SW Smurfit Westrock PLC - 10-K

Item 1A. Risk Factors

Investing in our ordinary shares involves uncertainty and risk due to a variety of factors. You should carefully consider the risks

described below, which could have a material adverse effect on our business, financial condition, reputation, results of operations

(including revenues and profitability) and/or ordinary share price, with all of the other information included in this Annual Report on

Form 10-K . The Company may not be able to accurately predict, control or mitigate these risks. Statements in this section are based on

the Company’s beliefs and opinions regarding matters that could materially adversely affect the Company in the future and are not

representations as to whether such matters have or have not occurred previously. The risks and uncertainties described below are not

exhaustive and should not be considered a complete statement of all potential risks or uncertainties that the Company faces or may

face in the future.

Risk Factors Summary

The following summary is intended to enhance the readability and accessibility of our risk factor disclosures. We encourage you to

carefully review the full risk factors discussed below in their entirety for additional information. Some of the factors that could

adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares, include:

Market and Industry Risks

• As a leading global manufacturing business, we have been, and may be materially adversely affected by economic,

geopolitical and social factors that are beyond our control.

• We may be adversely affected by uncertainty, downturns, actions taken by competitors or other changes in the paper and

packaging industry.

• Our earnings are highly dependent on demand.

• Price fluctuations in, or shortages in the availability of, energy, transportation and raw materials could materially adversely

affect our business.

• We are exposed to significant competition in the paper and packaging industry, which may materially and adversely affect

the price and volume of products sold.

Operating Risks

• We may experience business disruptions that adversely affect our operations.

• We may fail to anticipate trends and develop or integrate new technologies or to protect intellectual property related to our

products and technologies.

• Our capital expenditures may not achieve the desired outcomes or may be completed at a higher cost than anticipated.

• We are exposed to risks related to international sales and operations.

• We could be exposed to currency exchange rate fluctuation risks.

• We may produce faulty or contaminated products due to failures in quality control measures.

• We are subject to cybersecurity risks that could threaten the confidentiality, integrity and availability of data in our systems,

and could result in disruptions to our operations .

• We may be adversely impacted by work stoppages and other labor relations matters.

• We may not be able to attract, motivate and/or retain qualified personnel, including our key personnel.

• We face challenges associated with sustainability matters, including the impact of climate change and its potential impact on

areas such as our operations and raw material availability.

• Failure by us to successfully implement strategic transformation initiatives, including those relating to information

technology infrastructure, or to achieve our mid-range or long-range targets and goals could adversely affect our business and

share price.

• If we are unsuccessful in integrating acquisitions or if disposals result in unexpected costs or liabilities, our business could be

materially and adversely affected.

• We face risks related to the Combin ation.

Financial Risks

• Our growth depends on our ability to retain existing customers and attract new customers.

• Our debt could adversely affect our financial health and operating flexibility.

• Adverse credit and financial market events and conditions, as well as credit rating downgrades, could, among other things,

impede access to or increase the cost of financing.

• We have a significant amount of goodwill and other intangible assets and a write-down could materially adversely impact our

operating results.

• We have a number of pension arrangements that are currently in deficit and may require increased funding due to statutory

requirements .

• Our decision or ability to pay dividends in respect of our shares or conduct share repurchases is subject to a number of

factors, and there are no guarantees that the Company will pay dividends or maintain or increase the level of any such

dividends or that the Company will conduct share repurchases.

• Changes in existing financial accounting standards or practices may have a material adverse effect on our business, results of

operations, cash flows and financial condition, and the trading price of our ordinary shares.

Legal and Regulatory Risks

• We are subject to a wide variety of laws, regulations and other requirements that may change or may impose substantial

compliance costs.

• We are subject to a growing number of environmental and climate change laws and regulations that impose compliance

obligations and costs, and failure to comply with these laws may have a material adverse effect on our business.

• Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an

adverse effect on our reputation, business, financial condition and results of operations.

• We are subject to compliance with competition and antitrust laws and regulations in the jurisdictions in which we operate

and, from time to time, may be subject to investigations or proceedings with respect to allegations of unfair competitive

practices and similar behavior.

• We are subject to a number of laws and regulations relating to privacy, security and data protection, and failure to comply

could lead to fines and/or litigation.

• Failure to comply with applicable occupational health and safety laws and regulations may have a material adverse effect on

our business.

• The Company’s maintenance of two exchange listings may adversely affect liquidity in the market for our shares and result in

pricing differentials of our shares between the two exchanges.

• We are required to comply with the Sarbanes-Oxley Act, and we may continue to incur significant costs and devote

substantial management time towards maintaining and improving our internal controls, which may materially adversely affect

our operating results in the future .

Risks Related to Our Incorporation in Ireland

• We are incorporated in Ireland and Irish law differs from the laws in effect in the U.S. and might afford less protection to our

shareholders.

• Any attempts to acquire the Company will be subject to the Irish Takeover Panel Act 1997, Takeover Rules, 2022 (the “Irish

Takeover Rules”) and subject to the supervisory jurisdiction of the Irish Takeover Panel and the Company’s board of

directors (the “Board”) may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover attempt.

Market and Industry Risks

As a leading global manufacturing business, we have been, and may be in the future, materially adversely affected by factors that

are beyond our control, such as economic and financial market conditions, geopolitical conflicts and other social and political

unrest or change.

Our industry has been, and may be, adversely affected by a number of factors that are beyond our control, including, but not limited

• macroeconomic and business conditions, including deteriorating or volatile macroeconomic conditions and related supply and

demand dynamics, as well as inflation and deflation;

• geopolitical conflicts and other social and political unrest or change;

• sustainability, environmental regulations and trade policies and agreements;

• conditions in the financial markets, including counterparty risk, insurance carrier risk, rising interest rates, rising commodity

prices, and currency exchange rate fluctuations, which may impact price and demand for our products and the costs to finance

and operate our business;

• financial and economic uncertainties in our major international markets;

• government deficit reduction and other austerity measures in specific countries or regions, including protectionist measures

that limit international trade, could have a negative impact on manufacturing and production levels of businesses and

customers in the markets in which we operate ; and

• cyber incidents and related threats to the confidentiality, integrity and availability of data in systems.

We are unable to predict the timing or rate at which economic conditions in our markets may change and the impact of such changes.

For example, if the economic climate were to experience a deterioration as a result of geopolitical events (such as an escalation in

existing wars or conflicts or the initiation of additional conflicts or hostilities), trade tensions (including the implementation of tariffs

on U.S. imports by the current U.S. Administration and potential retaliatory tariffs) and/or a pandemic, it could result in an economic

slowdown which, if sustained over any significant length of time, could have a material adverse effect on our business, results of

operations, cash flows and financial condition, and the trading price of our ordinary shares. In addition, changes in trade policies,

including renegotiating, or potentially terminating, existing bilateral or multilateral agreements, as well as the imposition of tariffs,

could impact demand for our products and the costs associated with operating our business, including certain of our capital

investments.

We experienced cost inflation across our business in fiscal 2023, 2024 and 2025, albeit at moderating levels since fiscal 2022.

Persistent inflation results in higher manufacturing and transportation costs, which we may not be able to recover through higher

prices charged to our customers.

Unanticipated events such as global conflicts, public health crises, extraordinary weather events, labor disputes or strikes, and cyber

incidents may cause instability in global financial and foreign exchange markets. This instability could lead to volatility in the value of

our operating and functional currencies and hinder the availability of financing from our current lenders.

Our results of operations, cash flows and financial condition, and the trading price of our ordinary shares could be further adversely

affected, perhaps materially, by any of these matters.

We may be adversely affected by uncertainty, downturns, actions taken by competitors (such as the addition of new capacity) or

other changes in the paper and packaging industry; in addition, the cyclical nature of the paper and packaging industry could

result in overcapacity and depress prices for our products.

We are highly dependent on the market dynamics of the paper and packaging industry. We could therefore be materially adversely

affected by negative developments, uncertainty, downturns and changes in the paper and packaging industry as a whole or in part, as

well as by the addition of new capacity by our competitors. A lack of investor confidence in the paper and packaging industry could

also have an adverse effect on the trading price of our ordinary shares.

Our operating results are impacted by the paper and packaging industry’s historical cyclical investment pattern. This cyclicality arises,

in part, from the capital intensity of facilities such as paper mills (which generally continue production as long as paper prices are

sufficient to cover their marginal costs), the lead time between the planning and completion of a new mill and the fact that new

additions of containerboard and paperboard capacity tend to be large relative to the overall demand for the product. In addition, there

is the potential to convert certain other paper machines into containerboard machines, which may contribute to overcapacity.

Consequently, the industry has from time-to-time experienced periods of substantial overcapacity and there can be no assurance that

this will not reoccur. For example, we experienced market-related downtime at certain of our mills during the fourth quarter of fiscal

In the absence of sufficient economic growth to generate increased demand or the closure of facilities (either temporarily or

permanently) to mitigate the effect, new capacity can cause a period of regional overcapacity which may lead to downward pricing

pressure.

These adverse effects could be further exacerbated if producers in other regions (particularly China) experience overcapacity within

their own local and regional markets and seek to increase their levels of exports into those markets within which we operate and do so

at lower pricing levels. The effect of such activity would be to depress prices for our products and could materially adversely affect

our selling prices and profitability.

We believe that the trading price of our ordinary shares has from time to time been adversely affected in part due to the impact of

macroeconomic conditions on pricing and demand and announcements by certain of our competitors of planned additional capacity in

the European and North American containerboard markets in which we participate, as well as the subsequent implementation of

certain of those plans and the impact they will have on future supply and demand dynamics and pricing.

In addition, many of our customer contracts include price adjustment provisions based upon published indices (including those

published by Pulp and Paper Week (“PPW”)) for our products that contribute to the setting of selling prices for some of our products.

Such publications are limited surveys that may not accurately reflect changes in market conditions for our products. Changes in how

these indices are determined or maintained, or other indices are established or maintained, could adversely impact the selling prices for

these products. If published containerboard and paperboard index prices decline in a period, such changes will result in lower prices,

and likely lower profitability, for certain of our products, which could have an adverse effect on our results of operations, cash flows

and financial condition.

Our earnings are highly dependent on demand.

Because our operations generally have high fixed operating costs, and pricing movements can be triggered, at times, by imbalances

between supply and demand, our earnings are highly dependent on demand, which tends to fluctuate due to macroeconomic

conditions, dynamics in the markets we serve, and due to company- and customer-specific issues. For example, through 2024 and

2025, we experienced lower demand due to factors such as, but not limited to, uncertainty caused by challenging geopolitical and

macroeconomic conditions, certain customer inventory rebalancing and shifting consumer spending. These and other fluctuations

when they occur can lead to significant variability in our sales, results of operations and cash flow, making it difficult to predict our

financial results with certainty.

The extent of the impact of public health crises, including a pandemic, or related containment measures and government responses, are

highly uncertain and cannot be predicted, including as it relates to demand and volume for our products and could therefore adversely

affect our operational and financial performance.

Price fluctuations in, or shortages in the availability of, energy, transportation and raw materials could adversely affect our

business.

Our margins are affected by the prices that we are able to charge for our products and the costs of the raw materials we require to

make these products. Our primary raw materials are recovered fiber, particularly old corrugated containers (“OCC”), and wood fiber.

The prices for these raw materials tend to be volatile, and price fluctuations affect our margins.

OCC and wood fiber are used in the manufacture of our paper-based packaging products and are purchased in increasingly

competitive, price-sensitive markets. OCC prices are based on market prices that have historically exhibited price and demand

cyclicality and significant price volatility over short periods and may do so again in the future. In particular, the price of OCC depends

on a variety of factors over which we have no control, including demand from outside our countries of operation, environmental and

conservation regulations, natural disasters and weather. Despite owning our own recycling depots to independently source some of our

OCC supplies, from a price perspective, OCC prices are linked to official reference prices and are therefore based on market prices.

Historically, these market prices have exhibited significant price volatility.

Prices of wood fiber are also impacted by many of these factors. A decrease in the supply of such raw materials has caused, and any

such decrease in the future can be expected to cause, higher costs. In addition, the increase in demand for products manufactured, in

whole or in part, from OCC has in the past caused an occasional supply or demand imbalance in the market for OCC. It may also

cause a significant increase in the cost of wood fiber used in the manufacture of recycled containerboard and related products. Asian

purchasers have been in the OCC market for a number of years and have become material purchasers in the sector due to significant

ongoing expansion of their recycled containerboard mills capacity. The effect of this has been to create volatility with respect to the

price of OCC. Our raw material costs are likely to continue to fluctuate based upon supply and demand characteristics.

In response to growing pressure from increased environmental awareness and the need to comply with greenhouse gas emission

targets, a number of northern European governments have sought to encourage the use of wood for energy generation purposes

through the use of subsidies. These policies create a new source of demand for wood. This has the effect of increasing the price of

wood fiber and consequently the cost of our raw materials for the production of kraftliner. If this trend continues or grows, this could

lead to further raw material price increases and could have a material adverse effect on our margins.

Many of our customer contracts contain price adjustment clauses either allowing us to pass increased costs on to our customers or

adjust prices based on an index or other mechanism. However, not all of our agreements contain these clauses and these clauses may

not in all cases be effective to fully offset our increased costs. Where we are able to raise prices there is generally a three- to six-month

lag between the time our raw material prices increase and the time we realize increased pricing from our customers.

Certain of the Company’s paper mills are subject to regulation under regulatory programs that mandate reductions in greenhouse gas

emissions, including the EU Emissions Trading Scheme, Quebec’s Regulation respecting a cap-and-trade system for greenhouse gas

emission allowances, and, in the United States, the Washington Climate Commitment Act, whereby covered businesses are issued

emissions allowances based on an annual limit or “cap” on greenhouse gas emissions and are required to have a sufficient number of

allowances to cover their annual greenhouse gas emissions. If a business’ greenhouse gas emissions exceed its available allowances, it

may be required to make capital investments or other expenditures to reduce emissions, or it may be required to buy additional

allowances on the market, at government auctions, or from other program participants. Failure to have a sufficient number of

allowances available may subject a business to penalties. As part of an energy-intensive, trade-exposed sector, the Company’s paper

mills that are subject to existing cap-and-trade regulations are entitled to receive a certain number of greenhouse gas emission

allowances at no cost to ease the energy transition. There is a risk that we will not have enough free allowances to meet our

compliance requirements. If we are required to make investments to reduce our greenhouse gas emissions, such as switching fuels to

lower carbon alternatives, or purchase allowances, these costs may not be recoverable through higher prices for our products and could

negatively affect our operations, financial condition and cash flows. Failure to meet our greenhouse gas obligations could result in

fines, penalties and potential damage to our business reputation. We also face risks that more of the Company facilities could become

subject to cap-and-trade programs or similar greenhouse gas reduction mandates in the future and that these programs or mandates

could significantly increase our energy and other input costs in these jurisdictions. Our production processes are energy intensive. If

energy prices increase in the future, this would increase our production costs, which could consequently have a material adverse effect

on our profitability.

We distribute our products primarily by truck, rail and sea. The reduced availability of trucks, rail cars or cargo ships, including as a

result of labor shortages in the transportation industry, could adversely impact our ability to distribute our products in a timely or cost-

effective manner. Higher transportation costs could make our products less competitive compared to similar or alternative products

offered by competitors.

The failure to obtain raw materials, energy or transportation services at reasonable market prices (or the failure to pass on price

increases to customers) or a reduction in the availability of raw materials, energy or transportation services due to increased demand,

significant changes in climate or weather conditions or other factors could have a material adverse effect on our business, results of

operations, cash flows and financial condition, and the trading price of our ordinary shares.

We are exposed to significant competition in the paper and packaging industry, and if we are unable to compete effectively, our

results of operations, cash flows and financial condition, and the trading price of our ordinary shares, could be adversely affected.

We operate in a highly competitive and fragmented industry. The paper and packaging industry is characterized by a high level of

price competition, as well as other competitive factors including innovation, design, quality and service. To the extent that any of our

competitors are more successful with respect to any key competitive factor, our business, results of operations, cash flows and

financial condition, and the trading price of our ordinary shares could be materially adversely affected. Pricing pressure could arise

from, among other things, limited demand growth in the market in question, price reductions by competitors, growth in supply from

existing competitors, entry of new competitors into the markets in which we operate, the ability of competitors to capitalize on their

economies of scale and create excess product supply, the ability of competitors to operate or successfully relocate or open production

facilities in countries where production costs are lower than those in which we operate and the introduction by our competitors of new

products, technologies and equipment, including the use of artificial intelligence and machine learning solutions.

Our products also compete, to some extent, with various other packaging materials, including products made of plastics, wood and

various types of metal. Customer shifts away from paper packaging to packaging made from other materials could adversely affect our

results of operations, cash flows and financial condition, and the trading price of our ordinary shares.

Operating Risks

We may experience business disruptions that adversely affect our operations.

We depend on continuous operation of our facilities. The operations at our facilities have in the past and may in the future be

interrupted or impaired by various operating risks, including, but not limited to, risks associated with:

• catastrophic events, such as fires, floods, earthquakes, explosions, natural disasters, severe weather, including hurricanes,

tornadoes and droughts, and pandemics, or other health crises or similar occurrences;

• interruptions in the delivery of raw materials or other manufacturing inputs;

• failure of third-party service providers and/or business partners to fulfill their commitments and responsibilities in a timely

manner and in accordance with agreed upon terms;

• government regulations;

• prolonged power failures;

• unscheduled maintenance outages, including due to equipment breakdowns or failures;

• information system disruptions or failures due to any number of causes, including cyber incidents;

• violations of our permit requirements, revocation of permits, or permit modifications that impose additional or more stringent

obligations;

• releases of pollutants and hazardous substances to the environment;

• disruptions in transportation infrastructure, including roads, bridges, railroad tracks and tunnels;

• shortages of equipment or spare parts; and

• labor disputes, strikes and shortages.

Business disruptions have impaired, and may in the future impair, our production capabilities and adversely affect our results of

operations, cash flows and financial condition, and the trading price of our ordinary shares. For example, operations at several of our

facilities located in the south and southeastern U.S. have been interrupted in recent years by hurricanes and severe winter weather,

resulting in, among other things, lost mill production. In addition, the impact of any future public health crises, including a pandemic,

or other business disruptions, on our operational and financial performance in future periods will depend on future developments,

which are highly uncertain and cannot be predicted. Our production capabilities may be disrupted if we are unable to secure sufficient

supplies of raw materials or if significant portions of our workforce are unable to work effectively as a result of a business disruption.

We have contingency plans and insurance coverage, subject to applicable deductibles or retentions, policy limits and other conditions,

that we use to seek to mitigate the impact of business disruptions; however, we may not be successful with respect to those mitigation

efforts or any claim regarding insurance coverage and, if we are successful, any amounts paid pursuant to the insurance may not be

sufficient to cover all our costs and expenses.

Smurfit Westrock has 57 paper mills of differing capacities. If operations at any key mills (those which are more complex and/or have

higher capacity) were interrupted for any significant length of time, it could have a material adverse effect on our business, results of

operations , cash flows and financial condition, and the trading price of our ordinary shares.

We may fail to anticipate trends and develop or integrate new technologies that would enable us to offer products that respond to

changing customer preferences or to protect intellectual property related to our products and technologies.

Our success depends, in part, on our ability to offer differentiated solutions, and we must continually develop and introduce new

products and services to keep pace with technological and regulatory developments and changing customer preferences. The services

and products that we offer customers may not meet their needs as their business models evolve. Also, our customers may decide to

decrease their use of our products, use alternative materials for their product packaging or forego the packaging of certain products

entirely. Regulatory developments can also significantly alter the market for our products. For example, a move to electronic

distribution of disclaimers and other paperless regimes could adversely impact our healthcare inserts and labels businesses. Similarly,

certain states and local governments have adopted laws banning single-use paper bags or charging businesses or customers fees to use

paper bags. Certain jurisdictions in which we conduct business have enacted extended producer responsibility legislation that requires

producers to assume financial accountability for the complete lifecycle of products, including associated fees on packaging. These and

similar developments could adversely impact demand for certain of our products.

Customer preferences for products and packaging formats are constantly changing based on, among other factors, lifestyle changes,

buying habits, cost, convenience, and health and sustainability concerns and perceptions. Also, there is an increasing focus among

consumers to ensure that products delivered through e-commerce are packaged efficiently. In addition, customers are increasingly

interested in the carbon footprint of our products, and future packaging developments and trends may drive further substitution. Our

results of operations, cash flows and financial condition, and the trading price of our ordinary shares, could be adversely affected if we

fail to anticipate and address these and other trends, including by developing and offering products that respond to changing customer

preferences, or if there is any significant substitution away from paper-based packaging products.

In addition, creating or adopting new or complementary technologies and subsequently integrating them may be costly and difficult.

We have been involved in trialing new and evolving technology, but doing so may require significant investments of capital, and such

innovations are subject to long lead times and failure. Trialing such technology can take an extended period of time, with little to no

returns in the short or medium terms. We also utilize and intend to expand our use of automation, robotics and machine learning in

many of our products, including consumer-facing features, and we leverage generative artificial intelligence in our business processes.

While we believe the use of these emerging technologies can present significant benefits, they also create risks and challenges. Data

sourcing, technology, integration and process issues, bias in decision-making algorithms, concerns over intellectual property,

reputational implications if use becomes controversial, system security concerns, or the protection of privacy could impair the

adoption and acceptance of autonomous machine solutions. Additionally, if we are unable to match or surpass the advances of

artificial intelligence that our competitors implement for their products or for internal operations, our competitive position could be

impacted. Any such risks could have a material adverse effect on our business, results of operations , cash flows and financial

condition, and the trading price of our ordinary shares.

Our success also depends, in part, upon our ability to obtain and maintain protection for certain proprietary packaging products and

packaging machine technologies used to produce our products. Failure to protect our existing intellectual property may result in the

loss of valuable legal rights. Our competitors may obtain intellectual property rights that could require us to license those rights or to

modify or cease the use or sale of certain of our technologies or products. Our patents could be invalidated, rendered unenforceable,

circumvented, challenged or licensed to others, and our pending or future patent applications may not be issued with the scope of the

claims we seek, if at all. Further, other companies may develop technologies that are similar or superior to our technologies, duplicate

our technologies or design around our patents, and steps we take to protect our technologies may not prevent misappropriation of those

technologies.

Our capital expenditures may not achieve the desired outcomes or may be completed at a higher cost than anticipated.

We operate in a capital-intensive industry and undertake expansion projects to either support growth in our business or improve the

breadth and quality of our product offerings, including investments in both mill and converting operations. Many of our capital

projects are complex, costly and/or implemented over an extended period of time. Our expenditures for capital projects could be

higher than anticipated, we may experience unanticipated business disruptions or delays in completing the projects and/or we may not

achieve the desired benefits from those projects, including as a result of a deterioration in macroeconomic conditions or in our

business, unavailability of capital equipment or related materials, delays in obtaining permits or other requisite approvals or changes in

laws and regulations. In addition, disputes between us and contractors who are involved with implementing capital projects could lead

to time-consuming and costly litigation. Any of these circumstances could adversely affect our results of operations, cash flows and

financial condition, and the trading price of our ordinary shares.

We are exposed to risks related to international sales and operations.

We operate in many different countries. As of December 31, 2025 , we had operations in 40 countries. As a result, we have previously

been and remain vulnerable to risks in these countries, including:

• the imposition of tariffs, quotas, import duties or other market barriers, (including the implementation of tariffs on U.S.

imports by the current U.S. Administration and potential retaliatory tariffs), such as restrictions on repatriating cash from

foreign countries;

• responding to disruptions in existing trade agreements or increased trade tensions between countries or political and

economic unions;

• the difficulties of, and costs of complying with, a wide variety of complex and changing laws, treaties and regulations;

• increased difficulty in the collection of accounts receivable, including longer collection periods;

• inconsistent regulations and unexpected changes in legislation or regulatory requirements and increased difficulty and

expense in hiring and dismissing employees;

• the imposition of quotas relating to the composition of the employee base or the local sourcing of raw materials or other

similar quotas;

• political, economic and social unrest or instability (such as downturns or changes in economic activity due to, among other

things, regional conflicts or commodity inflation), as well as disruptions and government intervention in national economies

and social structures, including the threat of terrorism;

• geopolitical conflict;

• work stoppages, transport interruptions and difficulties in managing international operations;

• government limitations on foreign ownership or takeovers, expropriation of private sector assets or mandated price controls;

• transfer pricing and adverse tax policies; and

• adverse currency fluctuations.

We are subject to taxation in the jurisdictions where we operate. We have several ongoing audit examinations and disputes that

generally cover multiple years with various tax authorities. We base our tax returns on our interpretation of tax laws and regulations in

effect; however, governing tax bodies have in the past and may in the future disagree with certain of our tax positions, which could

result in a higher tax liability. See “Note 21. Commitments and Contingencies ” of the Notes to the Consolidated Financial Statements

for discussion of an ongoing tax liability matter in Brazil.

The occurrence of any of the foregoing could have a material adverse effect on our earnings as a result of the related delays or

increased costs in the production and delivery of products and services or otherwise disrupt the demand for our products. Any of these

circumstances could adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary

shares.

We could be exposed to currency exchange rate fluctuation risks.

We have operations in a number of countries. As such, currency movements can have a number of direct and indirect impacts on our

financial statements. Direct impacts include the translation of international operations’ local currency financial statements into U.S.

dollars and the remeasurement impact associated with non-functional currency financial assets and liabilities. Indirect impacts include

the change in competitiveness of imports into, and exports out of, the United States (and the impact on local currency pricing of

products that are traded internationally).

In addition, the relative strength or weakness of the U.S. dollar is important for the industry in which we operate because U.S.

containerboard and paperboard prices tend to influence the world market. A weak U.S. dollar over a sustained period has the potential

to result in lower imports into the United States of goods shipped in corrugated containers and, as a result, lower demand for our

containers from LATAM and Europe. A weak U.S. dollar could also result in additional competition in our European and Latin

American markets from other U.S. manufacturers that have an incentive to export more products due to increased demand for

relatively lower priced U.S. goods. Conversely, our U.S. operations could face additional competition from non-U.S. manufacturers if

a strong U.S. dollar was sustained over a long period. A strong U.S. dollar could also have the potential to reduce exports from the

United States of goods shipped in corrugated containers and, as a result, lower demand for our containers from the U.S.

We may produce faulty or contaminated products due to failures in quality control measures and systems, which could negatively

impact our business and share price.

We may fail to produce products that meet applicable safety and quality standards, which could result in adverse effects on consumer

health, litigation exposure, loss of market share and adverse reputational and financial impacts, among other potential consequences,

and we may incur substantial costs in taking appropriate corrective action (up to and including recalling products from end consumers

and reimbursing customers and/or end consumers for losses that they suffer as a result of these failures). Our failure to meet these

standards could lead to regulatory investigations, enforcement actions and/or prosecutions, and could result in adverse publicity, which

may damage our reputation. Any of these outcomes could have a material adverse effect on our business, results of operations , cash

flows and financial condition, and the trading of our ordinary shares.

We provide representations in certain of our contracts that our products are produced in accordance with customer specifications. If

the product contained in packaging manufactured by us is faulty or contaminated, the manufacturer of the product may allege that the

packaging we provided caused the fault or contamination, even if the packaging complies with contractual specifications. If our

packaging fails to meet contract specifications, we could face liability from our customers and third parties for bodily injury or other

damages. These liabilities could adversely affect our business, results of operations , cash flows and financial condition, and the trading

price of our ordinary shares.

We are subject to cybersecurity risks that could threaten the confidentiality, integrity and availability of data in our systems, and

could result in disruptions to our operations and adversely affect our operations, cash flows and financial condition.

Cybersecurity incidents could compromise our information technology or data and expose us to liability, which would cause our

business and reputation to suffer. We rely on various technologies, some of which are managed by third parties, to process, transmit

and store electronic information. In the ordinary course of our business, we collect and store sensitive data, including intellectual

property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable

information of our customers and employees, in our information technology. We also collect and store limited, non-sensitive customer

personally identifiable information. The secure processing, maintenance and transmission of this information is critical to our

operations. The current cyber threat environment presents enhanced risk for all companies, including those in our industry. The rapid

evolution and increased availability of artificial intelligence may intensify cybersecurity risks by making targeted attacks more

convincing and cybersecurity incidents more difficult to detect, contain, and mitigate.

Despite our security measures, our information technology, and that of our third-party providers and business partners, is subject to

recurring attempts by threat actors to access information, manipulate data or disrupt operations. Information technology that we, third-

party providers and business partners use may be vulnerable to cyber-attacks or outages by common hackers, criminal groups, nation-

state organizations or social activist organizations (whose efforts may increase as a result of geopolitical events and political and social

unrest or instability around the world) due to insider threat, malfeasance or other disruptions, such as cyber-attacks, power outages,

telecommunication or utility failures, systems failures, service provider failures, natural disasters or other catastrophic events. The

significant increase in remote working and the continued expansion of the integrated supply chain increase the risks of cyber incidents

and the improper dissemination of personal or confidential information. Any such breach could compromise our information

technology and the information stored there could be accessed, publicly disclosed, lost or stolen, potentially resulting in legal claims or

proceedings and regulatory penalties. In addition, any such outage could disrupt or temporarily halt our operations resulting in reduced

productivity, staff downtime, and increased insurance premiums, as well as additional costs for attempting to recover lost information,

equipment or data, and could damage our reputation, which could have a material adverse effect on our business, results of operations ,

cash flows and financial condition, and the trading price of our ordinary shares.

We may also face challenges and risks during integration of acquired businesses and operations, as we and the acquired businesses and

operations may face increased targeted attempts during this busy period. While we maintain plans and processes to prevent or mitigate

the impact of these events, these events could nonetheless result in disruptions and damage. In addition, as a result of the foregoing,

we could experience adverse publicity, loss of sales, the cost of remedial measures, including substantial legal fees, and significant

expenditures to reimburse third parties for damages, each of which could adversely impact our results of operations. Any insurance we

maintain against the risk of this type of loss may not be sufficient to cover actual losses, may not apply to the circumstances relating to

any particular loss, or may become materially more costly over time. As a result, any or all of the above events could adversely affect

our operations, cash flows and financial condition, and the trading price of our ordinary shares.

We may be adversely impacted by work stoppages and other labor relations matters.

There are different labor unions represented across our sites and a majority of our employees are covered by a collective labor

agreement as a result of either local or national negotiations in the countries concerned. Labor disputes or other problems, such as

work stoppages, or failure to successfully renegotiate the terms of any of the collective labor agreements, could lead to a substantial

interruption to our business.

In addition, our business relies on vendors, suppliers and other third parties that have union employees. Any of the matters described

above, including work stoppages or other labor relations matters affecting us or these vendors, suppliers and other third parties, as well

as future developments in relation to our business or otherwise that adversely affect relations between us and our employees, could

adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares.

We operate in a challenging market for talent and may not be able to attract, motivate and/or retain qualified personnel, including

our key personnel.

Our success depends on our ability to attract, motivate and retain employees with the skills necessary to understand and adapt to the

continuously developing needs of our customers. The increasing demand for qualified personnel makes it more difficult for us to

attract, motivate and retain employees with requisite skill sets, particularly employees with specialized technical and trade experience.

Changing demographics and labor work force trends also may result in a loss of knowledge and skills as more tenured and

experienced workers retire. If we are unable to attract, motivate and retain qualified personnel, or if we experience excessive turnover,

including among hourly workers, we may experience declining sales, manufacturing delays or other inefficiencies, increased

recruiting, training and relocation costs and other difficulties, and our results of operations, cash flows and financial condition, and the

trading price of our ordinary shares may be adversely impacted.

The market for both hourly workers and professional workers continued to be challenging in fiscal 2025, particularly in the U.S. The

labor environment for hourly workers remains competitive with continued instances of labor unrest, even as broader manufacturing

employment trends moderated from prior peaks. In certain locations where we operate, the demand for labor continues to exceed the

supply of labor, resulting in higher costs. Despite our focused efforts to attract, motivate and retain employees, we continue to focus

on the stabilization of attrition rates within our workforce. We also incurred higher operating costs at certain of our facilities in the

form of higher levels of overtime pay due to shift requirements and staffing challenges.

In addition, many professional workers desire a fully remote work setting. We offer flexible working arrangements in the majority of

instances; however, we may experience higher levels of attrition within our professional workforce if these workers desire more

remote work opportunities than we are able to offer. We may also experience higher levels of attrition if employees do not perceive

the purpose and impact of their work to be rewarding or their work-life balance to be satisfactory.

We also rely on key executive and management personnel to manage our business efficiently and effectively. The loss of these

employees, combined with a challenging market for attracting and retaining employees, could adversely affect our results of

operations, cash flows and financial condition, and the trading price of our ordinary shares may also be adversely impacted.

We face challenges associated with sustainability matters, including the impact of climate change and its potential impact on areas

such as our operations and raw material availability, which could have a significant impact on our reputation, business, results of

operations, cash flows and financial condition, and the trading price of our ordinary shares.

We have identified multiple ways in which climate change could impact our business operations, including through extreme weather

events. Our physical assets and infrastructure, including our manufacturing operations, are subject to risks from volatile and damaging

weather events. For example, severe weather, such as hurricanes, tornadoes, other extreme storms, wildfires, and floods, have resulted

in and/or could in future periods result in lost production and/or physical damage to our facilities. Unpredictable weather patterns or

extended periods of severe weather may also result in supply chain disruptions and increased material costs. In addition, one of our

key raw materials is virgin wood fiber, the availability of which is dependent on access to and the maintenance of healthy forests,

which could be impacted by adverse weather conditions, including drought, flooding and local restrictions on water usage. Moreover,

the ability to harvest the virgin wood fiber used in our manufacturing operations may be limited, and prices for this raw material may

fluctuate, during prolonged periods of heavy rain or drought or during tree disease or insect epidemics or other environmental

conditions that may be caused by variations in climate conditions. Other climate-related business risks that we face include risks

related to the transition to a lower-carbon economy, such as increased prices for certain fuels, including natural gas; the introduction of

a carbon tax or government mandates to reduce greenhouse gas emissions; and more stringent and/or complex environmental and

other legal requirements. To the extent that severe weather or other climate-related risks materialize, and we are unprepared for them,

we may incur unexpected costs, which could adversely affect our results of operations, cash flows and financial condition, and the

trading price of our ordinary shares.

The paper manufacturing industry in which we operate is energy intensive, and government initiatives, such as the European Union

Green Deal, the European Union’s initiative to reach net zero emissions of greenhouse gases by 2050, could increase government

regulation of greenhouse gas emissions, putting further limits on our paper manufacturing operations. In addition, if efforts aimed at

transitioning to a lower carbon economy result in a transition towards the use of materials that are more suitable for reusable

packaging, demand for paper packaging may decline, while demand for alternative packaging types may increase, which could

adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary shares.

Increased focus and activism related to sustainability matters may hinder our access to capital, as investors may reconsider their capital

investment as a result of their assessment of our sustainability practices. Customers, investors, regulators and other stakeholders are

focused on sustainability issues, including those with respect to climate change, circular economy, packaging waste, sustainable

supply chain practices, deforestation, biodiversity, land, energy and water use, diversity, equity, inclusion and belonging and other

human capital matters. This focus may result in more prescriptive reporting requirements with respect to these topics, an increased

expectation that such topics will be voluntarily disclosed by companies such as ours, and increased pressure to make commitments, set

or revise targets and take action to meet them. Concern over climate change or the use and composition of packaging materials may

also result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. These demands,

regulatory requirements, and related perceptions and preferences could cause us to incur additional costs or to make changes to our

operations to comply with such, demands, requirements and customer preferences, and a delay in our response (or the failure to

respond effectively) may lead to material adverse effects on our business, results of operations , cash flows and financial condition, and

the trading price of our ordinary shares. See also “ We are subject to a growing number of environmental laws and regulations, and the

cost of compliance or the failure to comply with, and any liabilities under, current and future laws and regulations may negatively

affect our business .” Further, there can be no assurance that environmental activist groups and similar organizations will not mount

campaigns against us. On the other hand, our sustainability efforts may not be favored by certain stakeholders, whose priorities and

expectations may not align or may be opposed to one another and/or those of the Company, and there can be no assurance that our

sustainability efforts will be perceived positively, including the perception that they are not sufficiently robust, or conversely, too

costly, or not otherwise in the best interests of the Company and our shareholders, and, as a result, our investor, customer and other

stakeholder relationships could be damaged or this could lead to public scrutiny or reputational damage, which could adversely impact

our reputation, business and results of operations.

Both legacy Smurfit Kappa and WestRock previously established and publicly disclosed sustainability targets which are important to

many stakeholders, including certain investors and customers. New targets for Smurfit Westrock are expected to be published in the

second quarter of 2026 in the 2025 sustainability report. We expect to report performance relative to any such targets on an annual

basis. Failure to meet any such targets could result in negative publicity and reputational damage and could have a material adverse

effect on our business, reputation, results of operations , cash flows and financial condition, and the trading price of our ordinary

shares. If any such targets or commitments are not achieved on their projected timelines or at all, or if they are perceived negatively,

including the perception that they are not sufficiently robust or, conversely, are too costly, this would impact our reputation as well as

our relationships with investors, customers and other stakeholders. Moreover, any failure to act responsibly with respect to

sustainability issues or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or

other sustainability matters, or increased operating or manufacturing costs due to increased regulation could have a material adverse

effect on our business, reputation, operating results, financial condition and the trading price of our ordinary shares. In addition, we

may also be adversely impacted as a result of conduct by contractors, customers or suppliers that fail to meet our or our stakeholders’

sustainability standards.

Any of these risks could adversely affect our results of operations, cash flows and financial condition, and the trading price of our

ordinary shares.

Failure by us to successfully implement strategic transformation initiatives, including those relating to information technology

infrastructure, or to achieve our mid-range or long-range targets and goals could adversely affect our business and share price.

Smurfit Kappa and WestRock have throughout the years undertaken various projects relating to information technology infrastructure.

As part of integration initiatives, the Company is reviewing and evaluating its various business systems and the system strategies and

alternatives for Smurfit Westrock. The implementation of changes in business systems could represent a significant financial

undertaking and may require substantial time and attention of management and key employees. We may not be able to successfully

implement these initiatives without delays or may experience unanticipated business disruptions and/or we may not achieve the

desired benefits from such changes. Project completion dates may also change. Any of these items, along with any failure to

effectively manage data governance risks during implementation of these initiatives, could adversely affect our results of operations,

cash flows and financial condition, and the trading price of our ordinary shares.

We continue to implement and have in the past developed and endeavored to implement a number of operating plans designed to

enhance our business. For example, during February 2026, we announced our medium-term plan (“Medium-Term Plan”) targeting an

accelerated path to growth. The anticipated benefits described in the Medium-Term Plan are based on assumptions that may prove to

be inaccurate, and a variety of factors could cause us to fail to realize some or all of the expected benefits and targets outlined in the

plan. If, for any reason, the benefits we realize, or our actual results, are less than our goals or targets, or the implementation of related

growth initiatives, strategies (including our capital allocation strategy) and/or plans adversely affect our operations or cost more or

take longer to effectuate than we expect, or if our assumptions prove inaccurate, our results of operations, cash flows and financial

condition, and share price may be materially adversely affected .

If we are unsuccessful in integrating acquisitions or if disposals result in unexpected costs or liabilities, our business could be

materially and adversely affected.

We have completed a number of mergers, acquisitions, investments and divestitures in the past, including the Combination, and we

may seek to acquire, invest in, sell or enter into transactions with additional companies in the future. See also “ We face risks related to

the Combination ”.

We may not be able to identify suitable targets or purchasers or successfully complete suitable transactions in the future, and future

completed transactions may not be successful.

These transactions create risks, including, but not limited to, risks associated with:

• disrupting our ongoing business, including greater than expected costs and management time and effort involved in

identifying and completing the transactions and integrating acquisitions;

• integrating acquired businesses and personnel into our business, including integrating personnel, information technology

systems and operations across different cultures and languages, and addressing the operational risks associated with these

integration activities as well as the economic, political and regulatory risks associated with specific countries;

• working with partners or other ownership structures with shared decision-making authority;

• obtaining and verifying relevant information regarding a business prior to the consummation of the transaction, including the

identification and assessment of liabilities, claims or other circumstances that could result in litigation or regulatory risk

exposure;

• obtaining required regulatory approvals and/or financing on favorable terms;

• retaining key employees, contractual relationships or customers;

• the potential impairment of assets and goodwill;

• the additional operating losses and expenses of businesses we acquire or in which we invest;

• incurring substantial indebtedness to finance an acquisition or investment;

• incurring unexpected costs or liabilities in the context of a disposal; and

• implementing controls, procedures and policies in acquired companies.

These transactions may not be successful and may adversely affect our results of operations, cash flows and financial condition, and

the trading price of our ordinary shares. Among the benefits we expect from potential, as well as completed, acquisitions and joint

ventures are synergies, cost savings, growth opportunities or access to new markets (or a combination thereof), and in the case of

divestitures, the realization of proceeds from the sale of businesses and assets to purchasers that place higher strategic value on these

businesses and assets than we do. For acquisitions, our success in realizing these benefits and the timing of realizing them depend on

the successful integration of the acquired businesses and operations with our business and operations. Even if we integrate these

businesses and operations successfully, we may not realize the full benefits we expected within the anticipated time frame, or at all,

and the benefits may be offset by unanticipated costs or delays.

We face risks related to the Combination.

We closed the Combination between Smurfit Kappa and WestRock on July 5, 2024. Following the Combination, we targeted annual

pre-tax run-rate synergies of $400 million by the end of 2025, which we achieved, owing to integration benefits, procurement leverage

and administrative and overhead rationalization. Furthermore, as we implement commercial practices and improve our operating

efficiency through the Combination, we expect to deliver further improvements in our results. However, these further improvements

are not certain, and may not be realized fully or at all, may take longer to realize or the costs of achieving the benefits and run-rate

synergies may be more than expected. Any such risks may result in our operating costs being greater than anticipated and may reduce

the net benefits of the Combination.

For instance, we have already incurred significant costs and expect to incur additional costs in connection with integrating the

operations of legacy Smurfit Kappa and legacy WestRock. Furthermore, there can be no assurance tha t we will continue to

successfully integrate the two businesses. It is possible that the integration process could result in the loss of key Smurfit Kappa or

WestRock employees, the loss of customers, the disruption of either or both companies’ ongoing businesses, unexpected integration

issues, higher than expected integration costs or an overall integration process that takes longer than originally anticipated. We may

face challenges in the continued integration of the operations of Smurfit Kappa and WestRock, including without limitation:

• ongoing combination of the companies’ operations and corporate functions;

• further integrating and unifying the offerings and services available to customers;

• further identifying and eliminating redundant and underperforming functions and assets;

• reaching the potential from cross-selling corrugated and consumer-packaging products;

• further harmonizing the companies’ operating practices, internal controls and other policies, procedures and processes;

• maintaining existing agreements with customers and suppliers and avoiding delays in entering into new agreements with

prospective customers and suppliers; and

• further coordinating distribution and marketing efforts across geographically dispersed organizations;

The integration may also result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be

realized on a timely basis. As such, any of the above factors may impair our ability to realize the anticipated benefits of the

Combination and could adversely affect our results of operations, cash flows and financial condition, and the trading price of our

ordinary shares. We may not realize all of the benefits of the Combination or such benefits may take longer than anticipated or may be

lower than estimated.

Financial Risks

Our continued growth depends on our ability to retain existing customers and attract new customers.

The future growth of our business depends on our ability to retain existing customers, attract new customers as well as securing

increased purchase volumes from such existing customers and new customers. There is no assurance that customers will continue to

use our services or that we will be able to continue to attract new volumes at the same rate as we have in the past.

A customer’s use of our services may decrease for a variety of reasons, including a decrease in the customer’s own sales and volumes,

the customer’s level of satisfaction with our products and services, the expansion of business to offer new products and services, the

effectiveness of our support services, the pricing of our products and services, the pricing, range and quality of competing products or

services, the effects of global economic conditions, regulatory limitations, trust, perception and interest in the paper and packaging

industry and in our products and services. Furthermore, the complexity and costs associated with switching to a competitor may not be

significant enough to prevent a customer from switching packaging providers.

Failure by us to retain existing customers, attract new customers, and increase revenue from both new and existing customers could

have a material adverse effect on our business, results of operations, cash flows and financial condition, and the trading price of our

ordinary shares. The effort to retain customers and attract new customers may require price concessions, financial expenditures,

commitments of resources, developments of processes, and other investments and innovations.

A number of the industries in which our customers operate have experienced consolidation in the past and may continue to do so in the

future. Such consolidation may affect our relations with our customers. In the past, when one of our customers has combined with

another, we have on occasion lost business and there can be no assurance that this will not occur again in the future. Additionally, the

ability of customers to exert pricing pressure on all suppliers, including us, has increased as their industries have consolidated and the

customers have become larger. However, our level of customer concentration may increase in the future. Such consolidation could

have a material adverse impact on our business, results of operations, cash flows and financial condition, and the trading price of our

ordinary shares.

Our debt could adversely affect our financial health and operating flexibility.

As of December 31, 2025 , our total debt was $13.8 billion . Our levels of debt could restrict our operating and financial flexibility,

including:

• requiring us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our debt,

thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate

purposes;

• increasing our vulnerability to general adverse economic, industry or competitive conditions;

• limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;

• impede access to or increase the cost of additional debt or equity capital in the future;

• restricting us from making strategic acquisitions or exploiting business opportunities; and

• placing us at a competitive disadvantage compared to our competitors that have less debt.

Any of these outcomes may adversely affect our results of operations, cash flows and financial condition, and the trading price of our

ordinary shares. To the extent that we incur additional debt or such other obligations, the risk associated with our debt described above

may increase.

In addition, a portion of our debt bears interest at variable rates that are linked to changing market interest rates. Our exposure to rising

interest rates subjects us to increased debt service obligations, both with respect to existing floating rate indebtedness and the

incurrence of additional fixed or floating indebtedness during periods where such rates are in effect. Although we may hedge a portion

of our exposure to variable interest rates by entering into interest rate swaps from time to time, we cannot provide assurances that we

will do so in the future. An increase in market interest rates would increase our interest expense on our variable rate debt obligations,

which may exacerbate the risks associated with our capital structure and adversely affect our results of operations, cash flows and

financial condition, and the trading price of our ordinary shares. Restrictions imposed by certain of our existing and future indentures

and credit facilities limit or may limit our ability to take certain actions.

Adverse credit and financial market events and conditions, as well as credit rating downgrades, could, among other things, imped e

access to or increase the cost of financing, which could have a material adverse impact on our business, results of operations, cash

flows and financial condition, and the trading price of our ordinary shares.

We rely on access to the credit and capital markets to finance our operations and refinance existing indebtedness. Any limitations on

our access to the credit and capital markets on satisfactory terms, or at all, could limit our liquidity, financial flexibility or cash flows

and affect our ability to execute our strategic plans, which could have a material adverse effect on our business, results of operations,

financial condition and the trading price of our ordinary shares.

Our access to the credit and capital markets is subject to a number of variables, including our results of operations, margins and

activity levels, the conditions of the global credit and capital markets, market perceptions of our creditworthiness and the ability and

willingness of lenders and investors to provide capital. In recent years, global financial markets have experienced disruptions and

general economic conditions have been volatile. During periods of financial market volatility, our access to the credit and capital

markets could be impaired, which could adversely affect our results of operations, cash flows and financial condition, and the trading

price of our ordinary shares.

In addition, the costs and availability of financing from the credit and capital markets depends on our credit ratings. Any rating,

outlook or watch assigned to such debt securities could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s

judgment, current or future circumstances change relating to the basis of the rating, outlook or watch, such as adverse changes to the

Company’s business. Any failure to maintain investment grade credit ratings could adversely affect our future cost of funding,

liquidity or access to capital markets, which could adversely affect our results of operations, cash flows and financial condition, and

the trading price of our ordinary shares.

We have a significant amount of goodwill and other intangible assets and a write-down could materially adversely impact our

operating results.

As of December 31, 2025 , we had goodwill and other intangible assets of $8.3 billion . In accordance with GAAP, we do not amortize

goodwill but rather test it annually and as otherwise required for impairment and any such impairments cannot be reversed. Similarly,

we review our other intangible assets for impairment when circumstances indicate that the carrying value may not be recoverable. The

impairment analysis requires us to analyze a number of factors and make estimates that require significant judgment. In the event that

general trading conditions and prospects deteriorate or factors underlying assumed discount rates, such as assumed long-term interest

rates, change, the determined recoverable amount of certain other intangible assets and goodwill may fall below carrying value. We

have recorded impairments in previous years. Additional impairments may occur in the future, which could adversely affect our results

of operations, cash flows and financial condition, and the trading price of our ordinary shares.

We have a number of pension arrangements that are currently in deficit and may require increased funding due to statutory

requirements .

We operate a number of pension and other long-term benefit plans throughout the world, devised in accordance with local conditions

and practice. Currently, a significant but declining proportion of our employees are members of defined benefit pension arrangements,

most of which are now closed to new entrants and future benefit accrual. The deficit of thes e employee benefit plans was $30 million

as of December 31, 2025 .

An increase in the value of the liabilities or decrease in the value of pension plan assets may negatively affect our balance sheet and

distributable reserves, any of which could have a material adverse effect on our business, results of operations, financial condition and

the trading price of our ordinary shares. The liabilities will mainly be affected by increases in life expectancy and by changes in long-

term yields, which are used to discount the liabilities to present value. The assets will be affected by increases in long-term yields,

which will reduce the value of bond investments, and by movements in equity markets. These factors create a considerable degree of

volatility in the measurement of any pension scheme’s deficit or surplus.

There is a risk that equity and bond markets will deteriorate if the global economic climate worsens, which could negatively affect the

funded status of our post-employment defined benefit arrangements. In addition, volatility in our net balance sheet liabilities resulting

from the relative change in the value of assets and liabilities may be further enhanced by investment strategies resulting in exposure to

various classes of assets.

Existing and potential changes in statutory minimum requirements may also affect the amount and timing of funding to be paid by us.

Most funding requirements consider yields on assets such as government bonds or interbank interest rate swap curves, depending on

the basis. Although recent statutory easements in the pace of funding on these bases and increases in bond/swap yields have provided

some contribution relief to us, we may nonetheless have to pay additional contributions to meet potentially onerous statutory minimum

funding requirements in the future, which could have a material adverse effect on our business, results of operations, financial

condition and the trading price of our ordinary shares.

Our decision or ability to pay dividends in respect of our shares or conduct share repurchases is subject to a number of factors,

including the distributions of earnings to the Company by its subsidiaries, the financial condition and results of operations of the

Company, as well as the distributable reserves of the Company at the discretion of the Company’s Board, and there are no

guarantees that the Company will pay dividends or will maintain or increase the level of any such dividends or that the Company

will conduct share repurchases.

Any determination to pay dividends to our shareholders is at the discretion of the Company’s Board and will be dependent on then-

existing conditions, including, but not limited to, our results of operations, capital investment priorities, the market price of our shares

and access to capital markets, legal requirements, industry practice, the distribution of earnings to the Company by its subsidiaries, the

financial condition, limitations under Irish law and other factors the Company deems relevant. While Smurfit Westrock has

historically paid dividends, including progressive dividends there can be no assurance that our shareholders will receive or be entitled

to dividends that are equivalent to the historical dividends, and there is no assurance as to the timing or level of future dividend

payments, if any, because these depend on, among other considerations, future earnings, capital requirements and financial condition,

legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our Board

deems relevant.

In addition, from time to time our Board may authorize share repurchase programs. The amount and timing of share repurchases are

subject to capital availability and our determination that share repurchases are in the best interest of our shareholders and are in

compliance with all respective laws and our applicable agreements. Our ability to repurchase shares will be subject to applicable

Board approval and authorization and management discretion and will depend upon, among other factors, our cash balances and

potential future requirements for strategic transactions, our results of operations, our financial condition, price and economic and

market conditions and other factors beyond our control that we may deem relevant. We can provide no assurance that we will

repurchase shares at favorable prices, if at all. We are not obligated to make any purchases and may discontinue any program at any

time.

We cannot guarantee that any share repurchase program or dividend program will be continuously active or fully consummated since

it can be discontinued, suspended or delayed at any time, or will enhance long-term shareholder value, and share repurchases or

dividends could increase the volatility of our stock prices and could diminish our cash reserves .

Changes in existing financial accounting standards or practices may have a material adverse effect on our business, results of

operations, cash flows and financial condition, and the trading price of our ordinary shares.

Changes in existing accounting rules or practices, new accounting pronouncements or rules or varying interpretations of current

accounting pronouncements could have a material adverse effect on our business, results of operations, cash flows financial condition,

and the trading price of our ordinary shares, or the manner in which we conduct our business. Further, such changes could potentially

affect our reporting of transactions completed before such changes are effective .

GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to promulgate

and interpret appropriate accounting principles. A change in these principles or interpretations could have a material adverse effect on

our business, results of operations, cash flows and financial condition, and the trading price of our ordinary shares, and could affect the

reporting of transactions completed before the announcement of a change.

Legal and Regulatory Risks

We are subject to a wide variety of laws, regulations and other requirements that may change or may impose substantial

compliance costs, and non-compliance with such laws and regulations may negatively affect our business.

We are subject to a wide variety of regional, national, state, provincial, and local laws, regulations and other requirements, including

those relating to the environment, product safety, competition, corruption, sanctions, occupational health and safety, labor and

employment, data privacy, artificial intelligence, tax and health care. These laws, regulations and other requirements may change or be

applied or interpreted in ways that will require us to modify our equipment and/or operations, subject us to enforcement risk, expose

us to reputational harm or require us to incur additional costs, including substantial compliance costs, which may adversely affect our

results of operations, cash flows and financial condition, and the trading price of our ordinary shares.

We operate in multiple countries, and each of these countries may have bribery and anti-corruption laws and regulations, including the

U.S. Foreign Corrupt Practices Act, the Sapin II Law in France, the Bribery Act in the United Kingdom and the Criminal Justice

(Corruption Offences) Act 2018 in Ireland, some of which are potentially extra-territorial in scope. Our internal control policies and

procedures, or those of our vendors, may not adequately protect us from reckless or criminal acts committed or alleged to have been

committed by our employees, agents or vendors. Any such non-compliance with bribery and anti-corruption legislation could lead to

civil or criminal, monetary and non-monetary penalties and/or could damage reputations.

The tax laws of Ireland and other jurisdictions in which we operate could change in the future, including through the enactment of

additional laws, the revision of existing laws, and/or developments in case law, regulations and policy changes. Any such changes

could cause a material change in our effective tax rate.

U ncertainty in the legal and regulatory regime relating to artificial intelligence may require significant resources to modify and

maintain business practices to comply with international laws and regulations, the nature of which cannot be determined at this time.

Several jurisdictions, including Europe, the U.S. federal government, and certain U.S. states, have already proposed or enacted laws,

regulations, and other requirements governing artificial intelligence. Other jurisdictions may decide to adopt similar or more restrictive

requirements. These requirements may make it harder for us to conduct our business using artificial intelligence, lead to regulatory

fines or penalties, require us to change our business practices, or require us to limit artificial intelligence usage, which may lead to

inefficiencies or competitive disadvantages .

We are subject to regulation by trade sanctions and related legislation, which have become an increasingly prevalent instrument of

foreign policy in recent years. Sanctions lists are generated by a wide variety of government agencies in countries where we do

business, and the individuals, entities and products on these lists are being modified with increasing frequency in recent years. Due to

our scale and footprint, we must monitor existing sanctions closely and exercise caution to avoid trading with any sanctioned country,

individual or organization. The penalties for non-compliance with sanctions regimes are severe; offenses for breach of sanctions

regimes can be both civil and criminal in nature. We could therefore be adversely affected by sanctions if we fail to closely monitor

compliance with sanctions regimes, which could adversely affect our results of operations, cash flows and financial condition, and the

trading price of our ordinary shares.

Furthermore, following the Combination, we are required to comply with securities laws and other laws and regulations applicable in

the U.S., the U.K. and Ireland, which resulted in considerable legal and financial compliance costs.

Ongoing and future compliance with existing and new laws and requirements has the potential to disrupt and/or burden our business

operations and may require significant expenditures, and our existing reserves for specific matters may not be adequate to cover future

costs. In particular, our manufacturing operations consume significant amounts of energy, and we may in the future incur additional or

increased capital, operating and other expenditures from changes due to new or increased climate-related and other environmental

requirements. We could also incur substantial liabilities, including fines or sanctions, enforcement actions, natural resource damages

claims, cleanup and closure costs, and third-party claims for property damage and personal injury under environmental and other laws.

Finally, the cost of compliance or the failure to comply with such laws and regulations could adversely affect our results of operations,

cash flows and financial condition, and the trading price of our ordinary shares.

We are subject to a growing number of environmental laws and regulations, and the cost of compliance or the failure to comply

with, and any liabilities under, current and future laws and regulations may negatively affect our business .

Environmental compliance requirements are a significant factor affecting our business. Our manufacturing processes involve the use

of natural resources, such as virgin wood fiber and fresh water, discharges to water, air emissions and waste handling and disposal

activities. These processes are subject to numerous international, national, regional, provincial, state and local environmental laws and

regulations, as well as the requirements of environmental permits and similar authorizations issued by various government authorities.

Complex and lengthy processes may be required to obtain and renew approvals, permits, and licenses for new, existing or modified

facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and

emergency protocols. We have incurred, and expect that we will continue to incur, significant capital, operating and other expenditures

complying with applicable environmental laws and regulations. Changes in environmental laws, as well as litigation relating to these

laws, could result in more stringent or additional environmental compliance obligations for the Company that may require additional

capital investments or increase our operating costs.

We are involved in various administrative and other proceedings relating to environmental matters that arise in the normal course of

business, and we may become involved in similar matters in the future. Although the ultimate outcome of these proceedings cannot be

predicted and we cannot at this time estimate any reasonably possible losses based on available information, we do not believe that the

currently expected outcome of any environmental proceedings and claims that are pending or threatened against us will have a

material adverse effect on our results of operations, financial condition or cash flows.

We also may incur significant expenditures in connection with the required remediation of environmental conditions at both currently

owned and formerly owned facilities, as well as in connection with various sites owned or operated by third parties. While we believe

that we can assert claims for indemnification of remediation expenses pursuant to rights we have under certain agreements in respect

of certain remediation sites and we have insurance coverage, subject to applicable deductibles or retentions, policy limits and other

conditions, for certain environmental matters, we may not be successful with respect to any claim regarding these insurance or

indemnification rights and, if we are successful, any amounts paid pursuant to the insurance or indemnification rights may not be

sufficient to cover all our costs and expenses. We also cannot predict whether we will be required to perform remediation projects at

other locations, and it is possible that our remediation requirements and costs could increase materially in the future and exceed

current reserves. In addition, we cannot currently determine the impact that future changes in cleanup standards or environmental

laws, regulations or enforcement practices will have on our results of operations, financial condition or cash flows. Any of these

circumstances could adversely affect our results of operations, cash flows and financial condition, and the trading price of our ordinary

shares.

Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse

effect on our reputation, business, financial condition and results of operations.

Changes or proposed changes in U.S. or other countries’ trade policies may result in restrictions and economic disincentives on

international trade. Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger

retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory

measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory or consumer-driven)

either in the U.S. or in other countries could affect the trade environment. We, like many other multinational corporations, conduct a

significant amount of business that would be impacted by changes to the trade policies of the U.S. and other countries (including

governmental action related to tariffs, international trade agreements, or economic sanctions). Such changes have the potential to

adversely impact the U.S. economy or certain sectors thereof or the economy of another country in which we conduct operations, our

industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial

condition and results of operations.

We are subject to compliance with antitrust and similar legislation in the jurisdictions in which we operate.

We are subject to legislation in many of the jurisdictions in which we operate relating to unfair competitive practices and similar

behavior. From time to time, we have been subject to allegations of such practices and regulatory investigations or proceedings with

respect thereto. For example, on July 29, 2025, we were named among the defendants in a class action lawsuit filed in the U.S. District

Court for the Northern District of Illinois alleging violations of U.S. antitrust laws. Such allegations, investigations or proceedings

(irrespective of merit) may require, and have required, us to devote significant management resources to defending ourselves. In the

event that such allegations are proven, we may be subject to fines, damages awards and other expenses, and our reputation may be

harmed, which could have a material adverse effect on our business, results of operations, cash flows and financial condition, and the

trading price of our ordinary shares.

For additional information, see “Note 21. Commitments and Contingencies ” of the Notes to Consolidated Financial Statements.

We are subject to a number of laws and regulations relating to privacy, security and data protection, and failure to comply with

such laws and regulations could adversely affect our business and our financial condition or lead to fines and/or litigation.

We are subject to a number of laws and regulations relating to privacy, security and data protection, including the General Data

Protection Regulation (EU 2016/679) (“GDPR”) and new and evolving privacy laws in the United States, Europe, Latin America, and

elsewhere. These laws and regulations have created individual privacy rights, imposed increased obligations on companies handling

personal data, and increased potential exposure to fines and penalties as a result of breaches of such privacy, security or data

protection laws. Additionally, new laws or regulations governing privacy, security, artificial intelligence and data protection may be

introduced which apply to us in any of the jurisdictions in which we operate. The nature and extent of any such new and/or amended

laws or regulations, and the impact they may have on us, cannot be predicted.

We rely on third-party service providers and our own employees and systems to collect and process personal data and to maintain our

databases, and as a result, we are exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, or damaged or

processed in breach of such privacy, security or data protection laws. These events could result in disruptions and damage, or the

misappropriation of sensitive data, and depending on their nature and scope, could lead to the compromise of confidential information,

improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes,

operational disruptions and exposure to liability. Such disruptions or misappropriations and the resulting repercussions, including

reputational damage and legal claims or proceedings, may have a material adverse effect on our business, results of operations, cash

flows and financial condition, and the trading price of our ordinary shares. See also “ We are subject to cybersecurity risks that could

threaten the confidentiality, integrity and availability of data in our systems, and could result in disruptions to our operations and

adversely affect our operations, cash flows and financial condition .”

While we endeavor to comply with all applicable laws and regulations relating to privacy, security, artificial intelligence and data

protection, it is possible that such requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to

another or may conflict with other laws or our practices. That concern is particularly relevant for the GDPR, as different EU member

state regulators may differ as to their interpretation of the GDPR and the approach they may take to breaches, enforcement, complaints

or the exercise of rights to access personal data by individuals. Any perceived or actual failure by us to protect confidential data,

personal data, any material non-compliance with privacy, security or data protection laws or regulations or any general IT system

failure may harm our reputation and credibility, adversely affect our revenues, reduce our ability to attract or retain customers, result

in litigation or other actions being brought against us and the imposition of significant fines and, as a result, could have a material

adverse effect on our business, results of operations, cash flows and financial condition, and the trading price of our ordinary shares.

Failure to comply with applicable occupational health and safety laws and regulations or maintain good health and safety and

employee well-being practices in our facilities may have a material adverse effect on our business.

We are subject to a broad range of laws and regulations relating to occupational health and safety, and our safety program includes

measures required for compliance. We have incurred, and will continue to incur, operating costs and capital expenditures to meet our

health and safety obligations, as well as to continually improve our safety systems.

In addition, our business involves the use of heavy equipment, machinery and chemicals and requires the performance of activities that

create safety exposures, including the performance of relatively difficult and specialized tasks. Safeguarding the health, safety and

overall well-being of our colleagues is a top concern, critical to attracting and retaining the best talent, and plays a pivotal role in

realizing our business and sustainability objectives. We implement our health and safety requirements through a safety management

system that includes best practice sharing and operational learning. We seek to reduce exposures and eliminate serious injuries and

fatalities through engagement, execution of targeted risk reduction measures, and implementation of systems that promote continuous

improvement. Despite such efforts, a serious incident affecting the health and safety of any of our employees could occur and disrupt

our operations. There is also a risk of significant fines and penalties or litigation if a health and safety incident occurs. Furthermore,

disruption of operations caused by a major incident could have a material adverse effect on our customer relationships, business,

results of operations, financial condition and the trading price of our ordinary shares. Additionally, portions of our operations are in

areas, including those with ongoing political or geopolitical uncertainty, which could pose security risks to our employees or

operations. See also “As a leading global manufacturing business, we have been, and may be in the future, adversely affected by

factors that are beyond our control, such as economic and financial market conditions, geopolitical conflicts and other social and

political unrest or change ” and “ We are exposed to risks related to international sales and operation s.”

The Company’s maintenance of two exchange listings may adversely affect liquidity in the market for our shares and result in

pricing differentials of our shares between the two exchanges .

Given trading in our shares on the NYSE and the London Stock Exchange (“ LSE”) takes place in different currencies (U.S. dollars on

the NYSE and pounds sterling on the LSE) and at different times (resulting from different time zones, different trading hours and

different trading days for the NYSE and the LSE), the trading prices of our shares on these two exchanges may at times differ due to

these and other factors. Any decrease in the price of our ordinary shares on the NYSE could cause a decrease in the trading price of

our ordinary shares on the LSE and vice versa.

We are required to comply with the Sarbanes-Oxley Act, and we may continue to incur significant costs and devote substantial

management time towards maintaining and improving our internal controls, which may materially adversely affect our operating

results in the future.

In addition to complying with securities laws and other laws and regulations applicable in the U.S., the U.K. and Ireland, we are

required to comply with the internal control, evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act of

2002 (the “Sarbanes-Oxley Act”), of which we have incurred and expect to continue to incur considerable legal and financial

compliance costs. Our management is responsible for establishing, maintaining and reporting on the Company’s internal controls over

financial reporting and disclosure controls and procedures to comply with applicable requirements, including the reporting

requirements of the Sarbanes-Oxley Act. These internal controls must be designed by management to achieve the objective of

providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

purposes and in accordance with GAAP. We are continuing to improve and refine our disclosure controls and procedures and internal

control over financial reporting to achieve this. Pursuant to Section 404(a) of the Sarbanes-Oxley Act, we are required to furnish a

report by management on the effectiveness of our internal control over financial reporting. Material weaknesses in our internal control

over financial reporting may be discovered in the future. If we are not able to comply with the requirements of Section 404, or if we or

our accounting firm further identifies deficiencies in our internal control over financial reporting that are deemed to be material

weaknesses, the market price of our ordinary shares could decline and we could be subject to lawsuits, sanctions or investigations by

regulatory authorities, which would require additional financial and management resources.

Risks Related to Our Incorporation in Ireland

We are incorporated in Ireland and Irish law differs from the laws in effect in the U.S. and might afford less protection to our

shareholders.

As an Irish company, we are governed by the Irish Companies Act. The Irish Companies Act differs in some significant, and possibly

material, respects from laws applicable to U.S. corporations and shareholders under various state corporation laws, including the

provisions relating to interested directors, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.

Irish law differs from the laws in effect in the U.S., and our shareholders could have more difficulty protecting their interests than

shareholders of a corporation incorporated in a jurisdiction of the U.S. The U.S. currently does not have a treaty with Ireland providing

for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As such, there is some uncertainty as to

whether the courts of Ireland would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers

based on U.S. federal or state civil liability laws, including the civil liability provisions of the U.S. federal or state securities laws, or

hear actions against us or those persons based on those laws.

Under Irish law, the duties of directors and officers of a company are generally owed to the company only. Shareholders of Irish

companies do not generally have rights to take action against directors or officers of the company under Irish law and may only do so

in limited circumstances. Directors of an Irish company must, in exercising their powers and performing their duties, act with due care

and skill, honesty and in good faith with a view to the best interests of the company. Directors have a duty not to put themselves in a

position in which their duties to the company and their personal interests might conflict and also are under a duty to disclose any

personal interest in any contract or arrangement with the company or any of its subsidiaries. If a director or officer of an Irish company

is found to have breached his or her duties to that company, he or she could be held personally liable to the company in respect of that

breach of duty.

In addition, under Irish law, we must have authority from our shareholders to issue any shares, including shares that are part of the

Company’s authorized but unissued share capital. In addition, unless otherwise authorized by its shareholders, when an Irish company

issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing

shareholders on a pro-rata basis. If we are unable to obtain these authorizations from our shareholders or are otherwise limited by the

terms of our authorizations, our ability to issue shares under our equity compensation plans and, if applicable, to facilitate funding

acquisitions or otherwise raise capital could be adversely affected.

Any attempts to acquire the Company will be subject to the Irish Takeover Rules and subject to the supervisory jurisdiction of the

Irish Takeover Panel and the Board may be limited by the Irish Takeover Rules in its ability to defend an unsolicited takeover

attempt.

The Company is subject to the Irish Takeover Rules, which regulate the conduct of takeovers of, and certain other relevant

transactions affecting, Irish public limited companies listed on certain stock exchanges, including the NYSE and the LSE. The Irish

Takeover Rules are administered by the Irish Takeover Panel, which has supervisory jurisdiction over such transactions. Among other

matters, the Irish Takeover Rules operate to ensure that no offer is frustrated or unfairly prejudiced and, in situations involving

multiple bidders, that there is a level playing field.

The Company is subject to the Irish Takeover Rules, under which we are not permitted to take certain actions that might “frustrate” an

offer for our ordinary shares once we receive an offer, or have reason to believe an offer is or may be imminent, without the approval

of more than 50% of our shareholders entitled to vote at a general meeting of the Company’s shareholders or the consent of the Irish

Takeover Panel. This may limit the ability of the Company’s Board to take defensive actions even if it believes that such defensive

actions would be in the Company’s best interests or the best interests of our shareholders.

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

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

OPERATIONS OF SMURFIT WESTROCK

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

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

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

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

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

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

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

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

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

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

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

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

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

OVERVIEW

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

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

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

markets.

Transaction Agreement and Combination with WestRock

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

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

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

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

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

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

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

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

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

the accounting for the Combination.

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

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

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

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

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

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

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

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

EXECUTIVE SUMMARY

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

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

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

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

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

results.

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

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

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

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

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

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

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

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

detailed review of Smurfit Westrock’s performance.

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

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

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

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

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

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

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

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

SIGNIFICANT FACTORS AND TRENDS AFFECTING SMURFIT WESTROCK’S RESULTS

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

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

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

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

during that period.

Volumes

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

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

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

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

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

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

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

trade restrictions), among others.

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

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

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

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

packaging.

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

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

Prices and Costs

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

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

chemicals, and transportation, overlaying supply and demand balances.

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

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

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

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

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

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

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

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

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

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

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

Foreign Currency Effects

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

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

RESULTS OF OPERATIONS

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

2024 ($ in millions):

Years ended December 31,

Net sales

Cost of goods sold

Gross profit

Selling, general and administrative expenses

Impairment and restructuring costs

Transaction and integration-related expenses associated with the Combination

Operating profit

Interest expense, net

Pension and other postretirement non-service income (expense), net

Other expense, net

Income before income taxes

Income tax expense

Net income

Net income attributable to noncontrolling interests

Net income attributable to common shareholders

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

Net Sales

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

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

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

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

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

Cost of Goods Sold

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

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

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

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

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

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

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

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

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

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

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

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

Impairment and Restructuring Costs

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

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

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

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

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

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

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

and May 2025, respectively.

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

Transaction and Integration-related Expenses Associated with the Combination

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

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

related expenses associated with the Combination consisted primarily of i ntegration-related expenses associated with the Combination

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

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

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

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

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

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

related expenses, such as work associated with information systems.

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

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

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

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

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

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

Interest Expense, Net

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

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

WestRock.

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

and debt issued in connection with the Combination.

Other Expense, Net

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

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

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

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

Income Tax Expense

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

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

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

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

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

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

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

anticipated to impact the total tax expense.

SEGMENT INFORMATION

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

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

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

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

disclosure purposes.

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

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

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

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

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

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

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

the ongoing operating results of the business.

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

and 2024 ($ in millions):

Years ended December 31,

Net sales (aggregate): (1)

North America

Europe, MEA and APAC

LATAM

Segment Adjusted EBITDA:

North America

Europe, MEA and APAC

LATAM

(1) Net sales before intersegment eliminations .

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

North America Segment

Net Sales

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

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

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

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

$311 million impact from a higher sales price mix.

Adjusted EBITDA

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

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

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

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

price mix of $311 million . The higher costs of $244 million were mainly due to the impact of increased e conomic downtim e along

with higher energy costs.

Europe, MEA and APAC Segment

Net Sales

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

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

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

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

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

offset by a negative volume impact of $56 million .

Adjusted EBITDA

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

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

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

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

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

LATAM Segment

Net Sales

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

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

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

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

Adjusted EBITDA

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

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

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

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

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

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

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

other investment activity, including acquisitions .

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

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

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

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

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

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

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

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

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

$8 00 million aggregate principal amount of its 5.185% senior green notes due 2036 (the “USD Notes”), with interest payable semi-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

developments in the market.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

foreseeable future.

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

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

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

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

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

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

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

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

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

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

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

discussion of the Company’s monetization facilities.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

more information.

Cash Flow Activity

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

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

Years ended December 31,

($ in millions)

Net cash provided by operating activities

Net cash used for investing activities

Net cash (used for) provided by financing activities

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

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

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

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

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

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

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

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

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

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

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

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

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

property, plant and equipment of $61 million .

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

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

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

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

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

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

Contractual Obligations and Commitments

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

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

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

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

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

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

payments.

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

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

obligations and timing of expected future payments.

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

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

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

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

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

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

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

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

commitments and the timing of the expected future payments.

Off-Balance Sheet Arrangements

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

NON-GAAP FINANCIAL MEASURE

Definitions

Non-GAAP Financial Measure

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

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

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

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

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

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

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

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

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

presented by other companies.

Adjusted EBITDA

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

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

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

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

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

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

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

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

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

Years ended December 31,

Net income

Income tax expense

Depreciation, depletion and amortization

Impairment and restructuring costs

Transaction and integration-related expenses associated with the Combination

Amortization of fair value step up on inventory

Interest expense, net

Pension and other postretirement non-service (income) expense, net

Share-based compensation expense

Other expense, net

Other adjustments

Adjusted EBITDA

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

adjustments” in the table above.

GUARANTOR SUMMARIZED FINANCIAL INFORMATION

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

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

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

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

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

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

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

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

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

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

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

As outlined above in the section entitled “Liquidity and Capital Resources”, on November 21, 2025, SWF issued $8 00 million

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

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

amended.

The Guarantees

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

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

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

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

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

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

Notes, the New Notes and t he November 2025 Notes , and SKT fully and unconditionally guarantees SWF’s obligations under the

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

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

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

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

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

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

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

against the Obligor Group.

Basis of Preparation of the Summarized Financial Information

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

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

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

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

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

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

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

SUMMARIZED STATEMENT OF OPERATIONS

Year ended

December 31,

Net sales to unrelated parties

Net sales to Non-Obligor Subsidiaries

Gross profit

Interest expense, net with unrelated parties

Interest expense, net with Non-Obligor Subsidiaries

Net income and net income attributable to the Obligor Group

SUMMARIZED BALANCE SHEETS

December 31,

December 31,

ASSETS

Current amounts due from Non-Obligor Subsidiaries

Other current assets

Total current assets

Non-current amounts due from Non-Obligor Subsidiaries

Other non-current assets

Total non-current assets

LIABILITIES

Current amounts due to Non-Obligor Subsidiaries

Other current liabilities

Total current liabilities

Non-current amounts due to Non-Obligor Subsidiaries

Other non-current liabilities

Total non-current liabilities

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

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

Consolidated Financial Statements.

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

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

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

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

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

based on management’s current estimates.

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

Financial Statements:

Business Combinations

From time to time, Smurfit Westrock may enter into business combinations, such as the Combination with WestRock which closed on

July 5, 2024. As described further in “Note 2. Acquisitions ” to the Consolidated Financial Statements, Smurfit Westrock allocated the

$13,461 million aggregate merger consideration to the fair values of WestRock assets acquired and liabilities assumed as of the

Closing Date. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill.

The purchase price allocation for the Merger was revised as additional information about the acquisition-date fair value of assets and

liabilities became available during the measurement period (a period not to exceed 12 months from the Closing Date). The purchase

price allocation was completed during the third quarter of fiscal 2025 after the Company completed the evaluation of the fair value of

acquired property, plant and equipment, intangible assets and certain income tax related items in addition to ensuring all other assets

and liabilities and contingencies had been identified and recorded. The acquisition method of accounting required significant estimates

and assumptions regarding the fair values of the elements of a business combination. The most significant assumptions related to the

fair value estimates of plant and machinery assets acquired as part of property, plant and equipment. The company prepared estimates

and engaged third-party valuation specialists to assist in the valuation of plant and machinery assets, which required significant

judgments and assumptions inherent in the estimates regarding items such as deriving the effective age, economic lives, residual

values and other factors, including estimating future cash flows that Smurfit Westrock expects to generate from the acquired assets.

If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and

projections used to develop these values, we could record future impairment charges. In addition, we have estimated the economic

lives of certain acquired assets, and these lives are used to calculate depreciation and amortization expense. If the Company’s

estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset

could be impaired.

See “Note 1.13. Business Combinations ” and “Note 2. Acquisitions ” to the Consolidated Financial Statements for Smurfit Westrock’s

accounting policy on business combinations and more information on the Combination with WestRock.

Goodwill Impairment

Smurfit Westrock reviews the carrying value of its goodwill annually during the fourth quarter, or more often if events or changes in

circumstances indicate that the carrying amount may exceed fair value as set forth in ASC 350, “Intangibles — Goodwill and Other”

(“ASC 350”). Smurfit Westrock tests goodwill for impairment at the reporting unit level. During the third quarter of 2024, following

the completion of the Combination, the Company changed its reportable segments and reassessed its reporting units. As a result of this

reassessment, the Company identified the following reporting units: (1) North America, which includes operations in the U.S. and

Canada, (2) Europe, MEA and APAC, (3) Mexico, (4) Argentina and Chile, (5) Colombia & Central Cluster, and (6) Brazil. See “Note

1.12. Goodwill and Non-current Assets ” and “Note 10. Goodwill ” to the Consolidated Financial Statements for Smurfit Westrock’s

accounting policy on goodwill and more information on reporting units .

During the fourth quarter of the year ended December 31, 2025 , Smurfit Westrock completed its annual goodwill impairment testing

for each of the Company’s reporting units by performing a qualitative assessment. Multiple factors were evaluated to assess whether it

was more likely than not that the estimated fair value of any reporting unit was below its carrying value. These factors included, but

were not limited to, its expectations for macroeconomic conditions, industry and market considerations, and financial performance,

including planned net sales and earnings of each reporting unit. The qualitative assessment also considered changes since the last

qualitative assessment of all the Company’s reporting units, which was performed in 2024 .

As a result of the qualitative assessment, Smurfit Westrock determined that it was more likely than not that the estimated fair value of

each reporting unit with goodwill exceeded its respective carrying value. Therefore, the Company determined that goodwill for each

reporting unit was not impaired and that a quantitative goodwill test was not required. See “Note 10. Goodwill ” to the Consolidated

Financial Statements for further information about the Company’s annual assessment of goodwill for impairment.

Although the Company believes all relevant factors were considered in the qualitative impairment analysis to reach the conclusion that

goodwill was not impaired, significant changes in any one of the assumptions, estimates and market factors underlying Smurfit

Westrock’s fair value determinations could produce a significantly different result potentially leading to the recording of an

impairment that could have significant impacts on the results of operations and financial position of the Company. Smurfit Westrock

has not made any material changes to its impairment loss assessment methodology during the past three fiscal years.

Accounting for Income Taxes

Smurfit Westrock’s income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits, reflect

management’s best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in

determining the consolidated income tax expense. In evaluating its ability to recover deferred tax assets and establishing or reducing a

valuation allowance in the jurisdiction from which they arise, Smurfit Westrock considers all available positive and negative evidence,

including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and the

effect of enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or

realized. A high degree of judgment is required to assess the impact of possible future outcomes on Smurfit Westrock’s current and

deferred tax positions.

As a result of this evaluation, Smurfit Westrock recorded valuation allowances of $429 million as of December 31, 2025 and

$372 million as of December 31, 2024 , related to certain deferred tax assets, primarily tax loss carryforwards, where there is

uncertainty as to the ultimate realization of a benefit. Smurfit Westrock regularly reviews the recoverability of deferred tax assets for

adjustments to taxable income, changes in tax laws or interpretations thereof and tax rates, as all of these could impact its effective tax

rate.

Smurfit Westrock is subject to routine tax audits and examinations. It uses significant judgment in (i) determining whether a tax

position, based solely on its technical merits, is “more likely than not” to be sustained upon examination and (ii) measuring the tax

benefit as the largest amount of benefit that is “more likely than not” to be realized upon settlement. Smurfit Westrock does not record

any benefit for tax positions that do not meet the “more likely than not” recognition threshold at the balance sheet date. Resolutions of

current uncertain tax positions are not expected to have a material adverse effect on the effective tax rate or on cashflows. Smurfit

Westrock has a progressive dividend strategy which means that it will remit earnings from some of its overseas subsidiaries to the

parent company in Ireland. Its foreign earnings are generally taxed at rates that are higher than in Ireland and so no incremental tax

should arise there, due to the availability of foreign tax credits. However, some earnings may be subject to limited additional foreign

taxes upon repatriation. Smurfit Westrock continues to indefinitely reinvest its foreign earnings as part of its wider capital allocation

strategy. To the extent that it cannot assert indefinite reinvestment of earnings, it records a deferred tax liability on its foreign earnings

at the applicable tax rate if it is not otherwise possible to remit earnings without additional tax.

As of December 31, 2025 and 2024 , Smurfit Westrock recognized a deferred tax liability of $209 million and $179 million ,

respectively, on unremitted earnings, in respect of foreign income taxes or withholding taxes for expected or assumed repatriation,

respectively. As Smurfit Westrock can decide which subsidiaries should pay dividends, it does not expect that this deferred tax

liability will have a material impact on its cash flows in the foreseeable future.

The determination of the amount of unrecognized deferred tax liability related to indefinitely invested foreign earnings not subject to

additional outside basis difference taxes is not practicable. A 1% change in the effective tax rate would increase or decrease Smurfit

Westrock’s income tax expense for the year ended December 31, 2025 by $10 million .

In 2021, political agreement was reached by the OECD Inclusive Framework on a two-pillar approach to international tax reform. This

includes the commitment to introduce a minimum effective tax rate of 15% for companies with revenue above €750 million (‘Pillar

Two’). The agreement has been enacted in most of the countries where Smurfit Westrock has business activities. The law was enacted

in Ireland with an effective date January 1, 2024, and it was broadly in line with the OECD Inclusive Framework. For the year ended

December 31, 2025 , a Pillar Two assessment was performed and its impact was not significant.

The Company has made accounting policy elections to account for the income tax effect(s) of U.S. Global Intangible Low-Taxed

Income (GILTI) as a period cost and to account for the income tax effect(s) of investment tax credits under the flow-through method.

Pension Obligations

The determination of pension obligations and pension expense requires various assumptions that can significantly affect liability and

expense amounts, such as the expected long-term rate of return on plan assets, discount rates, projected future compensation increases

and mortality rates for each of Smurfit Westrock’s plans. These assumptions are determined annually in conjunction with Smurfit

Westrock’s actuary. The accounting for these matters involves the making of estimates based on current facts, circumstances and

assumptions that, in management’s judgment, could change in a manner that would materially affect management’s future estimates

with respect to such matters and, accordingly, could cause Smurfit Westrock’s future reported financial condition and results of

operations to differ materially from those that Smurfit Westrock is currently reporting based on management’s current estimates.

A 50-basis point change in the discount rate, compensation level and expected long-term rate of return on plan assets, factoring in our

corridor as appropriate, would have had the following effect on Smurfit Westrock’s pension expense for the year ended December 31,

2025 , (in millions):

Defined Benefit Pension Plans

50 Basis Point

Increase

50 Basis Point

Decrease

Discount rate

Compensation level

Expected long-term rate of return on plan assets

NEW ACCOUNTING STANDARDS

See “Note 1. Description of Business and Summary of Significant Accounting Policies ” of the Notes to t he Consolidated Financial

Statements included elsewhere in this Annual Report on Form 10-K for a full description of recent accounting pronouncements,

including the respective expected dates of adoption and expected effects on Smurfit Westrock ’s results of operations and financial

condition.