condensed Consolidated Financial Statements and
related financial information included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial
position, results of operations and cash flows as of and for the periods presented.
Remediation Plan
The process of designing and implementing remediation measures is underway in respect of this material weakness and to improve our
internal control over financial reporting. These remediation measures include a number of ongoing actions which have been prioritized
in a material weakness remediation strategy that aligns to the most impactful controls:
•designing and implementing policies and guidance related to the operation of controls – a number of which have now been
designed and issued for execution;
•developing appropriate controls over the review of manual journal entries – including a phased roll out plan underway for the
implementation of an automated approval workflow for manual journal entries at relevant material locations in addition to a
risk-based interim manual control which has been designed and issued for execution; and
•enhancing and expanding across the organization the general IT processes and controls – with a prioritized focus on logical
access and change management.
In addition, control operators continue to participate in SOX training and live support sessions, with a specific focus on the priority
areas documented in the material weakness remediation strategy.
While we are working to remediate the identified deficiencies as timely and efficiently as possible, we cannot yet provide an estimate
of the time it will take to complete this remediation plan. The implementation of our remediation measures will require validation and
testing of the design and operating effectiveness of internal controls over a sustained period. In addition, we cannot ensure that the
measures taken by us to date, and actions that we may take in the future, will be sufficient to remediate these deficiencies or that they
will prevent or avoid potential future deficiencies.
Changes in Internal Control over Financial Reporting
Other than the changes that may continue to result 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 June 30, 2025 that has materially affected, or is
reasonably likely to materially affect, Smurfit Westrock’s internal control over financial reporting.
56
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The information called for by this item is incorporated herein by reference to “Note 16. Commitments and Contingencies” and “Note
19. Subsequent Events” of the Condensed Consolidated Financial Statements (included in Part I, Item 1).
Item 1A. Risk Factors
Investing in our ordinary shares involves uncertainty and risk due to a variety of factors, including those described in Part I, Item 1A,
“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially adversely affect
our business, financial condition, results of operations (including revenues and profitability) and/or ordinary share price. There have
been no material changes in our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no repurchases of the Company’s ordinary shares during the three months ended June 30, 2025.
During the three months ended June 30, 2025, 25,000 deferred shares held by Matsack Nominees Limited, a shareholder of the
Company, with a nominal value of €1.00 were surrendered to the Company for nil consideration and cancelled (in accordance with
Irish law). These shares were originally issued in order to meet capital maintenance requirements under Irish law but are no longer
required for this purpose.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Trading Plan(s)
In the three months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted
modified or terminated
Item 408 of Regulation S-K).
57
Item 6. Exhibits
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). | ||
10.1† | WestRock Company 2016 Deferred Compensation Plan for Non-Employee Directors (as amended). | ||
22† | List of Guarantor Subsidiaries and Issuers of Guaranteed Securities. | ||
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. | ||
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 Quarterly Report on Form 10-Q 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
58
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the
undersigned thereunto duly authorized.
Smurfit Westrock plc | ||
Dated: August 7, 2025 | /s/ Anthony Smurfit | |
Name: | Anthony Smurfit | |
Title: | President & Group Chief Executive Officer | |
(Principal Executive Officer) | ||
Smurfit Westrock plc | ||
Dated: August 7, 2025 | /s/ Ken Bowles | |
Name: | Ken Bowles | |
Title: | Executive Vice President & Group Chief Financial Officer | |
(Principal Financial Officer) | ||