Smurfit Westrock · 10-Q · Item 2 MD&A

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

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

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

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

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

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

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

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

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

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

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

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

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

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

OVERVIEW

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

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

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

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

EXECUTIVE SUMMARY

Smurfit Westrock’s net sales increased by $91 million, to $8,031 million in the three months ended June 30, 2026, from

$7,940 million in the three months ended June 30, 2025. The increase was primarily due to a net positive foreign currency impact that

was partially offset by a lower selling price mix. Smurfit Westrock’s net sales increased by $147 million, to $15,743 million in the six

months ended June 30, 2026, from $15,596 million in the six months ended June 30, 2025. The increase was primarily due to a net

positive foreign currency impact that was largely offset by a negative volume impact and a lower selling price mix.

Net income (loss) attributable to common shareholders increased by $117 million in the three months ended June 30, 2026 and

decreased by $202 million in the six months ended June 30, 2026. In addition to the increase in net sales, net income (loss)

attributable to common shareholders in the three months ended June 30, 2026 was primarily impacted by lower impairment and

restructuring costs, decreased raw material costs, lower downtime and lower transaction and integration-related expenses associated

with the Combination that were partially offset by an increase in freight costs, higher depreciation, depletion and amortization

expense and increased energy costs compared to the prior year quarter. Net income (loss) attributable to common shareholders

decreased by $202 million in the six months ended June 30, 2026 was primarily impacted by higher cost of goods sold, including

increased freight costs, higher depreciation, depletion and amortization expense, higher downtime and increased energy costs, as well

as the impact of accelerated depreciation for machine closures and adverse weather incurred in the first quarter of 2026, partially

offset by the increase in net sales. These increases were partially offset by lower impairment and restructuring costs, decreased raw

material costs and lower transaction and integration-related expenses associated with the Combination compared to the prior year

period.

Net cash provided by operating activities decreased by $95 million, to $969 million in the six months ended June 30, 2026, from

$1,064 million in the six months ended June 30, 2025, primarily due to a $106 million decrease in net income adjusted for non-cash

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

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

than cost. Changes in operating assets and liabilities were a benefit of $11 million compared to the prior year period. T1During the six

months ended June 30, 2026, Smurfit Westrock invested $1,089 million in capital expenditures. The Company’s net cash inflow from

changes in debt was $439 million, and it paid $474 million of cash dividends to shareholders. See the section entitled “Liquidity and

Capital Resources” below for additional information.

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

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. T2Normal patterns of

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

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

trade restrictions), among others.

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

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

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

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

packaging.

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

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

Prices and Costs

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

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

chemicals, and transportation, overlaying supply and demand balances.

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

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

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

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

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

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

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

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

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

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

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

Foreign Currency Effects

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

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

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

RESULTS OF OPERATIONS

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

Three months ended June 30,

Six months ended June 30,

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

(1)

(1)

Operating profit

Interest expense, net

Pension and other postretirement non-service income,

net

7

Other expense, net

Income before income taxes

Income tax expense

Net income (loss)

Net loss (income) attributable to noncontrolling

interests

1

(2)

3

—

Net income (loss) attributable to common

shareholders

Results of operations for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025

Net Sales

Net sales increased by $91 million, to $8,031 million in the three months ended June 30, 2026, from $7,940 million in the three

months ended June 30, 2025. T3This increase was primarily due to a $146 million net positive foreign currency impact that was partially

offset by a lower selling price mix of $60 million.

Net sales increased by $147 million, to $15,743 million in the six months ended June 30, 2026, from $15,596 million in the six months

ended June 30, 2025. This increase was primarily due to a $462 million net positive foreign currency impact that was partially offset

by a $258 million impact of lower volumes and a lower selling price mix of $67 million.

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

Cost of Goods Sold

Cost of goods sold increased by $207 million, to $6,632 million in the three months ended June 30, 2026, from $6,425 million in the

three months ended June 30, 2025. T4This increase in cost of goods sold was primarily due to a $102 million net negative foreign

currency impact, $90 million of higher freight costs and $47 million higher depreciation, depletion and amortization expense and $22

million higher energy costs, partially offset by the impact of a $71 million decrease in raw material costs, $26 million of lower

downtime.

Cost of goods sold increased by $572 million, to $13,076 million in the six months ended June 30, 2026, from $12,504 million in the

six months ended June 30, 2025. The increase in cost of goods sold was primarily due to a $379 million net negative foreign currency

impact, $138 million of higher freight costs, $78 million higher depreciation, depletion and amortization expense, $71 million of

accelerated depreciation costs for machine closures, $65 million impact of adverse weather, $48 million of higher downtime and $31

million of higher energy costs, partially offset by lower volumes of $234 million and the impact of a $43 million decrease in raw

material costs.

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

SG&A expenses increased by $7 million, to $970 million in the three months ended June 30, 2026, from $963 million in the three

SG&A expenses decreased by $5 million, to $1,931 million in the six months ended June 30, 2026, from $1,936 million in the six

Impairment and Restructuring Costs

Impairment and restructuring costs decreased by $161 million, to $119 million in the three months ended June 30, 2026, from $280

million in the three months ended June 30, 2025. In the three months ended June 30, 2026, impairment and restructuring costs

consisted of $72 million of impairment charges and $47 million of restructuring costs. In the three months ended June 30, 2025,

impairment and restructuring costs consisted of $184 million of impairment charges and $96 million of restructuring costs. The higher

impairment and restructuring costs in the three months ended June 30, 2025 were primarily associated with the April 2025

Announced Closures.

Impairment and restructuring costs decreased by $122 million, to $173 million in the six months ended June 30, 2026, from

$295 million in the six months ended June 30, 2025. In the six months ended June 30, 2026, impairment and restructuring costs

consisted of $107 million of impairment charges and $66 million of restructuring costs. In the six months ended June 30, 2025,

impairment and restructuring costs consisted of $184 million of impairment charges and $111 million of restructuring costs.

See “Note 4. Impairment and Restructuring Costs” 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 $1 million and $21 million in

the three months ended June 30, 2026 and 2025, respectively. In the three months ended June 30, 2025, transaction and integration-

related expenses consisted primarily of $23 million of integration-related expenses associated with the Combination.

The Company incurred transaction and integration-related expenses associated with the Combination of $1 million and $57 million in

the six months ended June 30, 2026 and 2025, respectively. In the six months ended June 30, 2025, transaction and integration-related

expenses consisted of $57 million of integration-related expenses associated with the Combination.

Interest Expense, Net

Interest expense, net decreased by $3 million to $179 million in the three months ended June 30, 2026, from $182 million in the three

Interest expense, net decreased by $4 million to $345 million in the six months ended June 30, 2026, from $349 million in the six

See “Note 8. Interest” of the Condensed Consolidated Financial Statements for additional information.

Pension and Other Postretirement Non-Service Income, Net

Pension and other postretirement non-service income, net increased by $3 million with income of $10 million in the three months

Pension and other postretirement non-service income, net increased by $2 million, to income of $18 million in the six months ended

See “Note 12. Retirement Plans and Deferred Compensation Arrangements” of the Condensed Consolidated Financial Statements for

additional information.

Other Expense, Net

Other expense, net decreased by $6 million to expense of $12 million in the three months ended June 30, 2026, from expense of $18

million in the three months ended June 30, 2025.

Other expense, net was unchanged at $23 million for the six months ended June 30, 2026 compared with $23 million for the six

Income Tax Expense

Income tax expense was $40 million in the three months ended June 30, 2026, compared to an income tax expense of $84 million in

the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2026, was 31.3%, while the effective

Income tax expense was $61 million in the six months ended June 30, 2026, compared to an income tax expense of $92 million in the

six months ended June 30, 2025. The effective tax rate for the six months ended June 30, 2026, was 28.8%, while the effective tax rate

See “Note 11. Income Taxes” of the Condensed Consolidated Financial Statements for the primary factors impacting our effective tax

rates.

SEGMENT INFORMATION

Smurfit Westrock has identified its three 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, net, share-based compensation expense,

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

and other specific items that management believes are not indicative of the ongoing operating results of the business.

The following table contains selected financial information for Smurfit Westrock’s segments for the periods presented ($ in millions):

Three months ended June 30,

Six months ended June 30,

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 three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025

North America Segment

Net Sales

Net sales before intersegment eliminations for the North America segment decreased by $12 million, to $4,743 million in the three

months ended June 30, 2026, from $4,755 million in the three months ended June 30, 2025. This decrease was primarily due to a

lower selling price mix of $46 million that was partially offset by a net positive foreign currency impact of $33 million.

Net sales before intersegment eliminations for the North America segment decreased by $179 million, to $9,245 million in the six

months ended June 30, 2026, from $9,424 million in the six months ended June 30, 2025. This decrease was primarily due to lower

volumes of $258 million and a $5 million impact from a lower selling price mix, that was partially offset by a net positive foreign

currency impact of $84 million.

Adjusted EBITDA

Adjusted EBITDA for the North America segment decreased by $48 million, to $704 million in the three months ended June 30, 2026,

from $752 million in the three months ended June 30, 2025. This decrease was primarily due to a lower selling price mix of $46

million and higher costs of $7 million, partially offset by a $10 million favorable impact of product mix on volume. Higher costs of $7

million were primarily due to higher freight costs of $61 million, partially offset by lower downtime of $26 million and lower raw

material costs of $14 million.

Adjusted EBITDA for the North America segment decreased by $236 million, to $1,301 million in the six months ended June 30,

2026, from $1,537 million in the six months ended June 30, 2025. This decrease was primarily due to higher costs of $183 million, a

$38 million impact of lower volumes (including product mix) and a lower selling price mix of $5 million. Higher costs of $183 million

were primarily due to $99 million of higher freight costs, a $55 million impact of adverse weather and $48 million of higher

downtime.

Europe, MEA and APAC Segment

Net Sales

Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $48 million, to $2,826 million in

the three months ended June 30, 2026, from $2,778 million in the three months ended June 30, 2025. This increase was primarily due

to a net positive foreign currency impact of $77 million primarily due to the strengthening of the euro against the U.S. dollar, partially

offset by a lower selling price mix of $18 million and lower volumes of $11 million.

Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $237 million, to $5,597 million in

the six months ended June 30, 2026, from $5,360 million in the six months ended June 30, 2025. This increase was primarily due to a

net positive foreign currency impact of $315 million primarily due to the strengthening of the euro against the U.S. dollar, partially

offset by a lower selling price mix of $67 million and lower volumes of $11 million.

Adjusted EBITDA

Adjusted EBITDA for the Europe, MEA and APAC segment increased by $8 million, to $380 million in the three months ended

June 30, 2026, from $372 million in the three months ended June 30, 2025. The increase was primarily due to lower costs of $12

million and a net positive foreign currency impact of $10 million that were partially offset by a lower selling price mix impact of $18

million. The $12 million of lower costs was primarily due to $58 million of lower raw material costs, partially offset by $24 million of

higher freight costs and $18 million of higher energy costs.

Adjusted EBITDA for the Europe, MEA and APAC segment increased by $40 million, to $801 million in the six months ended

June 30, 2026, from $761 million in the six months ended June 30, 2025. The increase was primarily due to lower costs of $52 million

and a net positive foreign currency impact of $54 million that were partially offset by a lower selling price mix impact of $67 million.

The $52 million of lower costs was primarily due to $86 million of lower raw material costs and $10 million of lower energy costs,

partially offset by higher freight costs of $34 million.

LATAM Segment

Net Sales

Net sales before intersegment eliminations for the LATAM segment increased by $41 million, to $559 million in the three months

ended June 30, 2026, from $518 million in the three months ended June 30, 2025. This increase was primarily due to a net positive

foreign currency impact.

Net sales before intersegment eliminations for the LATAM segment increased by $68 million, to $1,099 million in the six months

ended June 30, 2026, from $1,031 million in the six months ended June 30, 2025. This increase was primarily due to a net positive

foreign currency impact.

Adjusted EBITDA

Adjusted EBITDA for the LATAM segment increased by $1 million, to $124 million in the three months ended June 30, 2026, from

$123 million in the three months ended June 30, 2025. The increase was primarily due to a net positive foreign currency impact of $9

million, partially offset by higher costs of $7 million primarily due to higher energy costs.

Adjusted EBITDA for the LATAM segment decreased by $5 million, to $233 million in the six months ended June 30, 2026, from

$238 million in the six months ended June 30, 2025. This decrease was primarily due to higher costs of $17 million primarily due to

higher energy costs, partially offset by a net positive foreign currency impact of $9 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 2026, we exercised the second one-year extension option, extending the

maturity date to June 2031. The amount of commercial paper outstanding does not reduce available capacity under the revolving loan

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

dividends and other investment activity, including acquisitions.

As of June 30, 2026, Smurfit Westrock held cash and cash equivalents of $677 million, of which $137 million were held in euro, $205

million were held in U.S. dollars and $335 million were held in other currencies. At June 30, 2026, the Company had $4,562 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 5.0 years as of June 30, 2026. T5Combined with cash and cash

equivalents of $677 million, the Company had $5,239 million of available liquidity.

As of June 30, 2026, Smurfit Westrock had $14,164 million of total debt. As of June 30, 2026, the carrying amount of current debt

was $931 million. In the six months ended June 30, 2026, total debt increased by $391 million. Excluding changes in carrying value,

such as translation adjustments and amortization moves, borrowings increased by $439 million. See “Note 10. Debt” of the Condensed

Consolidated Financial Statements for additional debt-related information.

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

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

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

foreseeable future.

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

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

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

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

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

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

guidance under “Transfers and Servicing” (“ASC 860”), resulting in derecognition of such receivables from the Company’s

Condensed Consolidated Balance Sheets. Receivables involved with these customer-based SCF programs may vary from period to

period, and were 6% of the Company’s accounts receivable balance at June 30, 2026. 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 9. Fair Value Measurement” of the Condensed 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 Condensed Consolidated Balance Sheets and the activity is reflected in “Net cash

provided by operating activities” in the Company’s Condensed Consolidated Statements of Cash Flows. Based on correspondence

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

to sell to the financial institutions varies from period to period, the amount generally averages approximately 10-14% of the

Company’s accounts payable balance. The outstanding payment obligations to financial institutions under these programs were

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 10.

Debt” and “Note 16. Variable Interest Entities” of the Condensed Consolidated Financial Statements for a discussion of the

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

Cash Flow Activity

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

Flows for the periods presented ($ in millions):

Six months ended June 30,

Net cash provided by operating activities

Net cash used for investing activities

Net cash used for financing activities

Net cash provided by operating activities decreased by $95 million to $969 million in the six months ended June 30, 2026 from

$1,064 million in the six months ended June 30, 2025, primarily due to a $106 million decrease in net income adjusted for non-cash

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

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

than cost. Changes in operating assets and liabilities were a benefit of $11 million compared to the prior year period. The decrease in

the cash outflows from changes in operating assets and liabilities was inclusive of cash payments to financial institutions of

$23 million in connection with the Company’s accounts receivable monetization agreements in the six months ended June 30, 2026,

compared to cash payments of $12 million in the prior year period. See “Note 9. Fair Value Measurement” of the Condensed

Consolidated Financial Statements for additional information.

Net cash used for investing activities of $1,075 million in the six months ended June 30, 2026 consisted primarily of capital

expenditures of $1,089 million and cash paid for purchase of businesses, net of cash acquired of $19 million that were partially offset

by proceeds from sale of property, plant and equipment of $19 million. Net cash used for investing activities of $996 million in the six

months ended June 30, 2025 consisted primarily of capital expenditures of $999 million.

Net cash used for financing activities of $109 million in the six months ended June 30, 2026 consisted primarily of outflows from cash

dividends paid to shareholders of $474 million and tax paid in connection with shares withheld from employees of $85 million that

were partially offset by cash inflows from a net increase in debt of $439 million and proceeds from re-issuance of shares from treasury

stock of $14 million. Net cash used for financing activities of $204 million in the six months ended June 30, 2025 consisted primarily

of cash outflows from dividends paid to shareholders of $450 million and tax paid in connection with shares withheld from employees

of $67 million, partially offset by cash inflows from a net increase in debt of $318 million.

Contractual Obligations and Commitments

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

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

contractual obligations are reflected on Smurfit Westrock’s Condensed Consolidated Balance Sheets as of June 30, 2026, while others

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

including current portion, lease obligations, purchase obligations and other obligations.

There have been no material changes to the contractual obligations and commitments disclosed in “Management’s Discussion and

Analysis of Financial Condition and Results of Operations” of the Form 10-K for the fiscal year ended December 31, 2025.

Off-Balance Sheet Arrangements

As of June 30, 2026, 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 (loss) before

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

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

related expenses associated with the Combination 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 (loss)”.

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

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

Three months ended June 30,

Six months ended June 30,

Net income (loss)

Income tax expense

Depreciation, depletion and amortization

Impairment and restructuring costs

Transaction and integration-related expenses associated

with the Combination

1

1

Interest expense, net

Pension and other postretirement non-service income,

net

(7)

Share-based compensation expense

Other expense, net

Other adjustments

6

Adjusted EBITDA

See “Note 2. Segment Information” of the Condensed Consolidated Financial Statements for additional information regarding “Other

adjustments” in the table above.

GUARANTOR SUMMARIZED FINANCIAL INFORMATION

On April 3, 2024, Smurfit Kappa Treasury Unlimited Company (“SKT”) completed a private offering of $750 million aggregate

principal amount of 5.200% senior 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, Smurfit Westrock Financing Designated Activity Company (“SWF” and together with SKT, the

“Issuers”) completed a private offering of $850 million aggregate principal amount of 5.418% senior 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. On November 21, 2025, SWF issued $800 million aggregate principal amount of 5.185% senior green notes due 2036, and

on November 24, 2025 SKT issued €500 million aggregate principal amount of 3.489% senior green notes due 2031 (“November

2025 Notes”). These notes have been registered under the U.S. Securities Act of 1933, as amended.

The Guarantees

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

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

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

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

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

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

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

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

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

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

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

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

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

Group, whether by dividends, loans or otherwise. Holders of the Original Notes, 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 Condensed

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

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

SUMMARIZED STATEMENT OF OPERATIONS

Six months ended

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

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

There have been no material changes during the six months ended June 30, 2026 to Smurfit Westrock’s critical accounting policies

and estimates as identified in Smurfit Westrock’s Annual Report on Form 10-K for the year ended December 31, 2025.

NEW ACCOUNTING STANDARDS

See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Condensed Consolidated Financial

Statements for a full description of recent accounting pronouncements, including the respective expected dates of adoption and

expected effects on Smurfit Westrock’s results of operations and financial condition.