Item 8. - Financial Statements and Supplementary Data

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Item 8. - Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Amcor plc

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Amcor plc and its subsidiaries (the “Company”) as of June 30, 2022 and 2021 and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended June 30, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of June 30, 2022 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021 and the results of its operations and its cash flows for each of the three years in the period ended June 30,2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of assets and liabilities held for sale

As described in Notes 2, 4, and 6 to the consolidated financial statements, during the fourth quarter of fiscal year 2022, the Company classified the assets and liabilities of its three manufacturing facilities in Russia (“Russian business”) as held for sale, as a result of the Company's decision to sell its Russian operations. The Company has recorded an impairment charge of $90 million as of June 30, 2022, within the line item “Restructuring, impairment, and related expenses, net” on the consolidated statements of income. Assets and liabilities held for sale are reported at the lower of their carrying value or fair value less cost to sell. Fair value is determined based on management’s assessment of indicative bids, a market multiples model in which a market multiple is applied to forecasted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), discounted cash flows, appraised values or management's estimates, depending on the specific situation.

The principal considerations for our determination that performing procedures relating to the valuation of assets and liabilities held for sale is a critical audit matter are the significant judgment by management when developing the fair value measurement of the Russian business and a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to market multiples and forecasted EBITDA.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s valuation of assets and liabilities held for sale. These procedures also included, among others, (i) testing management’s process for developing the fair value estimate; (ii) evaluating the appropriateness of the market multiples model; (iii) testing the completeness and accuracy of underlying data used in the model and (iv) evaluating the reasonableness of the significant assumptions used by management related to market multiples and forecasted EBITDA. Evaluating management’s assumptions related to market multiples and forecasted EBITDA involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Russian business; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.


/s/ PricewaterhouseCoopers AG
Zurich, Switzerland
August 18, 2022

We have served as the Company's auditor since 2019.

Amcor plc and Subsidiaries

Consolidated Statements of Income

($ in millions, except per share data)


For the years ended June 30,	2022		2021		2020
Net sales	$	14,544	$	12,861	$	12,468
Cost of sales	(11,724)		(10,129)		(9,932)

Gross profit	2,820		2,732		2,536

Operating expenses:
Selling, general, and administrative expenses	(1,284)		(1,292)		(1,385)
Research and development expenses	(96)		(100)		(97)
Restructuring, impairment, and related expenses, net	(234)		(94)		(115)
Other income, net	33		75		55

Operating income	1,239		1,321		994

Interest income	24		14		22
Interest expense	(159)		(153)		(207)
Other non-operating income, net	11		11		16

Income from continuing operations before income taxes and equity in income/(loss) of affiliated companies	1,115		1,193		825

Income tax expense	(300)		(261)		(187)
Equity in income/(loss) of affiliated companies, net of tax	—		19		(14)

Income from continuing operations	815		951		624

Loss from discontinued operations, net of tax	—		—		(8)

Net income	$	815	$	951	$	616

Net income attributable to non-controlling interests	(10)		(12)		(4)

Net income attributable to Amcor plc	$	805	$	939	$	612

Basic earnings per share:
Income from continuing operations	$	0.532	$	0.604	$	0.387
Loss from discontinued operations	—		—		(0.005)
Net income	$	0.532	$	0.604	$	0.382

Diluted earnings per share:
Income from continuing operations	$	0.529	$	0.602	$	0.387
Loss from discontinued operations	—		—		(0.005)
Net income	$	0.529	$	0.602	$	0.382

See accompanying notes to consolidated financial statements.

Amcor plc and Subsidiaries

Consolidated Statements of Comprehensive Income

($ in millions)


For the years ended June 30,	2022		2021		2020
Net income	$	815	$	951	$	616
Other comprehensive income/(loss):
Net gains/(losses) on cash flow hedges, net of tax (a)	(7)		26		(22)
Foreign currency translation adjustments, net of tax (b)	(201)		205		(287)
Net investment hedge of foreign operations, net of tax (c)	—		—		(2)
Pension, net of tax (d)	94		52		(16)
Other comprehensive income/(loss)	(114)		283		(327)
Total comprehensive income	701		1,234		289
Comprehensive income attributable to non-controlling interests	(10)		(12)		(4)
Comprehensive income attributable to Amcor plc	$	691	$	1,222	$	285

(a) Tax benefit related to cash flow hedges	$	2	$	—	$	—
(b) Tax benefit/(expense) related to foreign currency translation adjustments	$	(5)	$	7	$	(2)
(c) Tax benefit related to net investment hedge of foreign operations	$	—	$	—	$	1
(d) Tax benefit/(expense) related to pension adjustments	$	(21)	$	(14)	$	12

See accompanying notes to consolidated financial statements.

Amcor plc and Subsidiaries

Consolidated Balance Sheets

($ in millions, except share and per share data)


As of June 30,	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	775	$	850
Trade receivables, net of allowance for doubtful accounts of $25 and $28, respectively	1,935		1,864
Inventories, net	2,439		1,991
Prepaid expenses and other current assets	512		561
Assets held for sale, net	192		—
Total current assets	5,853		5,266
Non-current assets:

Property, plant, and equipment, net	3,646		3,761
Operating lease assets	560		532
Deferred tax assets	130		139
Other intangible assets, net	1,657		1,835
Goodwill	5,285		5,419
Employee benefit assets	89		52
Other non-current assets	206		184
Total non-current assets	11,573		11,922
Total assets	$	17,426	$	17,188
Liabilities
Current liabilities:
Current portion of long-term debt	$	14	$	5
Short-term debt	136		98
Trade payables	3,073		2,574
Accrued employee costs	471		523
Other current liabilities	1,344		1,145
Liabilities held for sale	65		—
Total current liabilities	5,103		4,345
Non-current liabilities:
Long-term debt, less current portion	6,340		6,186
Operating lease liabilities	493		462
Deferred tax liabilities	677		696
Employee benefit obligations	201		307
Other non-current liabilities	471		371
Total non-current liabilities	8,182		8,022
Total liabilities	$	13,285	$	12,367

Commitments and contingencies (See Note 20)

Shareholders' Equity
Amcor plc shareholders’ equity:
Ordinary shares ($0.01 par value):
Authorized (9,000 million shares)
Issued (1,489 and 1,538 million shares, respectively)	$	15	$	15
Additional paid-in capital	4,431		5,092
Retained earnings	534		452
Accumulated other comprehensive loss	(880)		(766)
Treasury shares (2 and 3 million shares, respectively)	(18)		(29)
Total Amcor plc shareholders' equity	4,082		4,764
Non-controlling interests	59		57
Total shareholders' equity	4,141		4,821
Total liabilities and shareholders' equity	$	17,426	$	17,188

See accompanying notes to consolidated financial statements.

Amcor plc and Subsidiaries

Consolidated Statements of Cash Flows

($ in millions)


For the years ended June 30,	2022		2021		2020
Cash flows from operating activities:
Net income	$	815	$	951	$	616
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and impairment	625		574		652
Russia and Ukraine impairment	138		—		—
Net periodic benefit cost	12		15		10
Amortization of debt discount and deferred financing costs	2		10		8

Net gain on disposal of property, plant, and equipment	(3)		(10)		(4)
Net gain on disposal of businesses	—		(44)		—

Equity in (income)/loss of affiliated companies	—		(19)		14
Net foreign exchange (gain)/loss	(14)		21		(16)
Share-based compensation	63		58		34
Other, net	106		(83)		—
Loss from highly inflationary accounting for Argentine subsidiaries	22		27		38
Deferred income taxes, net	(33)		4		(114)
Dividends received from affiliated companies	—		4		7
Changes in operating assets and liabilities, excluding effect of acquisitions, divestitures, and currency:
Trade receivables	(272)		(189)		133
Inventories	(626)		(112)		26
Prepaid expenses and other current assets	(67)		(90)		(23)
Trade payables	711		342		(48)
Other current liabilities	123		11		8
Accrued employee costs	(20)		29		81
Employee benefit obligations	(35)		(40)		(33)
Other, net	(21)		2		(5)
Net cash provided by operating activities	1,526		1,461		1,384
Cash flows from investing activities:
Issuance of loans to affiliated companies	(5)		—		—
Investments in affiliated companies and other	(12)		(5)		—

Purchase of property, plant, and equipment, and other intangible assets	(527)		(468)		(400)
(Payments)/proceeds from divestitures	(1)		214		425
Proceeds from sales of property, plant, and equipment, and other intangible assets	18		26		13
Net cash (used in)/provided by investing activities	(527)		(233)		38
Cash flows from financing activities:
Proceeds from issuance of shares	114		30		1

Purchase of treasury shares	(143)		(8)		(67)
Proceeds from/(purchase of) non-controlling interest	—		(8)		4
Proceeds from issuance of long-term debt	1,066		790		3,194
Repayment of long-term debt	(1,243)		(530)		(4,225)
Net borrowing/(repayment) of commercial paper	638		(235)		1,742
Net borrowing/(repayment) of short-term debt	15		(123)		(585)
Repayment of lease liabilities	(5)		(2)		(2)
Share buyback/cancellations	(601)		(351)		(537)
Dividends paid	(732)		(742)		(761)
Net cash used in financing activities	(891)		(1,179)		(1,236)

Effect of exchange rates on cash and cash equivalents	(108)		58		(45)
Cash and cash equivalents classified as held for sale	(75)		—		—

Net increase/(decrease) in cash and cash equivalents	(75)		107		141
Cash and cash equivalents balance at beginning of the fiscal year	850		743		602

Cash and cash equivalents balance at end of the fiscal year	$	775	$	850	$	743

See accompanying notes to consolidated financial statements, including Note 23, "Supplemental Cash Flow Information."

Amcor plc and Subsidiaries

Consolidated Statements of Equity

($ in millions, except per share data)


	Ordinary Shares		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Shares		Non-controlling Interest		Total
Balance as of June 30, 2019	$	16	$	6,008	$	324	$	(722)	$	(16)	$	65	$	5,675

Net income					612						4		616
Other comprehensive loss							(327)				—		(327)
Share buyback/cancellations	—		(537)										(537)
Dividends declared ($0.465 per share)					(748)						(13)		(761)
Options exercised and shares vested			(15)						16				1

Forward contracts entered to purchase own equity to meet share-based incentive plans, net of tax			(10)										(10)

Purchase of treasury shares									(67)				(67)

Share-based compensation expense			34										34
Change in non-controlling interest					—						5		5
Cumulative adjustment related to the adoption of ASC 842					58								58
Balance as of June 30, 2020	16		5,480		246		(1,049)		(67)		61		4,687

Net income					939						12		951
Other comprehensive income							283				—		283
Share buyback/cancellations	(1)		(350)										(351)
Dividends declared ($0.4675 per share)					(728)						(14)		(742)
Options exercised and shares vested			(16)						46				30

Forward contracts entered to purchase own equity to meet share-based incentive plans, net of tax			(72)										(72)

Purchase of treasury shares									(8)				(8)
Share-based compensation expense			58										58
Change in non-controlling interest			(8)		—						(2)		(10)
Cumulative adjustment related to the adoption of ASC 326					(5)								(5)
Balance as of June 30, 2021	15		5,092		452		(766)		(29)		57		4,821

Net income					805						10		815
Other comprehensive loss							(114)				—		(114)
Share buyback/cancellations	—		(601)										(601)
Dividends declared ($0.4775 per share)					(723)						(9)		(732)
Options exercised and shares vested			(40)						154				114
Forward contracts entered to purchase own equity to meet share-based incentive plans, net of tax			(83)										(83)
Purchase of treasury shares									(143)				(143)
Share-based compensation expense			63										63
Change in non-controlling interest			—								1		1

Balance as of June 30, 2022	$	15	$	4,431	$	534	$	(880)	$	(18)	$	59	$	4,141

See accompanying notes to consolidated financial statements.

Amcor plc and Subsidiaries

Notes to Consolidated Financial Statements

Note 1 - Business Description

Amcor plc ("Amcor" or the "Company") is a public limited company incorporated under the Laws of the Bailiwick of Jersey. The Company's history dates back more than 150 years, with origins in both Australia and the United States of America. Today, Amcor is a global leader in developing and producing responsible packaging for food, beverage, pharmaceutical, medical, home and personal-care, and other consumer goods end markets. The Company's innovation excellence and global packaging expertise enables the Company to solve packaging challenges around the world every day, producing packaging that is more functional, appealing, and cost effective for its customers and their consumers and importantly, more sustainable for the environment.

The Company's business activities are organized around two reportable segments, Flexibles and Rigid Packaging. The Company has a globally diverse operating footprint, selling to customers in Europe, North America, Latin America, and the Asia Pacific regions. The Company develops and produces a broad range of packaging products including flexible packaging, rigid packaging containers, specialty cartons, and closures. The Company's sales are widely diversified, with the majority of sales made to the food, beverage, pharmaceutical, medical device, home and personal care, and other consumer goods end markets. All markets are considered to be highly competitive as to price, innovation, quality, and service.

Note 2 - Significant Accounting Policies

Basis of Presentation and Principles of Consolidation: The consolidated financial statements include the accounts of the Company and subsidiaries for which the Company has a controlling financial interest. All significant intercompany transactions and balances have been eliminated. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Certain amounts in the Company's notes to consolidated financial statements may not add or recalculate due to rounding.

Business Combinations: The Company uses the acquisition method of accounting, which requires separate recognition of assets acquired and liabilities assumed from goodwill, at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the fair value of any non-controlling interests in the acquiree over the net of the acquisition date fair values of the assets acquired and liabilities assumed. During the measurement period, which may be up to one year from the acquisition date, the Company has the ability to record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of income.

Held for Sale and Discontinued Operations: The Company classifies assets and liabilities (the "disposal group") as held for sale in the period when all of the relevant criteria to be classified as held for sale are met. Criteria include management commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year. Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell. Fair value is determined based on management’s assessment of indicative bids, a market multiples model in which a market multiple is applied to forecasted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), discounted cash flows, appraised values or management's estimates, depending on the specific situation. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met. If the disposal group meets the definition of a business, the goodwill within the reporting unit is allocated to the disposal group based on its relative fair value. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the initial carrying value of the disposal group. Assets held for sale are not amortized or depreciated. The Company recorded an impairment charge on assets held for sale of $90 million for the fiscal year ended June 30, 2022.

A disposal group that represents a strategic shift to the Company or is acquired with the intention to sell is reflected as a discontinued operation on the consolidated statements of income and prior periods are recast to reflect the earnings or losses as income from discontinued operations. The consolidated financial statements and related notes reflect the three plants in Europe acquired as part of the Bemis acquisition as a discontinued operation in fiscal year 2019 as the Company agreed to divest of these plants as a condition of approval from the European Commission. The plants were divested in the first quarter of fiscal year 2020.

See Note 6, "Held for Sale and Discontinued Operations," for more information on assets held for sale and discontinued operations.

Estimates and Assumptions Required: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

These estimates are based on historical experience and various assumptions believed to be reasonable under the circumstances. Management evaluates these estimates on an ongoing basis and adjusts or revises the estimates as circumstances change. As future events and their impacts cannot be determined with precision, actual results may differ from these estimates. In the opinion of management, the consolidated financial statements reflect all adjustments necessary to fairly present the results of the periods presented.

Translation of Foreign Currencies: The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s subsidiaries is generally the local currency of each entity. Transactions in currencies other than the functional currency of the entity are recorded at the rates of exchange prevailing at the date of the transaction. Monetary assets and liabilities in currencies other than the entity’s functional currency are remeasured at the exchange rate as of the balance sheet date to the entity’s functional currency. Foreign currency transaction gains and losses related to short-term and long-term debt are recorded in other non-operating income, net, in the consolidated statements of income and the net gains or net losses are not

material in any of the periods presented. All other foreign currency transaction gains and losses are recorded in other income, net in the consolidated statements of income. These foreign currency transaction net gains or net losses amounted to a net gain of $19 million, a net loss of $4 million, and a net gain of $21 million during the fiscal years ended June 30, 2022, 2021, and 2020, respectively.

Upon consolidation, the results of operations of subsidiaries whose functional currency is other than the reporting currency of the Company are translated using average exchange rates in effect during each year. Assets and liabilities of operations with a functional currency other than the U.S. dollar are translated at the exchange rate as of the balance sheet date, while equity balances are translated at historical rates. Translation gains and losses are reported in accumulated other comprehensive loss as a component of shareholders’ equity.

Highly Inflationary Accounting: A highly inflationary economy is defined as an economy with a cumulative inflation rate of approximately 100 percent or more over a three-year period. As of July 1, 2018, the Argentine economy was designated as highly inflationary for accounting purposes. Accordingly, the U.S. dollar replaced the Argentine peso as the functional currency for the Company's subsidiaries in Argentina. The impact of highly inflationary accounting on monetary balances was a loss of $16 million, $19 million, and $28 million for the fiscal years ended June 30, 2022, 2021, and 2020, respectively, in the consolidated statements of income.

Revenue Recognition: The Company generates revenue by providing its customers with flexible and rigid packaging, serving a variety of markets including food, consumer products, and healthcare end markets. The Company enters into a variety of agreements with customers, including quality agreements, pricing agreements, and master supply agreements, which outline the terms under which the Company does business with a specific customer. The Company also sells to some customers solely based on purchase orders. The Company has concluded for the vast majority of its revenues, that its contracts with customers are either a purchase order or the combination of a purchase order with a master supply agreement. All revenue recognized in the consolidated statements of income is considered to be revenue from contracts with customers.

The Company typically satisfies the obligation to provide packaging to customers at a point in time upon shipment when control is transferred to customers. Revenue is recognized net of allowances for returns and customer claims and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company does not have any material contract assets or contract liabilities. The Company disaggregates revenue based on geography. Disaggregation of revenue is presented in Note 21, "Segments."

Significant Judgments

Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company identified potential performance obligations in its customer master supply agreements and determined that none of them are capable of being distinct as the customer can only benefit from the supplied packaging. Therefore, the Company has concluded that it has one performance obligation to supply packaging to customers.

The Company may provide variable consideration in several forms, which are determined through its agreements with customers. The Company can offer prompt payment discounts, sales rebates, or other incentive payments to customers. Sales rebates and other incentive payments are typically awarded upon achievement of certain performance metrics, including volume. The Company accounts for variable consideration using the most likely amount method. The Company utilizes forecasted sales data and rebate percentages specific to each customer agreement and updates its judgment of the amounts to which the customer is entitled each period.

The Company enters into long-term agreements with certain customers, under which it is obligated to make various up-front payments for which it expects to receive a benefit in excess of the cost over the term of the contract. These up-front payments are deferred and reflected in prepaid expenses and other current assets or other non-current assets on its consolidated balance sheets. Contract incentives are typically recognized as a reduction to revenue over the term of the customer agreement.

Practical Expedients

The Company sells primarily through its direct sales force. Any external sales commissions are expensed when incurred because the amortization period would be one year or less. External sales commission expense is included in selling, general, and administrative expenses in the consolidated statements of income.

The Company accounts for shipping and handling activities as fulfillment costs. Accordingly, shipping and handling costs are classified as a component of cost of sales while amounts billed to customers are classified as a component of net sales.

The Company excludes from the measurement of the transaction price all taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue producing transaction and collected from the customer, including sales taxes, value added taxes, excise taxes, and use taxes. Accordingly, the tax amounts are not included in net sales.

The Company does not adjust the promised consideration for the time value of money for contracts where the difference between the time of payment and performance is one year or less.

Research and Development: Research and development expenses are expensed as incurred.

Restructuring Costs: Restructuring costs are recognized when the liability is incurred. The Company calculates severance obligations based on its standard customary practices. Accordingly, the Company records provisions for severance when probable and estimable and the Company has committed to the restructuring plan. In the absence of a standard customary practice or established local practice, liabilities for severance are recognized when incurred. If fixed assets become impaired as a result of the Company’s restructuring efforts, these assets are written down to their fair value less costs to sell, as the Company commits to dispose of them and they are no longer in use. Depreciation is accelerated on fixed assets for the period of time the asset continues to be used until the asset ceases to be used. Other restructuring costs, including costs to relocate equipment, are generally recorded as the cost is incurred or the service is provided. See Note 7, "Restructuring," for more information on the Company’s restructuring plans.

Cash, Cash Equivalents, and Restricted Cash: The Company considers all highly liquid investments, with a maturity of three months or less when purchased, to be cash equivalents. Cash equivalents include demand deposits that can be readily liquidated without penalty at the Company’s option. Cash equivalents are carried at cost which approximates fair market value. The Company had restricted cash of $8 million and $23 million at June 30, 2022 and 2021, respectively, which was held in a share trust associated with Company share-based payment obligations.

Trade Receivables, net of allowance for doubtful accounts ("Trade accounts receivable, net"): Trade accounts receivable, net, are stated at the amount the Company expects to collect, which is net of an allowance for sales returns and the estimated losses resulting from the inability of its customers to make required payments. The allowance for doubtful accounts is estimated based on the current expected credit loss model ("CECL") and it incorporates information about past events, current conditions, and reasonable and supportable forecasts of future economic conditions. When determining the collectability of specific customer accounts, a number of factors are evaluated, including: customer creditworthiness, past transaction history with the customer, and changes in customer payment terms or practices. In addition, overall historical collection experience, current economic industry trends, and a review of the current status of trade accounts receivable are considered when determining the required allowance for doubtful accounts. Changes in allowance for doubtful accounts were not material for fiscal years ended June 30, 2022, 2021, and 2020.

The Company enters into factoring arrangements from time to time, including customer-based supply-chain financing programs, to sell trade receivables to third-party financial institutions. Agreements which result in true sales of the transferred receivables, which occur when receivables are transferred without recourse to the Company, are reflected as a reduction of trade receivables, net on the consolidated balance sheets and the proceeds are included in the cash flows from operating activities in the consolidated statements of cash flows. Agreements that allow the Company to maintain effective control over the transferred receivables and which do not qualify as a true sale are accounted for as secured borrowings and recorded on the consolidated balance sheets within trade receivables, net and short-term debt. The expenses associated with receivables factoring are recorded in the consolidated statements of income primarily as a reduction of net sales. The Company did not factor any trade receivables in fiscal years 2022 and 2021 which did not qualify as true sales of the receivables.

Inventories, net: Inventories are stated at the lower of cost and net realizable value. The cost of inventories is based upon the first-in, first-out ("FIFO") method or average cost method. Costs related to inventories include raw materials, direct labor and manufacturing overhead.

Inventories, net are summarized as follows:


($ in millions)	June 30, 2022		June 30, 2021
Raw materials and supplies	$	1,161	$	905
Work in process and finished goods	1,389		1,193
Less: inventory reserves	(111)		(107)
Inventories, net	$	2,439	$	1,991

Property, Plant, and Equipment, Net ("PP&E"): PP&E is carried at cost less accumulated depreciation and impairment and includes expenditures for new facilities and equipment and those costs which substantially increase the useful lives or capacity of existing PP&E. Cost of constructed assets includes capitalized interest incurred during the construction period. Maintenance and repairs that do not improve efficiency or extend economic life are expensed as incurred.

PP&E, including assets held under finance leases, is depreciated using the straight-line method over the estimated useful lives of assets or, in the case of leasehold improvements and finance leases, over the period of the lease or useful life of the asset as described below. The Company periodically reviews these estimated useful lives and, when appropriate, changes are made prospectively.


Leasehold land						Over lease term
Land improvements						Up to 30 years
Buildings						Up to 45 years
Machinery and equipment						Up to 25 years
Finance leases						Lease term or 5 - 25 years

Impairment of Long-lived Assets: The Company reviews long-lived assets, primarily PP&E and certain identifiable intangible assets with finite lives, for impairment when facts or circumstances indicate the carrying amount of an asset or asset group may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets, the carrying values are reduced to the estimated fair value. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as applicable.

Impairment of long-lived assets recognized in the consolidated statements of income, excluding assets held for sale, were as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Selling, general, and administrative expenses	$	1	$	1	$	1
Restructuring, impairment, and related expenses, net	42		9		21
Total impairment losses recognized in the consolidated statements of income	$	43	$	10	$	22

Leases: The Company enters into leasing arrangements for certain manufacturing sites, offices, warehouses, land, vehicles, and equipment. The Company determines at the inception of the contract whether the contract is or contains a lease. A contract is a lease if it conveys the right to control an identified asset for a period of time in exchange for consideration.

For leases with an original term of more than twelve months, the Company recognizes a right-of-use (“ROU”) asset and a lease liability. Short-term leases with a term of twelve months or less are not recorded on the consolidated balance sheets and the related expense is recognized on a straight-line basis over the term of the lease.

Lease liabilities are recognized at the commencement date based on the present value of the remaining lease payments over the lease terms, which include any noncancellable lease terms and any renewal periods that the Company is reasonably certain to exercise. A significant portion of the leases of the Company includes an option or options to extend the lease term. The Company re-evaluates its leases on a regular basis to consider the economic and strategic incentives of exercising lease renewal options. As the implicit rates in Company's leases generally cannot be readily determined, the Company uses estimates of its incremental borrowing rate as the discount rates to determine the lease liabilities.

Certain leases require variable payments that are dependent on usage, output, or other factors. Variable lease payments that do not depend on an index or rate are excluded from lease payments in the measurement of the ROU lease asset and lease liability and recognized as an expense in the period in which the obligation for the payments occur.

Goodwill: Goodwill represents the excess of cost over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but instead tested annually or whenever events and circumstances indicate an impairment may have occurred during the fiscal year. Among the factors that could trigger an impairment review are a reporting unit’s operating results significantly declining relative to its operating plan or historical performance, and competitive pressures and changes in the general markets in which it operates.

All goodwill is assigned to a reporting unit, which is defined as the operating segment. In conjunction with the acquisition of Bemis, the Company reassessed its segment reporting structure in the first fiscal quarter of 2020 and elected to disaggregate the Flexibles Americas operating segment into Flexibles North America and Flexibles Latin America. With this change, the Company has six reporting units with goodwill that are assessed for potential impairment.

In performing the required impairment tests, the Company has the option to first assess qualitative factors to determine if it is necessary to perform a quantitative assessment for goodwill impairment. If the qualitative assessment concludes that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, a quantitative assessment is performed. The Company's quantitative assessment utilizes present value (discounted cash flow) methods to determine the fair value of the reporting units with goodwill. Determining fair value using discounted cash flows requires considerable judgment and is sensitive to changes in underlying assumptions and market factors. Key assumptions relate to revenue growth, projected operating income growth, terminal values, and discount rates. If current expectations of future growth rates and margins are not met, or if market factors outside of Amcor’s control, such as factors impacting the applicable discount rate, or economic or political conditions in key markets change significantly, then goodwill allocated to one or more reporting units may be impaired.

The Company performs its annual impairment analysis in the fourth fiscal quarter of each fiscal year.

A qualitative impairment analysis was performed in the fourth fiscal quarter for five of the Company's six reporting units in fiscal year 2022 and 2021. The Company elected to perform a quantitative goodwill impairment test for one Flexibles reporting unit in fiscal year 2022 and 2021, and performed a quantitative impairment test for all of its reporting units in fiscal year 2020. The Company’s annual impairment analyses for all three fiscal years concluded that goodwill was not impaired. Quantitative impairment analyses performed during the last three fiscal years concluded that the fair values of the reporting units substantially exceeded their carrying values. No reporting units failed the assessments noted above in the annual impairment analysis for 2022.

The Company's decision to sell its three manufacturing facilities in Russia (“Russian business”) in the fourth quarter of fiscal year 2022 and subsequent classification as held for sale was considered a triggering event which required an additional quantitative impairment test for one Flexibles reporting unit to assess if goodwill is impaired. Based on the quantitative impairment test performed for this Flexibles reporting unit, the Company concluded that goodwill was not impaired. Additionally, the Company considered whether any other events and/or changes in circumstances had resulted in the likelihood that the goodwill of any of its other reporting units may have been impaired. Management has determined that no such events have occurred subsequent to the annual evaluation and as of June 30, 2022.

Other Intangible Assets, Net: Contractual or separable intangible assets that have finite useful lives are amortized against income using the straight-line method over their estimated useful lives, which range from 1 to 20 years. The straight-line method of amortization reflects an appropriate allocation of the costs of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period.

Costs incurred to develop software programs to be used solely to meet the Company's internal needs have been capitalized as computer software within other intangible assets.

Fair Value Measurements: The fair values of the Company's financial assets and financial liabilities reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date (exit price). The Company determines fair value based on a three-tiered fair value hierarchy. The hierarchy consists of:

Level 1: fair value measurements represent exchange-traded securities which are valued at quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;
Level 2: fair value measurements are determined using input prices that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data; and
Level 3: fair value measurements are determined using unobservable inputs, such as internally developed pricing models for the asset or liability due to little or no market activity for the asset or liability.

Derivative Instruments: The Company recognizes all derivative instruments on the consolidated balance sheets at fair value. The impact on earnings from recognizing the fair values of these instruments depends on their intended use, their hedge designation and their effectiveness in offsetting changes in the fair values of the exposures they are hedging. Derivatives not designated as hedging instruments are adjusted to fair value through income. Depending on the nature of derivatives designated as hedging instruments, changes in the fair value are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in shareholders’ equity through other comprehensive income/(loss) until the hedged item is recognized. Gains or losses, if any, related to the ineffective portion of any hedge are recognized through earnings over the life of the hedging relationship.

See Note 12, "Derivative Instruments," for more information regarding specific derivative instruments included on the Company’s consolidated balance sheets, such as forward foreign currency exchange contracts, currency swap contracts, and interest rate swap arrangements, among other derivative instruments.

Employee Benefit Plans: The Company sponsors various defined contribution plans to which it makes contributions on behalf of employees. The expense under such plans was $79 million, $68 million, and $64 million for the fiscal years ended June 30, 2022, 2021, and 2020, respectively.

The Company sponsors a number of defined benefit plans that provide benefits to current and former employees. For the company-sponsored plans, the relevant accounting guidance requires that management make certain assumptions relating to the long-term rate of return on plan assets, discount rates used to determine the present value of future obligations and expenses, salary inflation rates, mortality rates, and other assumptions. The Company believes that the accounting estimates related to its pension plans are critical accounting estimates because they are highly susceptible to change from period to period based on the performance of plan assets, actuarial valuations, market conditions, and contracted benefit changes. The selection of assumptions is based on historical trends and known economic and market conditions at the time of valuation, as well as independent studies of trends performed by the Company’s actuaries. However, actual results may differ substantially from the estimates that were based on the critical assumptions.

The Company recognizes the funded status of each defined benefit pension plan in the consolidated balance sheets. Each overfunded plan is recognized as an asset in employee benefit assets and each underfunded plan is recognized as a liability in employee benefit obligations. Pension plan liabilities are revalued annually, or when an event occurs that requires remeasurement, based on updated assumptions and information about the individuals covered by the plan. Accumulated actuarial gains and losses in excess of a 10 percent corridor and the prior service cost are amortized on a straight-line basis from the date recognized over the average remaining service period of active participants or over the average life expectancy for plans with significant inactive participants. The service costs related to defined benefits are included in operating income. The other components of net benefit cost other than service cost are recorded within other non-operating income, net in the consolidated statements of income.

Equity Method and Other Investments: Investments in ordinary shares of companies, in which the Company believes it exercises significant influence over operating and financial policies, are accounted for using the equity method of accounting. Under this method, the investment is carried at cost and is adjusted to recognize the investor’s share of earnings or losses of the investee after the date of acquisition and is adjusted for impairment whenever it is determined that a decline in the fair value below the cost basis is other than temporary. The fair value of the investment then becomes the new cost basis of the investment and it is not adjusted for subsequent recoveries in fair value. The Company sold its equity investment in AMVIG Holdings Limited ("AMVIG") in the first quarter of fiscal year 2021, refer to Note 8, "Equity Method and Other Investments."

All equity investments that do not result in consolidation and are not accounted for under the equity method are measured at fair value with unrealized gains and losses related to mark-to-market adjustments included in net income. The Company utilizes the measurement alternative for equity investments that do not have readily determinable fair values and measures these investments at cost adjusted for impairments and observable price changes in orderly transactions. To date, investments not accounted for under the equity method are not material.

Contingencies: The Company is subject to numerous contingencies arising in the ordinary course of business, such as legal and administrative proceedings, environmental claims and proceedings, workers' compensation, and other claims. Accruals for estimated losses are recorded by the Company at the time information becomes available indicating that losses are probable and that the amounts can be reasonably estimated. When management can reasonably estimate a range of losses it may incur, it records an accrual for the amount within the range that constitutes its best estimate. If no amount within a range appears to be a better estimate than any other, the low end of the range is accrued. The Company records anticipated recoveries under existing insurance contracts when recovery is probable.

Share-based Compensation: Amcor has a variety of equity incentive plans. For employee awards with a service or market condition, compensation expense is recognized over the vesting period on a straight-line basis using the grant date fair value of the award and the estimated number of awards that are expected to vest. For awards with a performance condition, the Company reassesses the probability of vesting at each reporting period and adjusts compensation cost based on its probability assessment. The Company also has immaterial cash-settled share-based compensation plans which are accounted for as liabilities. Such share-based awards are remeasured to fair value at each reporting date. The Company estimates forfeitures based on employee level, time remaining to vest, and historical forfeiture experience.

Income Taxes: The Company uses the asset and liability method to account for income taxes. Deferred income taxes reflect the future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts at each balance sheet date, based upon enacted income tax laws and tax rates. Income tax expense or benefit is provided based on earnings reported in the consolidated financial statements. The provision for income tax expense or benefit differs from the amounts of income taxes currently payable because certain items of income and expense included in the consolidated financial statements are recognized in different time periods by taxing authorities.

Deferred tax assets, including operating losses, capital losses, and tax credit carryforwards, are reduced by a valuation allowance when it is more likely than not that any portion of these tax attributes will not be realized. In addition, from time to time, management assesses the need to accrue or disclose uncertain tax positions. In making these assessments, management must often analyze complex tax laws of multiple jurisdictions. Accounting guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company records the related interest expense and penalties, if any, as tax expense in the tax provision. See Note 17, "Income Taxes," for more information on the Company's income taxes.

Note 3 - New Accounting Guidance

Recently Adopted Accounting Standards

In December 2019, the FASB issued updated guidance to simplify the accounting for income taxes by removing certain exceptions and improving the consistent application of U.S. GAAP in other tax accounting areas. This guidance is effective for annual reporting periods, and any interim periods within those annual periods, that begin after December 15, 2020 with early adoption permitted. The guidance became effective for the Company on July 1, 2021 and the adoption did not have a material impact on the Company's consolidated financial statements.

Accounting Standards Not Yet Adopted

In November 2021, the FASB issued an Accounting Standards Update ("ASU") 2021-10 that adds certain disclosure requirements for entities that receive government assistance. The standard is effective for annual periods beginning after December 15, 2021 with early application permitted. The Company will adopt this guidance on July 1, 2022 and does not expect the adoption to have a material impact on the Company's consolidated financial statements.

The Company considers the applicability and impact of all ASUs issued by the FASB. The Company determined at this time that all other ASUs not yet adopted are either not applicable or are expected to have minimal impact on the Company's consolidated financial statements.

Note 4 - Restructuring, Impairment, and Related Expenses, Net

Restructuring, impairment, and related expenses, net, as reported on the consolidated statements of income are summarized as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Restructuring and related expenses, net	$	(96)	$	(94)	$	(115)
Impairment expenses	(138)		—		—
Restructuring, impairment, and related expenses, net	$	(234)	$	(94)	$	(115)

Restructuring and related expenses, net includes expenses related to the Company's 2019 plan focused on the integration of acquired Bemis operations which was complete at the end of fiscal year 2022, expenses related to the 2018 plan to restructure the Company's rigid packaging operations, and restructuring expenses associated with the Company's decision to sell its Russian business. For further information, refer to Note 7, "Restructuring."

Impairment expenses of $138 million were incurred in the fourth quarter of fiscal year 2022 as a result of the Russia-Ukraine Conflict. In the fourth quarter, the Company approved a plan to sell its Russian operations which resulted in a non-cash impairment charge of $90 million. For further information, refer to Note 6, "Held for Sale and Discontinued Operations." In addition, the Company recognized other expenses of $48 million, given the expectation that certain assets not held for sale in the conflict region will not be recoverable. The Company's manufacturing plant in Ukraine ceased operations in February 2022 and has not resumed operations given the ongoing conflict in the region has displaced the Company's employees, destroyed nearby manufacturing facilities, and impaired the region's supporting infrastructure. Other asset impairment expenses in the last three fiscal years were not material and were primarily reported in restructuring and related expenses, net.

Note 5 - Divestitures

Year ended June 30, 2022

During the third quarter of fiscal year 2022, the Company completed the disposal of non-core assets in the Flexibles reporting segment. The Company recorded an expense of $10 million during the fiscal year ended June 30, 2022 to adjust the long-lived assets to their fair value less cost to sell.

Year ended June 30, 2021

As part of optimizing its portfolio under the 2019 Bemis Integration Plan, the Company completed the disposal of a non-core European hospital supplies business, which was part of the Flexibles reportable segment. The resulting gain from the sale has been recorded in the line restructuring, impairment, and related expenses, net, in the consolidated statements of income. Refer to Note 4, "Restructuring, Impairment, and Related Expenses, Net" and Note 7, "Restructuring."

The Company also completed the disposal of two non-core businesses in India and Argentina in the Flexibles segment during the first quarter of fiscal year 2021, recording a loss on sale of $6 million, which was primarily driven by the reclassification of cumulative translation adjustments through the income statements that had previously been recorded in other comprehensive income/(loss).

The Company sold its equity investment in AMVIG Holdings Limited ("AMVIG") in the first quarter of fiscal year 2021. Refer to Note 8, "Equity Method and Other Investments."

Year ended June 30, 2020

Closing of the Bemis acquisition was conditional upon the receipt of regulatory approvals, approval by both Amcor and Bemis shareholders, and satisfaction of other customary conditions. In order to satisfy certain regulatory approvals, the Company was required to divest three of Bemis' medical packaging facilities located in the United Kingdom and Ireland ("EC Remedy") and three Amcor medical packaging facilities in the United States ("U.S. Remedy"). The U.S. Remedy was completed during the fourth quarter of fiscal year 2019 and the Company received $214 million resulting in a gain of $159 million. The EC Remedy was completed during the first quarter of fiscal year 2020 and the Company received $397 million and recorded a loss on the sale of $9 million which is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings from discontinued operations upon sale of the EC Remedy.

In addition, the Company sold an equity method investment acquired through the Bemis acquisition in the third quarter of fiscal year 2020 for proceeds of $28 million. There was no gain or loss on sale as the investment was recorded at fair value upon acquisition.

Note 6 - Held for Sale and Discontinued Operations

During the fourth quarter of fiscal year 2022, the Company classified the assets and liabilities of its Russian business as held for sale as a result of the Company's decision to sell its Russian business. The Russian business is part of the Company’s Flexibles segment and is expected to be sold within one year. The Company has recorded an impairment of $90 million as of June 30, 2022, within the line item restructuring, impairment, and related expenses, net on the consolidated statements of income. The disposal of the Russian business will not represent a strategic shift that will have a major effect on the Company's operations and financial results, and therefore does not qualify for reporting as a discontinued operation.

Major classes of assets and liabilities of the Russian business classified as held for sale as of June 30, 2022 were as follows:


($ in millions)	June 30, 2022
Cash and cash equivalents	$	75
Trade receivables, net	66
Inventories, net	40
Prepaid expenses and other current assets	36
Property, plant, and equipment, net	49
Goodwill	16
Total assets held for sale	282
Less impairment (1)	(90)
Total assets held for sale, net	$	192

Trade payables	65
Total current liabilities held for sale	$	65

(1) Impairment inclusive of accumulated other comprehensive loss related to the Russian business.

This table excludes other assets and liabilities held for sale but not part of the Russian business and that are not material for disclosure.

On February 11, 2019, the Company received approval from the European Commission ("EC") for the acquisition of Bemis Company, Inc. ("Bemis"). A condition of the approval was an agreement to divest three Bemis medical packaging facilities located in the United Kingdom and Ireland ("EC Remedy"). Upon completion of the Bemis acquisition on June 11, 2019, the Company determined that the EC Remedy met the criteria to be classified as a discontinued operation, in accordance with ASC 205-20, "Discontinued Operations." The sale of the EC Remedy closed on August 8, 2019. The Company recorded a loss on the sale of $9 million, which is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings from discontinued operations upon sale of the EC Remedy.

The following table summarizes the results of the Company's discontinued operations:


	Years ended June 30,
($ in millions)	2022		2021		2020
Net sales	$	—	$	—	$	16

Loss from discontinued operations	—		—		(7)
Tax expense from discontinued operations	—		—		(1)
Loss from discontinued operations, net of tax	$	—	$	—	$	(8)

Note 7 - Restructuring

2019 Bemis Integration Plan

In connection with the acquisition of Bemis Company, Inc. ("Bemis"), the Company initiated restructuring activities in the fourth quarter of 2019 aimed at integrating and optimizing the combined organization.

The 2019 Bemis Integration Plan was completed by June 30, 2022 with final pre-tax integration cost amounting to $253 million. The total 2019 Bemis Integration Plan cost includes $213 million of restructuring and related expenses, net, and $40 million of general integration expenses. The net cash expenditures for the plan, including disposal proceeds, are $170 million, of which $40 million relates to general integration expenses. As part of this Plan the Company has incurred $144 million in employee related expenses, $36 million in fixed asset related expenses, $39 million in other restructuring and $45 million in restructuring related expenses, partially offset by a gain on disposal of a business of $51 million. In fiscal year 2022, the Plan resulted in net cash outflows of $49 million of which $47 million were payments related to restructuring and related expenditures. The remaining cash outflow will be primarily incurred in fiscal year 2023.

Restructuring related costs are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities. General integration costs are not linked to restructuring. The Company believes the disclosure of restructuring related costs provides more information on the total cost of the 2019 Bemis Integration Plan. The restructuring related costs relate primarily to the closure of facilities and include costs to replace graphics, train new employees on relocated equipment, and losses on sale of closed facilities.

2018 Rigid Packaging Restructuring Plan

On August 21, 2018, the Company announced a restructuring plan in Amcor Rigid Packaging ("2018 Rigid Packaging Restructuring Plan") aimed at reducing structural costs and optimizing the footprint. The Plan included the closures of manufacturing facilities and headcount reductions to achieve manufacturing footprint optimization and productivity improvements as well as overhead cost reductions.

The 2018 Rigid Packaging Restructuring Plan was completed by June 30, 2021 with total pre-tax restructuring costs of $121 million, of which $78 million resulted in cash expenditures, with the main component being the cost to exit manufacturing facilities and employee related costs.

Other Restructuring Plans

The Company has entered into other restructuring plans ("Other Restructuring Plans"). The Company's restructuring charges related to these plans were $59 million, $6 million, and $18 million for the fiscal years ended June 30, 2022, 2021, and 2020, respectively. During the fourth quarter of fiscal year 2022, the Company recorded $57 million in restructuring and related expenses classified within Other Restructuring Plans triggered by the Russia-Ukraine conflict to help mitigate the impact of the Russian sale.

Consolidated Amcor Restructuring Plans

The total expenses incurred from the beginning of the Company's material restructuring plans are as follows:


($ in millions)	2018 Rigid Packaging Restructuring Plan		2019 Bemis Integration Plan (1)		Other Restructuring Plans (2)		Total Restructuring and Related Expenses, Net (1)

Fiscal year 2019 net charges to earnings	$	64	$	48	$	19	$	131
Fiscal year 2020 net charges to earnings	37		60		18		115
Fiscal year 2021 net charges to earnings	20		68		6		94
Fiscal year 2022 net charges to earnings	—		37		59		96
Expense incurred to date	$	121	$	213	$	102	$	436

(1)Total restructuring and related expenses, net, include restructuring related costs from the 2019 Bemis Integration Plan of $17 million, $13 million, and $15 million for the fiscal years 2022, 2021, and 2020, respectively.

(2)Fiscal year 2022 includes $55 million in restructuring expenses and $2 million of restructuring related expenses that pertain to the Russia-Ukraine conflict as discussed above in section "Other Restructuring Plans".

An analysis of the restructuring expenses by type incurred follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Employee related expenses	$	58	$	76	$	45
Fixed asset related expenses	4		23		24
Other expenses	15		34		29
Gain on sale of business	—		(51)		—
Total restructuring expenses, net	$	77	$	82	$	98

An analysis of the Company's restructuring plan liability, not including restructuring related liabilities, is as follows:


($ in millions)	Employee Costs		Fixed Asset Related Costs		Other Costs		Total Restructuring Costs
Liability balance at June 30, 2019	$	73	$	7	$	8	$	88
Net charges to earnings	45		24		29		98
Cash paid	(48)		(5)		(25)		(78)

Non-cash and other	—		(23)		—		(23)

Liability balance at June 30, 2020	70		3		12		85
Net charges to earnings	76		23		34		133

Cash paid	(61)		(5)		(30)		(96)
Non-cash and other	(9)		(23)		—		(32)
Foreign currency translation	2		2		1		5
Liability balance at June 30, 2021	78		—		17		95
Net charges to earnings	58		4		15		77
Cash received/(paid), net	(27)		4		(14)		(37)
Non-cash and other	(3)		(5)		—		(8)
Foreign currency translation	(9)		—		—		(9)
Liability balance at June 30, 2022	$	97	$	3	$	18	$	118

The expenses related to restructuring activities, including restructuring related activities, have been presented on the consolidated statements of income as restructuring, impairment, and related expenses, net. The accruals related to restructuring activities have been recorded on the consolidated balance sheets under other current liabilities.

Note 8 - Equity Method and Other Investments

Investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, with usually not more than 50% voting interest. The Company sold its only significant equity method investment, a 47.6% interest in AMVIG Holdings Limited ("AMVIG") on September 30, 2020, realizing a net gain of $15 million, which was recorded in equity in income/(loss) of affiliated companies, net of tax in the consolidated statements of income.

As of June 30, 2022 and 2021, investments accounted for under the equity method and other investments carried at cost are immaterial. The Company received no dividends from equity method investments in the fiscal years ended June 30, 2022 and 2021. During the fiscal year ended June 30, 2020, the Company received dividends of $10 million from AMVIG.

The Company reviews its investments accounted for under the equity method for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Due to impairment indicators present in fiscal year ended June 30, 2020, the Company performed impairment tests by comparing the carrying value of its investment in AMVIG to its fair value, which was determined based on AMVIG's quoted share price. The fair value of the investment dropped below its carrying value during fiscal year ended June 30, 2020, and therefore the Company recorded an other-than-temporary impairment of $26 million to bring the value of its investment to fair value. The impairment charge was included in equity in income/(loss) of affiliated companies, net of tax, in the consolidated statements of income.

Note 9 - Property, Plant, and Equipment, Net

The components of property, plant, and equipment, net, were as follows:


($ in millions)	June 30, 2022		June 30, 2021
Land and land improvements	$	201	$	221
Buildings and improvements	1,323		1,355
Plant and equipment	5,797		5,937
Total property, plant, and equipment	7,321		7,513

Accumulated depreciation	(3,617)		(3,712)
Accumulated impairment	(58)		(40)

Total property, plant, and equipment, net	$	3,646	$	3,761

Depreciation expense amounted to $398 million, $389 million, and $403 million for fiscal years 2022, 2021, and 2020, respectively. Amortization of assets under finance leases is included in depreciation expense.

Note 10 - Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill attributable to each reportable segment were as follows:


($ in millions)	Flexibles Segment		Rigid Packaging Segment		Total
Balance as of June 30, 2020	$	4,369	$	970	$	5,339

Disposals	(5)		—		(5)
Foreign currency translation	73		12		85
Balance as of June 30, 2021	4,437		982		5,419


Held for sale reclassification	(16)		—		(16)
Foreign currency translation	(114)		(4)		(118)
Balance as of June 30, 2022	$	4,307	$	978	$	5,285

Goodwill reclassified to assets held for sale, net during fiscal year 2022 is related to the Russian business. Refer to Note 6, "Held for Sale and Discontinued Operations."

Other Intangible Assets, Net

Other intangible assets, net is comprised of the following:


	June 30, 2022
($ in millions)	Gross Carrying Amount		Accumulated Amortization and Impairment (1)		Net Carrying Amount
Customer relationships	$	1,970	$	(529)	$	1,441
Computer software	235		(162)		73
Other (2)	323		(180)		143
Total other intangible assets	$	2,528	$	(871)	$	1,657


	June 30, 2021
($ in millions)	Gross Carrying Amount		Accumulated Amortization and Impairment (1)		Net Carrying Amount
Customer relationships	$	1,986	$	(405)	$	1,581
Computer software	233		(156)		77
Other (2)	321		(144)		177
Total other intangible assets	$	2,540	$	(705)	$	1,835

(1)Accumulated amortization and impairment includes $33 million and $34 million for June 30, 2022 and 2021, respectively, of accumulated impairment in the Other category.

(2)Other includes $16 million and $17 million for June 30, 2022 and 2021, respectively, of acquired intellectual property assets not yet being amortized as the related R&D projects have not yet been completed.

Amortization expense for intangible assets during the fiscal years 2022, 2021, and 2020 was $180 million, $182 million, and $204 million, respectively. During the last three fiscal years, there were no impairment charges recorded on intangible assets.

Estimated future amortization expense for intangible assets is as follows:


($ in millions)	Amortization
Fiscal year 2023	$	173
Fiscal year 2024	169
Fiscal year 2025	156
Fiscal year 2026	152
Fiscal year 2027	138

Note 11 - Fair Value Measurements

The fair values of the Company's financial assets and financial liabilities listed below reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date (exit price).

The Company's non-derivative financial instruments primarily include cash and cash equivalents, trade receivables, trade payables, short-term debt, and long-term debt. At June 30, 2022 and 2021, the carrying value of these financial instruments, excluding long-term debt, approximated fair value because of the short-term nature of these instruments.

Fair value disclosures are classified based on the fair value hierarchy. See Note 2, "Significant Accounting Policies," for information about the Company's fair value hierarchy.

The carrying value of long-term debt with variable interest rates approximates its fair value. The fair value of the Company's long-term debt with fixed interest rates is based on market prices, if available, or expected future cash flows discounted at the current interest rate for financial liabilities with similar risk profiles.

The carrying values and estimated fair values of long-term debt with fixed interest rates (including fixed-rate debt with designated receive-fixed/pay-variable interest rate swaps, excluding finance leases) were as follows:


	June 30, 2022					June 30, 2021
	Carrying Value			Fair Value		Carrying Value		Fair Value
($ in millions)			(Level 2)			(Level 2)
Total long-term debt with fixed interest rates (excluding commercial paper and finance leases)	$	3,952		$	3,694	$	4,325	$	4,558

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

Additionally, the Company measures and records certain assets and liabilities, including derivative instruments and contingent purchase consideration liabilities, at fair value. The following table summarizes the fair value of these instruments, which are measured at fair value on a recurring basis, by level, within the fair value hierarchy:


	June 30, 2022
($ in millions)	Level 1		Level 2		Level 3		Total
Assets
Commodity contracts	$	—	$	6	$	—	$	6
Forward exchange contracts	—		7		—		7

Total assets measured at fair value	$	—	$	13	$	—	$	13

Liabilities
Contingent purchase consideration liabilities	$	—	$	—	$	16	$	16
Commodity contracts	—		3		—		3
Forward exchange contracts	—		17		—		17
Interest rate swaps	—		69		—		69

Total liabilities measured at fair value	$	—	$	89	$	16	$	105


	June 30, 2021
($ in millions)	Level 1		Level 2		Level 3		Total
Assets
Commodity contracts	$	—	$	14	$	—	$	14
Forward exchange contracts	—		7		—		7
Interest rate swaps	—		19		—		19
Total assets measured at fair value	$	—	$	40	$	—	$	40

Liabilities
Contingent purchase consideration liabilities	$	—	$	—	$	18	$	18

Forward exchange contracts	—		4		—		4

Total liabilities measured at fair value	$	—	$	4	$	18	$	22

The fair value of the commodity contracts was determined using a discounted cash flow analysis based on the terms of the contracts and observed market forward prices discounted at a currency specific rate. Forward exchange contract fair values were determined based on quoted prices for similar assets and liabilities in active markets using inputs such as currency rates and forward points. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market based swap yield curves, taking into account current interest rates.

Contingent purchase consideration obligations arise from business acquisitions. As of June 30, 2022, the Company's contingent purchase consideration liabilities consist of a $10 million liability that is contingent on future royalty income generated by Discma AG, a subsidiary acquired in March 2017, with the $6 million balance relating to consideration for small business acquisitions where payments are contingent on the Company vacating a certain property or performance criteria. The fair value of the contingent purchase consideration liabilities was determined for each arrangement individually. The fair value was determined using the income approach with significant inputs that are not observable in the market. Key assumptions include the discount rates consistent with the level of risk of achievement and probability adjusted financial projections. The expected outcomes are recorded at net present value, which requires adjustment over the life for changes in risks and probabilities. Changes arising from modifications in forecasts related to contingent consideration are expected to be immaterial.

The fair value of contingent purchase consideration liabilities is included in other current liabilities and other non-current liabilities in the consolidated balance sheets. The change in fair value of the contingent purchase consideration liabilities, which was included in other income, net is due to the passage of time and changes in the probability of achievement used to develop the estimate.

The following table sets forth a summary of changes in the value of the Company's Level 3 financial liabilities:


	June 30,
($ in millions)	2022		2021		2020
Fair value at the beginning of the year	$	18	$	15	$	14

Changes in fair value of Level 3 liabilities	—		2		1
Payments	(1)		—		—
Foreign currency translation	(1)		1		—
Fair value at the end of the year	$	16	$	18	$	15

Assets and Liabilities Measured and Recorded at Fair Value on a Nonrecurring Basis

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis. The Company measures certain assets, including technology intangible assets, equity method and other investments, long-lived assets held for sale, and other long-lived and intangible assets at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections.

As further discussed in Note 6 – “Held for Sale and Discontinued Operations,” during the fourth quarter of fiscal year 2022, the Company met the criteria to recognize the related assets and liabilities of its Russian operations as held for sale which resulted in the Company remeasuring the disposal group at its fair value, less cost to sell, which is considered a Level 3 fair value measurement.

In addition, resulting from the effective disposal of non-core businesses during the fiscal year ended June 30, 2022, the Company has recorded a total loss of $34 million, predominantly to adjust the long-lived assets to their fair value less cost to sell. Of these losses, $24 million are included within restructuring, impairment, and related expenses, net as relating to the Russia-Ukraine conflict with the balance recorded in other income, net in the consolidated statements of income. During the fiscal year ended June 30, 2022, further long-lived assets with a carrying value of $12 million were written down to a fair value of zero as the Company's Durban, South Africa, manufacturing facility was destroyed in a fire as the result of general civil unrest. In addition, other long-lived assets in South Africa, with a carrying amount of $8 million, were written down to their estimated fair value of $4 million using level 3 inputs.

The Company sold its equity method investment in AMVIG on September 30, 2020. Refer to Note 8, "Equity Method and Other Investments."

The Company tests indefinite-lived intangibles for impairment when facts and circumstances indicate the carrying value may not be recoverable from their undiscounted cash flows. During fiscal years 2022, 2021 and 2020, there were no indefinite-lived intangible impairment charges recorded.

Note 12 - Derivative Instruments

The Company periodically uses derivatives and other financial instruments to hedge exposures to interest rate, commodity price, and currency risks. The Company does not hold or issue derivative instruments for speculative or trading purposes. For hedges that meet the hedge accounting criteria, the Company, at inception, formally designates and documents the instruments as a fair value hedge or a cash flow hedge of a specific underlying exposure. On an ongoing basis, the Company assesses and documents that its hedges have been and are expected to continue to be highly effective.

Interest Rate Risk

The Company's policy is to manage exposure to interest rate risk by maintaining a mixture of fixed-rate and variable-rate debt, monitoring global interest rates, and, where appropriate, hedging floating interest rate exposure or debt at fixed interest rates through various interest rate derivative instruments including, but not limited to, interest rate swaps, cross-currency interest rate swaps, and interest rate locks. For interest rate swaps that are accounted for as fair value hedges, the gains and losses related to the changes in the fair value of the interest rate swaps are included in interest expense and offset changes in the fair value of the hedged portion of the underlying debt that are attributable to the changes in market interest rates. Changes in the fair value of interest rate swaps that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income in other non-operating income, net.

During December 2021, the Company entered into an aggregate $250 million notional amount of receive-fixed/pay variable interest rate swaps, which will mature on May 15, 2028. These swaps were designated as a fair value hedge against 50% of $500 million of principal on the 4.50% U.S. dollar notes due in May 2028. Also during December 2021, the Company settled $100 million of a receive-fixed/pay-variable interest rate swap as a result of the full redemption of $275 million 5.95% U.S. private placement notes at maturity. This interest rate swap was designated as a fair value hedge at inception.

In July 2021, the Company terminated $400 million of its receive-fixed/pay-variable interest rate swaps that were designated as fair value hedges and received $2 million in net proceeds. This termination was in association with the full redemption of the $400 million 4.50% U.S. dollar notes due October 2021, completed on July 15, 2021. In July 2021, the Company also terminated an aggregate amount of €300 million (equivalent of $357 million) receive-fixed/pay-variable interest rate swaps and received €13 million (equivalent of $15 million) in net proceeds. These interest rate swaps, which were to mature in March 2023, were designated as fair value hedges against €300 million of principal on the 2.75% Euro bonds due March 2023. The gain on the termination of the aforementioned swaps is deferred and is being amortized to interest income over the remaining contractual term of the 2.75% Euro bonds due March 2023.

As of June 30, 2022 and 2021, the total notional amount of the Company's receive-fixed/pay-variable interest rate swaps was $650 million and $1,257 million, respectively.

Foreign Currency Risk

The Company manufactures and sells its products and finances operations in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange rates. The purpose of the Company's foreign currency hedging program is to manage the volatility associated with the changes in exchange rates.

To manage this exchange rate risk, the Company utilizes forward contracts. Contracts that qualify for hedge accounting are designated as cash flow hedges of certain forecasted transactions denominated in foreign currencies. The effective portion of the changes in fair value of these instruments is reported in accumulated other comprehensive loss ("AOCI") and reclassified into earnings in the same financial statement line item and in the same period or periods during which the related hedged transactions affect earnings. The ineffective portion is recognized in earnings over the life of the hedging relationship in the same consolidated statements of income line item as the underlying hedged item. Changes in the fair value of forward contracts that have not been designated as hedging instruments are reported in the accompanying consolidated statements of income.

As of June 30, 2022 and 2021, the notional amount of the outstanding forward contracts was $1.0 billion and $1.1 billion, respectively.

Commodity Risk

Certain raw materials used in the Company's production processes are subject to price volatility caused by weather, supply conditions, political and economic variables, and other unpredictable factors. The Company's policy is to minimize exposure to price volatility by passing through the commodity price risk to customers, including the use of fixed price swaps.

The Company purchases on behalf of customers fixed price commodity swaps to offset the exposure of price volatility on the underlying sales contracts. These instruments are cash closed out on maturity and the related cost or benefit is passed through to customers. Information about commodity price exposure is derived from supply forecasts submitted by customers and these exposures are hedged by central treasury units. Changes in the fair value of commodity hedges are recognized in AOCI. The cumulative amount of the hedge is recognized in the consolidated statements of income when the forecasted transaction is realized.

The Company had the following outstanding commodity contracts to hedge forecasted purchases:


	June 30, 2022	June 30, 2021
Commodity	Volume	Volume
Aluminum	17,040 tons	22,629 tons
PET resin	16,886,520 lbs.	6,312,764 lbs.

The following table provides the location of derivative instruments in the consolidated balance sheets:


($ in millions)	Balance Sheet Location	June 30, 2022		June 30, 2021
Assets
Derivatives in cash flow hedging relationships:
Commodity contracts	Other current assets	$	6	$	14
Forward exchange contracts	Other current assets	3		3
Forward exchange contracts	Assets held for sale, net	3		—
Derivatives in fair value hedging relationships:
Interest rate swaps	Other current assets	—		15
Derivatives not designated as hedging instruments:
Forward exchange contracts	Other current assets	1		4
Total current derivative contracts		13		36
Derivatives in fair value hedging relationships:
Interest rate swaps	Other non-current assets	—		4


Total non-current derivative contracts		—		4
Total derivative asset contracts		$	13	$	40

Liabilities
Derivatives in cash flow hedging relationships:
Commodity contracts	Other current liabilities	$	3	$	—
Forward exchange contracts	Other current liabilities	5		2
Derivatives not designated as hedging instruments:
Forward exchange contracts	Other current liabilities	11		2

Total current derivative contracts		19		4
Derivatives in cash flow hedging relationships:
Forward exchange contracts	Other non-current liabilities	1		—
Derivatives in fair value hedging relationships:
Interest rate swaps	Other non-current liabilities	69		—


Total non-current derivative contracts		70		—
Total derivative liability contracts		$	89	$	4

Certain derivative financial instruments are subject to netting arrangements and are eligible for offset. The Company has made an accounting policy election not to offset the fair values of these instruments within the consolidated balance sheets.

The following tables provide the effects of derivative instruments on AOCI and in the consolidated statements of income:


	Location of Gain / (Loss) Reclassified from AOCI into Income (Effective Portion)		Gain / (Loss) Reclassified from AOCI into Income (Effective Portion)
		Years ended June 30,
($ in millions)		2022			2021			2020
Derivatives in cash flow hedging relationships
Commodity contracts	Cost of sales		$	20		$	1		$	(6)
Forward exchange contracts	Net sales		—			—			(1)

Treasury locks	Interest expense		(3)			(2)			—
Total			$	17		$	(1)		$	(7)


	Location of Gain / (Loss) Recognized in the Consolidated Income Statements		Gain / (Loss) Recognized in Income for Derivatives not Designated as Hedging Instruments
		Years ended June 30,
($ in millions)		2022			2021			2020
Derivatives not designated as hedging instruments
Forward exchange contracts	Other income, net		$	(45)		$	11		$	(6)
Cross currency interest rate swaps	Other income, net		—			(4)			—
Total			$	(45)		$	7		$	(6)


	Location of Loss Recognized in the Consolidated Income Statements		Loss Recognized in Income for Derivatives in Fair Value Hedging Relationships
		Years ended June 30,
($ in millions)		2022			2021			2020
Derivatives in fair value hedging relationships
Interest rate swaps	Interest expense		$	(75)		$	(14)		$	(1)
Forward exchange contracts	Other income, net		(11)			—			—
Total			$	(86)		$	(14)		$	(1)

The changes in AOCI for effective derivatives were as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Amounts reclassified into earnings
Commodity contracts	$	(20)	$	(1)	$	6
Forward exchange contracts	—		—		1
Treasury locks	3		2		—
Change in fair value
Commodity contracts	9		22		(7)
Forward exchange contracts	(1)		3		(2)
Treasury locks	—		—		(20)
Tax effect	2		—		—
Total	$	(7)	$	26	$	(22)

Note 13 - Pension and Other Post-Retirement Plans

The Company sponsors both funded and unfunded defined benefit pension plans that include statutory and mandated benefit provision in some countries as well as voluntary plans (generally closed to new joiners). During fiscal year 2022, the Company maintained 20 statutory and mandated defined benefit arrangements and 57 voluntary defined benefit plans.

The principal defined benefit plans are structured as follows:


Country	Number of Funded Plans	Number of Unfunded Plans	Comment
Canada	2	1	Closed to new entrants
France (1)	3	2	3 plans are closed to new entrants, 2 plans are open to new entrants; 2 plans are partially indemnified by Rio Tinto Limited
Germany (1)	2	11	12 plans are closed to new entrants, 1 is open to new entrants; 6 plans are partially indemnified by Rio Tinto Limited
Switzerland	1	—	Open to new entrants
United Kingdom	2	—	Closed to new entrants
United States of America	3	2	Closed to new entrants

(1)Rio Tinto Limited assumes responsibility for its former employees' retirement entitlements as of February 1, 2010 when Amcor acquired Alcan Packaging from Rio Tinto Limited.

Net periodic benefit cost for benefit plans includes the following components:


	Years ended June 30,
($ in millions)	2022		2021		2020
Service cost	$	24	$	27	$	23
Interest cost	39		40		49
Expected return on plan assets	(61)		(60)		(72)
Amortization of net loss	5		8		6
Amortization of prior service credit	(3)		(2)		(2)
Curtailment credit	—		(1)		—
Settlement costs	8		3		6

Net periodic benefit cost	$	12	$	15	$	10

On October 12, 2021, the Company contracted with Pacific Life Insurance Company to purchase a group annuity contract and transfer $186 million of its pension plan assets and related benefit obligations. This transaction required a remeasurement of the pension plan assets and obligations and resulted in the recognition of a $3 million non-cash pension settlement loss in the twelve months ended June 30, 2022.

Changes in benefit obligations and plan assets were as follows:


($ in millions)	June 30, 2022		June 30, 2021
Change in benefit obligation:
Benefit obligation at the beginning of the year	$	2,022	$	2,051
Service cost	24		27
Interest cost	39		40
Participant contributions	6		6
Actuarial gain	(341)		(58)
Plan curtailments	—		(4)
Settlements	(244)		(40)
Benefits paid	(70)		(79)
Administrative expenses	(6)		(7)
Plan amendments	1		(15)
Divestitures	(4)		(1)

Foreign currency translation	(113)		102
Benefit obligation at the end of the year	$	1,314	$	2,022
Accumulated benefit obligation at the end of the year	$	1,269	$	1,954


Change in plan assets:
Fair value of plan assets at the beginning of the year	$	1,759	$	1,691
Actual return on plan assets	(189)		57
Employer contributions	35		41
Participant contributions	6		6
Benefits paid	(70)		(79)
Settlements	(244)		(40)
Administrative expenses	(6)		(7)

Foreign currency translation	(96)		90
Fair value of plan assets at the end of the year	$	1,195	$	1,759
Funded status at the end of the year	$	(119)	$	(263)

Actuarial gains resulting in a decrease to the benefit obligation for the fiscal year ended June 30, 2022, were primarily due to a weighted average increase in discount rates for our pension plans of 1.7 percentage points. Settlement impact is attributed to group annuity contracts, primarily a $186 million contract with Pacific Life Insurance Company, and other lump sum transfers and payments.

The following table provides information for defined benefit plans with a projected benefit obligation in excess of plan assets:


($ in millions)	June 30, 2022		June 30, 2021
Projected benefit obligation	$	398	$	1,387
Fair value of plan assets	189		1,072

The following table provides information for defined benefit plans with an accumulated benefit obligation in excess of plan assets:


($ in millions)	June 30, 2022		June 30, 2021
Accumulated benefit obligation	$	357	$	1,351
Fair value of plan assets	177		1,070

The following table provides information as to how the funded status is recognized in the consolidated balance sheets:


($ in millions)	June 30, 2022		June 30, 2021
Non-current assets - Employee benefit assets	$	89	$	52
Current liabilities - Other current liabilities	(7)		(8)
Non-current liabilities - Employee benefit obligations	(201)		(307)
Funded status	$	(119)	$	(263)

Amounts recognized in other comprehensive (income)/loss for the fiscal years ended are as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Changes in plan assets and benefit obligations recognized in other comprehensive (income)/loss:
Net actuarial loss/(gain) occurring during the year	$	(91)	$	(58)	$	41
Net prior service loss/(gain) occurring during the year	1		(16)		—
Amortization of actuarial loss	(5)		(8)		(6)
Gain recognized due to settlement/curtailment	(8)		(2)		(6)
Amortization of prior service credit	3		2		2
Acquisition/disposal loss	(1)		—		—
Foreign currency translation	(14)		16		(3)
Tax effect	21		14		(12)
Total recognized in other comprehensive (income)/loss	$	(94)	$	(52)	$	16

Amounts in AOCI that have not yet been recognized as net periodic benefit cost, as of fiscal year-ends, are as follows:


	June 30,
($ in millions)	2022		2021		2020
Net prior service credit	$	(15)	$	(20)	$	(6)
Net actuarial loss	65		185		237
Accumulated other comprehensive loss at the end of the year	$	50	$	165	$	231

Weighted-average assumptions used to determine benefit obligations at fiscal year-end were:


	June 30,
	2022		2021		2020
Discount rate	3.8	%	2.1	%	2.0	%
Rate of compensation increase	2.3	%	1.7	%	1.9	%

Weighted-average assumptions used to determine net periodic benefit cost for the fiscal years ended were:


	June 30,
	2022		2021		2020
Discount rate	2.1	%	2.0	%	2.5	%
Rate of compensation increase	1.7	%	1.9	%	2.1	%
Expected long-term rate of return on plan assets	3.8	%	3.5	%	4.5	%

Where funded, the Company and, in some countries, the employees make cash contributions into the pension fund. In the case of unfunded plans, the Company is responsible for benefit payments as they fall due. Plan funding requirements are generally determined by local regulation and/or best practice and differ between countries. The local statutory funding positions are not necessarily consistent with the funded status disclosed on the consolidated balance sheets. For any funded plans in deficit (as measured under local country guidelines), the Company agrees with the trustees and plan fiduciaries to undertake suitable funding programs to provide additional contributions over time in accordance with local country requirements.

Contributions to the Company's defined benefit pension plans, not including unfunded plans, are expected to be $18 million over the next fiscal year.

The following benefit payments for the succeeding five fiscal years and thereafter, which reflect expected future service, as appropriate, are expected to be paid:


($ in millions)
2023	$	70
2024	75
2025	73
2026	76
2027	76
2028-2032	408

The ERISA Benefit Plan Committee in the United States, the Pension Plan Committee in Switzerland, and the Trustees of the pension plans in Canada, Ireland, and UK establish investment policies, investment strategies, allocation strategies, and investment risk profiles for the Company's pension plan assets and are required to consult with the Company on changes to their investment policy. In developing the expected long-term rate of return on plan assets at each measurement date, the Company considers the plan assets' historical returns, asset allocations, and the anticipated future economic environment and long-term performance of the asset classes. While appropriate consideration is given to recent and historical investment performance, the assumption represents management's best estimate of the long-term prospective return.

The pension plan assets measured at fair value were as follows:


	June 30, 2022
($ in millions)	Level 1		Level 2		Level 3		Total
Equity securities	$	111	$	98	$	—	$	209
Government debt securities	40		278		—		318
Corporate debt securities	33		100		—		133
Real estate	7		121		2		130
Insurance contracts	—		—		216		216
Cash and cash equivalents	21		3		—		24
Other	5		26		134		165
Total	$	217	$	626	$	352	$	1,195


	June 30, 2021
($ in millions)	Level 1		Level 2		Level 3		Total
Equity securities	$	139	$	186	$	—	$	325
Government debt securities	61		457		—		518
Corporate debt securities	74		180		—		254
Real estate	53		57		3		113
Insurance contracts	—		—		301		301
Cash and cash equivalents	32		8		—		40
Other	12		15		181		208
Total	$	371	$	903	$	485	$	1,759

Equity securities: Valued primarily at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on significant observable inputs such as fund values provided by the independent fund administrators (Level 2).

Government debt securities: Valued at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on observable inputs such as fund values provided by independent fund administrators, pricing of similar agency issues, live trading feeds from several vendors, and benchmark yield (Level 2).

Corporate debt securities: Valued at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on observable inputs such as fund values provided by independent fund administrators, or benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. Inputs may be prioritized differently at certain times based on market conditions (Level 2).

Real estate: Valued at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on observable inputs such as fund values provided by independent fund administrators (Level 2).

Insurance contracts: Valued based on the value of the associated insured liabilities.

Cash and cash equivalents: Consist of cash on deposit with brokers and short-term money market funds and are shown net of receivables and payables for securities traded at period end but not yet settled (Level 1) and cash indirectly held across investment funds (Level 2). All cash and cash equivalents are stated at cost, which approximates fair value.

Other:

Level 1: Derivatives valued as closing prices reported in the active market.

Level 2: Assets held in diversified growth funds, pooled funds, financing funds, and derivatives, where the value of the assets are determined by the investment managers or other independent third parties, based on observable inputs.

Level 3: Indemnified plan assets and pooled funds (equity, credit, macro-orientated, multi-strategy, cash, and other). The value of indemnified plan assets are determined based on the value of the liabilities that the assets cover. The value of the pooled funds is calculated by the investment managers based on the net asset values of the underlying portfolios.

The following table sets forth a summary of changes in the value of the Company's Level 3 assets:


($ in millions)
Balance as of June 30, 2021	$	485
Actual return on plan assets	(61)
Purchases, sales, and settlements	(17)
Transfer out of Level 3	(5)
Foreign currency translation	(50)
Balance as of June 30, 2022	352

Note 14 - Debt

Long-Term Debt

The following table summarizes the carrying value of long-term debt at June 30, 2022 and 2021, respectively:


				June 30,
($ in millions)	Maturities	Interest rates		2022		2021
Term debt
U.S. dollar notes, $400 million (1)(2)	Oct 2021	4.50	%	—		400
U.S. private placement notes, $275 million (1)(3)	Dec 2021	5.95	%	—		275
Euro bonds, €300 million (1)	Mar 2023	2.75	%	313		357
U.S. dollar notes, $500 million (4)	May 2025	4.00	%	500		—
U.S. dollar notes, $600 million	Apr 2026	3.63	%	600		600
U.S. dollar notes, $300 million	Sep 2026	3.10	%	300		300
Euro bonds, €500 million	Jun 2027	1.13	%	522		595
U.S. dollar notes, $500 million	May 2028	4.50	%	500		500
U.S. dollar notes, $500 million	Jun 2030	2.63	%	500		500
U.S. dollar notes, $800 million	May 2031	2.69	%	800		800
Total term debt				4,035		4,327

Bank loans				22		4
Commercial paper (1)				2,310		1,817
Other loans				18		22
Finance lease obligations				62		32
Fair value hedge accounting adjustments (5)				(69)		19
Unamortized discounts and debt issuance costs				(24)		(30)
Total debt				6,354		6,191
Less: current portion				(14)		(5)
Total long-term debt				$	6,340	$	6,186

(1)Indicates debt which has been classified as long-term liabilities in accordance with the Company’s ability and intent to refinance such obligations on a long-term basis.

(2)On July 15, 2021, the Company redeemed all $400 million outstanding amount of the 4.50% senior notes due October 2021.

(3)On December 15, 2021, the Company redeemed U.S. private placement notes of a principal amount of $275 million at maturity using proceeds from the commercial paper program. The notes carried an interest rate of 5.95%.

(4)On May 17, 2022, the Company issued U.S. dollar notes with an aggregate principal amount of $500 million and a contractual maturity in May 2025. The notes pay a coupon of 4.00% per annum, payable semi-annually in arrears. The notes are unsecured senior obligations of the Company and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries.

(5)Relates to fair value hedge basis adjustments relating to interest rate hedging.

The following table summarizes the contractual maturities of the Company's long-term debt, including current maturities (excluding payments for finance leases) at June 30, 2022 for the succeeding five fiscal years:


($ in millions)
2023	$	317
2024	—
2025 (1)	1,755
2026	600
2027 (2)	1,878

(1) Commercial paper denominated in U.S. dollars is classified as maturing in 2025, supported by the 3-year syndicated facility, with a 1-year option to extend.

(2) Commercial paper denominated in Euros is classified as maturing in 2027, supported by the 5-year syndicated facility, with a 1-year option to extend.

Bank and other loans

The Company has entered into syndicated and bilateral multi-currency credit facilities with financial institutions. On April 26, 2022, the Company terminated the three-, four-, and five-year syndicated facility agreements, which collectively provided for $3.8 billion of credit facilities. On the same day, the Company entered into three- and five-year syndicated facility agreements that each provide a revolving credit facility of $1.9 billion or $3.8 billion in total. The facilities are unsecured and have contractual maturities in April 2025 and April 2027, respectively. The agreements include customary terms and conditions for a syndicated facility of this nature, and the revolving tranches have two 12-month options available to management to extend the maturity date.

Interest charged on borrowings under the credit facilities is based on the applicable market rate plus the applicable margin. As of June 30, 2022 and 2021, the Company's credit facilities amounted to $3.8 billion.

As of June 30, 2022 and 2021, the Company has $1.4 billion and $2.0 billion of undrawn commitments, respectively. The Company incurs facility fees of 0.125% on the undrawn commitments. Such facility fees incurred were immaterial in the fiscal years ended June 30, 2022, 2021, and 2020, respectively.

At June 30, 2022 and 2021, land and buildings with a carrying value of $38 million and $19 million, respectively, have been pledged as security for bank and other loans.

Redemption of term debt

The Company may redeem its long-term debt, in whole or in part, at any time or from time to time prior to its maturity. The redemption prices typically represent 100% of the principal amount of the relevant debt plus any accrued and unpaid interest. In addition, for notes that are redeemed by the Company before their stated permitted redemption date, a make-whole premium is payable.

On December 15, 2021, the Company redeemed U.S. private placement notes of a principal amount of $275 million at maturity using the proceeds from the commercial paper program. The notes carried an interest rate of 5.95%.

On July 15, 2021, the Company redeemed all $400 million outstanding amount of the 4.50% senior notes due in October 2021 at a price equal to the principal plus accrued interest.

Priority, Guarantees, and Financial Covenants

All the notes are general unsecured senior obligations of the Company and are fully and unconditionally guaranteed on a joint and several basis by certain existing subsidiaries that guarantee its other indebtedness.

The Company's primary bank debt facilities and notes are unsecured and subject to negative pledge arrangements limiting the amount of secured indebtedness the Company can incur to 10.0% of total tangible assets, subject to some exceptions and variations by facility. As of June 30, 2022, the Company is required to satisfy certain financial covenants pursuant to its bank debt facilities, which are tested as of the last day of each quarterly and annual financial period. The covenants require the Company to maintain a leverage ratio of not higher than 3.9 times, which is calculated as total net debt divided by Adjusted EBITDA. As of June 30, 2022 and 2021, the Company was in compliance with all debt covenants.

Short-Term Debt

Short-term debt is generally used to fund working capital requirements. The Company has classified commercial paper as long-term at June 30, 2022 in accordance with the Company’s ability and intent to refinance such obligations on a long-term basis.

The following table summarizes the carrying value of short-term debt at June 30, 2022 and 2021, respectively:


	June 30,
($ in millions)	2022		2021
Bank loans	$	32	$	45

Bank overdrafts	104		53
Total short-term debt	$	136	$	98

As of June 30, 2022, the Company paid a weighted-average interest rate of 1.40% per annum on short-term debt, payable at maturity. As of June 30, 2021, the Company paid a weighted-average interest rate of 6.10% per annum, payable at maturity.

Note 15 - Leases

The components of lease expenses are as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Operating lease expense (1)	$	130	$	113	$	112
Short-term and variable lease expense (2)	17		20		—

Finance lease expense
Amortization of right-of-use assets (2)	2		2		2
Interest on lease liabilities (3)	1		1		1

Total lease expense (1)	$	150	$	136	$	115

(1)Included in cost of sales and selling, general, and administrative expenses.

(2)Included in cost of sales.

(3)Included in interest expense.

The Company's leases do not contain any material residual value guarantees or material restrictive covenants. As of June 30, 2022, the Company does not have material lease commitments that have not commenced.

Supplemental balance sheet information related to leases was as follows:


		June 30,
($ in millions)	Balance Sheet Location	2022		2021
Assets
Operating lease right-of-use assets, net	Operating lease assets	$	560	$	532
Finance lease assets (1)	Property, plant, and equipment, net	62		30
Total lease assets		$	622	$	562

Liabilities
Operating leases:
Current operating lease liabilities	Other current liabilities	$	101	$	96
Non-current operating lease liabilities	Operating lease liabilities	493		462
Finance leases:
Current finance lease liabilities	Current portion of long-term debt	10		2
Non-current finance lease liabilities	Long-term debt, less current portion	52		30
Total lease liabilities		$	656	$	590

(1)Finance lease assets are recorded net of accumulated amortization of $9 million and $8 million at June 30, 2022 and 2021, respectively.

Supplemental cash flow information related to leases was as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	122	$	111	$	108
Operating cash flows from finance leases	1		1		1
Financing cash flows from finance leases	5		2		2

Lease assets obtained in exchange for new lease obligations:
Operating leases	55		55		63
Finance leases	34		1		31

The following table presents the maturities of the Company's lease liabilities recorded on the consolidated balance sheets as of June 30, 2022:


($ in millions)	Operating Leases		Finance Leases
Fiscal year 2023	$	114	$	12
Fiscal year 2024	103		12
Fiscal year 2025	82		11
Fiscal year 2026	74		7
Fiscal year 2027	60		2
Thereafter	263		29
Total lease payments	696		73
Less: imputed interest	(102)		(11)
Total lease liabilities	$	594	$	62

The weighted-average remaining lease term and discount rate are as follows:


	June 30,
	2022		2021
Weighted-average remaining lease term (in years):
Operating leases	9.0		8.5
Finance leases	10.1		17.2

Weighted-average discount rate:
Operating Leases	3.3	%	3.5	%
Finance leases	2.9	%	3.8	%

Note 16 - Shareholders' Equity

The changes in ordinary and treasury shares during fiscal years 2022, 2021, and 2020, were as follows:


	Ordinary Shares			Treasury Shares
(shares and dollars in millions)	Number of Shares	Amount		Number of Shares	Amount
Balance as of June 30, 2019	1,626	$	16	1	$	(16)
Share buyback/cancellations	(57)	—		—	—

Options exercised and shares vested	—	—		(1)	16

Purchase of treasury shares	—	—		7	(67)
Balance as of June 30, 2020	1,569	16		7	(67)
Share buyback/cancellations	(31)	(1)		—	—

Options exercised and shares vested	—	—		(5)	46

Purchase of treasury shares	—	—		1	(8)
Balance as of June 30, 2021	1,538	15		3	(29)
Share buyback/cancellations	(49)	—		—	—
Options exercised and shares vested	—	—		(13)	154

Purchase of treasury shares	—	—		12	(143)
Balance as of June 30, 2022	1,489	$	15	2	$	(18)

The changes in the components of accumulated other comprehensive loss during the fiscal years ended June 30, 2022, 2021, and 2020 were as follows:


	Foreign Currency Translation		Net Investment Hedge		Pension		Effective Derivatives		Total Accumulated Other Comprehensive Loss
($ in millions)	(Net of Tax)		(Net of Tax)		(Net of Tax)		(Net of Tax)
Balance as of June 30, 2019	$	(609)	$	(11)	$	(90)	$	(12)	$	(722)
Other comprehensive loss before reclassifications	(298)		(2)		(25)		(28)		(353)
Amounts reclassified from accumulated other comprehensive loss	11		—		9		6		26
Net current period other comprehensive loss	(287)		(2)		(16)		(22)		(327)
Balance as of June 30, 2020	(896)		(13)		(106)		(34)		(1,049)
Other comprehensive income before reclassifications	179		—		44		25		248
Amounts reclassified from accumulated other comprehensive loss	26		—		8		1		35
Net current period other comprehensive income	205		—		52		26		283
Balance as of June 30, 2021	(691)		(13)		(54)		(8)		(766)
Other comprehensive income/(loss) before reclassifications	(220)		—		85		6		(129)
Amounts reclassified from accumulated other comprehensive loss	19		—		9		(13)		15
Net current period other comprehensive income/(loss)	(201)		—		94		(7)		(114)
Balance as of June 30, 2022	$	(892)	$	(13)	$	40	$	(15)	$	(880)

The following tables provide details of amounts reclassified from accumulated other comprehensive loss:


	For the years ended June 30,
($ in millions)	2022		2021		2020
Amortization of pension:
Amortization of prior service credit	$	(3)	$	(2)	$	(2)
Amortization of actuarial loss	5		8		6
Acquisition/disposal loss	1		—		—
Effect of pension settlement/curtailment	8		2		6
Total before tax effect	11		8		10
Tax effect on amounts reclassified into earnings	(2)		—		(1)
Total net of tax	$	9	$	8	$	9

(Gains)/losses on cash flow hedges:
Commodity contracts	$	(20)	$	(1)	$	6
Forward exchange contracts	—		—		1
Treasury locks	3		2		—
Total before tax effect	(17)		1		7
Tax effect on amounts reclassified into earnings	4		—		(1)
Total net of tax	$	(13)	$	1	$	6

Losses on foreign currency translation:
Foreign currency translation adjustment (1)	$	19	$	26	$	11
Total before tax effect	19		26		11
Tax effect on amounts reclassified into earnings	—		—		—
Total net of tax	$	19	$	26	$	11

(1)During the fiscal year ended June 30, 2022, the Company effectively disposed of a non-core business and transferred $19 million of accumulated foreign currency translation from accumulated other comprehensive loss to earnings. During the fiscal year ended June 30, 2021, the Company recorded a gain on disposal of AMVIG and other non-core businesses. Upon completion of the sales, $26 million of accumulated foreign currency translation was transferred from accumulated other comprehensive loss to earnings. Refer to Note 8, "Equity Method and Other Investments" for further information on the disposal of AMVIG and Note 5, "Divestitures" for more information about the Company's other disposals. The fiscal year ended June 30, 2020 includes the loss on sale of the EC Remedy of $9 million, which is the result of the reclassification of accumulated foreign currency translation amounts from accumulated other comprehensive loss to earnings. Refer to Note 6, "Held for Sale and Discontinued Operations" for more information.

Forward contracts to purchase own shares

The Company's employee share plans require the delivery of shares to employees in the future when rights vest or vested options are exercised. The Company currently acquires shares on the open market to deliver shares to employees to satisfy vesting or exercising commitments. This exposes the Company to market price risk.

To manage the market price risk, the Company has entered into forward contracts for the purchase of its ordinary shares. As of June 30, 2022, the Company has entered into forward contracts that mature between November 2022 and June 2023 to purchase 14 million shares at a weighted average price of $12.67. As of June 30, 2021, the Company had outstanding forward contracts for 8 million shares at a weighted average price of $11.65 that matured in June 2022.

The forward contracts to purchase the Company's own shares are classified as a current liability. Equity is reduced by an amount equal to the fair value of the shares at inception. The carrying value of the forward contracts at each reporting period was determined based on the present value of the cost required to settle the contracts.

Note 17 - Income Taxes

Amcor plc is a tax resident of the United Kingdom of Great Britain and Northern Ireland ("UK").

The components of income from continuing operations before income taxes and equity in income/(loss) of affiliated companies were as follows:


	Years ended June 30,
($ in millions)	2022		2021		2020
Domestic (UK)	$	(58)	$	(25)	$	(36)
Foreign	1,173		1,218		861
Total income from continuing operations before income taxes and equity in income/(loss) of affiliated companies	$	1,115	$	1,193	$	825

Income tax expense consisted of the following:


	Years ended June 30,
($ in millions)	2022		2021		2020
Current tax
Domestic (UK)	$	2	$	11	$	1
Foreign	331		246		300
Total current tax	333		257		301
Deferred tax
Domestic (UK)	(10)		(1)		1
Foreign	(23)		5		(115)
Total deferred tax	(33)		4		(114)
Income tax expense	$	300	$	261	$	187

The deferred tax benefit in fiscal year 2020 related to undistributed foreign earnings and included the tax impact of the EC Remedy sale of $83 million.

The following is a reconciliation of income tax computed at the UK statutory tax rate of 19.0%, 19.0%, and 18.5% for fiscal years 2022, 2021, and 2020, respectively, to income tax expense.


	Years ended June 30,
($ in millions)	2022		2021		2020
Income tax expense at statutory rate	$	212	$	227	$	153
Foreign tax rate differential	43		18		70

Non-deductible expenses, non-taxable items, net	(2)		2		13
Tax law changes	(1)		(1)		(30)
Change in valuation allowance	4		40		(17)
Uncertain tax positions, net	62		32		—
Other (1)	(18)		(57)		(2)
Income tax expense	$	300	$	261	$	187

(1)In fiscal year 2022, Other is comprised of adjustments to prior year, movements in deferred tax positions of $13 million, and other individually immaterial items. In fiscal year 2021, Other is comprised of adjustments to prior fiscal year, including one related to the crystallization of benefits from business restructuring of $45 million and other individually immaterial items.

Amcor operates in over forty different jurisdictions with a wide range of statutory tax rates. The tax expense from operating in non-UK jurisdictions in excess of the UK statutory tax rate is included in the line "Foreign tax rate differential" in the above tax rate reconciliation table. For fiscal year 2022, the Company's effective tax rate was 26.9% as compared to the effective tax rates of 21.9% and 22.6% for fiscal years 2021 and 2020, respectively, with the increase in fiscal year 2022 predominantly attributable to an increase in tax provisions for uncertain tax positions. For fiscal year 2021, the Company's effective tax rate was higher than its UK statutory tax rate primarily due to pretax income being earned in jurisdictions outside

of the UK where the applicable tax rates are higher than the UK statutory tax rate. The fiscal year 2020 foreign tax rate differential reflects a benefit related to Swiss tax law changes, which was mostly offset by current period tax charges related to true-up adjustments. Refer to the section "Swiss Tax Reform" in this footnote for a discussion of the impacts of the Swiss tax law changes which the Company recognized in the last three fiscal years.

Significant components of deferred tax assets and liabilities are as follows:


	June 30,
($ in millions)	2022		2021
Deferred tax assets
Inventories	$	15	$	22
Accrued employee benefits	62		101
Provisions	18		10
Net operating loss carryforwards	325		293
Tax credit carryforwards	39		40
Accruals and other	48		63
Total deferred tax assets	507		529
Valuation allowance	(407)		(403)
Net deferred tax assets	100		126
Deferred tax liabilities
Property, plant, and equipment	(319)		(325)
Other intangible assets, including gross impacts from Swiss tax reform	(304)		(326)
Trade receivables	—		(7)
Derivatives	(4)		—
Undistributed foreign earnings	(20)		(25)
Total deferred tax liabilities	(647)		(683)
Net deferred tax liability	(547)		(557)
Balance sheet location:
Deferred tax assets	130		139
Deferred tax liabilities	(677)		(696)
Net deferred tax liability	$	(547)	$	(557)

The Company maintains a valuation allowance on net operating losses and other deferred tax assets in jurisdictions for which it does not believe it is more likely than not to realize those deferred tax assets based upon all available positive and negative evidence, including historical operating performance, carry-back periods, reversal of taxable temporary differences, tax planning strategies, and earnings expectations. The Company's valuation allowance increased by $4 million, by $40 million, and by $73 million for fiscal year 2022, 2021, and 2020, respectively.

As of June 30, 2022 and 2021, the Company had total net operating loss carry forwards, including capital losses, in the amount of $1,178 million and $1,085 million, respectively, and tax credits in the amount of $39 million and $40 million, respectively. The vast majority of the losses and tax credits do not expire.

The Company considers the following factors, among others, in evaluating its plans for indefinite reinvestment of its subsidiaries' earnings: (i) the forecasts, budgets, and financial requirements of the Company and its subsidiaries, both for the long-term and for the short-term; and (ii) the tax consequences of any decision to repatriate or reinvest earnings of any subsidiary. As of June 30, 2022, the Company has not provided deferred taxes on approximately $1,093 million of earnings in certain foreign subsidiaries because such earnings are indefinitely reinvested in its international operations. Upon distribution of such earnings in the form of dividends or otherwise, the Company may be subject to incremental foreign tax. It is not practicable to estimate the amount of foreign tax that might be payable. As of June 30, 2022, a cumulative deferred tax liability of $20 million has been recorded attributable to undistributed earnings that the Company has deemed are no longer indefinitely reinvested. The remaining undistributed earnings of the Company's subsidiaries are not deemed to be indefinitely reinvested and can be repatriated at no tax cost. Accordingly, there is no provision for income or withholding taxes on these earnings.

The Company accounts for its uncertain tax positions in accordance with ASC 740, "Income Taxes." At June 30, 2022 and 2021, unrecognized tax benefits totaled $195 million and $133 million, respectively, all of which would favorably impact the effective tax rate if recognized.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the fiscal years ended June 30, 2022, 2021, and 2020, the Company's accrual for interest and penalties for these uncertain tax positions was $12 million, $12 million, and $7 million, respectively. The Company does not currently anticipate that the total amount of unrecognized tax benefits will result in material changes to its financial position within the next 12 months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the fiscal years presented is as follows:


	June 30,
($ in millions)	2022		2021		2020
Balance at the beginning of the year	$	133	$	101	$	102
Additions based on tax positions related to the current year	50		39		19
Additions for tax positions of prior years	19		7		2
Reductions for tax positions from prior years	(6)		(12)		(13)
Reductions for settlements	—		—		(7)
Reductions due to lapse of statute of limitations	(1)		(2)		(2)

Balance at the end of the year	$	195	$	133	$	101

The Company conducts business in a number of tax jurisdictions and, as such, is required to file income tax returns in multiple jurisdictions globally. The fiscal years 2016 through 2021 remain open for examination by the United States Internal Revenue Service ("IRS"), the fiscal year 2020 remains open for examination by Her Majesty’s Revenue & Customs ("HMRC"), and the fiscal years 2011 through 2021 are currently subject to audit or remain open for examination in various tax jurisdictions.

The Company believes that its income tax reserves are adequately maintained taking into consideration both the technical merits of its tax return positions and ongoing developments in its income tax audits. However, the final determination of the Company's tax return positions, if audited, is uncertain and therefore there is a possibility that final resolution of these matters could have a material impact on the Company's results of operations or cash flows.

Swiss Tax Reform

During the fiscal year ended June 30, 2020, Swiss tax laws were changed in order to remove certain tax regimes and replace these with new measures that are hereafter referred to as "Swiss Tax Reform." In the fourth quarter of fiscal year 2020, the Company obtained confirmation from local authorities as to the methodology to calculate the future benefits and recorded the impact. The Company recorded a benefit of $22 million at June 30, 2020 related to a reduction in deferred tax expense from an allowed step-up of intangible assets for tax purposes, an additional benefit of $2 million during fiscal year 2021, and a decrease of $2 million during fiscal year 2022.

Note 18 - Share-based Compensation

The Company's equity incentive plans include grants of share options, restricted shares/units, performance shares, performance rights, and share rights.

In fiscal years 2022, 2021, and 2020, share options and performance rights or performance shares (awarded to U.S. participants in place of performance rights) were granted to officers and employees. The exercise price for share options was set at the time of grant. The requisite service period for outstanding share options, performance rights, or performance shares ranges from two to three years. The awards are also subject to performance and market conditions. At vesting, share options can be exercised and converted to ordinary shares on a one-for-one basis, subject to payment of the exercise price. The contractual term of the share options ranges from five to six years from the grant date. At vesting, performance rights can be exercised and converted to ordinary shares on a one-for-one basis. Performance shares vest automatically and convert to ordinary shares on a one-for-one basis.

Restricted shares/units may be granted to directors, officers, and employees of the Company and vest on terms as described in the award. The restrictions prevent the participant from disposing of the restricted shares/units during the vesting period. The fair value of restricted shares/units is determined based on the closing price of the Company's shares on the grant date.

Share rights may be granted to directors, officers, and employees of the Company and vest on terms as described in the award. The restrictions prevent the participant from disposing of the share rights during the vesting period. The fair value of share rights is determined based on the closing price of the Company's shares on the grant date, adjusted for dividend yield.

As of June 30, 2022, 47 million shares were reserved for future grants. The Company uses treasury shares to settle share-based compensation obligations. Treasury shares are acquired through market purchases throughout the fiscal year for the required number of shares.

Share-based compensation expense was primarily recorded in selling, general, and administrative expenses in the consolidated statements of income. The total share-based compensation expense was as follows:


	For the years ended June 30,
($ in millions)	2022		2021		2020
Share-based compensation expense	$	63	$	58	$	34

As of June 30, 2022, there was $87 million of total unrecognized compensation cost related to all unvested share options and other equity incentive plans. That cost is expected to be recognized over a weighted-average period of 1.8 years.

The weighted-average grant date fair values by type of equity incentive plan for awards granted in fiscal years 2022, 2021 and 2020 were as follows:


	For the years ended June 30,
(in $ per unit of award)	2022	2021	2020
Share options (1)	1.29	1.08	0.74
Restricted shares/units	11.62	11.06	10.15
Performance rights/shares (2)	9.40	7.22	6.70
Share rights	11.44	10.22	8.80

(1)The fair value of share options was determined using Black-Scholes option pricing model with the following key assumptions for the fiscal years ended June 30, 2022, 2021 and 2020, respectively: risk-free interest rate of 1.0% (2021: 0.2%, 2020: 1.8%), expected share-price volatility of 22.0% (2021: 25.0%, 2020: 18.0%), expected dividend yield of 4.1% (2021: 4.7%, 2020: 4.6%), and expected life of options of 6.1 years (2021: 6.1 years, 2020: 5.7 years).

(2)The fair value of performance rights/shares was determined using a combination of Black-Scholes option pricing model and Monte Carlo simulation. The key assumptions for the fiscal years ended June 30, 2022, 2021 and 2020, respectively, were: risk-free interest rate of 0.4% (2021: 0.2%, 2020: 1.8%), expected share-price volatility of 22.0% (2021: 25.0%, 2020: 18.0%), and expected dividend yield of 4.1% (2021: 4.7%, 2020: 4.6%).

Changes in outstanding share options were as follows:


	Share options
	Number	Weighted-average Exercise Price			Remaining Weighted-average Contract Life		Intrinsic Value
	(in millions)			(in years)		($ in millions)
Share options outstanding at June 30, 2021	55	$	10.49
Granted	9	12.40
Exercised	(11)	11.00
Forfeited	(8)	10.95
Share options outstanding at June 30, 2022	45	10.66			3.9		$	80
Vested and exercisable at June 30, 2022	3	$	11.14		2.2		$	3

The Company received $114 million, $30 million, and $1 million on the exercise of stock options during the fiscal years ended June 30, 2022, 2021, and 2020, respectively. During the fiscal years ended June 30, 2022, 2021, and 2020, the intrinsic value associated with the exercise of share options was $15 million, $6 million, and $1 million, respectively. The grant date fair value of share options vested was $13 million, $2 million, and $0 million for fiscal years ended June 30, 2022, 2021, and 2020, respectively.

Changes in outstanding other equity incentive plans and the fair values vested are presented below:


	Restricted shares/units					Performance rights/shares				Share rights
	Number		Weighted-average Grant Date Fair Value			Number		Weighted-average Grant Date Fair Value		Number		Weighted-average Grant Date Fair Value
	(in millions)				(in millions)			(in millions)
Outstanding at June 30, 2021	1		$	11.17		9		$	6.93	3		$	9.83
Granted	1		11.62			4		9.40		2		11.44
Exercised	(1)		10.32			(1)		6.79		(1)		8.99
Forfeited	—		—			(1)		6.96		—		10.50
Outstanding at June 30, 2022	1		$	11.41		11		$	7.79	4		$	10.90

Fair value vested ($ in millions)	Restricted shares/units					Performance rights/shares				Share rights
Year Ended June 30, 2022	$	3				$	8			$	7
Year Ended June 30, 2021	3					3				5
Year Ended June 30, 2020	2					2				11

Note 19 - Earnings Per Share Computations

The Company applies the two-class method when computing its earnings per share ("EPS"), which requires that net income per share for each class of share be calculated assuming all of the Company's net income is distributed as dividends to each class of share based on their contractual rights.

Basic EPS is computed by dividing net income available to ordinary shareholders by the weighted-average number of ordinary shares outstanding after excluding the ordinary shares to be repurchased using forward contracts. Diluted EPS includes the effects of share options, restricted shares, performance rights, performance shares, and share rights, if dilutive.


	Years ended June 30,
($ in millions, except per share amounts)	2022		2021		2020
Numerator
Net income attributable to Amcor plc	$	805	$	939	$	612
Distributed and undistributed earnings attributable to shares to be repurchased	(3)		(2)		—
Net income available to ordinary shareholders of Amcor plc—basic and diluted	$	802	$	937	$	612
Net income available to ordinary shareholders of Amcor plc from continuing operations—basic and diluted	$	802	$	937	$	620
Net loss available to ordinary shareholders of Amcor plc from discontinued operations—basic and diluted	$	—	$	—	$	(8)

Denominator
Weighted-average ordinary shares outstanding	1,514		1,553		1,601
Weighted-average ordinary shares to be repurchased by Amcor plc	(5)		(2)		(1)
Weighted-average ordinary shares outstanding for EPS—basic	1,509		1,551		1,600
Effect of dilutive shares	6		5		2
Weighted-average ordinary shares outstanding for EPS—diluted	1,516		1,556		1,602

Per ordinary share income
Income from continuing operations	$	0.532	$	0.604	$	0.387
Loss from discontinued operations	—		—		(0.005)
Basic earnings per ordinary share	$	0.532	$	0.604	$	0.382

Income from continuing operations	$	0.529	$	0.602	$	0.387
Loss from discontinued operations	—		—		(0.005)
Diluted earnings per ordinary share	$	0.529	$	0.602	$	0.382

Certain stock awards outstanding were not included in the computation of diluted earnings per share above because they would not have had a dilutive effect. The excluded stock awards represented an aggregate of 7 million, 6 million, and 37 million shares at June 30, 2022, 2021, and 2020, respectively. Basic and diluted weighted average ordinary shares outstanding have decreased in fiscal years 2022 and 2021 due to share repurchases.

Note 20 - Contingencies and Legal Proceedings

Contingencies - Brazil

The Company's operations in Brazil are involved in various governmental assessments and litigation, principally related to claims for excise and income taxes. The Company vigorously defends its positions and believes it will prevail on most, if not all, of these matters. The Company does not believe that the ultimate resolution of these matters will materially impact the Company's consolidated results of operations, financial position or cash flows. Under customary local regulations, the Company's Brazilian subsidiaries may need to post cash or other collateral if a challenge to any administrative assessment proceeds to the Brazilian court system; however, the level of cash or collateral already pledged or potentially required to be pledged would not significantly impact the Company's liquidity. At June 30, 2022 and 2021, the Company has recorded accruals of $12 million and $11 million, respectively, included in other non-current liabilities in the consolidated balance sheets, and has estimated a reasonably possible loss exposure in excess of the accrual of $20 million and $17 million, respectively. The litigation process is subject to many uncertainties and the outcome of individual matters cannot be accurately predicted. The Company routinely assesses these matters as to the probability of ultimately incurring a liability and records the best estimate of the ultimate loss in situations where the likelihood of an ultimate loss is probable. The Company's assessments are based on its knowledge and experience, but the ultimate outcome of any of these matters may differ from the Company's estimates.

As of June 30, 2022, the Company provided letters of credit of $36 million, judicial insurance of $1 million and deposited cash of $12 million with the courts to continue to defend the cases referenced above.

Contingencies - Environmental Matters

The Company, along with others, has been identified as a potentially responsible party ("PRP") at several waste disposal sites under U.S. federal and related state environmental statutes and regulations and may face potentially material environmental remediation obligations. While the Company benefits from various forms of insurance policies, actual coverage may not, or only partially, cover the total potential exposures. The Company has recorded $17 million aggregate accruals for its share of estimated future remediation costs at these sites.

In addition to the matters described above, the Company has also recorded aggregate accruals of $43 million for potential liabilities for remediation obligations at various worldwide locations that are owned or operated by the Company, or were formerly owned or operated.

The SEC requires the Company to disclose certain information about proceedings arising under federal, state, or local environmental provisions if the Company reasonably believes that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, the Company uses a threshold of $1 million or more for purposes of determining whether disclosure of any such proceedings is required. Applying this threshold, there are no environmental matters required to be disclosed for the fiscal year ended June 30, 2022.

While the Company believes that its accruals are adequate to cover its future obligations, there can be no assurance that the ultimate payments will not exceed the accrued amounts. Nevertheless, based on the available information, the Company does not believe that its potential environmental obligations will have a material adverse effect upon its liquidity, results of operations, or financial condition.

Other Matters

In the normal course of business, the Company is subject to legal proceedings, lawsuits, and other claims. While the potential financial impact with respect to these ordinary course matters is subject to many factors and uncertainties, management believes that any financial impact to the Company from these matters, individually and in the aggregate, would not have a material adverse effect on the Company's financial position or results of operation.

Note 21 - Segments

The Company's business is organized and presented in the two reportable segments outlined below:

Flexibles: Consists of operations that manufacture flexible and film packaging in the food and beverage, medical and pharmaceutical, fresh produce, snack food, personal care, and other industries.

Rigid Packaging: Consists of operations that manufacture rigid containers for a broad range of predominantly beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads and personal care items, and plastic caps for a wide variety of applications.

Other consists of the Company's undistributed corporate expenses including executive and functional compensation costs, equity method and other investments, intercompany eliminations, and other business activities.

Operating segments are organized along the Company's product lines and geographical areas. The Company's five Flexibles operating segments (Flexibles Europe, Middle East and Africa; Flexibles North America; Flexibles Latin America; Flexibles Asia Pacific; and Specialty Cartons) have been aggregated in the Flexibles reportable segment as they exhibit similarity in economic characteristics and future prospects, similarity in the products they offer, their production technologies, the customers they serve, the nature of their service delivery models, and their regulatory environments.

The Company evaluates performance and allocates resources based on adjusted earnings before interest and taxes ("Adjusted EBIT") from continuing operations. The Company defines Adjusted EBIT as operating income adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance and to include equity in income/(loss) of affiliated companies, net of tax.

The accounting policies of the reportable segments are the same as those in the consolidated financial statements. During the first quarter of fiscal year 2021, the Company revised the presentation of adjusted earnings before interest and tax ("Adjusted EBIT") from continuing operations in the reportable segments to include an allocation of certain research and development and selling, general, and administrative expenses that management previously reflected in Other. The Company refines its expense allocation methodologies to the reportable segments periodically as more relevant information becomes available and to align with industry or market changes. Corporate expenses are allocated to the reportable segments based primarily on direct attribution. Prior period has been recast to conform to the new cost allocation methodology.

The following table presents information about reportable segments:


	Years ended June 30,
($ in millions)	2022		2021		2020
Sales including intersegment sales
Flexibles	$	11,151	$	10,040	$	9,755
Rigid Packaging	3,393		2,823		2,716
Other	—		—		—
Total sales including intersegment sales	14,544		12,863		12,471

Intersegment sales
Flexibles	—		2		3
Rigid Packaging	—		—		—
Other	—		—		—
Total intersegment sales	—		2		3

Net sales	$	14,544	$	12,861	$	12,468

Adjusted earnings before interest and taxes ("Adjusted EBIT") from continuing operations
Flexibles	1,517		1,427		1,296
Rigid Packaging	289		299		284
Other	(105)		(105)		(83)
Adjusted EBIT from continuing operations	1,701		1,621		1,497
Less: Material restructuring programs (1)	(37)		(88)		(106)
Less: Impairments in equity method investments (2)	—		—		(26)
Less: Material acquisition costs and other (3)	(4)		(7)		(145)
Less: Amortization of acquired intangible assets from business combinations (4)	(163)		(165)		(191)

Less: Impact of hyperinflation (5)	(16)		(19)		(28)

Less: Pension settlements (6)	(8)		—		(5)
Add/(Less): Net gain/(loss) on disposals (7)	(10)		9		—
Less: Property and other losses, net (8)	(13)		—		—
Less: Russia-Ukraine conflict impacts (9)	(200)		—		—
EBIT from continuing operations	1,250		1,351		996

Interest income	24		14		22
Interest expense	(159)		(153)		(207)
Equity in income (loss) of affiliated companies, net of tax	—		(19)		14
Income from continuing operations before income taxes and equity in income (loss) of affiliated companies	$	1,115	$	1,193	$	825

(1)Material restructuring programs includes restructuring and related expenses for the 2019 Bemis Integration Plan for fiscal year 2022 and 2018 Rigid Packaging Restructuring Plan and the 2019 Bemis Integration Plan for fiscal years 2021 and 2020. Refer to Note 7, "Restructuring," for more information about the Company's restructuring activities.

(2)Impairments in equity method investments include the impairment charges related to other-than-temporary impairments related to the investment in AMVIG. During the fiscal year 2021, the Company sold its interest in AMVIG. Refer to Note 8, "Equity Method and Other Investments," for more information about the Company's equity method investments.

(3)Includes costs associated with the Bemis transaction. Fiscal year 2021 includes a $19 million benefit related to Brazil indirect taxes resulting from a May 2021 Brazil Supreme Court decision. During fiscal year 2020, material acquisition costs and other includes $58 million amortization of Bemis acquisition related inventory fair value step-up and $88 million of Bemis transaction related costs and integration costs not qualifying as exit costs, including certain advisory, legal, audit, and audit related fees.

(4)Amortization of acquired intangible assets from business combinations includes amortization expenses related to all acquired intangible assets from past acquisitions, including $26 million of sales backlog amortization for the fiscal year 2020 from the Bemis acquisition.

(5)Impact of hyperinflation includes the adverse impact of highly inflationary accounting for subsidiaries in Argentina where the functional currency was the Argentine Peso.

(6)Pension settlements in fiscal year 2022 relate to the purchases of group annuity contracts and transfer of pension plan assets and related benefit obligations. Refer to Note 13, "Pension and Other Post-Retirement Plans," for more information. For fiscal year 2020, impact of pension settlements includes the amount of actuarial losses recognized in the consolidated income statements related to the settlement of certain defined benefit plans, not including related tax effects.

(7)Net gain/(loss) on disposals includes an expense of $10 million from the disposal of non-core assets for fiscal year 2022. Refer to Note 11, "Fair Value Measurements," for more information. Fiscal year 2021 includes the gain realized upon the disposal of AMVIG and the loss upon disposal of other non-core businesses not part of material restructuring programs. Refer to Note 8, "Equity Method and Other Investments," for further information on the disposal of AMVIG and Note 5, "Divestitures," for more information about the Company's other disposals.

(8)Property and other losses, net includes property and related business losses primarily associated with the destruction of the Company's Durban, South Africa, facility during general civil unrest in July 2021, net of insurance recovery.

(9)Russia-Ukraine conflict impacts include $138 million of impairment charges, $57 million of restructuring and related expenses, and $5 million of other expenses for fiscal year 2022. Refer to Note 4,"Restructuring, Impairment, and Related Expenses, Net, " and Note 7, "Restructuring," for further information.

The tables below present additional financial information by reportable segments:


	Years ended June 30,
($ in millions)	2022		2021		2020
Flexibles	$	376	$	336	$	271
Rigid Packaging	136		127		125
Other	15		5		4
Total capital expenditures for the acquisition of long-lived assets	$	527	$	468	$	400


	Years ended June 30,
($ in millions)	2022		2021		2020
Flexibles	$	450	$	447	$	478
Rigid Packaging	120		115		111
Other	9		10		18
Total depreciation and amortization	$	579	$	572	$	607

Total assets by segment is not disclosed as the Company does not use total assets by segment to evaluate segment performance or allocate resources and capital.

The Company did not have sales to a single customer that exceeded 10% of consolidated net sales for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

Sales by major product were:


		Years ended June 30,
($ in millions)	Segment	2022		2021		2020
Films and other flexible products	Flexibles	$	10,033	$	8,934	$	8,637
Specialty flexible folding cartons	Flexibles	1,118		1,104		1,115
Containers, preforms, and closures	Rigid Packaging	3,393		2,823		2,716
Net sales		$	14,544	$	12,861	$	12,468

The following table provides long-lived asset information for the major countries in which the Company operates. Long-lived assets include property, plant, and equipment, net of accumulated depreciation and impairments.


	June 30,
($ in millions)	2022		2021

United States of America	$	1,720	$	1,673
Other countries (1)	1,926		2,088
Long-lived assets	$	3,646	$	3,761

(1)Includes the Company's country of domicile, Jersey. The Company had no long-lived assets in Jersey in any period shown. No individual country represented more than 10% of the respective totals.

The following tables disaggregate net sales information by geography in which the Company operates based on manufacturing or selling operations:


	Year Ended June 30, 2022
($ in millions)	Flexibles		Rigid Packaging		Total
North America	$	4,296	$	2,656	$	6,952
Latin America	1,060		737		1,797
Europe (1)	4,062		—		4,062
Asia Pacific	1,733		—		1,733
Net sales	$	11,151	$	3,393	$	14,544

(1)Includes the Company's country of domicile, Jersey. The Company had no sales in Jersey in the period shown.


	Year Ended June 30, 2021
($ in millions)	Flexibles		Rigid Packaging		Total
North America	$	3,719	$	2,319	$	6,038
Latin America	914		504		1,418
Europe (1)	3,828		—		3,828
Asia Pacific	1,577		—		1,577
Net sales	$	10,038	$	2,823	$	12,861

(1)Includes the Company's country of domicile, Jersey. The Company had no sales in Jersey in the period shown.


	Year Ended June 30, 2020
($ in millions)	Flexibles		Rigid Packaging		Total
North America	$	3,637	$	2,219	$	5,856
Latin America	957		497		1,454
Europe (1)	3,665		—		3,665
Asia Pacific	1,493		—		1,493
Net sales	$	9,752	$	2,716	$	12,468

(1)Includes the Company's country of domicile, Jersey. The Company had no sales in Jersey in the period shown.

Note 22 - Deed of Cross Guarantee

The parent entity, Amcor plc, and its wholly owned subsidiaries listed below are subject to a Deed of Cross Guarantee dated June 24, 2019 (the "Deed") under which each company guarantees the debts of the others:


Amcor Pty Ltd			Amcor Holdings (Australia) Pty Ltd
Amcor Services Pty Ltd			Amcor Flexibles Group Pty Ltd
Amcor Investments Pty Ltd			Amcor Flexibles (Australia) Pty Ltd
Amcor Finance Australia Pty Ltd			Amcor Flexibles (Port Melbourne) Pty Ltd
Amcor European Holdings Pty Ltd			Amcor Packaging (Asia) Pty Ltd
ARP North America Holdco Ltd			ARP LATAM Holdco Ltd

The entities above were the only parties to the Deed at June 30, 2022 and comprise the closed group for the purposes of the Deed (and also the extended closed group). ARP North America Holdco Ltd and ARP LATAM Holdco Ltd were newly incorporated entities and were added to the deed on September 25, 2019. By a Revocation Deed, dated September 9, 2021, the Deed was revoked in respect of Amcor Flexibles (Dandenong) Pty Ltd, Packsys Pty Ltd, Packsys Holdings (Aus) Pty Ltd, and Techni-Chem Australia Pty Ltd. No other parties have been added, removed or the subject to a notice of disposal since September 9, 2021.

By entering into the Deed, the wholly owned subsidiaries have been relieved from the requirement to prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.

The following financial statements are additional disclosure items specifically required by ASIC and represent the consolidated results of the entities subject to the Deed only.

Deed of Cross Guarantee

Statements of Income

($ in millions)


For the year ended June 30,	2022		2021
Net sales	$	391	$	335
Cost of sales	(337)		(282)

Gross profit	54		53

Operating expenses	(1,251)		(2,441)
Other income, net	2,355		3,898

Operating income	1,158		1,510

Interest income	12		18
Interest expense	(14)		(11)
Other non-operating loss, net	1		(5)

Income before income taxes	1,157		1,512

Income tax (expense)/credit	(4)		17

Net income	$	1,153	$	1,529

Deed of Cross Guarantee

Summarized Statements of Comprehensive Income

($ in millions)


For the year ended June 30,	2022		2021
Net income	$	1,153	$	1,529
Other comprehensive income/(loss) (1) :

Foreign currency translation adjustments, net of tax	(30)		32
Net investment hedge of foreign operations, net of tax	—		—
Other comprehensive income/(loss)	(30)		32
Comprehensive (income)/loss attributable to non-controlling interests	—		—
Total comprehensive income	$	1,123	$	1,561

(1)All of the items in other comprehensive income/(loss) may be reclassified subsequently to profit or loss.

Deed of Cross Guarantee

Summarized Statements of Income and Accumulated Losses

($ in millions)


For the year ended June 30,	2022		2021
Retained earnings, beginning balance	$	6,737	$	5,935
Net income	1,153		1,529

Retained earnings before distribution	7,890		7,464

Dividends recognized during the financial period	(723)		(727)

Retained earnings at the end of the financial period	$	7,167	$	6,737

Deed of Cross Guarantee

Balance Sheet

($ in millions)


As of June 30,	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	68	$	47
Receivables, net	662		690
Inventories	71		66
Prepaid expenses and other current assets	19		32
Total current assets	820		835
Non-current assets:
Property, plant, and equipment, net	63		74
Deferred tax assets	26		39
Other intangible assets, net	12		12
Goodwill	91		100
Other non-current assets	14,039		13,336
Total non-current assets	14,231		13,561
Total assets	$	15,051	$	14,396
Liabilities
Current liabilities:
Short-term debt	$	901	$	816
Payables	162		137
Accrued employee costs	21		23
Other current liabilities	191		109
Total current liabilities	1,275		1,085
Non-current liabilities:
Long-term debt, less current portion	319		370
Other non-current liabilities	2		3
Total liabilities	1,596		1,458
Shareholders' Equity
Issued	15		15
Additional paid-in capital	5,239		5,122
Retained earnings	7,167		6,737
Accumulated other comprehensive income	1,034		1,064
Total shareholders' equity	13,455		12,938
Total liabilities and shareholders' equity	$	15,051	$	14,396

Note 23 - Supplemental Cash Flow Information

Supplemental cash flow information is as follows:


	For the years ended June 30,
($ in millions)	2022		2021		2020
Interest paid, net of amounts capitalized	$	155	$	146	$	212
Income taxes paid	256		321		304

Non-cash investing activities includes the purchase of property and equipment for which payment has not been made. As of June 30, 2022, 2021, and 2020, purchase of property and equipment, accrued but unpaid, was $110 million, $76 million, and $78 million, respectively.

Note 24 - Subsequent Events

On August 17, 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.12 per share to be paid on September 28, 2022 to shareholders of record as of September 8, 2022. Amcor has received a waiver from the Australian Securities Exchange ("ASX") settlement operating rules, which will allow Amcor to defer processing conversions between its ordinary share and CHESS Depositary Instrument ("CDI") registers from September 7, 2022 to September 8, 2022, inclusive.

On August 17, 2022, the Company's Board of Directors approved a $400 million buyback of ordinary shares and/or CHESS Depositary Instruments ("CDIs") in the next twelve months. Pursuant to this program, purchases of the Company's ordinary shares and/or CDIs will be made subject to market conditions and at prevailing market prices, through open market purchases. The Company expects to complete the share buyback within twelve months, however, the timing, volume, and nature of repurchase may be amended, suspended, or discontinued at any time.

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