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

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

Management’s Discussion and Analysis ("MD&A") should be read in conjunction with our Form 10-K for fiscal year 2024 filed with the U.S. Securities and Exchange Commission (the "SEC") on August 16, 2024, together with the unaudited condensed consolidated financial statements and accompanying notes included in Part 1, Item 1 of this Form 10-Q. Throughout the MD&A, amounts and percentages may not recalculate due to rounding.

Summary of Financial Results

Three Months Ended March 31,Nine Months Ended March 31,
($ in millions)2025202420252024
Net sales$3,333100.0%$3,411100.0%$9,927100.0%$10,105100.0%
Cost of sales(2,679)(80.4%)(2,719)(79.7%)(7,988)(80.5%)(8,147)(80.6%)
Gross profit65419.6%69220.3%1,93919.5%1,95819.4%
Operating expenses:
Selling, general, and administrative expenses(303)(9.1%)(330)(9.7%)(913)(9.2%)(931)(9.2%)
Research and development expenses(27)(0.8%)(25)(0.7%)(82)(0.8%)(80)(0.8%)
Restructuring, transaction and integration expenses(32)(1.0%)(30)(0.9%)(71)(0.7%)(82)(0.8%)
Other income/(expenses), net210.6%——%490.5%(46)(0.5%)
Operating income3139.4%3079.0%9229.3%8198.1%
Interest income100.3%100.3%300.3%310.3%
Interest expense(85)(2.6%)(89)(2.6%)(252)(2.5%)(263)(2.6%)
Other non-operating income/(expenses), net(1)—%20.1%(3)—%2—%
Income before income taxes and equity in income/(loss) of affiliated companies2377.1%2306.7%6977.0%5895.8%
Income tax expense(40)(1.2%)(40)(1.2%)(141)(1.4%)(107)(1.1%)
Equity in income/(loss) of affiliated companies, net of tax——%(1)—%1—%(3)—%
Net income$1975.9%$1895.5%$5575.6%$4794.7%
Net income attributable to non-controlling interests(1)—%(2)(0.1%)(7)(0.1%)(6)(0.1%)
Net income attributable to Amcor plc$1965.9%$1875.5%$5505.5%$4734.7%

Overview

Amcor is a global leader in developing and producing responsible packaging solutions across a variety of materials for food, beverage, pharmaceutical, medical, home and personal-care, and other products. We work with leading companies around the world to protect products, differentiate brands, and improve supply chains. We offer a range of innovative, differentiating flexible and rigid packaging, specialty cartons, closures, and services. We are focused on making packaging that is increasingly recyclable, reusable, lighter weight, and made using an increasing amount of recycled content. In fiscal year 2024, 41,000 Amcor people generated $13.6 billion in annual sales from operations that span 212 locations in 40 countries.

Significant Developments Affecting the Periods Presented

Completion of Berry Global Group, Inc. Merger on April 30, 2025

On November 19, 2024, the Company, Aurora Spirit, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Berry Global Group, Inc., a Delaware corporation (“Berry”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides for the merger of Merger Sub with and into Berry (the “Merger”), with Berry surviving the Merger as a wholly-owned subsidiary of Amcor. On April 30, 2025, we completed the transactions called for by the Merger Agreement to obtain all of the ownership interest in Berry. In connection with the closing of the Merger, we issued approximately 846 million ordinary shares to Berry shareholders, excluding shares for Berry vested share based payment awards at closing, and paid $2.2 billion in connection with the required extinguishment of certain Berry indebtedness using the proceeds from the cumulative issuance of $2.2 billion in long-term debt in March 2025. Refer to Part 1, Item 1 - Financial Statements, Note 3, "Merger with Berry Global Group, Inc.", Note 12, "Debt", and Note 18, "Subsequent Events" for further information.

Economic and Market Conditions

Market dynamics remain challenging with softer consumer demand and customer order volatility in certain markets, and higher costs in certain areas, including labor costs, during fiscal year 2025. Despite these hurdles, we have benefited from overall sales volume growth of 1% through the first nine months of fiscal year 2025, with sales volumes in North America generally softening sequentially in the third quarter of fiscal year 2025. The underlying causes for the market volatility being experienced can be attributed to a variety of factors, such as geopolitical tension and conflicts, changes in U.S. domestic and global tariff frameworks, inflation in many economies impacting consumption and consumer demand, and customer destocking following a period of supply chain constraints. While we generally manufacture our products in the local markets where they are sold, the volatility in tariffs may negatively impact customer and consumer demand, disrupt our supply chains, and increase inflation, raising our costs. In this context, we have remained focused on taking price and cost actions to offset inflation and aligning our cost base with market dynamics and expect to continue to do so. There is no assurance that we will meet our performance expectations or that ongoing geopolitical tensions, including disruptions related to tariffs and other factors, will not negatively impact our financial results.

Russia-Ukraine Conflict / 2023 Restructuring Plan

On February 7, 2023, we announced that we expect to invest $110 million to $130 million of the sale proceeds from our Russian business sold in December 2022 for net cash proceeds of $365 million in various cost savings initiatives to partly offset divested earnings from the Russian business (the "2023 Restructuring Plan" or the "Plan").

As of March 31, 2025, we have initiated restructuring and related projects with an expected net cost of approximately $220 million, of which approximately $130 million is expected to result in net cash expenditures. From the initiation of the Plan until March 31, 2025, we have incurred $99 million in employee-related expenses, $34 million in fixed asset related expenses, $54 million in other restructuring, and $26 million in restructuring related expenses. The Plan has resulted in $106 million of cumulative net cash outflows to date. The Plan has been largely completed as of December 31, 2024. Management expects to realize an annualized pre-tax benefit of approximately $50 million from structural cost reduction actions taken as a result of all Russia related restructuring by the end of fiscal year 2025.

For further information, refer to Note 6, "Restructuring," of Part I, "Item 1, Notes to Condensed Consolidated Financial Statements".

Highly Inflationary Accounting

We have subsidiaries in Argentina that historically had a functional currency of the Argentine Peso. As of June 30, 2018, the Argentine economy was designated as highly inflationary for accounting purposes. Accordingly, beginning July 1, 2018, we began reporting the financial results of our Argentine subsidiaries with a functional currency of the Argentine Peso at the functional currency of the parent, which is the U.S. dollar. Following the governmental election in the second quarter of fiscal year 2024, Argentina devalued the Argentine Peso by approximately 55% against the U.S. dollar. In April 2025, the Argentine government lifted its capital controls over the Argentine peso and implemented a currency band within which the government will allow the Argentine peso to trade against the U.S. dollar and will enable the Central Bank of Argentina to increase its reserves. As of the date of this filing, the Argentine peso is trading within the currency band established by the government and the country has received additional funding from the International Monetary Fund. The impact of highly inflationary accounting in the three months ended March 31, 2025 and 2024 resulted in a negative impact on monetary assets of $3 million and $4 million, respectively, and $8 million and $55 million in the nine months ended March 31, 2025 and 2024, respectively, in foreign currency transaction losses that were reflected in the unaudited condensed consolidated statements of income.

Results of Operations - Three Months Ended March 31, 2025

Consolidated Results of Operations

Three Months Ended March 31,
($ in millions, except per share data)20252024
Net sales$3,333$3,411
Operating income313307
Operating income as a percentage of net sales9.4%9.0%
Net income attributable to Amcor plc$196$187
Diluted Earnings Per Share$0.136$0.129

Net sales decreased by $78 million, or 2%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Excluding negative currency impacts of $78 million, the negative impacts from disposed operations of $58 million, and the positive impacts from the pass-through of higher raw material costs of approximately $45 million, the remaining variation in net sales for the three months ended March 31, 2025 was an increase of approximately $13 million, reflecting flat sales volumes and favorable price/mix impacts.

Net income attributable to Amcor plc increased by $9 million, or 5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, mainly due to lower selling, general, and administrative expenses of $27 million and higher other income, net, of $21 million, partially offset by a decrease in gross profit of $38 million.

Diluted earnings per share ("Diluted EPS") increased by $0.007, or 5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, with the net income available to ordinary shareholders of Amcor plc also increasing by 5% due to the above items and the diluted weighted average number of shares remaining in line with the prior year.

Segment Results of Operations

Flexibles Segment

Three Months Ended March 31,
($ in millions)20252024
Net sales$2,605$2,598
Adjusted EBIT357358
Adjusted EBIT as a percentage of net sales13.7%13.8%

Net sales increased by $7 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Excluding negative currency impacts of $59 million, the positive impacts from pass-through of higher raw material costs of approximately $40 million, and the negative impacts from disposed operations of $11 million, the remaining variation in net sales for the three months ended March 31, 2025 was an increase of approximately $37 million, or 1%, reflecting higher sales volumes and favorable price/mix impacts, both with less than a 1% favorable impact.

Adjusted earnings before interest and tax ("Adjusted EBIT") decreased by $1 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Excluding negative currency impacts of $7 million, the remaining variation in Adjusted EBIT for the three months ended March 31, 2025, was an increase of $6 million, or 2%, driven by favorable volumes flow through of approximately 3% and favorable operating costs performance of approximately 9%, partially offset by unfavorable price/mix impacts of approximately 10%.

Rigid Packaging Segment

Three Months Ended March 31,
($ in millions)20252024
Net sales$728$813
Adjusted EBIT5571
Adjusted EBIT as a percentage of net sales7.6%8.7%

Net sales decreased by $85 million, or 10%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Excluding the negative impacts from disposed operations of approximately $45 million, the negative currency impacts of $19 million, and the positive impacts from the pass-through of higher raw material costs of approximately $5 million, the remaining variation in net sales for the three months ended March 31, 2025 was a decrease of approximately $26 million, or 3%, reflecting unfavorable sales volumes of approximately 2% and unfavorable price/mix impacts of approximately 1%.

Adjusted EBIT decreased by $16 million, or 22%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Excluding the negative impacts from disposed operations of approximately $5 million and the negative currency impacts of $2 million the remaining variation in Adjusted EBIT for the three months ended March 31, 2025 was a decrease of approximately $9 million, or 12%, driven by unfavorable volumes of 8% and unfavorable price/mix impacts of approximately 11%, partially offset by a lower operating costs impact of 7%.

Consolidated Gross Profit

Three Months Ended March 31,
($ in millions)20252024
Gross profit$654$692
Gross profit as a percentage of net sales19.6%20.3%

Gross profit decreased by $38 million, or 5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was primarily driven by negative currency impacts of 2%, disposals in the current fiscal year, and lower sales, partially offset by improved operating cost performance, which also drove a decrease in gross profit as a percentage of sales to 19.6% for the three months ended March 31, 2025.

Consolidated Selling, General, and Administrative Expenses

Three Months Ended March 31,
($ in millions)20252024
Selling, general, and administrative expenses$(303)$(330)
Selling, general, and administrative expenses as a percentage of net sales(9.1%)(9.7%)

Selling, general, and administrative expenses decreased by $27 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The change was primarily a result of SG&A cost reduction initiatives and restructuring benefits and the non-reoccurrence of CEO transition costs in the current year.

Consolidated Restructuring, Transaction and Integration Expenses

Three Months Ended March 31,
($ in millions)20252024
Restructuring, transaction and integration expenses$(32)$(30)
Restructuring, transaction and integration expenses as a percentage of net sales(1.0%)(0.9%)

Restructuring, transaction and integration expenses increased by $2 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The change was a result of transaction and integration costs of $26 million, incurred in connection with the Merger with Berry during the current period, partially offset by a decrease in restructuring and related expenses, net, of $24 million.

Consolidated Other Income, Net

Three Months Ended March 31,
($ in millions)20252024
Other income, net$21$—
Other income, net as a percentage of net sales0.6%—%

Other income, net changed by $21 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The change was primarily driven by the year on year change in indirect tax benefits and the change in the fair value of the swap hedging a portion of U.S. commercial paper.

Consolidated Income Tax Expense

Three Months Ended March 31,
($ in millions)20252024
Income tax expense$(40)$(40)
Effective income tax rate16.9%17.4%

The effective tax rate for the three months ended March 31, 2025 decreased by 0.5 percentage points compared to the three months ended March 31, 2024, primarily due to the differences in the magnitude of non-deductible expenses and discrete events between the periods.

Results of Operations - Nine Months Ended March 31, 2025

Consolidated Results of Operations

Nine Months Ended March 31,
($ in millions, except per share data)20252024
Net sales$9,927$10,105
Operating income$922$819
Operating income as a percentage of net sales9.3%8.1%
Net income attributable to Amcor plc$550$473
Diluted Earnings Per Share$0.380$0.327

Net sales decreased by $178 million, or 2%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Excluding the negative currency impacts of $133 million, the negative impacts from disposed operations of $60 million, and the positive impacts from the pass-through of higher raw material costs of approximately $45 million, the remaining decrease in net sales for the nine months ended March 31, 2025 was approximately $30 million, reflecting higher sales volumes of 1%, partially offset by unfavorable price/mix impacts of approximately 1% .

Net income attributable to Amcor plc increased by $77 million, or 16%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024, mainly due to lower selling, general, and administrative expenses of $18 million, lower restructuring, transaction and integration expenses of $11 million, higher other income, net, of $95 million, and lower interest expense, net of $10 million, partially offset by a decrease in gross profit of $19 million, higher income tax expense of $34 million, and unfavorable change in other non-operating income/(expenses) of $5 million.

Diluted earnings per share increased by $0.053, or 16%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024, with the net income available to ordinary shareholders of Amcor plc also increasing by 17% due to the above items and the diluted weighted average number of shares remaining in line with the prior year.

Segment Results of Operations

Flexibles Segment

Nine Months Ended March 31,
($ in millions)20252024
Net sales$7,667$7,646
Adjusted EBIT$1,008$992
Adjusted EBIT as a percentage of net sales13.1%13.0%

Net sales increased by $21 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Excluding the negative currency impacts of $87 million, the positive impacts from the pass-through of higher raw material costs of approximately $80 million, and the negative impacts from disposed operations of $13 million, the remaining variation in net sales for the nine months ended March 31, 2025 was an increase of approximately $41 million, or 1%, mainly reflecting favorable sales volumes of approximately 2%, partially offset by unfavorable price/mix impacts of less than 2%.

Adjusted EBIT increased by $16 million, or 2%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Excluding negative currency impacts of $13 million, the remaining increase in Adjusted EBIT for the nine months ended March 31, 2025 was $29 million, or 3%, reflecting the positive effects from favorable volumes of approximately 8% and favorable operating cost performance of approximately 15%, partially offset by negative price/mix impacts of approximately 20%.

Rigid Packaging Segment

Nine Months Ended March 31,
($ in millions)20252024
Net sales$2,260$2,459
Adjusted EBIT$171$184
Adjusted EBIT as a percentage of net sales7.6%7.5%

Net sales decreased by $199 million, or 8%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Excluding the negative impacts from disposed operations of approximately $45 million, the negative currency impacts of $46 million, and the negative impacts from the pass-through of lower raw material costs of approximately $35 million, the remaining variation in net sales for the nine months ended March 31, 2025 was a decrease of approximately $73 million, or 3%. This reflects unfavorable sales volumes of approximately 2% and unfavorable price/mix impacts of approximately 1%.

Adjusted EBIT decreased by $13 million, or 7%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. Excluding the negative currency impacts of $7 million and the negative impacts from disposed operations of approximately $5 million, the remaining variation in Adjusted EBIT for the nine months ended March 31, 2025, was a decrease of approximately $1 million, or 1%, reflecting negative effects from unfavorable volumes of approximately 7% and unfavorable price/mix impacts of approximately 9%, partially offset by favorable operating cost performance of approximately 15%.

Consolidated Gross Profit

Nine Months Ended March 31,
($ in millions)20252024
Gross profit$1,939$1,958
Gross profit as a percentage of net sales19.5%19.4%

Gross profit decreased by $19 million, or 1%, for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The decrease was primarily driven by negative currency impacts of 1%, lower sales, and impact of disposals in the current fiscal year, partially offset by improved operating cost performance, which also drove an increase in gross profit as a percentage of sales increased to 19.5% for the nine months ended March 31, 2025.

Consolidated Selling, General, and Administrative Expenses

Nine Months Ended March 31,
($ in millions)20252024
Selling, general, and administrative expenses$(913)$(931)
Selling, general, and administrative expenses as a percentage of net sales(9.2%)(9.2%)

Selling, general, and administrative expenses decreased by $18 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The change was primarily a result of SG&A cost reduction initiatives, restructuring benefits, and the non-reoccurrence of CEO transition costs in the current year.

Consolidated Restructuring, Transaction and Integration Expenses

Nine Months Ended March 31,
($ in millions)20252024
Restructuring, transaction and integration expenses$(71)$(82)
Restructuring, transaction and integration expenses as a percentage of net sales(0.7%)(0.8%)

Restructuring, transaction and integration expenses decreased by $11 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The change was a result of a decrease in restructuring and related expenses, net, of $47 million, partially offset by transaction and integration costs of $36 million, incurred in connection with the merger with Berry during the current year.

Consolidated Other Income/(Expenses), Net

Nine Months Ended March 31,
($ in millions)20252024
Other income/(expenses), net$49$(46)
Other income/(expenses), net as a percentage of net sales0.5%(0.5%)

Other income/(expenses), net changed by $95 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024, primarily driven by the current year lower negative impacts of highly inflationary accounting for subsidiaries in Argentina and the gain on the divestiture of Bericap.

Consolidated Income Tax Expense

Nine Months Ended March 31,
($ in millions)20252024
Income tax expense$(141)$(107)
Effective income tax rate20.2%18.2%

The effective tax rate for the nine months ended March 31, 2025 increased by 2.0 percentage points compared to the nine months ended March 31, 2024, primarily due to the tax impact of the divestiture of Bericap, and differences in the magnitude of non-deductible expenses and discrete events between the periods.

Presentation of Non-GAAP Information

This Quarterly Report on Form 10-Q refers to non-GAAP financial measures: adjusted earnings before interest and taxes ("Adjusted EBIT"), earnings before interest and tax ("EBIT"), adjusted net income, and net debt. Such measures have not been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). These non-GAAP financial measures adjust for factors that are unusual or unpredictable. These measures exclude the impact of certain amounts related to the effect of changes in currency exchange rates, acquisitions, and restructuring, including employee-related costs, equipment relocation costs, accelerated depreciation, and the write-down of equipment. These measures also exclude gains or losses on sales of significant property and divestitures, significant property and other impairments, net of insurance recovery, certain regulatory and litigation matters, significant pension settlements, impairments in goodwill and equity method investments, and certain acquisition-related expenses, including financing-related, transaction, and integration expenses, due diligence expenses, professional and legal fees, purchase accounting adjustments for inventory, order backlog, intangible amortization, changes in the fair value of contingent acquisition payments and economic hedging instruments on commercial paper, CEO transition costs, and impacts related to the Russia-Ukraine conflict. Note that while amortization of acquired intangible assets is excluded from non-GAAP adjusted financial measures, the revenue of the acquired entities and all other expenses unless otherwise stated, are reflected in Adjusted EBIT and adjusted net income and the acquired assets contribute to revenue generation.

This adjusted information should not be construed as an alternative to results determined in accordance with U.S. GAAP. We use the non-GAAP measures to evaluate operating performance and believe that these non-GAAP measures are useful to enable investors and other external parties to perform comparisons of our current and historical performance.

A reconciliation of reported net income attributable to Amcor plc to Adjusted EBIT, and adjusted net income for the three and nine months ended March 31, 2025, and 2024 is as follows:

Three Months Ended March 31,Nine Months Ended March 31,
($ in millions)2025202420252024
Net income attributable to Amcor plc, as reported$196$187$550$473
Add: Net income attributable to non-controlling interests1276
Net income197189557479
Add: Income tax expense4040141107
Add: Interest expense8589252263
Less: Interest income(10)(10)(30)(31)
EBIT312308920818
Add: Amortization of acquired intangible assets from business combinations (1)3743116126
Add: Impact of hyperinflation (2)34855
Add: Transaction and Integration (3)26—36—
Add: Restructuring and related expenses, net (4)6303582
Add: CEO transition costs (5)—8—8
Add/(Less): Other (6)—4(3)17
Adjusted EBIT$384$397$1,112$1,106
Less: Interest expense(85)(89)(252)(263)
Add: Adjustments to interest expense (7)5—5—
Less: Income tax expense(40)(40)(141)(107)
Less: Adjustments to income tax expense (8)(12)(19)(19)(51)
Add: Interest income10103031
Less: Net income attributable to non-controlling interests(1)(2)(7)(6)
Adjusted net income$261$257$728$710

(1)Amortization of acquired intangible assets from business combinations includes amortization expense related to all acquired intangible assets from past acquisitions.

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

(3)Transaction and Integration includes incremental costs related to the Merger. Refer to Note 5 "Restructuring, Transaction, and Integration Expenses.

(4)Restructuring and related expenses, net, primarily includes costs incurred in connection with the 2023 Restructuring Plan. Refer to Note 6, "Restructuring" for further information.

(5)For the three and nine months ended March 31, 2024, CEO transition costs primarily reflect accelerated compensation, including share-based compensation, granted to the Company's former Chief Executive Officer and other transition related expenses.

(6)For the nine months ended March 31, 2025, Other includes various expense and income items primarily relating to a pre-tax gain on the disposal of Bericap of $15 million, and a loss on disposal of a non-core business. Refer to Note 4, "Acquisitions and Disposals" for further information. For the three and nine months ended March 31, 2024, Other includes various expense and income items relating to acquisitions, retroactive foil duties, certain litigation reserve settlements, and fair value movements on economic hedges.

(7)Adjustments to interest expense for the three and nine months ended March 31, 2025, includes incremental interest expense incurred in connection with the Merger. Refer to Note 3, "Merger with Berry Global Group, Inc." and Note 12,"Debt".

(8)Net tax impact on items (1) through (7) above.

Reconciliation of Net Debt

A reconciliation of total debt to net debt as of March 31, 2025, and June 30, 2024, is as follows:

($ in millions)March 31, 2025June 30, 2024
Current portion of long-term debt$9$12
Short-term debt15084
Long-term debt, less current portion8,6386,603
Total debt8,7976,699
Less cash and cash equivalents(2,045)(588)
Net debt$6,752$6,111

Supplemental Guarantor Information

Amcor plc, along with certain wholly owned subsidiary guarantors, guarantee the following senior notes issued by the wholly owned subsidiaries, Amcor Flexibles North America, Inc., Amcor UK Finance plc., Amcor Finance (USA), Inc., and Amcor Group Finance plc.

  • $500 million, 4.000% Guaranteed Senior Notes due 2025 of Amcor Flexibles North America, Inc.

  • $300 million, 3.100% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc.

  • $600 million, 3.625% Guaranteed Senior Notes due 2026 of Amcor Flexibles North America, Inc.

  • $500 million, 4.500% Guaranteed Senior Notes due 2028 of Amcor Flexibles North America, Inc.

  • $500 million, 2.630% Guaranteed Senior Notes due 2030 of Amcor Flexibles North America, Inc.

  • $800 million, 2.690% Guaranteed Senior Notes due 2031 of Amcor Flexibles North America, Inc.

  • €500 million, 1.125% Guaranteed Senior Notes due 2027 of Amcor UK Finance plc

  • €500 million, 3.950% Guaranteed Senior Notes due 2032 of Amcor UK Finance plc

  • $500 million, 5.625% Guaranteed Senior Notes due 2033 of Amcor Finance (USA), Inc.

  • $500 million, 5.450% Guaranteed Senior Notes due 2029 of Amcor Group Finance plc

The six notes issued by Amcor Flexibles North America, Inc. are guaranteed by its parent entity, Amcor plc, and the subsidiary guarantors Amcor Pty Ltd, Amcor Finance (USA), Inc., Amcor Group Finance plc, and Amcor UK Finance plc. The two notes issued by Amcor UK Finance plc are guaranteed by its parent entity, Amcor plc, and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., Amcor Finance (USA), Inc., and Amcor Group Finance plc. The note issued by Amcor Finance (USA), Inc. is guaranteed by its ultimate parent entity, Amcor plc, and the subsidiary guarantors Amcor Pty Ltd, Amcor Flexibles North America, Inc., Amcor Group Finance plc, and Amcor UK Finance plc. The note issued by Amcor Group Finance plc is guaranteed by its ultimate parent entity, Amcor plc, and the subsidiary guarantors Amcor Pty Ltd, Amcor Finance (USA), Inc., Amcor Flexibles North America, Inc., and Amcor UK Finance plc.

All guarantors fully, unconditionally, and irrevocably guarantee, on a joint and several basis, to each holder of the notes, the due and punctual payment of the principal of, and any premium and interest on, such note and all other amounts payable, when and as the same shall become due and payable, whether at stated maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of the notes and related indenture. The obligations of the applicable guarantors under their guarantees will be limited as necessary to recognize certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer, voidable preference, financial assistance, corporate purpose, or similar laws) under applicable law. The guarantees will be unsecured and unsubordinated obligations of the guarantors and will rank equally with all existing and future unsecured and unsubordinated debt of each guarantor. None of our other subsidiaries guarantee such notes. The issuers and guarantors conduct large parts of their operations through other subsidiaries of Amcor plc.

Amcor Flexibles North America, Inc. is incorporated in Missouri in the United States, Amcor UK Finance plc and Amcor Group Finance plc are incorporated in England and Wales, United Kingdom, Amcor Finance (USA), Inc. is incorporated in Delaware in the United States, and the guarantors are incorporated under the laws of Jersey, Australia, the United States, and England and Wales and, therefore, insolvency proceedings with respect to the issuers and guarantors could proceed under, and be governed by, among others, Jersey, Australian, United States, or English insolvency law, as the case may be, if either issuer or any guarantor defaults on its obligations under the applicable Notes or Guarantees, respectively.

Set forth below is the summarized financial information of the combined Obligor Group made up of Amcor plc (as parent guarantor), Amcor Flexibles North America, Inc., Amcor UK Finance plc, Amcor Group Finance plc, and Amcor Finance (USA), Inc. (as subsidiary issuers of the notes and guarantors of each other’s notes), and Amcor Pty Ltd (as the remaining subsidiary guarantor).

Basis of Preparation

The following summarized financial information is presented for the parent, issuer, and guarantor subsidiaries ("Obligor Group") on a combined basis after elimination of intercompany transactions between entities in the combined group and amounts related to investments in any subsidiary that is a non-guarantor.

This information is not intended to present the financial position or results of operations of the combined group of companies in accordance with U.S. GAAP.

Statement of Income for Obligor Group

($ in millions)Nine Months Ended March 31, 2025
Net sales - external$723
Net sales - to subsidiaries outside the Obligor Group5
Total net sales728
Gross profit168
Net income (1)$3,048
Net income attributable to non-controlling interests—
Net income attributable to Obligor Group$3,048

(1) Includes a gain on internal reorganization executed during the period which involved subsidiaries outside the Obligor Group.

Balance Sheets for Obligor Group

($ in millions)March 31, 2025June 30, 2024
Assets
Current assets - external$1,853$1,160
Current assets - due from subsidiaries outside the Obligor Group138165
Total current assets1,9911,325
Non-current assets - external1,4181,447
Non-current assets - due from subsidiaries outside the Obligor Group12,77512,538
Total non-current assets14,19313,985
Total assets$16,184$15,310
Liabilities
Current liabilities - external$1,794$2,341
Current liabilities - due to subsidiaries outside the Obligor Group1534
Total current liabilities1,8092,375
Non-current liabilities - external8,7996,815
Non-current liabilities - due to subsidiaries outside the Obligor Group7,81010,822
Total non-current liabilities16,60917,637
Total liabilities$18,418$20,012

New Accounting Pronouncements

Refer to Note 2, "New Accounting Guidance," in "Item 1. Financial Statements - Notes to Condensed Consolidated Financial Statements".

Critical Accounting Estimates and Judgments

Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Our estimates and judgments are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. These critical accounting estimates are discussed in detail in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates and Judgments” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024. There have been no material changes in critical accounting estimates and judgments as of March 31, 2025, from those described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Liquidity and Capital Resources

We finance our business primarily through cash flows provided by operating activities, borrowings from banks, and proceeds from issuances of debt and equity. We periodically review our capital structure and liquidity position in light of market conditions, expected future cash flows, potential funding requirements for debt refinancing, capital expenditures and acquisitions, the cost of capital, sensitivity analyses reflecting downside scenarios, the impact on our financial metrics and credit ratings, and our ease of access to funding sources.

We believe that our cash flows provided by operating activities, together with borrowings available under our credit facilities and access to the commercial paper market, backstopped by our bank debt facilities, will continue to provide sufficient liquidity to fund our operations, capital expenditures, and other commitments, including dividends and purchases of our ordinary shares and CHESS Depositary Instruments under authorized share repurchase programs, into the foreseeable future.

Overview

Nine Months Ended March 31,
($ in millions)20252024
Net cash provided by operating activities$276$378
Net cash used in investing activities(249)(369)
Net cash provided by/(used in) financing activities1,448(206)

Cash Flow Overview

Net Cash Provided by Operating Activities

Net cash provided by operating activities decreased by $102 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The change is primarily driven by higher working capital outflows in the current period, mainly impacted by higher inventories, partially offset by higher net income after adjusting for non-cash items in the current period as compared to the prior period.

Net Cash Used in Investing Activities

Net cash used in investing activities decreased by $120 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The change is primarily driven by the proceeds received from the sale of Bericap in the current period.

Net Cash Provided by/(used in) Financing Activities

Net cash provided by financing activities increased by $1,654 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The change is primarily driven by the issuance of senior notes, partially offset by the repayment of commercial papers.

Net Debt

We borrow from financial institutions and debt investors in the form of bank overdrafts, bank loans, corporate bonds, unsecured notes, and commercial paper. We have a mixture of fixed and floating interest rates and use interest rate swaps to provide further flexibility in managing the interest cost of borrowings.

On August 5, 2024, we entered into an interest rate swap contract for a notional amount of $500 million, which was subsequently downsized to $400 million notional on November 4, 2024. Under the terms of the contract, we will pay a fixed rate of interest of 4.30% and receive a variable rate of interest, based on compound overnight SOFR, effective from August 12, 2024, through June 30, 2025, with monthly settlements commencing on September 1, 2024. The interest rate swap contract will economically hedge the SOFR component of our forecasted commercial paper issuances.

On March 17, 2025, we issued additional guaranteed senior notes in an aggregate principal amount of $2.2 billion (collectively, the “Notes”). The Notes consist of (i) $725 million principal amount of 4.800% Guaranteed Senior Notes due 2028, (ii) $725 million principal amount of 5.100% Guaranteed Senior Notes due 2030 and (iii) $750 million principal amount

of 5.500% Guaranteed Senior Notes due 2035. The Notes are senior unsecured obligations and are unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.

Subsequently, we used the net proceeds from the Notes to repay certain existing indebtedness of Berry in connection with the closing of the Merger.

Short-term debt consists of bank debt with a duration of less than 12 months and bank overdrafts which are classified as current due to the short-term nature of the borrowings, except where we have the ability and intent to refinance and as such extend the debt beyond 12 months. The current portion of long-term debt consists of debt amounts repayable within a year after the balance sheet date.

Our primary bank debt facilities and notes are unsecured and subject to negative pledge arrangements limiting the amount of indebtedness incurred outside the Guarantor Group as well as the secured indebtedness we can incur to an aggregate of 15.0% of our total tangible assets, subject to some exceptions and variations by facility. In addition, the covenants of the bank debt facilities require us to maintain a leverage ratio not higher than 3.9 times. The negative pledge arrangements and the financial covenants are defined in the related debt agreements. As of March 31, 2025, we were in compliance with all applicable covenants under our bank debt facilities.

Our net debt as of March 31, 2025, and June 30, 2024, was $6.8 billion and $6.1 billion, respectively.

Debt Facilities

As of March 31, 2025, we had an undrawn committed credit facility available in the amount of $2.54 billion. Our senior facility is available to fund working capital, growth capital expenditures, and refinancing obligations and is provided to us by a bank syndicate. This facility matures in March 2030 and has two 12-month options available to management to extend the maturity date.

As of March 31, 2025, the revolving senior bank debt facility had an aggregate limit of $3.75 billion, of which $1.21 billion had been drawn (inclusive of amounts drawn under commercial paper programs reducing the overall balance of available senior facilities). On March 3, 2025, we terminated the previously existing senior bank debt facilities, and simultaneously, we entered into a new five-year syndicated facility agreement providing an aggregate limit of $3.75 billion. Subject to certain conditions, we can request the total commitment level under the agreement to be increased by up to $1.0 billion. For further information, refer to Note 12, "Debt."

In connection with the Merger (refer to Note 3, "Merger with Berry Global Group, Inc."), we entered into a commitment letter with lending institutions, dated as of November 19, 2024, to provide a 364-day senior unsecured bridge loan facility (the "Bridge Facility") in an aggregate principal amount of up to $3.0 billion to fund the repayment of certain outstanding debt of Berry upon the closing of the Merger, and the payment of fees and expenses related to the Merger. We paid a commitment fee of $11 million on the Bridge Facility in the three months ended December 31, 2024. On February 13, 2025, we voluntarily reduced the commitments under the Bridge Facility by $800 million to an aggregate principal amount of $2.2 billion. On March 17, 2025, following the issuance of Notes (as defined above), the commitment for the Bridge Facility was terminated.

Dividend Payments

We declared and paid a $0.1250 cash dividend per ordinary share during the three months ended September 30, 2024, a $0.1275 cash dividend per ordinary share during the three months ended December 31, 2024, and a $0.1275 cash dividend per ordinary share during the three months ended March 31, 2025.

Credit Rating

Our capital structure and financial practices have earned us investment grade credit ratings from three internationally recognized credit rating agencies. These investment grade credit ratings are important to our ability to issue debt at favorable rates of interest, for various terms, and from a diverse range of markets that are highly liquid, including European and U.S. debt capital markets, and from global financial institutions.

Share Repurchases

On February 7, 2023, our Board of Directors approved a $100 million buyback of ordinary shares and/or CHESS Depositary Instruments ("CDIs") in the following twelve months. On February 6, 2024, our Board of Directors extended the approval for the remaining $39 million of ordinary shares and CDIs of the $100 million buyback for twelve months. During the nine months ended March 31, 2025, no shares were repurchased under this program and the buyback authorization expired during the third quarter of fiscal year 2025.

We had cash outflows of $47 million and $48 million for the purchase of our own shares during the nine months ended March 31, 2025, and 2024, respectively, as treasury shares to satisfy the vesting and exercises of share-based compensation awards. As of March 31, 2025, and June 30, 2024, we held treasury shares at a cost of $7 million and $11 million, respectively, representing approximately 0.6 million and 0.9 million shares, respectively.

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