filings.toolsItem 8. Financial Statements
246K characters. Original on sec.gov · Markdown
Item 8. Financial Statements
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
SMURFIT WESTROCK PLC
| Page | |
| Report of Independent Registered Public Accounting Firm (Auditor Name KPMG, Auditor Location: Dublin, Ireland, PCAOB ID: 1116) | 75 |
| Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023 | 77 |
| Consolidated Statements of Operations for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 | 78 |
| Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 | 79 |
| Consolidated Statements of Cash Flows for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 | 80 |
| Consolidated Statements of Changes in Equity for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 | 81 |
| Notes to the Consolidated Financial Statements | 82 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Smurfit Westrock Public Limited Company
Opinion on the Consolidated Financial Statements
We have audited the accompanying Consolidated Balance Sheets of Smurfit Westrock Public Limited Company and subsidiaries (‘the
Company’) as of December 31, 2024, and 2023, the related Consolidated Statements of Operations, Comprehensive (Loss) Income,
Cash Flows and Changes in Equity for each of the years in the three-year period ended December 31, 2024, and the related notes
(collectively, the Consolidated Financial Statements). In our opinion, the Consolidated Financial Statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted
accounting principles.
Basis for opinion
These Consolidated Financial Statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements 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 audit
to obtain reasonable assurance about whether the Consolidated Financial Statements are free of material misstatement, whether due to
error or fraud. Our audits 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. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matter
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: (1) relates to accounts or
disclosures that are material to the Consolidated Financial Statements and (2) involved our especially challenging, subjective, or
complex judgments.
The communication of a critical audit matter 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.
Evaluation of the fair value of acquired plant and machinery assets
As described in Note 2 to the Consolidated Financial Statements, the Company completed the acquisition of WestRock Company on
July 5, 2024, which was accounted for as a business combination using the acquisition method. The Company estimated the fair value
of the acquired property, plant and equipment assets to be $17,612 million, which includes plant and machinery assets.
Report of Independent Registered Public Accounting Firm
We identified the evaluation of the fair value of the acquired plant and machinery assets as a critical audit matter. It required especially
subjective auditor judgement, including the involvement of valuation specialists with specialized skills and knowledge, to assess the
appropriateness of the methodology applied and the significant assumptions used in the valuation model, specifically the effective age,
estimated useful lives and residual fair values of the plant and machinery assets. We performed a sensitivity analysis to identify these
significant assumptions used to value the plant and machinery assets, individually and in the aggregate. Minor changes in these
assumptions could have a significant impact on the fair value of the acquired plant and machinery.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of an internal
control over the Company’s purchase price allocation process, specifically over the development of the significant assumptions.
We involved valuation professionals with specialized skills and knowledge, who assisted in (i) evaluating the appropriateness of the
valuation methodology by comparing it against methodologies applied by other market participants for similar assets; (ii) assessing the
reasonableness of the significant assumptions by comparing them to industry data; and (iii) comparing management’s fair value of the
acquired plant and machinery assets with an independently developed range of values using available industry data and assumptions.
We also made inquiries of finance and operations management to understand and challenge the significant assumptions applied in the
valuation model for the plant and machinery assets.
/s/ KPMG
We have served as the Company’s auditor since 2018.
Dublin, Ireland
March 7, 2025
Smurfit Westrock plc
Consolidated Balance Sheets
(in millions, except share and per share data*)*
| December 31, 2024 | December 31, 2023 | ||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents (amounts related to consolidated variable interest entities of $2 million and $3 million at December 31, 2024 and December 31, 2023, respectively) | $855 | $1,000 | |
| Accounts receivable, net (amounts related to consolidated variable interest entities of $767 million and $816 million at December 31, 2024 and December 31, 2023, respectively) | 4,117 | 1,806 | |
| Inventories | 3,550 | 1,203 | |
| Other current assets | 1,533 | 561 | |
| Total current assets | 10,055 | 4,570 | |
| Property, plant and equipment, net | 22,675 | 5,791 | |
| Goodwill | 6,822 | 2,842 | |
| Intangibles, net | 1,117 | 218 | |
| Prepaid pension asset | 635 | 29 | |
| Other non-current assets (amounts related to consolidated variable interest entities of $389 million and $— million at December 31, 2024 and December 31, 2023, respectively) | 2,455 | 601 | |
| Total assets | $43,759 | $14,051 | |
| Liabilities and Equity | |||
| Current liabilities: | |||
| Accounts payable | $3,290 | $1,728 | |
| Accrued expenses | 715 | 278 | |
| Accrued compensation and benefits | 882 | 438 | |
| Current portion of debt | 1,053 | 78 | |
| Other current liabilities | 1,393 | 484 | |
| Total current liabilities | 7,333 | 3,006 | |
| Non-current debt due after one year | 12,542 | 3,669 | |
| Deferred tax liabilities | 3,600 | 280 | |
| Pension liabilities and other postretirement benefits, net of current portion | 706 | 537 | |
| Other non-current liabilities (amounts related to consolidated variable interest entities of $335 million and $— million at December 31, 2024 and December 31, 2023, respectively) | 2,191 | 385 | |
| Total liabilities | 26,372 | 7,877 | |
| Commitments and Contingencies (Note 21) | |||
| Equity: | |||
| Preferred stock; $0.001 par value; 500,000,000 and Nil shares authorized; 10,000 and Nil shares outstanding at December 31, 2024 and December 31, 2023, respectively | — | — | |
| Common stock; $0.001 par value; 9,500,000,000 and 9,910,931,085 shares authorized; 520,444,261 and 260,354,342 shares outstanding at December 31, 2024 and December 31, 2023, respectively | 1 | — | |
| Deferred shares, €1 par value; 25,000 shares and 25,000 shares authorized; 25,000 and 100 shares outstanding at December 31, 2024 and December 31, 2023, respectively | — | — | |
| Treasury stock, at cost (2,037,589, and 1,907,129 common stock at December 31, 2024 and December 31, 2023 respectively) | (93) | (91) | |
| Capital in excess of par value | 15,948 | 3,575 | |
| Accumulated other comprehensive loss | (1,446) | (847) | |
| Retained earnings | 2,950 | 3,521 | |
| Total shareholders’ equity | 17,360 | 6,158 | |
| Noncontrolling interests | 27 | 16 | |
| Total equity | 17,387 | 6,174 | |
| Total liabilities and equity | $43,759 | $14,051 | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
Smurfit Westrock plc
Consolidated Statements of Operations
(in millions, except share and per share data)
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Net sales | $21,109 | $12,093 | $13,509 | ||
| Cost of goods sold | (16,914) | (9,039) | (10,237) | ||
| Gross profit | 4,195 | 3,054 | 3,272 | ||
| Selling, general and administrative expenses | (2,793) | (1,604) | (1,543) | ||
| Goodwill impairment | — | — | (12) | ||
| Impairment of other assets | — | — | (159) | ||
| Transaction and integration-related expenses associated with the Combination | (395) | (78) | — | ||
| Operating profit | 1,007 | 1,372 | 1,558 | ||
| Pension and other postretirement non-service expense, net | (24) | (49) | (8) | ||
| Interest expense, net | (398) | (139) | (139) | ||
| Other (expense) income, net | (25) | (46) | 15 | ||
| Income before income taxes | 560 | 1,138 | 1,426 | ||
| Income tax expense | (241) | (312) | (391) | ||
| Net income | 319 | 826 | 1,035 | ||
| Less: Net income attributable to noncontrolling interests | — | (1) | (1) | ||
| Net income attributable to common shareholders | $319 | $825 | $1,034 | ||
| Basic earnings per share attributable to common shareholders | $0.83 | $3.19 | $4.00 | ||
| Diluted earnings per share attributable to common shareholders | $0.82 | $3.17 | $3.96 | ||
| The accompanying notes are an integral part of these Consolidated Financial Statements. |
Smurfit Westrock plc
Consolidated Statements of Comprehensive (Loss) Income
(in millions, except share and per share data)
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Net income | $319 | $826 | $1,035 | ||
| Other comprehensive (loss) income, net of tax: | |||||
| Foreign currency translation (loss) gain | (895) | 410 | (366) | ||
| Defined benefit pension and other postretirement benefit plans adjustments | 87 | (53) | 110 | ||
| Net gains (losses) on cash flow hedging derivatives | — | 5 | (7) | ||
| Other comprehensive (loss) income, net of tax | (808) | 362 | (263) | ||
| Comprehensive (loss) income | (489) | 1,188 | 772 | ||
| Less: Comprehensive income attributable to noncontrolling interests | — | (1) | (1) | ||
| Comprehensive (loss) income attributable to common shareholders | $(489) | $1,187 | $771 | ||
| The accompanying notes are an integral part of these Consolidated Financial Statements. |
Smurfit Westrock plc
Consolidated Statements of Cash Flows
(in millions*)*
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Operating activities: | |||||
| Net income | $319 | $826 | $1,035 | ||
| Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||||
| Depreciation, depletion and amortization | 1,464 | 580 | 564 | ||
| Cash surrender value increase in excess of premiums paid | (17) | — | — | ||
| Goodwill impairment | — | — | 12 | ||
| Impairment charges on assets other than goodwill | 24 | 5 | 109 | ||
| Share-based compensation expense | 206 | 66 | 68 | ||
| Deferred income tax (benefit) expense | (137) | (28) | 41 | ||
| Pension and other postretirement funding more than cost | (55) | (39) | (61) | ||
| Other | 28 | (10) | (18) | ||
| Change in operating assets and liabilities, net of acquisitions and divestitures: | |||||
| Accounts receivable | (144) | 245 | (91) | ||
| Inventories | 62 | 220 | (209) | ||
| Other assets | (31) | 43 | (116) | ||
| Accounts payable | (273) | (260) | (33) | ||
| Income taxes | (5) | (99) | 53 | ||
| Accrued liabilities and other | 42 | 10 | 79 | ||
| Net cash provided by operating activities | 1,483 | 1,559 | 1,433 | ||
| Investing activities: | |||||
| Capital expenditures | (1,466) | (929) | (930) | ||
| Cash paid for purchase of businesses, net of cash acquired | (719) | (29) | (93) | ||
| Proceeds from corporate owned life insurance | 5 | — | — | ||
| Proceeds from sale of property, plant and equipment | 61 | 17 | 13 | ||
| Deferred consideration paid | (1) | (4) | (15) | ||
| Other | 6 | 14 | 5 | ||
| Net cash used for investing activities | (2,114) | (931) | (1,020) | ||
| Financing activities: | |||||
| Additions to debt | 5,707 | 88 | 52 | ||
| Repayments of debt | (4,321) | (136) | (56) | ||
| Debt issuance costs | (63) | — | — | ||
| Changes in commercial paper, net | 1 | — | — | ||
| Other debt additions (repayments), net | 2 | (4) | — | ||
| Repayments of finance lease liabilities | (22) | (3) | (3) | ||
| Tax paid in connection with shares withheld from employees | (26) | — | — | ||
| Purchases of treasury stock | (27) | (30) | (32) | ||
| Share buyback | — | — | (42) | ||
| Cash dividends paid to shareholders | (650) | (391) | (349) | ||
| Other | 6 | (3) | (1) | ||
| Net cash provided by (used for) financing activities | 607 | (479) | (431) | ||
| Effect of exchange rate changes on cash and cash equivalents | (121) | 10 | (126) | ||
| (Decrease) Increase in cash and cash equivalents | (145) | 159 | (144) | ||
| Cash and cash equivalents at beginning of period | 1,000 | 841 | 985 | ||
| Cash and cash equivalents at end of period | $855 | $1,000 | $841 |
The accompanying notes are an integral part of these Consolidated Financial Statements.
Smurfit Westrock plc
Consolidated Statements of Changes in Equity
(in millions, except per share data)
| Shares of Common Stock | Common Stock | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | Noncontrolling Interest (“NCI”) | Total | |
| Balance at December 31, 2021**(1)** | 259 | $— | $3,485 | $(69) | $2,444 | $(946) | $4,914 | $15 | $4,929 |
| Net income | — | — | — | — | 1,034 | — | 1,034 | 1 | 1,035 |
| Other comprehensive loss, net of tax | — | — | — | — | — | (263) | (263) | — | (263) |
| Share-based compensation | — | — | 66 | — | — | — | 66 | — | 66 |
| Issuance of common stock | 1 | — | — | — | — | — | — | — | — |
| Purchases of treasury stock | — | — | — | (32) | — | — | (32) | — | (32) |
| Shares distributed by Smurfit Kappa Employee Trust | — | — | (23) | 23 | — | — | — | — | — |
| Share buyback | — | — | — | (42) | — | — | (42) | — | (42) |
| Cancellation of common stock | (1) | — | — | 42 | (42) | — | — | — | — |
| Dividends declared ($1.35 per share) | — | — | — | — | (349) | — | (349) | (1) | (350) |
| Balance at December 31, 2022 | 259 | $— | $3,528 | $(78) | $3,087 | $(1,209) | $5,328 | $15 | $5,343 |
| Net income | — | — | — | — | 825 | — | 825 | 1 | 826 |
| Other comprehensive income, net of tax | — | — | — | — | — | 362 | 362 | — | 362 |
| Share-based compensation | — | — | 64 | — | — | — | 64 | — | 64 |
| Issuance of common stock | 1 | — | — | — | — | — | — | — | — |
| Purchases of treasury stock | — | — | — | (30) | — | — | (30) | — | (30) |
| Shares distributed by Smurfit Kappa Employee Trust | — | — | (17) | 17 | — | — | — | — | — |
| Dividends declared ($1.50 per share) | — | — | — | — | (391) | — | (391) | — | (391) |
| Balance at December 31, 2023 | 260 | $— | $3,575 | $(91) | $3,521 | $(847) | $6,158 | $16 | $6,174 |
| Net income | — | — | — | — | 319 | — | 319 | — | 319 |
| Other comprehensive loss, net of tax | — | — | — | — | — | (808) | (808) | — | (808) |
| Share-based compensation | — | — | 200 | — | — | — | 200 | — | 200 |
| Shares distributed by Smurfit Kappa Employee Trust | — | — | (25) | 25 | — | — | — | — | — |
| Purchases of treasury stock | — | — | — | (27) | — | — | (27) | — | (27) |
| Shares of Smurfit Westrock common stock issued to WestRock shareholders and NCI assumed as a result of the Merger | 258 | 1 | 12,098 | — | — | — | 12,099 | 11 | 12,110 |
| Converted WestRock RSUs and Options attributable to pre- Combination services | — | — | 91 | — | — | — | 91 | — | 91 |
| Issuance of common stock net of tax paid in connection with shares withheld from employees | 2 | — | 4 | — | (26) | — | (22) | — | (22) |
| Reclassification from retained earnings to accumulated other comprehensive loss | — | — | — | — | (209) | 209 | — | — | — |
| Dividends declared ($1.25 per share)(2) | — | — | 5 | — | (655) | — | (650) | — | (650) |
| Balance at December 31, 2024 | 520 | $1 | $15,948 | $(93) | $2,950 | $(1,446) | $17,360 | $27 | $17,387 |
(1) Pursuant to the Transaction Agreement, on July 5, 2024 each issued ordinary share, par value €0.001 per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for
one ordinary share, par value $0.001 per share, of Smurfit Westrock (a “Smurfit Westrock Share”). The exchange of shares is reflected retroactively to the earliest period
presented.
(2) Includes cash dividends and dividend equivalent units declared on certain unvested share-based payment awards.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies
1.1. Description of Business
Unless the context otherwise requires, or unless indicated otherwise, “we”, “us”, “our”, “Smurfit Westrock” and “the Company” refer
to the business of Smurfit Westrock plc, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries.
Smurfit Westrock plc (formerly known as Cepheidway Limited and Smurfit WestRock Limited) is a company limited by shares that is
incorporated in Ireland. On December 11, 2023, Smurfit Westrock changed its name to Smurfit WestRock Limited, and then on June
18, 2024, it re-registered as an Irish public limited company and was renamed Smurfit Westrock plc.
We are a multinational provider of sustainable fiber-based paper and packaging solutions. We partner with our customers to provide
differentiated, sustainable paper and packaging solutions that enhance our customers’ prospects of success in their markets. Our team
members support customers around the world from our operating and business locations in North America, South America, Europe,
Asia, Africa, and Australia.
Pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction Agreement”), among Smurfit Westrock, Smurfit
Kappa Group plc (“Smurfit Kappa”), WestRock Company (“WestRock”) and Sun Merger Sub, LLC (“Merger Sub”) the following
was completed (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme of arrangement under the Irish Companies Act
(the “Smurfit Kappa Share Exchange”) and (ii) Merger Sub merged with and into WestRock, with WestRock continuing as the
surviving entity (the “Merger” and, together with the Smurfit Kappa Share Exchange, the “Combination”). The Combination closed on
July 5, 2024 (the “Closing Date”). Upon the completion of the Combination, Smurfit Kappa and WestRock each became wholly
owned subsidiaries of Smurfit Westrock.
1.2. Basis of Presentation and Principles of Consolidation
Other than activities related to its formation and in anticipation of the Combination, Smurfit Westrock did not conduct any operations
from its incorporation until completion of the Combination. Given the non-operational nature of Smurfit Westrock prior to the
Combination, the Smurfit Kappa Share Exchange is not considered a business combination and does not give rise to any goodwill or
adjustments to accounting basis.
The Consolidated Financial Statements of Smurfit Westrock following the Smurfit Kappa Share Exchange are a continuation of the
financial statements of Smurfit Kappa. The comparative financial information presented in these Consolidated Financial Statements
reflect the pre-Combination carrying values of Smurfit Kappa with the legal share capital retroactively adjusted to reflect the legal
capital of Smurfit Westrock as the successor after giving effect to the Smurfit Kappa Share Exchange.
The Merger is recognized as a business combination under Accounting Standards Codification (“ASC”) 805, “Business
Combinations” (“ASC 805”). Smurfit Kappa was determined to be the accounting acquirer of WestRock. Accordingly, the financial
statements reflected in these Consolidated Financial Statements include WestRock's financial position and results of operations for the
period subsequent to the completion of the Combination on July 5, 2024.
Refer to “Note 2. Acquisitions” for additional information related to the accounting for the Combination.
Following the completion of the Combination, we reassessed our reportable segments due to changes in our organizational structure
and how our chief operating decision maker (“CODM”) makes key operating decisions, allocates resources and assesses the
performance of our business. Consequently, subsequent to the Combination, we began to manage the combined business as three
reportable segments: (1) North America, (2) Europe, the Middle East and Africa (“MEA”), and Asia-Pacific (“APAC”), and (3) Latin
America (“LATAM”).
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.2. Basis of Presentation and Principles of Consolidation - continued
As a result of the change in reportable segments, prior year amounts have been recast to conform to the current year presentation.
Throughout these Consolidated Financial Statements, amounts and activity reflect re-presentations related to the change in our
reportable segments. The change in reportable segments had no impact on the Company’s Consolidated Balance Sheets, Consolidated
Statements of Operations, Consolidated Statements of Comprehensive (Loss) Income, Consolidated Statements of Cash Flows and
Consolidated Statements of Changes in Equity previously reported. Refer to “Note 3. Segment Information”, for further discussion of
the Company’s segment reporting structure.
The Consolidated Financial Statements have been derived from the historical accounting records of the Company and were prepared in
accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The Company’s fiscal year end is
December 31. The reporting currency is the United States dollar (“the U.S. dollar”).
The Consolidated Financial Statements include the accounts of Smurfit Westrock plc, and our wholly and partially owned subsidiaries
for which we have a controlling financial interest, including variable interest entities for which we are the primary beneficiary. We
have eliminated all intercompany accounts and transactions.
The Company consolidates entities in which it has a controlling financial interest based on either the Variable Interest Entity (“VIE”)
or voting interest model.
The Company consolidates entities that are VIEs when the Company determines it is the primary beneficiary. Generally, the primary
beneficiary of a VIE is a reporting entity that has (a) the power to direct the activities that most significantly affect the VIE’s economic
performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be
significant to the VIE.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
1.3. Reclassifications and Adjustments
Following the Combination, certain reclassifications have been made to the prior year amounts to conform to the current year
presentation. These reclassifications include the recast within our reportable segments, as described above. On completion of the
Merger, as part of the harmonization of accounting policies, a disclosure reclassification of amounts previously classified as 'other
postretirement benefit plans' took place with the plans now being classified and disclosed as 'defined benefit pension plans'. The prior
year disclosure information in “Note 18. Retirement Plans” has been updated to conform to the current year presentation.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.4. Use of Estimates
The preparation of Consolidated 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 period. These estimates and the underlying assumptions affect the
amounts of assets and liabilities reported, disclosures about gain contingencies and contingent liabilities and reported amounts of
revenues and expenses, including income taxes. Such estimates include the fair value of assets acquired and assumed liabilities in a
business combination, determining goodwill and measuring impairment, income taxes and pension and other postretirement benefits.
These estimates and assumptions are based on management’s judgment. Actual results may differ from those estimates, and the
differences could be material.
We base our estimates on the current information available, our experiences and various other assumptions believed to be reasonable
under the circumstances. The process of determining significant estimates is fact specific and takes into account factors such as
historical experience, current and expected economic conditions, product mix, and in some cases, actuarial techniques. We regularly
evaluate these significant factors and make adjustments in the Consolidated Financial Statements where facts and circumstances
dictate.
1.5. Revenue Recognition
Generally, we recognize revenue on a point-in-time basis when the customer takes title to the goods and assumes the risks and rewards
for the goods, which coincides with the transfer of control of our goods to the customer upon delivery. Additionally, we manufacture
certain customized products that have no alternative use to us (since they are made to specific customer specifications), and we believe
that for certain customers we have a legally enforceable right to payment for performance completed to date on these products,
including a reasonable profit. For products that meet these two criteria, we recognize revenue over time. This results in revenue
recognition prior to the date of shipment or title transfer for these products and results in the recognition of a contract asset (unbilled
receivables) with a corresponding reduction in finished goods inventory on our Consolidated Balance Sheets.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods and is derived primarily
from fixed consideration. Certain contracts may also include variable consideration, typically in the form of volume-based rebates and
early settlement discounts. If a contract with a customer includes variable consideration, we estimate the expected impact based on
historical experience and net the provisions for volume-based rebates, early settlement discounts and other adjustments against our
gross sales. We concluded this method is consistent with the most likely amount method under ASC 606, “Revenue from Contracts
with Customers” (“ASC 606”) and allows us to make the best estimate of the consideration we will be entitled to from customers.
As permitted by ASC 606, we have elected to treat costs associated with obtaining new contracts as expenses when incurred if the
amortization period of the asset we would recognize is one year or less. We do not record interest income when the difference in
timing of control transfer and customer payment is one year or less. No element of financing is deemed present as the sales are made
with credit terms consistent with market practice and are in line with normal credit terms in the entities’ country of operation.
We also account for sales and other taxes that are imposed on and concurrent with individual revenue-producing transactions between
a customer and us on a net basis which excludes the taxes from our net sales.
1.6. Shipping and Handling Costs
We account for shipping and handling activities as fulfillment costs. Accordingly, we classify shipping and handling costs, such as
freight to our customers’ destinations, as a component of cost of goods sold while amounts billed to customers are classified as a
component of net sales.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.7. Cash and Cash Equivalents
We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. The
carrying amounts of our cash and cash equivalents approximate fair market values.
1.8. Accounts Receivable and Allowances
Our accounts receivable balance arises from a diverse and varied customer base, across the Company’s operations and as such there is
no significant concentration of credit risk. Credit evaluations are performed on all customers over certain thresholds and all customers
are subject to continued monitoring. Credit limits are reviewed on a regular basis.
We perform an evaluation of the current expected credit losses inherent in our accounts receivable at each balance sheet date. Such an
evaluation includes consideration of historical loss experience, trends in customer payment frequency, present economic conditions,
and judgment about the future financial health of our customers and industry sector. Generally, credit terms associated with our
receivables collection are approximately 30 to 90 days.
We state accounts receivable at the amount owed by the customer, net of allowances for estimated credit impairment losses, returns,
early settlement discounts and rebates (when netting conditions are met). We do not discount accounts receivable because we
generally collect accounts receivable over a relatively short time. We write off receivables when they are no longer determined to be
collectible.
See “Note 6. Accounts Receivable, net” for additional information on accounts receivable and allowances. See “Note 13. Fair Value
Measurement” and “Note 14. Debt” for additional information on receivables securitization facilities.
1.9. Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is determined on a first-in, first-out basis
and includes expenditure incurred in acquiring the inventories and bringing them to their present location and condition.
Raw materials are valued on the basis of purchase cost on a first-in, first-out basis. For finished goods and work-in-progress, cost
includes direct materials, direct labor and attributable overheads based on normal operating capacity and excludes borrowing costs.
Net realizable value is the estimated proceeds of sale less costs to completion and any costs to be incurred in selling and distribution.
We include the cost of wood harvested from forestlands in the carrying values of raw materials.
Full provision is made for all damaged, deteriorated and unusable material. The Company regularly reviews inventory quantities on-
hand for excess and obsolete inventory and, when circumstances indicate, records charges to write-down inventories to their estimated
net realizable value. Any write-down of inventory to net realizable value creates a new cost basis for that inventory. Materials and
other supplies held for use in the production of inventories are not written down below cost if the finished goods, in which they will be
incorporated, are expected to be sold at or above cost. See “Note 7. Inventories” for additional information.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.10. Leased Assets
We lease various real estate, including certain operating facilities, warehouses, office space and land. We also lease equipment and
vehicles.
At inception of a contract, we assess whether a contract is, or contains, a lease. A contract is, or contains, a lease, if the contract
conveys a right to control the use of an identified asset for a period of time in exchange for consideration. We recognize a right-of-use
(“ROU”) asset and a lease liability at the lease commencement date which is the date at which the asset is made available for our use.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. We categorize leases with contractual terms longer than 12 months as either operating or finance.
Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets
acquired under finance leases are recorded in “Property, plant and equipment, net.” All other leases are categorized as operating
leases.
For operating and finance leases, the lease liability is initially measured at the present value of the future lease payments at the lease
commencement date. The lease liability is subsequently measured at amortized cost using the effective-interest method. Our leases
may include options to extend or terminate the lease. These options to extend are included in the lease term when it is reasonably
certain that we will exercise that option. As the implicit rate is generally not readily determinable for our leases, we apply a portfolio
approach using an estimated incremental borrowing rate to determine the initial present value of lease payments over the lease terms
on a collateralized basis over a similar term, which is based on market and company specific information.
We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate, and apply the rate based on the
currency of the lease.
While some leases provide for variable payments, they are not included in the ROU assets and liabilities because they are not based on
an index or rate. Variable payments for real estate leases primarily relate to common area maintenance, insurance, taxes and utilities.
Variable payments for equipment, vehicles and leases within supply agreements primarily relate to usage, repairs, and maintenance.
We have made an accounting policy election to not recognize an ROU asset and liability for leases with a term of 12 months or less
unless the lease includes an option to renew or purchase the underlying asset that we are reasonably certain to exercise. In addition, the
Company has applied the practical expedient to account for the lease and non-lease components as a single lease component for all of
the Company's leases. See “Note 12. Leases” for additional information.
1.11. Property, Plant and Equipment
We record property, plant and equipment at cost less accumulated depreciation and impairment charges. Cost includes major
expenditures for improvements and replacements that extend useful lives, increase capacity, increase revenues or reduce costs, while
normal maintenance and repairs are expensed as incurred. For financial reporting purposes, we provide depreciation and amortization
primarily on a straight-line method generally over the estimated useful lives of the assets as follows:
Buildings and Building Improvements 10 - 40 years
Plant and Equipment 3 - 25 years
Leasehold improvements are depreciated over the shorter of the asset life or the lease term, generally between 3 and 15 years.
The estimated residual value and the useful lives of assets are reviewed at each reporting date. The useful lives of assets could be
reduced by climate-related factors, for example, because of physical risks, obsolescence or legal restrictions. Capital expenditures will
continue to be required for ongoing projects in order to meet our climate change targets and the useful lives of future capital
expenditure may differ from current assumptions, however there are no significant changes in the estimates of useful lives during the
current financial year. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are
included in the Consolidated Statements of Operations.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.11. Property, Plant and Equipment - continued
Capitalization of costs in respect of constructing an asset commences when it is probable that future economic benefits associated with
the asset will flow to the Company and the cost of the asset can be measured reliably. Cost includes expenditures that are directly
attributable to the construction of the asset. Construction in progress is not depreciated and is assessed for impairment when there is an
indicator of impairment. When these assets are available for use, they are transferred out of construction in progress to the applicable
heading under property, plant and equipment.
Forestlands consist of standing timber. Timber is stated at cost less depletion. Depletion refers to the carrying value of timber that is
harvested. Costs related to acquiring, planting and growing timber and expenditure directly attributable to the timber are capitalized.
At the time of harvest, the cost of the wood harvested is included in inventories.
1.12. Goodwill and Non-current Assets
The amount of goodwill acquired in a business combination that is assigned to one or more reporting units as of the acquisition date is
the excess of the purchase price of the acquired businesses (or portion thereof) included in the reporting unit, over the fair value
assigned to the individual assets acquired or liabilities assumed from a market participant perspective. Goodwill is assigned to the
reporting unit(s) expected to benefit from the synergies of the combination even though other assets or liabilities of the acquired entity
may not be assigned to that reporting unit. We determine recoverability by comparing the estimated fair value of the reporting unit to
which the goodwill applies to the carrying value, including goodwill, of that reporting unit.
In accordance with ASC 350, “Intangibles – Goodwill and Other” (“ASC 350”), we review the carrying value of our goodwill
annually in the fourth quarter or more often if events or changes in circumstances indicate that the carrying amount may exceed fair
value. We test goodwill for impairment at the reporting unit level, which is an operating segment or one level below an operating
segment, referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business
for which discrete financial information is available and segment management regularly reviews the operating results of that
component. However, two or more components of an operating segment are aggregated and deemed a single reporting unit if the
components have similar economic characteristics. We determine the fair value of each reporting unit using the discounted cash flow
method or, as appropriate, a combination of the discounted cash flow method and the guideline public company method.
ASC 350 allows an optional qualitative assessment, prior to a quantitative assessment test, to determine whether it is “more likely than
not” that the fair value of a reporting unit exceeds its carrying amount. We evaluate goodwill for impairment by first performing a
qualitative assessment to determine whether a quantitative goodwill test is necessary. If the Company determines, based on qualitative
factors, that the fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment is necessary. If
based on qualitative factors, the fair value of the reporting unit may more likely than not be less than its carrying amount, a
quantitative goodwill impairment test would be required. For reporting units where the Company performs the quantitative goodwill
impairment test, an impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair
value. As part of the quantitative test, we utilize the present value of expected cash flows or, as appropriate, a combination of the
present value of expected cash flows and the guideline public company method to determine the estimated fair value of our reporting
units. This present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate
(based on a weighted average cost of capital), which represents the time value of money and the inherent risk and uncertainty of the
future cash flows. Factors that management must estimate when performing this step in the process include, among other items, sales
volume, sales prices, inflation, discount rates, exchange rates, tax rates, anticipated synergies and productivity improvements resulting
from past acquisitions, capital expenditures and continuous improvement projects. The assumptions we use to estimate future cash
flows are consistent with the assumptions that the reporting units use for internal planning purposes, which we believe would be
generally consistent with that of a market participant. If we determine that the estimated fair value of the reporting unit exceeds its
carrying amount, goodwill of the reporting unit is not impaired. If we determine that the carrying amount of the reporting unit exceeds
its estimated fair value, we measure the goodwill impairment charge based on the excess of a reporting unit’s carrying amount over its
fair value, but not in excess of the total amount of goodwill allocated to the respective reporting unit, as required under ASU 2017-04
“Simplifying the Test for Goodwill Impairment.”
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.12. Goodwill and Non-current Assets - continued
The Company has capitalized certain contractual or separable intangible assets, primarily customer relationships, trade names and
trademarks, developed technology, software assets and land use rights. These intangible assets are amortized based on the expected
pattern in which the economic benefits are consumed or straight-line if the pattern was not reliably determinable. The useful lives of
intangible assets other than goodwill are finite and range from two to twenty-two years. Amortization is recognized as an expense
within “Selling, general and administrative expenses” and “Cost of goods sold” in the Consolidated Statements of Operations.
We follow the provisions included in ASC 360, “Property, Plant, and Equipment” in determining whether the carrying value of any of
our non-current assets, including ROU assets and amortizable intangibles other than goodwill, is impaired. We determine whether
indicators of impairment are present. We review non-current assets for impairment when events or changes in circumstances indicate
that the carrying amount of the non-current asset might not be recoverable. If we determine that indicators of impairment are present,
we determine whether the estimated undiscounted cash flows for the potentially impaired assets are less than the carrying value.
This requires management to estimate future cash flows through operations over the remaining useful life of the asset and its ultimate
disposition. The assumptions we use to estimate future cash flows are consistent with the assumptions we use for internal planning
purposes, updated to reflect current expectations. If our estimated undiscounted cash flows do not exceed the carrying value, we
estimate the fair value of the asset and record an impairment charge if the carrying value is greater than the fair value of the asset. We
estimate fair value using discounted cash flows, observable prices for similar assets, or other valuation techniques.
Our judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational
performance. Future events could cause us to conclude that impairment indicators exist and that assets associated with a particular
operation are impaired. Evaluating impairment also requires us to estimate future operating results and cash flows, which also require
judgment by management. Any resulting impairment loss could have a material adverse impact on our financial condition and results
of operations.
1.13. Business Combinations
In accordance with ASC 805, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in
an acquiree at their fair values as of the date of acquisition. We measure goodwill as the excess of consideration transferred, which we
also measure at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The
acquisition method of accounting requires us to make significant estimates and assumptions regarding the fair values of the elements
of a business combination as of the date of acquisition, including the fair values of identifiable property, plant and equipment,
intangible assets, deferred tax asset valuation allowances, liabilities including those related to debt, pensions and other postretirement
plans, unrecognized tax benefits, contingent consideration and contingencies. Significant estimates and assumptions include subjective
and/or complex judgments regarding items such as discount rates, customer attrition rates, economic lives and other factors, including
estimating future cash flows that we expect to generate from the acquired assets.
The acquisition method of accounting also requires us to refine these estimates over a measurement period not to exceed one year to
reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have
affected the measurement of the amounts recognized as of that date. If we are required to adjust provisional amounts that we have
recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on
our financial condition and results of operations. If the subsequent actual results and updated projections of the underlying business
activity change compared with the assumptions and projections used to develop these values, we could record future impairment
charges. In addition, we have estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation
and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could be increased or
decreased, or the acquired asset could be impaired. Acquisition related costs are expensed as incurred.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.13. Business Combinations - continued
In a business combination achieved in stages, the cost includes the acquisition date fair value of any pre-existing equity interest in the
subsidiary. When settlement of all or part of a business combination is deferred, the fair value of the deferred component is determined
by discounting the amounts payable to their present value at the date of exchange. Where a business combination agreement provides
for an adjustment to the purchase consideration which is contingent on future events, the contingent consideration is measured at fair
value. Any subsequent remeasurement of the contingent amount is recognized in the Consolidated Statements of Operations if it is
identified as a financial liability.
1.14. Fair Value of Financial Instruments and Nonfinancial Assets and Liabilities
We estimate fair values in accordance with ASC 820 “Fair Value Measurement” (“ASC 820”). ASC 820 provides a framework for
measuring fair value and expands disclosures required about fair value measurements. Specifically, ASC 820 sets forth a definition of
fair value and a hierarchy prioritizing the inputs to valuation techniques. ASC 820 defines fair value as the price that would be
received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in
an orderly transaction between market participants on the measurement date. Additionally, ASC 820 defines levels within the
hierarchy based on the availability of quoted prices for identical items in active markets, similar items in active or inactive markets and
valuation techniques using observable and unobservable inputs. We incorporate credit valuation adjustments to reflect both our own
nonperformance risk and the respective counterparty’s nonperformance risk in our fair value measurements.
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.
Financial instruments not recognized at fair value on a recurring or non-recurring basis include cash and cash equivalents, accounts
receivable, certain other current assets, short-term debt, accounts payable, certain other current liabilities and non-current debt. With
the exception of debt with fixed interest rates, the carrying amounts of these financial instruments approximate their fair values due to
either their variable interest rates or short maturities. The fair value of debt such as debentures and various notes are based on quoted
market prices as of the balance sheet date. The fair value of the revolving credit facility approximates its carrying value due to the
nature of the repricing and interest based on variable rates. We measure the fair value of our mutual fund investments based on quoted
prices in active markets. Additionally, we measure our derivative contracts, if any, based on observable inputs such as interest rates,
yield curves, spot and future commodity prices, and spot and future exchange rates.
We discuss fair values in more detail in “Note 13. Fair Value Measurement” and our pension and postretirement assets and liabilities
in “Note 18. Retirement Plans”.
1.15. Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax
assets and liabilities are determined based on the differences between the financial statement carrying amount and the tax basis of
assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The tax
effects of accumulated other comprehensive income are eliminated when the circumstances upon which it is premised cease to exist.
Where applicable, the portfolio approach is utilized. All deferred tax assets and liabilities are classified as non-current in our
Consolidated Balance Sheets.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.15. Income Taxes - continued
We reduce deferred tax assets with a valuation allowance to the amount we believe is more-likely than-not to be realized. In making
such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary
differences, projected future taxable income, tax-planning strategies, recent financial operations and carry back availability, if any. In
the event we were to determine that we would be able to realize or not realize our deferred tax assets in the future at their net recorded
amount, we would make an adjustment to the valuation allowance, which would reduce or increase income tax expense, respectively.
Certain provisions of ASC 740, “Income Taxes” (“ASC 740”) provide that a “tax position that meets the more-likely-than-not
recognition threshold shall initially and subsequently be measured as the largest amount of tax benefit that is greater than 50 percent
likely of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.” We use significant
judgment in (i) determining whether a tax position, based solely on its technical merits, is more-likely- than-not to be sustained upon
examination and (ii) measuring the tax benefit as the largest amount of benefit that is greater than 50-percent likely of being realized
upon settlement. We do not record any benefit for the tax positions where we do not meet the initial recognition threshold. Income tax
positions must meet the ASC 740 recognition criteria as of the reporting date to be recognized. We recognize interest related to tax
positions in “Income tax expense” in the Consolidated Statements of Operations. Prior to the Combination, interest relating to tax
positions was immaterial. We recognize penalties related to tax positions in “Income tax expense” in the Consolidated Statements of
Operations. Resolutions of tax positions could have a material adverse effect on our cash flows or materially benefit our results of
operations in future periods upon their resolution.
The Company has made an accounting policy election to account for the income tax effect(s) of U.S. Global Intangible Low-Taxed
Income (GILTI) as a period cost. The Company had made an accounting policy election to account for the income tax effect(s) of
investment tax credits under the flow-through method.
1.16. Pension and Other Postretirement Benefits
We sponsor pension and other postretirement benefits in the U.S. and most of the other countries in which we operate. We use a
December 31 measurement date for these plans. We measure our plan assets at fair value and the obligations at the present value of the
estimated payments to plan participants. We recognize the net funded position of our plans as assets or liabilities in our Consolidated
Balance Sheets. Estimated future payments are determined based on assumptions. Actuarial gains and losses occur when actual
experience differs from the estimates used to determine the components of net periodic pension cost including differences between
actual and expected returns on plan assets, plan remeasurement and when certain assumptions used to determine the projected benefit
obligation are updated, such as but not limited to, changes in the discount rate and the change in the rate of compensation.
The amount of unrecognized actuarial gains and losses recognized in the current year’s operations is based on amortizing the
unrecognized gains or losses for each plan that exceed the larger of 10% of the projected benefit obligation or the fair value of plan
assets, also known as “the corridor”. The amount of unrecognized gain or loss that exceeds the corridor is amortized over the average
future service of the plan participants or the average life expectancy of inactive plan participants for plans where all or almost all the
plan participants are inactive.
1.17. Share-Based Compensation
We recognize an expense for share-based compensation plans based on the estimated fair value of the related awards. We measure
share-based compensation awards using fair value-based measurement methods determined at the grant date. The compensation
expense is recognized using the straight-line method over the requisite service period for time-based awards. For awards vesting based
on market conditions, a compensation expense is recognized whether or not the market condition is met, as long as the service
condition is met. For awards vesting based on performance conditions, compensation expense is recognized over the requisite service
period only if it is probable that the performance condition will be achieved. The Company reassesses the probability of vesting at
each reporting period and adjusts the compensation expense based on its probability assessment. Forfeitures are estimated based on
historical experience.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.18. Foreign Currency
The Consolidated Financial Statements are presented in the U.S. dollar, which is the reporting currency of the Company. We translate
the assets and liabilities of our foreign operations to U.S. dollars using end-of-period exchange rates. Changes in the carrying value of
these assets and liabilities attributable to fluctuations in exchange rates are recognized in “Foreign currency translation (loss) gain” a
component of Other comprehensive (loss) income, net of tax. We translate income statement activity of our foreign operations to U.S.
dollar using the average exchange rate prevailing during the period. On disposal of a foreign operation, accumulated currency
translation differences are reclassified to profit or loss as part of the overall gain or loss on disposal.
Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the foreign exchange rate at
the reporting date. Non-monetary assets and liabilities carried at cost are not subsequently retranslated. Non-monetary assets carried at
fair value are subsequently remeasured at the exchange rate at the date of valuation. Gains or losses arising on foreign currency
remeasurements are recorded within “Other (expense) income, net” in the Consolidated Statements of Operations with the exception
of differences on foreign currency borrowings that qualify as a hedge of the Company’s net investment in foreign operations. The
portion of exchange gains or losses on foreign currency borrowings used to provide a hedge against a net investment in a foreign
operation and that is determined to be an effective hedge is recognized in Other comprehensive (loss) income, net of tax.
We recorded a loss on foreign currency transactions of $22 million, $52 million and $2 million in the years ended December 31, 2024,
2023 and 2022, respectively.
1.19. Supplier Finance Program Obligations
We maintain supplier finance programs whereby we have entered into payment processing agreements with certain financial
institutions. These agreements allow participating suppliers to track payment obligations from Smurfit Westrock, and if voluntarily
elected by the supplier, to sell payment obligations from Smurfit Westrock to financial institutions at a discounted price. We are not a
party to the agreements between the participating financial institutions and the suppliers in connection with the program, and we do
not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or
provided any guarantees as part of the programs. We have no economic interest in our suppliers’ decisions to participate in the
programs. Our responsibility is limited to making payment in full to the respective financial institution according to the terms
originally negotiated with the supplier, which generally do not exceed 120 days. Smurfit Westrock or the financial institutions may
terminate the agreements upon 30 or 90 days’ notice. These obligations are classified as accounts payable within the Consolidated
Balance Sheets.
The Company's outstanding payment obligations to financial institutions for the year ended December 31, 2024 were as follows:
| 2024 | |
| Outstanding payment obligations at the beginning of the fiscal year | $— |
| Assumed as part of the Combination | 440 |
| Amounts added during the period | 792 |
| Amounts settled during the period | (782) |
| Balance at end of the fiscal year | $450 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
1. Description of Business and Summary of Significant Accounting Policies - continued
1.20. Repair and Maintenance Costs
We expense routine repair and maintenance costs as we incur them. We defer certain expenses we incur during planned major
maintenance activities and recognize the expenses ratably over the shorter of the estimated interval until the next major maintenance
activity or the life of the deferred item. This maintenance is generally performed every 12 to 24 months and has a significant impact on
our results of operations in the period performed primarily due to lost production during the maintenance period. The deferred planned
major maintenance costs are recorded as assets within “Other non-current assets” on the Consolidated Balance Sheets.
1.21. New Accounting Standards Recently Adopted
In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04,
“Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This ASU requires
that all entities that use supplier finance programs in connection with the purchase of goods and services disclose sufficient
information about the program to allow a user of financial statements to understand the program’s nature, activity during the period,
changes from period to period, and potential magnitude. This ASU was effective for fiscal years beginning after December 15, 2022,
except for the amendment on rollforward information, which was effective for fiscal years beginning after December 15, 2023. The
Company adopted this ASU effective January 1, 2023, with the exception of the amendment on rollforward information, which was
adopted in the year beginning January 1, 2024 and applied prospectively. The adoption of this standard did not have a material impact
on the Company’s Consolidated Financial Statements. See Note 1.19. Supplier Finance Program Obligations for more information.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures.” This ASU requires an entity to disclose incremental segment information, including enhanced disclosures about
significant segment expenses. ASU 2023-07 is effective for the Company’s annual reporting periods beginning after December 15,
2023 and for interim periods beginning after December 15, 2024. Adoption is a fully retrospective method of transition. Early
adoption is permitted. The Company adopted this ASU in the fourth quarter of the year ended December 31, 2024 by including the
required applicable segment disclosures. See Note 3. Segment Information for more information.
1.22. New Accounting Standards Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This
ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate
reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company’s annual reporting
periods beginning after December 15, 2024. Adoption is either with a prospective method or a fully retrospective method of transition.
Early adoption is permitted. The Company is currently evaluating the effect that adoption of ASU 2023-09 will have on its disclosures
in the Consolidated Financial Statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). This ASU requires new financial
statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. ASU 2024-03
will be effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.
Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. The
Company is currently evaluating the impact of this standard on its disclosures in the Consolidated Financial Statements.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
2. Acquisitions
The following relates to acquisitions by the Company that took place in the years ended December 31, 2024, 2023 and 2022. We
accounted for these acquisitions in accordance with ASC 805.
Fiscal 2024 Acquisitions
As referred to in “Note 1. Description of Business and Summary of Significant Accounting Policies”, on September 12, 2023, Smurfit
Kappa and WestRock, a public company incorporated in Delaware, announced they had reached a definitive agreement on the terms
of a proposed combination.
The Combination closed on July 5, 2024. Pursuant to the Transaction Agreement, on the Closing Date each issued ordinary share, par
value €0.001 per share, of Smurfit Kappa (a “Smurfit Kappa Share”) was exchanged for one ordinary share, par value $0.001 per
share, of Smurfit Westrock (a “Smurfit Westrock Share”) and, in exchange for the net assets of WestRock acquired through the
Merger, each share of common stock, par value $0.01 per share, of WestRock (the “WestRock Common Stock”), was converted into
the right to receive one Smurfit Westrock Share and $5.00 in cash (the “Merger Consideration”) for an aggregate cash consideration of
$1,291 million (the “Cash Consideration”) and issuance of 258,228,403 shares to WestRock shareholders.
Upon completion of the Combination, Smurfit Kappa and WestRock each became wholly owned subsidiaries of Smurfit Westrock
with Smurfit Kappa shareholders owning approximately 50.3% and WestRock shareholders owning approximately 49.7%.
The Company expects the Combination to result in a global leadership position in sustainable packaging, characterized by quality,
product, and geographic diversity.
On April 3, 2024, Smurfit Kappa Treasury (a wholly owned subsidiary of Smurfit Westrock plc) completed an offering in the
aggregate principal amount of $2,750 million of senior unsecured notes in three series, comprised of the following: $750 million
aggregate principal amount of 5.200% senior notes due 2030 (the “2030 Notes”), $1,000 million aggregate principal amount of
5.438% senior notes due 2034 (the “2034 Notes”) and $1,000 million aggregate principal amount of 5.777% senior notes due 2054
(the “2054 Notes” and, together with the 2030 Notes and 2034 Notes, the “Notes” or the “Financing”) (such offering, the “April Notes
Offering”). A portion of the net proceeds of the April Notes Offering was used to finance the Cash Consideration, fees, commissions,
costs and expenses payable in connection with the Combination.
Merger Consideration
The following table summarizes the components of the aggregate Merger Consideration. The amounts are calculated by reference to
Smurfit Kappa’s share price of £36.56 on the Closing Date, translated to U.S. dollars using the closing exchange rate as of that date.
| Cash paid for outstanding WestRock Stock (a) | $1,291 |
| Smurfit Westrock Shares issued to WestRock Shareholders (b) | 12,098 |
| Converted WestRock Options and WestRock RSU Awards attributable to pre-Combination service (c) | 101 |
| Settlement of pre-existing relationships, trade and other payable and receivable balances with WestRock (d) | (29) |
| Aggregate Merger Consideration | $13,461 |
(a) The cash component of the aggregate Merger Consideration is based on 258,228,403 shares of WestRock Stock multiplied by the Cash Consideration of $5.00 per WestRock share.
(b) Value of Smurfit Westrock Shares issued is based on 258,228,403 shares of outstanding WestRock Stock resulting in the issue of 258,228,403 Smurfit Westrock Shares at the closing share price of
£36.56 on July 5, 2024, translated to U.S. dollars using the closing exchange rate of £1 to $1.2815 as of that date.
(c) Consideration for WestRock Options and WestRock restricted stock unit (“RSU”) Awards replaced with Smurfit Westrock equity awards with similar terms, and the amount represents the consideration
for their replacement. A portion of the fair value of Smurfit Westrock equity awards issued represents consideration transferred, while the remaining portion represents the post-Combination
compensation expense based on the vesting terms of the converted awards. Also included, is the Merger Consideration in respect of WestRock Director RSU Awards, settled options held by former
WestRock employees and vested and unreleased RSU awards all of which converted into WestRock Stock immediately prior to the Closing Date.
(d) Component of Merger Consideration in respect of the settlement for no gain or loss of trade and other receivable and payable balances with WestRock as of the date of the Merger. The Merger
Consideration has been increased by the amount of the settled Smurfit Kappa receivable of $3 million in respect of sales to WestRock and has been reduced to account for the effective settlement of
accounts payable of $32 million in respect of trade and other purchases from WestRock. The WestRock receivable and payable in respect of these inter-company transactions were not recognized as an
acquired asset or assumed liability.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
2. Acquisitions - continued
Fiscal 2024 Acquisitions - continued
Preliminary Purchase Price Allocation
Smurfit Westrock management determined that Smurfit Kappa is the accounting acquirer in the Merger, which is accounted for under
the acquisition method of accounting for business combinations in accordance with ASC 805.
The preliminary allocation of the purchase price with respect to the Merger is based upon management’s estimates of and assumptions
related to the fair values of WestRock assets acquired and liabilities assumed as of the Closing Date using currently available
information. The excess of the purchase price over the fair value of net assets acquired has been allocated to goodwill.
The purchase price allocation for the Merger is preliminary and is subject to revision as additional information about the acquisition-
date fair value of assets and liabilities becomes available. The Company is still evaluating the fair value of acquired property, plant
and equipment, intangible assets and certain income tax related items in addition to ensuring all other assets and liabilities and
contingencies have been identified and recorded. The Company has estimated the preliminary fair value of assets acquired and
liabilities assumed based on information currently available and will continue to adjust those estimates during the measurement period
(a period not to exceed 12 months from the Closing Date). The Company has reflected the measurement period adjustments to date in
the period in which the adjustments occurred, and will continue to reflect measurement period adjustments, if any, in the period in
which the adjustments occur. The Company will finalize the accounting for the Merger within the measurement period.
The following table summarizes the preliminary purchase price allocation to the fair value of the assets acquired and liabilities
assumed as of the acquisition date:
| Preliminary Allocation | Measurement Period Adjustments | Adjusted Preliminary Allocation | |||
| Identifiable net assets: | |||||
| Cash and cash equivalents | $603 | $— | $603 | ||
| Accounts receivable | 2,374 | — | 2,374 | ||
| Inventories | 2,504 | 29 | 2,533 | ||
| Other current assets | 825 | (13) | 812 | ||
| Property, plant and equipment | 17,567 | 45 | 17,612 | ||
| Intangibles | 922 | 41 | 963 | ||
| Prepaid pension asset | 558 | — | 558 | ||
| Other non-current assets | 1,765 | 68 | 1,833 | ||
| Accounts payable | (2,018) | — | (2,018) | ||
| Accrued compensation and benefits | (447) | — | (447) | ||
| Current portion of debt | (1,285) | — | (1,285) | ||
| Other current liabilities | (1,123) | (16) | (1,139) | ||
| Non-current debt due after one year | (7,438) | (2) | (7,440) | ||
| Deferred tax liabilities | (3,523) | 27 | (3,496) | ||
| Pension liabilities and other postretirement benefits, net of current portion | (299) | — | (299) | ||
| Other non-current liabilities | (1,872) | (2) | (1,874) | ||
| Noncontrolling interests | (11) | — | (11) | ||
| Identifiable net assets acquired as of July 5, 2024 | 9,102 | 177 | 9,279 | ||
| Goodwill arising on Merger | 4,359 | (177) | 4,182 | ||
| Aggregate Merger Consideration | $13,461 | $— | $13,461 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
2. Acquisitions - continued
Fiscal 2024 Acquisitions - continued
Measurement period adjustments primarily related to the adjustments in the fair values of the acquired property, plant and equipment
and other intangible assets from the third-party valuation and related impact on deferred income taxes. The measurement period
adjustments are based on facts and circumstances that existed, but were not known, as of the acquisition date. The offset to the
measurement period adjustments was to goodwill. The impact to the Consolidated Statement of Operations as a result of these
measurement period adjustments was not material.
The goodwill arising from the Merger is attributable to the workforce of the acquired business and the significant synergies expected
to arise after the Merger. Of the total goodwill recognized on the Merger, $3,882 million was allocated to the North American
segment, $206 million was allocated to the LATAM segment and $94 million was allocated to the Europe, MEA and APAC segment.
Of the total goodwill recognized, $187 million is estimated to be deductible for tax purposes.
The fair value of the assets acquired includes accounts receivable of $2,374 million that are not purchased financial assets with credit
deterioration. The gross amount due under contracts was $2,429 million of which $55 million was expected to be uncollectible.
Acquired other non-current assets includes a sales-type lease receivable and notes receivable with an aggregate fair value of $85
million. The gross amount due under contracts was $107 million, $22 million of which was expected to be uncollectible.
The preliminary fair value of acquired property, plant and equipment was determined primarily using the cost approach method. Due
to the specialized industrial nature of our plant and machinery assets, we have primarily applied the depreciated replacement cost
method to determine their acquisition date fair value. This valuation method involves making assumptions for the current replacement
costs of similar fixed assets adjusted for estimated physical deterioration, functional and economic obsolescence. The determination of
key assumptions was supported by the market approach if an active secondary market was identified, and the income approach was
considered to determine economic obsolescence for certain assets. These valuations resulted in Level 3 non-recurring fair value
measurements.
The preliminary fair values of intangible assets were generally determined using income-based methods. The income method used for
customer relationship intangibles is the multi-period excess earnings method based on forecasts of the expected future cash flows
attributable to those assets. The relief from royalty method which the Company has used for the valuation of trade name and certain
technology intangibles, estimates fair value by reference to the royalties saved through ownership of the intangible asset rather than
paying a rent or royalty for its use. The fair value of certain technology-based intangibles was determined using a cost savings
approach that measures the value of an asset by estimating the cost savings achieved through owning the asset.
Significant estimates and assumptions inherent in the valuations reflect consideration of other market participants, the amount and
timing of future cash flows (including expected growth rates, discount rates, cost savings and profitability), royalty rates used in the
relief from royalty method, and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and
circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions used to calculate the fair values
of acquired intangible assets.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
2. Acquisitions - continued
Fiscal 2024 Acquisitions - continued
Preliminary identifiable intangible assets are presented in the following table:
| Preliminary Fair Value | Weighted Average Useful Lives (in years) | ||
| Preliminary fair value of intangible assets acquired: | |||
| Customer relationships | $459 | 14 | |
| Trade names and trademarks | 228 | 10 | |
| Developed technology | 179 | 12 | |
| Software assets | 93 | 5 | |
| Land use rights | 4 | 22 | |
| Intangible assets acquired | $963 | 12 |
The Company incurred transaction-related expenses associated with the Combination of $202 million for the year ended December 31,
2024 ($78 million for the year ended December 31, 2023). These costs were associated primarily with legal and other professional
services and were recorded in transaction and integration-related expenses associated with the Combination.
Following the Combination, Smurfit Kappa funded the prepayment and cancellation of WestRock’s credit agreement with an
outstanding amount of $750 million (“Delayed Draw Term Facility”). Waivers from lenders removing change in control provisions
had previously been received for this loan facility. The outstanding balance of the facility as of July 5, 2024 was recognized as an
assumed liability. The repayment did not form part of Merger Consideration. The repayment of the principal ($750 million) has been
presented as a financing cash outflow with the payment of accrued interest ($1 million) reflected within operating activities, each in
the Consolidated Statement of Cash Flows.
Outstanding WestRock Share-based Compensation Awards
In connection with the Combination, outstanding WestRock RSU Awards (other than director RSUs) for current employees were
replaced with Smurfit Westrock RSU Awards and a cash award equal to $5.00 per share, both of which will vest over the same
requisite service period as the original awards. Director RSUs were fully vested upon the change in control and settled shortly
thereafter in July 2024. Outstanding WestRock performance stock units (“PSUs”) were converted at the higher of target or the average
actual performance of the last three years prior to the Merger and replaced with Smurfit Westrock RSU Awards and a cash award
equal to $5.00 per share, both of which will vest over the same requisite service period as the original awards. The outstanding
WestRock stock options and their exercise prices were converted using an exchange ratio based on the volume weighted average price
of Smurfit Kappa shares for a ten day period prior to the close of the Merger and replaced with Smurfit Westrock stock options with
the same terms and conditions as the original awards. Outstanding WestRock stock options for former employees were settled in
connection with the acquisition. The Merger Consideration includes $101 million related to WestRock awards that were settled or
replaced in connection with the acquisition. Compensation expense of $21 million was recognized immediately post-acquisition and
$162 million of compensation expense will be recognized over the remaining service period of up to three years. In addition, during
the year ended December 31, 2024, $51 million of stock compensation expense was recognized in respect of “dual trigger” awards to
certain executives, which accelerated vesting upon (i) a change in control and (ii) involuntary termination or a termination for good
reason following a change in control.
WestRock Net Sales and Earnings
WestRock contributed net sales of $9,381 million and net loss of $39 million to the consolidated results of Smurfit Westrock for the
period from completion of the Merger to December 31, 2024.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
2. Acquisitions - continued
Fiscal 2024 Acquisitions - continued
Unaudited Pro Forma Combined Financial Information
The following unaudited pro forma combined financial information presents the combined results of operations for the year ended
December 31, 2024 and 2023, as if the Merger had occurred on January 1, 2023.
| Years ended December 31, | |||
| 2024 | 2023 | ||
| Net sales | $30,919 | $32,511 | |
| Net income (loss) attributable to common shareholders | $650 | $(1,410) |
The unaudited pro forma combined financial information above is based on the historical financial statements of Smurfit Kappa,
WestRock, and Smurfit Westrock, and is not indicative of the results of operations that would have been achieved if the Merger had
occurred on January 1, 2023, nor is it indicative of future results. The unaudited pro forma combined financial information has been
prepared by applying the accounting policies of Smurfit Westrock and includes, where applicable, adjustments for the following
factually supportable items or transactions, directly attributable to the Merger: (i) elimination of intercompany activity; (ii)
incremental depreciation expense from the preliminary fair value adjustments to property, plant and equipment; (iii) amortization
expense from the preliminary fair value adjustments to acquired intangible assets; (iv) incremental stock-based compensation expense
associated with the Merger; (v) interest expense for acquisition financing and the amortization of the fair value adjustment to debt
assumed; (vi) removal of pension and other postretirement amortization expense resulting from the fair value adjustment to acquired
WestRock pension and other post-employment benefit assets and liabilities; (vii) changes to align accounting policies; and (viii)
associated tax-related impacts of adjustments.
The unaudited pro forma combined financial information also reflects pro forma adjustments for the following material non-recurring
expenses directly attributable to the Merger, each reflected as of the beginning of the earliest pro-forma comparative period presented:
(i) transaction-related costs of both Smurfit Kappa and WestRock amounting to $448 million, including retention-related bonuses; and
(ii) amortization of the fair value adjustment to acquired inventories of $224 million.
These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company
believes are reasonable to reflect the impact of the Merger on the Company’s historical financial information on a supplemental pro
forma basis. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be
achieved by the combined business.
In the year ended December 31, 2024, we also acquired Artemis, a bag-in-box packaging company in Bulgaria, and goodwill arising
on the acquisition was $10 million. The acquisition was not considered to be significant as to warrant separate disclosure of the net
assets acquired.
During fiscal 2024, the Company recorded a measurement period adjustment to the fair values initially assigned to the Cartonajes
Carrión business acquired in 2023, resulting in a reduction in goodwill recognized of $10 million.
Fiscal 2023 Acquisitions
We acquired Asterias, a folding carton company in Poland, and Cartonajes Carrión, a specialty packaging operation in Spain, in the
year ended December 31, 2023. Goodwill arising on these acquisitions was $21 million in total, of which $16 million was expected to
be deductible for income tax purposes. Neither acquisition was considered to be significant as to warrant separate disclosure of the net
assets acquired.
During fiscal 2023, the Company recorded a measurement period adjustment to the fair values initially assigned to the PaperBox and
Pusa Pack businesses acquired in 2022, resulting in a decrease in goodwill of $24 million and $1 million, respectively.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
2. Acquisitions - continued
Fiscal 2022 Acquisitions
We completed the following acquisitions in the year ended December 31, 2022:
-
On April 1, 2022, we acquired 100% of Argencraft, a corrugated facility in Argentina.
-
On April 29, 2022, we acquired 100% of Atlas Packaging, a corrugated packaging company in the United Kingdom.
-
On October 3, 2022, we acquired 100% of PaperBox, a packaging plant in Brazil.
-
On October 31, 2022, we acquired 100% of Pusa Pack, a bag-in-box packaging plant in Spain.
The total aggregate purchase consideration for the 2022 acquisitions was $107 million, consisting of $99 million in cash and $8
million in deferred consideration. None of the business combinations completed during the year were considered material to warrant
separate disclosure of the fair values attributable to those combinations.
The $93 million of cash outflows reflected in the Consolidated Statements of Cash Flows for the year ended December 31, 2022,
relate to the total cash consideration, net of $6 million in cash acquired in 2022.
The total net assets acquired were $87 million. Acquisition related costs were expensed as incurred and were not material to our
financial statements. The aggregate purchase price of these acquisitions reflects goodwill of $20 million, which is not expected to be
deductible for income tax purposes. The goodwill is primarily composed of expected benefits related to expanding the Company’s
established and growing packaging business.
3. Segment Information
Following the completion of the Combination, we reassessed our reportable segments due to changes in our organizational structure
and how our CODM makes key operating decisions, allocates resources and assesses the performance of our business. The CODM is
determined to be the executive management team, comprising the Group Chief Executive Officer and Group Chief Financial Officer.
The CODM is responsible for assessing performance, allocating resources and making strategic decisions.
During the year ended December 31, 2024, we identified three operating segments, which are also our reportable segments:
i.North America, which includes operations in the U.S., Canada and Mexico.
ii.Europe, the Middle East and Africa (“MEA”), and Asia-Pacific (“APAC”).
iii.Latin America (“LATAM”), which includes operations in Central America and Caribbean, Argentina, Brazil, Chile, Colombia,
Ecuador and Peru.
These changes reflect how we manage our business effective during the third quarter of 2024, following the completion of the
Combination. Our operating segments are consistent with our internal management structure and no operating segments have been
aggregated for disclosure purposes. Prior period comparatives have been recast to reflect the change in segments.
In the identification of the operating and reportable segments, we considered the level of integration of our different businesses as well
as our objective to develop long-term customer relationships by providing customers with differentiated packaging solutions that
enhance the customer’s prospects of success in their end markets.
The North America, Europe, MEA and APAC and LATAM segments are each highly integrated within the segment and there are
many interdependencies within these operations. They each include a system of mills and plants that primarily produce a number of
grades of containerboard that is converted into corrugated containers within each segment, or is sold to third parties.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
3. Segment Information - continued
In addition, the North America segment also produces paperboard, kraft paper and market pulp; other paper-based packaging, such as
folding cartons, inserts, labels and displays and also engages in the assembly of displays as well as the distribution of packaging
products.
The Europe, MEA and APAC segment also produces other types of paper, such as solidboard, graphic board, sack kraft paper and
machine glazed paper (together known as kraft paper) and graphic paper; and other paper-based packaging, such as honeycomb,
solidboard packaging, folding cartons, inserts and labels; and bag-in-box packaging (the latter with operations located in Europe,
Argentina, Canada, Mexico and the U.S., but managed under the Europe, MEA and APAC segment).
The LATAM segment also comprises forestry; other types of paper, such as paperboard and kraft paper; and paper-based packaging,
such as folding cartons and paper sacks.
Inter-segment transfers or transactions are entered into under normal commercial terms and conditions on an arm’s length basis.
The accounting policies of the reportable segments are the same as those described in “Note 1. Description of Business and Summary
of Significant Accounting Policies.”
We operate in 40 countries worldwide. The table below reflects financial data of our foreign operations for each of the past three fiscal
years:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Net sales (unaffiliated customers) | |||||
| Ireland (country of domicile) | $172 | $128 | $124 | ||
| U.S. | 7,311 | 303 | 373 | ||
| Mexico | 1,960 | 1,343 | 1,365 | ||
| Germany | 1,711 | 1,694 | 1,960 | ||
| France | 1,427 | 1,492 | 1,603 | ||
| Other Americas | 2,330 | 1,322 | 1,388 | ||
| Other Europe, MEA and APAC | 6,198 | 5,811 | 6,696 | ||
| Total | $21,109 | $12,093 | $13,509 |
Our net sales are derived almost entirely from the sale of goods and are disclosed based on the location of production.
No one customer represents greater than 10% of our net sales.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
3. Segment Information - continued
| December 31, | |||
| 2024 | 2023 | ||
| Long-lived assets**(1)** | |||
| Ireland (country of domicile) | $62 | $44 | |
| U.S. | 14,841 | 217 | |
| Mexico | 1,686 | 625 | |
| Germany | 683 | 633 | |
| France | 638 | 624 | |
| Other Americas | 2,327 | 889 | |
| Other Europe, MEA and APAC | 3,424 | 3,133 | |
| Total | $23,661 | $6,165 |
(1) Long-lived assets include “Operating lease right-of-use assets” and “Property, plant and equipment, net” and are disclosed based on
their location.
Segment profitability is measured based on Adjusted EBITDA, defined as income before income taxes, unallocated corporate costs,
depreciation, depletion and amortization, interest expense, net, pension and other postretirement non-service expense, net, share-based
compensation expense, other (expense) income, net, impairment of goodwill and other assets, amortization of fair value step up on
inventory, transaction and integration-related expenses associated with the Combination and other specific items that management
believes are not indicative of the ongoing operating results of the business.
The CODM uses Adjusted EBITDA for each segment predominantly: to forecast and assess the performance of the segments,
individually and comparatively; to set pricing strategies for the segments; and to make decisions about the allocation of operating and
capital resources to each segment strategically, in the annual budget and in the quarterly forecasting process. The CODM considers
budget, or forecast, -to-actual variances on a quarterly and annual basis for segment Adjusted EBITDA to inform these decisions.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
3. Segment Information - continued
The following tables show selected financial data for our segments.
| Year ended December 31, 2024 | North America | Europe, MEA and APAC | LATAM | Total | |||
| Net sales (unaffiliated customers) | $9,901 | $9,556 | $1,652 | $21,109 | |||
| Add net sales (intersegment) | 191 | 21 | 59 | 271 | |||
| Net sales (aggregate) | $10,092 | $9,577 | $1,711 | $21,380 | |||
| Less segment expenses: | |||||||
| Segment cost of goods sold | $(7,450) | $(6,948) | $(1,192) | $(15,590) | |||
| Segment selling, general and administration expenses | (1,032) | (1,100) | (141) | (2,273) | |||
| $(8,482) | $(8,048) | $(1,333) | $(17,863) | ||||
| Segment Adjusted EBITDA | $1,610 | $1,529 | $378 | $3,517 | |||
| Unallocated corporate costs | (131) | ||||||
| Depreciation, depletion and amortization | (1,464) | ||||||
| Transaction and integration-related expenses associated with the Combination | (395) | ||||||
| Amortization of fair value step up on inventory | (224) | ||||||
| Interest expense, net | (398) | ||||||
| Pension and other postretirement non-service expense, net | (24) | ||||||
| Share-based compensation expense | (206) | ||||||
| Other expense, net | (25) | ||||||
| Other adjustments | (90) | ||||||
| Income before income taxes | $560 |
Significant segment expenses are segment cost of sales and segment selling, general and administrative expenses. Segment cost of
sales primarily include raw materials, direct labor and plant overhead costs. Segment selling, general and administrative expenses
primarily include compensation and benefits, external professional fees and other operating costs. Both segment cost of sales and
segment selling, general and administrative expenses exclude certain adjustments that management believes are not indicative of the
operating results of the business.
Other adjustments in the table above include restructuring costs of $56 million, a non-recurring, non-cash currency translation
adjustment in Argentina of $42 million and losses at closed facilities of $10 million partially offset by a reimbursement of a fine from
the Italian Competition Authority of $18 million.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
3. Segment Information - continued
| Year ended December 31, 2023 | North America | Europe, MEA and APAC | LATAM | Total | |||
| Net sales (unaffiliated customers) | $1,623 | $9,184 | $1,286 | $12,093 | |||
| Add net sales (intersegment) | 1 | 9 | 58 | 68 | |||
| Net sales (aggregate) | $1,624 | $9,193 | $1,344 | $12,161 | |||
| Less segment expenses: | |||||||
| Segment cost of goods sold | $(1,165) | $(6,498) | $(939) | $(8,602) | |||
| Segment selling, general and administration expenses | (178) | (1,011) | (131) | (1,320) | |||
| $(1,343) | $(7,509) | $(1,070) | $(9,922) | ||||
| Segment Adjusted EBITDA | $281 | $1,684 | $274 | $2,239 | |||
| Unallocated corporate costs | (111) | ||||||
| Depreciation, depletion and amortization | (580) | ||||||
| Transaction and integration-related expenses associated with the Combination | (78) | ||||||
| Interest expense, net | (139) | ||||||
| Pension and other postretirement non-service expense, net | (49) | ||||||
| Share-based compensation expense | (66) | ||||||
| Other expense, net | (46) | ||||||
| Other adjustments | (32) | ||||||
| Income before income taxes | $1,138 |
Significant segment expenses are segment cost of sales and segment selling, general and administrative expenses. Segment cost of
sales primarily include raw materials, direct labor and plant overhead costs. Segment selling, general and administrative expenses
primarily include compensation and benefits, external professional fees and other operating costs. Both segment cost of sales and
segment selling, general and administrative expenses exclude certain adjustments that management believes are not indicative of the
operating results of the business.
Other adjustments in the table above includes restructuring costs of $32 million.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
3. Segment Information - continued
| Year ended December 31, 2022 | North America | Europe, MEA and APAC | LATAM | Total | |||
| Net sales (unaffiliated customers) | $1,719 | $10,432 | $1,358 | $13,509 | |||
| Add net sales (intersegment) | 1 | 19 | 39 | 59 | |||
| Net sales (aggregate) | $1,720 | $10,451 | $1,397 | $13,568 | |||
| Less segment expenses: | |||||||
| Segment cost of goods sold | $(1,263) | $(7,533) | $(996) | $(9,792) | |||
| Segment selling, general and administration expenses | (176) | (998) | (121) | (1,295) | |||
| $(1,439) | $(8,531) | $(1,117) | $(11,087) | ||||
| Segment Adjusted EBITDA | $281 | $1,920 | $280 | $2,481 | |||
| Unallocated corporate costs | (91) | ||||||
| Depreciation, depletion and amortization | (564) | ||||||
| Goodwill impairment | (12) | ||||||
| Impairment of other assets | (159) | ||||||
| Interest expense, net | (139) | ||||||
| Pension and other postretirement non-service expense, net | (8) | ||||||
| Share-based compensation expense | (68) | ||||||
| Other income, net | 15 | ||||||
| Other adjustments | (29) | ||||||
| Income before income taxes | $1,426 |
Significant segment expenses are segment cost of sales and segment selling, general and administrative expenses. Segment cost of
sales primarily include raw materials, direct labor and plant overhead costs. Segment selling, general and administrative expenses
primarily include compensation and benefits, external professional fees and other operating costs. Both segment cost of sales and
segment selling, general and administrative expenses exclude certain adjustments that management believes are not indicative of the
operating results of the business.
Impairment of other assets in the table above is made up of the impairment of Russian operations of $159 million, included in the
Europe, MEA and APAC segment. See “Note 20. Disposal of Russian Operations” for additional information on the impairment of the
Russian operations.
Other adjustments in the table above include restructuring costs of $29 million.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
3. Segment Information - continued
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Capital expenditures: | |||||
| North America | $723 | $135 | $124 | ||
| Europe, MEA and APAC | 503 | 594 | 600 | ||
| LATAM | 216 | 194 | 202 | ||
| Total per reportable segments | $1,442 | $923 | $926 | ||
| Corporate | 24 | 6 | 4 | ||
| Total capital expenditure | $1,466 | $929 | $930 |
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Other significant non-cash charges: (1) | |||||
| Goodwill impairment | |||||
| LATAM | $— | $— | $(12) | ||
| Total goodwill impairment | $— | $— | $(12) |
(1) Refer to Note 9. Goodwill for more details.
Total assets by segment were:
| December 31, | |||
| 2024 | 2023 | ||
| Assets: | |||
| North America | $29,078 | $1,607 | |
| Europe, MEA and APAC | 10,723 | 9,521 | |
| LATAM | 3,180 | 1,795 | |
| Total per reportable segments | $42,981 | $12,923 | |
| Corporate(1) | 778 | 1,128 | |
| Total assets | $43,759 | $14,051 |
(1) Corporate assets are composed primarily of Pension assets, Property, plant and equipment, net, Deferred tax assets, Recoverable or
refundable income taxes and Cash and cash equivalents.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
4. Revenue Recognition
Disaggregated Revenue
ASC 606 requires that we disaggregate revenue from contracts with customers into categories that depict how the nature, amount,
timing and uncertainty of revenue and cash flows are affected by economic factors.
The following tables summarize our disaggregated revenue with unaffiliated customers by product type and segment for the year
ended December 31, 2024, 2023 and 2022. Net sales are attributed to segments based on the location of production.
| Year ended December 31, 2024 | |||||||
| North America | Europe, MEA and APAC | LATAM | Total | ||||
| Revenue by product: | |||||||
| Paper | $2,271 | $1,468 | $117 | $3,856 | |||
| Packaging | 7,630 | 8,088 | 1,535 | 17,253 | |||
| Total | $9,901 | $9,556 | $1,652 | $21,109 |
| Year ended December 31, 2023 | |||||||
| North America | Europe, MEA and APAC | LATAM | Total | ||||
| Revenue by product: | |||||||
| Paper | $106 | $1,380 | $53 | $1,539 | |||
| Packaging | 1,517 | 7,804 | 1,233 | 10,554 | |||
| Total | $1,623 | $9,184 | $1,286 | $12,093 |
| Year ended December 31, 2022 | |||||||
| North America | Europe, MEA and APAC | LATAM | Total | ||||
| Revenue by product: | |||||||
| Paper | $163 | $1,925 | $106 | $2,194 | |||
| Packaging | 1,556 | 8,507 | 1,252 | 11,315 | |||
| Total | $1,719 | $10,432 | $1,358 | $13,509 |
Packaging revenue is derived mainly from the sale of corrugated and consumer packaging products. The remainder of packaging
revenue is composed of bag-in-box, packaging solutions and other paper-based packaging products.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
4. Revenue Recognition - continued
Revenue Contract Balances
In connection with the Combination, the Company acquired contract assets and assumed contract liabilities. These contract assets
relate to the manufacture of certain products that have no alternative use to us, with right to payment for performance completed to
date on these products, including a reasonable profit. Contract assets are reduced when the customer takes title to the goods and
assumes the risks and rewards for the goods. Contract liabilities represent obligations to transfer goods or services to a customer for
which we have received consideration and are reduced once control of the goods is transferred to the customer.
Contract assets and contract liabilities are reported within “Other current assets” and “Other current liabilities”, respectively, on the
Consolidated Balance Sheets.
| Contract Assets (Short-Term) | Contract Liabilities (Short-Term) | ||
| Recorded on the Combination | $220 | $10 | |
| Decrease | (23) | (5) | |
| Ending balance - December 31, 2024 | $197 | $5 |
5. Transaction and Integration-related Costs Associated with the Combination
The following table summarizes the transaction and integration costs associated with the Combination:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Transaction-related costs associated with the Combination | $(202) | $(78) | $— | ||
| Integration-related costs associated with the Combination | (193) | — | — | ||
| Total transaction and integration-related costs associated with the Combination | $(395) | $(78) | $— |
Transaction-related Costs Associated with the Combination
Transaction-related costs associated with the Combination comprise of banking and financing related costs as well as legal and other
professional services which are directly attributable to the Combination and retention payments that are contractually committed to
and associated with the successful completion of the Combination.
Integration-related Costs Associated with the Combination
We incur integration costs post-acquisition that reflect work performed to facilitate merger and acquisition integration and primarily
consist of professional services and personnel and related expenses, such as work associated with information systems.
We consider transaction and integration costs to be corporate costs regardless of the segment or segments involved in the transaction.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
6. Accounts Receivable, net
Accounts receivable consists of the following:
| December 31, | |||
| 2024 | 2023 | ||
| Gross accounts receivable | $4,339 | $1,976 | |
| Less: Allowances | (222) | (170) | |
| Accounts receivable | $4,117 | $1,806 |
The following table represents a summary of the changes in allowances for the years ended December 31, 2024, 2023 and 2022:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Balance at the beginning of the fiscal year | $170 | $160 | $145 | ||
| Charges to net sales and selling, general and administrative expenses | 380 | 196 | 229 | ||
| Deductions | (318) | (185) | (203) | ||
| Write offs | (10) | (1) | (11) | ||
| Balance at the end of the fiscal year | $222 | $170 | $160 |
Allowances include the reserves for allowance for estimated credit impairment losses, returns, early settlement discounts and rebates
(where netting requirements are met).
7. Inventories
Inventories are as follows:
| December 31, | |||
| 2024 | 2023 | ||
| Finished goods | $1,374 | $514 | |
| Work-in-progress | 206 | 52 | |
| Raw materials | 1,288 | 348 | |
| Consumables and spare parts | 682 | 289 | |
| Inventories | $3,550 | $1,203 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
8. Property, Plant and Equipment, net
Property, plant and equipment consists of the following:
| December 31, | |||
| 2024 | 2023 | ||
| Land and buildings | $5,337 | $2,679 | |
| Forestlands | 251 | 78 | |
| Plant and equipment | 22,306 | 8,860 | |
| Construction in progress | 1,517 | 656 | |
| Finance lease right-of-use assets | 419 | 32 | |
| Property, plant and equipment at cost | 29,830 | 12,305 | |
| Less: Accumulated depreciation, depletion and amortization | (7,155) | (6,514) | |
| Property, plant and equipment, net | $22,675 | $5,791 |
Depreciation, depletion and amortization expense for the year ended December 31, 2024, 2023 and 2022 was $1,363 million, $528
million and $512 million, respectively and is recognized within “Cost of goods sold” and “Selling, general and administrative
expenses” in the Consolidated Statements of Operations.
In fiscal 2024, due to restructuring, we recognized impairment charges of $23 million in the North America segment and $1 million in
the Europe, MEA and APAC segment, respectively. In fiscal 2023, due to restructuring, we recognized an impairment charge of $5
million in the Europe, MEA and APAC segment. In fiscal 2022, we recognized an impairment charge of $55 million in the Europe,
MEA and APAC segment prior to classifying the Russian disposal group as held for sale (refer to “Note 20. Disposal of Russian
Operations”) and an impairment charge of $14 million in the North America segment due to restructuring.
Non-cash additions to property, plant and equipment included within accounts payable were $384 million, $235 million and $187
million at December 31, 2024, 2023 and 2022, respectively.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
9. Goodwill
During the third quarter of 2024, following completion of the Combination, the Company changed its reportable segments as
described in “Note 3. Segment Information”. Concurrent with the change in reportable segments, the Company reassessed its reporting
units. The prior year amounts for goodwill by reportable segment have been recast by assigning reporting units to new reportable
segments based on location of reporting units. The Company concluded the change in reportable segments was not a triggering event
for goodwill impairment.
The changes in the carrying amount of goodwill for the years ended December 31, 2024 and December 31, 2023 are as follows:
| North America | Europe, MEA and APAC | LATAM | Total | ||||
| Balance as of December 31, 2022 | $248 | $2,335 | $139 | $2,722 | |||
| Acquisitions | — | 20 | (24) | (4) | |||
| Translation adjustment | 16 | 89 | 19 | 124 | |||
| Balance as of December 31, 2023 | 264 | 2,444 | 134 | 2,842 | |||
| Acquisitions | 3,882 | 94 | 206 | 4,182 | |||
| Translation adjustment | (23) | (141) | (38) | (202) | |||
| Balance as of December 31, 2024 | $4,123 | $2,397 | $302 | $6,822 |
Further information on acquisitions is included in “Note 2. Acquisitions”.
During the fourth quarter of fiscal 2024, the Company performed a qualitative impairment test and determined it was more likely than
not that the fair value of all reporting units was greater than their carrying amount. Accordingly, the Company concluded that a
quantitative impairment test was not necessary, and that goodwill was not impaired.
In connection with the Company’s annual goodwill impairment testing performed during fiscal 2023, the Company elected to bypass
the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test. The Company concluded
goodwill was not impaired in fiscal 2023.
In 2022, management reassessed the expected future business performance in Peru as a result of the continued difficult economic
conditions and projected cash flows that were lower than expected, giving rise to an impairment charge of $12 million in the LATAM
segment.
Accumulated goodwill impairment losses at December 31, 2024 amount to $242 million comprising $198 million in Europe, MEA
and APAC and $44 million in LATAM. At December 31, 2023, the accumulated goodwill impairment losses were $264 million
comprising $209 million in Europe MEA and APAC and $55 million in LATAM. Movements in the period relate to foreign currency
translation adjustments.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
10. Other Intangible Assets
The gross carrying amount and accumulated amortization relating to intangible assets, excluding goodwill, are as follows and reflect
the removal of fully amortized intangible assets in the period fully amortized.
| December 31, | |||||||
| 2024 | 2023 | ||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||
| Customer relationships | $839 | $(292) | $397 | $(261) | |||
| Trade names and trademarks | 252 | (37) | 30 | (25) | |||
| Developed technology | 170 | (7) | — | — | |||
| Software assets | 424 | (235) | 293 | (216) | |||
| Land use rights | 3 | — | — | — | |||
| Total | $1,688 | $(571) | $720 | $(502) |
Intangible asset amortization expense was $101 million, $52 million and $52 million during the years ended December 31, 2024, 2023
and 2022, respectively.
Estimated other intangible asset amortization expense for the succeeding five years is as follows:
| Year ending December 31, 2025 | $138 |
| Year ending December 31, 2026 | 131 |
| Year ending December 31, 2027 | 120 |
| Year ending December 31, 2028 | 109 |
| Year ending December 31, 2029 | 96 |
11. Interest
The components of interest expense, net is as follows:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Interest expense | $(525) | $(170) | $(148) | ||
| Interest income | 127 | 31 | 9 | ||
| Interest expense, net | $(398) | $(139) | $(139) |
Total cash paid for interest, net of interest received was $396 million, $146 million and $129 million for the year ended December 31,
2024, 2023 and 2022, respectively. Of this, capitalized interest paid was $22 million, $10 million and $3 million for the year ended
December 31, 2024, 2023, 2022, respectively.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
12. Leases
We lease various real estate, including certain operating facilities, warehouses, office space and land. We also lease material handling
equipment, vehicles and certain other equipment.
Components of Lease Costs
The following table presents certain information related to the lease costs for finance and operating leases:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Operating lease costs | $(264) | $(118) | $(107) | ||
| Variable and short-term lease costs | (123) | (47) | (40) | ||
| Finance lease cost: | |||||
| Amortization of lease assets | (26) | (3) | (3) | ||
| Interest on lease liabilities | (14) | (1) | (1) | ||
| Lease cost | $(427) | $(169) | $(151) |
Supplemental Consolidated Balance Sheets Information Related to Leases
| Balance Sheet Location | December 31, | ||||
| 2024 | 2023 | ||||
| Operating leases: | |||||
| Operating lease right-of-use assets | Other non-current assets | $986 | $374 | ||
| Current operating lease liabilities | Other current liabilities | $309 | $113 | ||
| Non-current operating lease liabilities | Other non-current liabilities | 710 | 269 | ||
| Total operating lease liabilities | $1,019 | $382 | |||
| Finance leases: | |||||
| Property, plant and equipment | Property, plant and equipment, net | $419 | $32 | ||
| Accumulated amortization | (36) | (6) | |||
| Property, plant and equipment, net | $383 | $26 | |||
| Current finance lease liabilities | Current portion of debt | $33 | $3 | ||
| Non-current finance lease liabilities | Non-current debt due after one year | 506 | 26 | ||
| Total finance lease liabilities | $539 | $29 | |||
Operating lease right-of-use assets and lease liabilities increased by $660 million and $665 million, respectively, as a result of leased
assets acquired and liabilities assumed from the Combination. Similarly, finance lease right-of-use assets and lease liabilities have
increased by $391 million and $514 million, respectively. The measurement period adjustments included in the lease right-of-use
assets and liabilities since the preliminary allocation are immaterial.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
12. Leases - continued
| Lease Term and Discount Rate | December 31, | ||
| 2024 | 2023 | ||
| Weighted average remaining lease term: | |||
| Operating leases | 5.1 years | 7.5 years | |
| Finance leases | 13.1 years | 12.7 years | |
| Weighted average discount rate: | |||
| Operating leases | 4.9% | 3.6% | |
| Finance leases | 5.8% | 3.6% |
Supplemental Cash Flow Information Related to Leases
The following table presents supplemental cash flow information related to leases:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||
| Operating cash flows related to operating leases | $265 | $118 | $107 | ||
| Operating cash flows related to finance leases | 14 | 1 | 1 | ||
| Financing cash flows related to finance leases | 22 | 3 | 3 | ||
| Leased assets obtained in exchange for lease liabilities: | |||||
| Operating leases | $213 | $133 | $111 | ||
| Finance leases | $7 | $— | $— |
Maturity of Lease Liabilities
The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating
lease liabilities and finance lease liabilities recorded on the Consolidated Balance Sheets at December 31, 2024:
| Operating Leases | Finance Leases | Total | |||
| Year ending December 31, 2025 | $353 | $49 | $402 | ||
| Year ending December 31, 2026 | 271 | 49 | 320 | ||
| Year ending December 31, 2027 | 197 | 127 | 324 | ||
| Year ending December 31, 2028 | 121 | 40 | 161 | ||
| Year ending December 31, 2029 | 75 | 37 | 112 | ||
| Thereafter | 138 | 500 | 638 | ||
| Total lease payments | $1,155 | $802 | $1,957 | ||
| Less: Interest | (136) | (263) | (399) | ||
| Present value of future lease payments | $1,019 | $539 | $1,558 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
13. Fair Value Measurement
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 and other receivables, certain
other current assets, trade and other payables, certain other current liabilities, short-term debt and non-current debt, all of whose
carrying values approximates fair value (with the exception of debt with fixed interest rates). Fair value disclosures are classified
based on the fair value hierarchy. See “Note 1. Description of Business and Summary of Significant Accounting Policies,” for
information about the Company's fair value hierarchy.
The carrying values, net of deferred debt issuance costs, and estimated fair values of debt with fixed interest rates (classified as Level
2 in the fair value hierarchy) were as follows:
| 2024 | 2023 | ||||||
| Book Value | Fair Value | Book Value | Fair Value | ||||
| Debt with fixed interest rates | $11,370 | $11,289 | $3,615 | $3,379 |
The fair value of the Company's debt with fixed interest rates is based on quoted market prices. With the exception of financial
instruments included in the table above, the carrying amounts of all other debt instruments approximate their fair values. The variable
nature and repricing dates of the receivables securitization facilities and the revolving credit facility result in carrying values
approximating their fair values. Both the revolving credit facility and the receivables securitization facilities are classified as Level 2
in the fair value hierarchy.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The Company measures and records certain assets and liabilities, including derivative instruments 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:
| Level 1 | Level 2 | ||||||
| December 31, | December 31, | ||||||
| 2024 | 2023 | 2024 | 2023 | ||||
| Assets | |||||||
| Other Investments: | |||||||
| Listed | $2 | $2 | $— | $— | |||
| Unlisted | — | — | 10 | 9 | |||
| Derivatives in cash flow hedging relationships | — | — | 3 | 5 | |||
| Derivatives not designated as hedging instruments | — | — | 11 | 14 | |||
| Assets measured at fair value | $2 | $2 | $24 | $28 | |||
| Liabilities | |||||||
| Derivatives in cash flow hedging relationships | $— | $— | $1 | $8 | |||
| Derivatives not designated as hedging instruments | — | — | 13 | 12 | |||
| Liabilities measured at fair value | $— | $— | $14 | $20 |
There were no assets or liabilities, which are measured at fair value on a recurring basis, classified as Level 3 in the fair value
hierarchy for the periods presented.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
13. Fair Value Measurement - continued
Following the Combination, we have financial instruments recognized at fair value including supplemental retirement savings plans
(“Supplemental Plans”) that are nonqualified deferred compensation plans where participants’ accounts are credited with investment
gains and losses in accordance with their investment election or elections. The investment alternatives under the Supplemental Plans
are generally similar to investment alternatives available under 401(k) plans. Assets and liabilities held in respect of these
Supplemental Plans were carried at $185 million and $168 million, respectively, as of December 31, 2024. The amount of expense we
recorded for the current fiscal year was not significant.
The fair value of listed financial assets is determined by reference to their bid price at the reporting date. Unlisted financial assets are
valued using recognized valuation techniques for the underlying security including discounted cash flows and similar unlisted equity
valuation models.
The fair value of foreign currency forwards, cross currency swaps and energy hedging contracts is based on their listed market price, if
available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual
forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on
government bonds).
The fair value of natural gas commodity derivatives is estimated based on observable inputs such as commodity future prices.
For derivative financial instruments that are not designated as accounting hedges, the entire change in fair value of the financial
instrument is reported immediately in current period earnings.
Assets and Liabilities Measured and Recorded a****t Fair Value on a Non-recurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities
at fair value on a non-recurring basis. This includes assets acquired and liabilities assumed as a result of business combinations or non-
monetary exchanges, situations where events or changes in circumstances indicate the carrying value may not be recoverable, or when
they are deemed to be other than temporarily impaired. These assets include property, plant, and equipment, goodwill and other
intangible assets, assets and disposal groups held for sale and other non-current assets. The fair values of these assets are determined,
when applicable, based on valuation techniques using the best information available, and may include quoted market prices,
observable price for similar assets, market comparables, and discounted cash flow projections. These non-recurring fair value
measurements are considered to be Level 3 in the fair value hierarchy.
As further detailed in “Note 9. Goodwill”, in 2022, impairment charges were recorded for our Peru business, leading to the write-
down of goodwill to fair value. There was no goodwill related to this business recognized in the years ended December 31, 2023 or
December 31, 2024.
In addition, impairment losses on non-current assets were recorded in 2022 in respect of the Russian operations, resulting in a write-
down to fair value less costs to sell. In March 2023, we successfully concluded the sale of our Russian business, leading to the
derecognition of the assets and liabilities classified as held for sale as of December 31, 2022. The classification of the business as held
for sale met the required criteria as of December 31, 2022, which resulted in the remeasurement of the disposal group at its fair value
less costs to sell as of that date.
Refer to “Note 20. Disposal of Russian Operations” for more detailed information regarding the disposal of the Russian business and
the derecognition of assets and liabilities.
For more details on the measurement of assets acquired and liabilities assumed as part of business combinations during the year ended
December 31, 2024, refer to “Note 2. Acquisitions”. The fair values of assets and liabilities assumed as a result of business
combinations completed during the year ended December 31, 2023, have been evaluated and determined to be immaterial for separate
disclosure purposes.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
13. Fair Value Measurement - continued
Accounts Receivable Monetization Agreements
Available to the Company is a $700 million accounts receivable monetization facility to sell to a third-party financial institution all of
the short-term trade receivables generated from certain customer trade accounts. On September 13, 2024, we amended this agreement
to extend the maturity date by one year to September 15, 2025. This facility (the “Monetization Agreement”) has Coöperatieve
Rabobank U.A., New York Branch, as purchaser, (“Rabobank”). The terms of the Monetization Agreement limit the balance of
receivables sold to the amount available to fund such receivables sold, thereby eliminating the receivable for proceeds from the
financial institution at any transfer date. Transfers under the Monetization Agreement meet the requirements to be accounted for as
sales in accordance with guidance in ASC 860, “Transfers and Servicing”. We pay a monthly yield on investment to Rabobank at a
rate equal to adjusted Term SOFR plus a margin on the outstanding amount of Rabobank’s investment. The Company has a similar
$110 million bilateral facility with Sumitomo Mitsui Banking Corporation, New York Branch as purchaser, with a maturity of
December 4, 2025.
The customers from these facilities are not included in the receivables securitization facilities, as discussed in more detail in “Note 14.
Debt” and “Note 22. Variable Interest Entities”.
The following table presents a summary of these accounts receivable monetization agreements for the year ended December 31, 2024:
| Receivable from financial institutions recognized as part of Combination | $— |
| Receivables sold to the financial institutions and derecognized | (1,381) |
| Receivables collected by financial institutions | 1,319 |
| Cash proceeds from financial institutions | 62 |
| Receivable from financial institutions at December 31, 2024 | $— |
Receivables sold under these accounts receivable monetization agreements as of the balance sheet date were approximately $725
million.
Cash proceeds or payments related to the receivables sold are included in “Net cash provided by operating activities” in the
Consolidated Statements of Cash Flows in the “Accounts receivable” line item. The expense related to the sale of receivables was $23
million for the post-Combination period. The expense recorded may vary depending on current rates and levels of receivables sold and
is recorded in “Other (expense) income, net” in the Consolidated Statements of Operations. Although the sales are made without
recourse, we maintain continuing involvement with the receivables sold as we provide collections services related to the transferred
assets. The associated servicing liability is not material given the high credit quality of the customers underlying the receivables and
the anticipated short collection period.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
14. Debt
The following were individual components of debt:
| December 31, | |||||||
| 2024 | 2023 | ||||||
| Carrying value | Weighted average interest rate | Carrying value | Weighted average interest rate | ||||
| €250 million senior notes due 2025 | $— | —% | $279 | 2.8% | |||
| $292 million senior debentures due 2025 | 292 | 7.5% | 294 | 7.5% | |||
| €1,000 million senior notes due 2026 | — | —% | 1,121 | 2.9% | |||
| $500 million senior notes due 2027 | 479 | 3.4% | — | —% | |||
| $700 million receivables securitization due 2027 | 435 | 5.7% | — | —% | |||
| €750 million senior notes due 2027 | 781 | 1.5% | 832 | 1.5% | |||
| $500 million senior notes due 2028 | 481 | 3.9% | — | —% | |||
| $600 million senior notes due 2028 | 580 | 4.0% | — | —% | |||
| Revolving credit facility due 2029 | — | —% | 4 | 4.6% | |||
| €100 million receivables securitization variable funding notes due 2029 | — | —% | 6 | 4.9% | |||
| €230 million receivables securitization variable funding notes due 2029 | 5 | 4.3% | 14 | 5.0% | |||
| €500 million senior green notes due 2029 | 520 | 0.5% | 553 | 0.5% | |||
| $750 million senior notes due 2029 | 749 | 4.9% | — | —% | |||
| $400 million senior notes due 2030 | 454 | 8.2% | — | —% | |||
| $750 million senior green notes due 2030 | 749 | 5.2% | — | —% | |||
| $300 million senior notes due 2031 | 339 | 8.0% | — | —% | |||
| $76 million senior notes due 2032 | 82 | 6.8% | — | —% | |||
| $500 million senior notes due 2032 | 473 | 4.2% | — | —% | |||
| €600 million senior green notes due 2032 | 624 | 3.5% | — | —% | |||
| €500 million senior green notes due 2033 | 519 | 1.0% | 553 | 1.0% | |||
| $600 million senior notes due 2033 | 514 | 3.0% | — | —% | |||
| $1,000 million senior green notes due 2034 | 1,000 | 5.4% | — | —% | |||
| $850 million senior green notes due 2035 | 850 | 5.4% | — | —% | |||
| €600 million senior green notes due 2036 | 624 | 3.8% | — | —% | |||
| $3 million senior notes due 2037 | 3 | 6.8% | — | —% | |||
| $150 million senior notes due 2047 | 175 | 7.6% | — | —% | |||
| $1,000 million senior green notes due 2054 | 1,000 | 5.8% | — | —% | |||
| Commercial paper | 546 | 4.8% | — | —% | |||
| Vendor financing and commercial card programs | 116 | —% | — | —% | |||
| Term loan facilities | 600 | 6.1% | — | —% | |||
| Bank loans | 120 | 7.6% | 68 | 10.2% | |||
| Finance lease obligations | 539 | 5.8% | 29 | 3.6% | |||
| Bank overdrafts | 9 | 2.1% | 16 | 1.5% | |||
| Total debt, excluding debt issuance costs | 13,658 | 3,769 | |||||
| Debt issuance costs | (63) | (22) | |||||
| Total debt | 13,595 | 3,747 | |||||
| Less: Current portion of debt | (1,053) | (78) | |||||
| Non-current debt due after one year | $12,542 | $3,669 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
14. Debt - continued
The weighted average interest rate for short term debt was 5.1% and 7.2% as of December 31, 2024, and 2023, respectively.
As of December 31, 2024, the aggregate maturities of debt, excluding finance lease obligations, for the succeeding five years and
thereafter are as follows:
| Year ended December 31, 2025 | $1,030 |
| Year ended December 31, 2026 | 30 |
| Year ended December 31, 2027 | 1,731 |
| Year ended December 31, 2028 | 1,105 |
| Year ended December 31, 2029 | 1,877 |
| Year ended December 31, 2030 and thereafter | 7,399 |
| Unamortized fair value adjustments, bond discounts and debt issuance costs | (116) |
| Total | $13,056 |
See “Note 12. Leases” of the Notes to Consolidated Financial Statements for the aggregate maturities of finance lease obligations for
the succeeding five fiscal years and thereafter.
The maturity profile of undrawn committed facilities are as follows:
| 2024 | 2023 | ||
| Within one year | $— | $— | |
| Between one and two years | — | — | |
| More than two years | 5,079 | 1,832 |
The undrawn commitments above pertain to the revolving credit facility and the receivables securitization facilities, which are further
explained below.
The commitment fees on the revolving credit facility and receivables securitization facilities were immaterial for the years ended
December 31, 2024, and 2023.
During the years ended December 31, 2024, 2023 and 2022, amortization of debt issuance costs charged to interest expense were $10
million, $7 million and $7 million, respectively.
The carrying amount of borrowings which are designated as net investment hedges at the year-end amounted to $49 million as of
December 31, 2024, and 2023. There has been no ineffectiveness recognized in relation to these hedges in the current or prior financial
years.
The carrying amount of our debt includes a fair value adjustment related to debt assumed through mergers and acquisitions. The value
of the debt assumed upon the Combination (inclusive of the adjustment) was $8,725 million. At December 31, 2024, the unamortized
fair value adjustment was $48 million, which will be amortized over a weighted average remaining life of 7.4 years.
At December 31, 2024, all of our debt was unsecured with the exception of our receivables securitization facilities and finance lease
obligations.
The Senior Notes are unsecured, unsubordinated obligations that rank equally in right of payment with all of our existing and future
unsecured, unsubordinated obligations. The Senior Notes are effectively subordinated to any of our existing and future secured debt to
the extent of the value of the assets securing such debt and to the obligations of our non-debtor/guarantor subsidiaries.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
14. Debt - continued
Senior Notes Issued and Redeemed
On April 3, 2024, Smurfit Kappa Treasury completed the April Notes Offering which is described in further detail in “Note 2.
Acquisitions”. This issuance automatically cancelled the commitments under a bridge facility agreement in the amount of $1,500
million which had been previously entered into to finance (directly or indirectly) the cash consideration of the Combination and/or
fees, commissions, costs and expenses payable in relation to the Combination. The bridge facility agreement was due to mature in
December 2024.
We (a) used a portion of the proceeds from the April Notes Offering (i) to finance the payment of the Cash Consideration of the
Combination; (ii) to finance the payment of fees, commissions, costs and expenses in relation to the Combination and the April Notes
Offering; and (iii) for general corporate purposes, including the repayment of indebtedness, and (b) intend to use an amount equivalent
to the proceeds from the April Notes Offering to finance or refinance a portfolio of eligible green projects in accordance with Smurfit
Kappa’s Green Finance Framework, which we may, in the future, update in line with developments in the market.
On August 12, 2024, we redeemed €250 million aggregate principal amount of our 2.750% senior notes due February 2025. We
funded this redemption by drawing on our receivables securitization facilities. No gain/loss on extinguishment of debt has been
recorded.
On September 17, 2024, we discharged $600 million aggregate principal amount of our 3.750% senior notes due March 2025. We
funded this discharge using a portion of the proceeds from our April Notes Offering. We recorded a $4 million loss on extinguishment
of debt.
On November 26, 2024, we issued $850 million aggregate principal amount of 5.418% senior notes due 2035, with interest payable
semi-annually in arrears, beginning on July 15, 2025. On November 27, 2024, we also issued €600 million aggregate principal
amount of 3.454% senior notes due 2032 and €600 million aggregate principal amount of 3.807% senior notes due 2036, both with
interest payable annually in arrears. These senior notes (the “November Notes”) can be redeemed, at par in whole or in part, within
three months to their maturity, in accordance with the respective indentures.
We used the net proceeds of the above November Notes (i) to redeem, on December 2, 2024, the outstanding €1,000 million in
aggregate principal amount of 2.875% senior notes due 2026, in full at the applicable redemption price set forth in the applicable
indenture, (ii) to redeem, on December 6, 2024, the outstanding $750 million in aggregate principal amount of 4.650% senior notes
due 2026, in full at the applicable redemption price set forth in the applicable indenture, and we intend to use the remaining funds for
general corporate purposes, including the repayment of indebtedness. We also intend to use an amount equivalent to the proceeds of
these November Notes to finance or refinance a portfolio of eligible green projects in accordance with our Green Finance Framework,
which we may, in the future, update in line with developments in the market.
We recorded a $7 million and $2 million loss on extinguishment at repayment of the $750 million 4.650% senior notes due 2026 and
the €1,000 million 2.875% senior notes due 2026, respectively.
Revolving Credit Facility
On June 28, 2024, conditional upon the closing of the Combination, the Company entered into a Multicurrency Term and Revolving
Facilities Agreement (the “New Credit Agreement”) with certain lenders and Wells Fargo Bank, National Association, as agent,
providing for (i) a U.S. dollar term loan facility in an aggregate principal amount of $600 million (the “Term Loan Facility”), (ii) a
multicurrency revolving loan facility in an aggregate principal amount of $4,500 million including a swingline sub-facility in an
aggregate principal amount of $500 million (together, the “New RCF”).
On July 2, 2024, the Term Loan Facility of $600 million under the New Credit Agreement was cancelled prior to any drawdown and
no early termination penalties were incurred as a result of the cancellation.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
14. Debt - continued
Revolving Credit Facility - continued
We cancelled the €1,350 million Revolving Credit Facility, that was due to mature in January 2026 (the “Existing RCF”) as part of the
conditions of the New Credit Agreement upon the closing of the Combination on the Closing Date. There were no early termination
penalties incurred as a result of the termination of the Existing RCF. The conditions attaching to the New Credit Agreement became
effective on the Closing Date.
Loans under the New RCF may be drawn in U.S. dollars, euro, pounds sterling, Swiss francs, Japanese yen, Swedish kronor and
Canadian dollars, with a borrower (or the obligors’ agent on behalf of a borrower) selecting the currency of a loan under the New
RCF. Borrowings under the New RCF bear interest at rates based upon an underlying reference rate, plus a margin determined in
accordance with a ratings-based pricing grid. Reference rates include SOFR for U.S. dollars, EURIBOR for euro, SONIA for pounds
sterling, STIBOR for Swedish kronor and SARON for Swiss francs. Unused revolving commitments under the New RCF will accrue a
commitment fee equal to a percentage of the applicable interest rate margin. The New RCF also requires the payment of a utilization
fee calculated on outstanding revolving loans, based on the utilization rate of the New RCF. The New RCF has an initial term of five
years from the date of the New Credit Agreement, which may be extended on two occasions by up to an aggregate of two years. The
New RCF is unsecured. The New RCF includes customary terms and conditions for investment grade borrowers. There are no
financial covenants. As of December 31, 2024, there were no amounts outstanding under the facility.
Term Loan Facilities
Farm Credit Facility
A credit agreement (the “Farm Credit Facility Agreement”) is in place with CoBank, ACB, as administrative agent. The Farm Credit
Facility Agreement provides for a senior unsecured term loan facility in an aggregate principal amount of $600 million (the “Farm
Credit Facility”) with a maturity date of July 9, 2029. The carrying value of this facility at December 31, 2024, was $600 million.
At our option, loans issued under the Farm Credit Facility Agreement will bear interest at either Term SOFR or an alternate base rate,
in each case plus an applicable interest rate margin that will fluctuate between 1.650% per annum and 2.275% per annum (for Term
SOFR loans) or between 0.650% per annum and 1.275% per annum (for alternate base rate loans), based upon the Company’s
corporate credit ratings (as defined in the Farm Credit Facility Agreement). In addition, Term SOFR loans will be subject to a credit
spread adjustment equal to 0.1% per annum.
Delayed Draw Term Facility
A credit agreement with an outstanding amount of $750 million (the “Delayed Draw Term Facility”) was in place at the Combination
date. This amount (plus accrued interest) was repaid and the facility cancelled on July 5, 2024.
Receivables Securitization Facilities
We have three trade receivables securitization programs. The first program has a facility size of €100 million, a margin of 1.1%, and
was scheduled to mature in January 2026. During December 2024 the facility was amended to extend the maturity date to December
- This program is supported by receivables generated by our operating companies in Austria, Belgium, Italy, and the Netherlands,
which are sold to a special purpose Group subsidiary. The funding for this program is provided by a conduit of Coöperatieve
Rabobank U.A. (trading as Rabobank).
The second program has a facility size of €230 million, a margin of 1.1%, and was scheduled to mature in November 2026. During
December 2024 the facility was amended to extend the maturity date to December 2029. This program is supported by receivables
generated by our operating companies in the UK, Germany, and France, which are sold to a special purpose entity. The funding for
this program is provided by Lloyds Banking Group.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
14. Debt - continued
Receivables Securitization Facilities - continued
As of December 31, 2024, the gross amount of receivables collateralizing the €100 million 2029 trade receivables securitization
program was €318 million (December 31, 2023: €327 million). At December 31, 2024, maximum available borrowings, excluding
amounts outstanding under this facility, were $104 million (December 31, 2023: $105 million). The gross amount of receivables
collateralizing the €230 million 2029 trade receivables securitization program at December 31, 2024 was €421 million (December 31,
2023: €415 million). At December 31, 2024 maximum available borrowings, excluding amounts outstanding under this facility, were
$234 million (December 31, 2023: $240 million). In accordance with the contractual terms, the counterparties have recourse to the
securitized debtors only. Given the short-term nature of the securitized receivables and the variable floating rates, the carrying amount
of the securitized receivables and the associated liabilities reported on the Consolidated Balance Sheets is estimated to approximate
fair value.
Following the Combination, the Company also has a third receivables securitization program provided by Coöperatieve Rabobank
U.A., New York Branch, in its capacity as administrative agent and certain other lenders. It has a facility size of $700 million, a
margin of 0.9% plus 0.1% credit spread adjustment and matures in June 2027. At December 31, 2024, maximum available borrowings
under this program were $676 million. At December 31, 2024, amounts available for borrowing under this facility (excluding amounts
utilized), were $241 million. The gross carrying amount of receivables collateralizing the maximum available borrowings at
December 31, 2024, was approximately $1,077 million. We have continuing involvement with the underlying receivables as we
provide credit and collection services pursuant to the underlying agreement.
Borrowing availability under this facility is based on the eligible underlying accounts receivable and compliance with certain
covenants. The agreement governing the receivables securitization facility contains restrictions, including, among others, on the
creation of certain liens on the underlying collateral.
The sale of the securitized receivables under our securitization programs does not meet the requirements for derecognition under ASC
860 “Transfers and Servicing”. As a result, the securitized receivables continue to be shown on the face of the Consolidated Balance
Sheets, and the notes issued to fund the purchase of these receivables are shown as secured borrowings with attributable interest
expense recognized over the life of the related transactions.
Commercial Paper
The Company, through its wholly owned subsidiary WRKCo Inc. as the issuer, maintains an unsecured commercial paper program.
Under the program, we may issue senior short-term unsecured commercial paper notes in an aggregate principal amount at any time
not to exceed $1,000 million with up to 397-day maturities. The program has no expiration date and can be terminated by either the
agent or us with not less than 30 days’ notice. The $1,000 million commercial paper program is supported by the $4,500 million New
RCF with a separate $500 million swingline sublimit which allows for same-day drawing in U.S. dollar. The amount of commercial
paper outstanding does not reduce available capacity under the New RCF. Commercial paper borrowings may vary during the period,
largely as a result of fluctuations in funding requirements.
Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. At December 31, 2024,
$546 million was issued. The weighted average interest rate pertaining to this facility was 4.8% as of that date.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
15. Shareholders’ Equity
Common Stock
Subject to the articles of association of the Company, the holders of ordinary shares are entitled to share in any dividends in proportion
to the number of shares held by them and are entitled to one vote for every share held by them.
Preferred Stock
The holders of the Series A Preferred Stock are entitled in priority to any payments of dividends on any other class of shares in the
Company to be paid annually on a fixed non-cumulative preferential dividend rate of 8% per annum. On a return of assets, whether on
liquidation or otherwise, the Series A Preferred Stock entitle the holder to repayment of the capital paid up on those shares (including
any share premium) in priority to any repayment of capital to the holders of any other shares. The holder of the Series A Preferred
Stock is not entitled to any further participation in the assets or profits of the Company and is not entitled to receive notice of, attend,
speak or vote at any general meeting of the Company.
Deferred Shares
Holders of deferred shares have no right to receive notice of, attend, speak, or vote at any general meetings of the Company. Deferred
shares do not carry the right to receive dividends. Any deferred shares that are issued will rank in priority below the ordinary shares
with respect to liquidation rights and such entitlement will be limited to the repayment of the amount paid up or credited as paid up on
the deferred shares.
Treasury Stock
This represents common stock assumed by the Smurfit Kappa Employee Trust under the terms of the Deferred Bonus Plan. For the
avoidance of doubt, ‘treasury stock’ shall not be construed to have the same meaning as treasury shares under section 109 of the Irish
Companies Act.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
16. Share-based Compensation
Share-based compensation expense relates primarily to awards granted under the Deferred Bonus Plan (“DBP”), the Performance
Share Plan (“PSP”), Performance Share Units (“PSUs”), Restricted Stock Units (“RSUs”), and Stock Options (“Options”). Share-
based compensation expense recognized in the Consolidated Statements of Operations is as follows:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Deferred Bonus Plan | $24 | $29 | $24 | ||
| Performance Share Plan | 65 | 35 | 42 | ||
| Performance Share Units | 2 | — | — | ||
| Restricted Stock Units | 109 | — | — | ||
| Total share-based compensation expense | $200 | $64 | $66 | ||
| Income tax benefit related to share-based compensation expense | $15 | $— | $3 |
Social charges relating to equity settled share-based payments for the years ended December 31, 2024, 2023 and 2022, were
$6 million, $2 million and $2 million, respectively.
The following note disclosure details the legacy Smurfit Kappa Group plans (the Deferred Bonus Plan and the Performance Share
Plan), the conversion of the legacy Westrock RSU and PSU awards due to the Combination and also the Smurfit Westrock 2024 Long
Term Incentive Plan (“LTIP”).
Deferred Bonus Plan
The DBP is a legacy Smurfit Kappa Group plc plan. The DBP authorized the granting of conditional awards. The number of shares
awarded under the DBP during the years ended December 31, 2024, 2023 and 2022, were 651,648, 764,182 and 571,693, respectively.
No new awards will be issued under the DBP from 2025 onwards.
Under the DBP, participants could be granted an award of up to 150% of salary (other than a recruitment award). The actual bonus
earned in any financial year was based on the achievement of clearly defined stretching annual financial targets for some of Smurfit
Kappa’s Key Performance Indicators. For 2024, these were Earnings before Interest and Tax, Free Cash Flow, together with targets
for Health and Safety, People and ESG and personal/strategic targets for the executive Directors.
The structure of the plan was that 50% of any annual bonus earned for a financial year was deferred into Smurfit Kappa plc shares
(“Deferred Shares”) to be granted in the form of a Deferred Share Award. In connection with the Combination, the Smurfit Kappa plc
shares were converted into Smurfit Westrock plc shares on a one-to-one basis.
The Deferred Shares will vest (i.e. become unconditional) after a three-year holding period based on a service condition of continuity
of employment, or in certain circumstances, based on normal good leaver provisions.
Deferred Share Awards were granted in 2024 to eligible employees in respect of the financial year ended December 31, 2023. The
total DBP expense for the year comprises an expense pertaining to the Deferred Share Awards granted in respect of 2021, 2022 and
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
16. Share-based Compensation - continued
The table below summarizes the changes in the DBP during the year ended December 31, 2024:
| Number of shares | Weighted average grant date fair value | ||
| Outstanding at beginning of year | 1,862,573 | $46.00 | |
| Granted | 651,648 | 41.34 | |
| Forfeited | (13,366) | 42.88 | |
| Vested | (523,972) | 47.42 | |
| Outstanding at end of year | 1,976,883 | $43.42 |
The grant date fair value of the awards is equivalent to the closing price of the Company shares at the date the award was granted.
The weighted average grant date fair value for awards granted in the year ended December 31, 2023 and 2022 were $38.88 and
$53.09, respectively.
During the years ended December 31, 2024, 2023 and 2022, 523,972, 483,801, and 929,542 shares vested having a fair value of $21
million, $18 million, and $49 million, respectively. As of December 31, 2024, unrecognized compensation expense related to the
awards was $27 million, which will be recognized over the remaining weighted average vesting period of 1.6 years.
Performance Share Plan
The PSP is a legacy Smurfit Kappa Group plc plan. The PSP authorized the granting of conditional awards or nil-cost options (right to
acquire shares during an exercise period without cost to the participant). The number of shares awarded under the PSP during the years
ended December 31, 2024, 2023 and 2022 were 1,700,922, 2,003,416, and 1,554,551, respectively. No new awards will be issued
under the PSP from 2025 onwards.
Under the PSP, participants could be granted an award of up to 250% of salary (other than a recruitment award). Awards could vest
after a three-year performance period to the extent to which the performance conditions had been met. Awards were also subject to an
additional holding period following vesting (of up to two years). At the end of the relevant holding period, the PSP awards are
released (i.e. become unconditional) to the participant. The performance targets assigned to the PSP awards were set by the Smurfit
Kappa Group plc Remuneration Committee on the granting of awards at the start of each three-year cycle.
The actual number of shares that vested under the PSP was dependent on the performance conditions of the Company’s Earnings per
Share (“EPS”), Return on Capital Employed (“ROCE”), Total Shareholder Return (“TSR”) (relative to a peer group) and
Sustainability targets measured over a three-year performance period. PSP performance conditions were reviewed at the end of the
three-year performance period and the PSP shares awarded vested depending upon the extent to which these performance conditions
had been satisfied. In connection with the Combination, the performance goals applicable to the Smurfit Kappa awards outstanding
under the PSP at the time of the Combination were deemed achieved at 100%.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
16. Share-based Compensation - continued
The table below summarizes the changes in the PSP for the year ended December 31, 2024:
| Number of shares | Weighted average grant date fair value | ||
| Outstanding at beginning of year | 4,375,762 | $34.32 | |
| Granted | 1,700,922 | 43.29 | |
| Forfeited | (157,115) | 35.50 | |
| Vested | (742,163) | 38.35 | |
| Lapsed | (409,729) | 38.35 | |
| Outstanding at end of year | 4,767,677 | $36.51 |
The weighted average grant date fair value for the year ended December 31, 2024 incorporates the fair value of the TSR component of
the awards. The weighted average grant date fair values were $30.13 and $36.53 during the years ended December 31, 2023 and 2022,
respectively.
The fair values assigned to the EPS, ROCE and Sustainability components of the PSP are equivalent to the closing price of the
Company shares on the trading day prior to the grant date.
The fair value assigned to the portion of awards which are subject to TSR performance was calculated as of the grant date using the
Monte Carlo simulation model. The grant date fair values for the TSR portion of these awards were $16.96 and $18.54, for 2023 and
2022, respectively. The Monte Carlo simulation takes into account peer group TSR and volatilities together with the following
assumptions:
| 2024 | 2023 | 2022 | |||
| Risk-free interest rate (%) | —% | 3.2% | 0.7% | ||
| Expected volatility (%) | —% | 27.7% | 31.5% | ||
| Expected term (years) | 0 | 3.0 | 3.0 |
For the 2024 awards, a TSR valuation was not required as they were granted in contemplation of the Combination. For the 2023 and
2022 awards, the expected volatility rate applied was based upon Smurfit Kappa’s historical and implied share price volatility levels.
Historical volatility was calculated over a period equal to the expected term. The risk-free interest rate is based on the yield at the date
of grant of swap rate curves with a maturity period equal to the expected term.
During the years ended December 31, 2024, 2023 and 2022 742,163, 1,322,030 and 1,178,642 shares vested having a fair value of
$30 million, $50 million and $62 million, respectively.
As of December 31, 2024, unrecognized compensation expense related to the awards was $103 million, which will be recognized over
the remaining weighted average vesting period of 1.6 years.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
16. Share-based Compensation - continued
Modification of Performance Share Plan Awards due to Combination
In connection with the Combination, the performance goals applicable to the Smurfit Kappa awards outstanding under the PSP at the
time of the Combination were deemed achieved at 100% and these awards were converted on a one-to-one basis into Smurfit
Westrock awards as of the Combination date.
Modification accounting was required for the TSR portion of the 2023 and 2022 PSP awards as the fair value changed as a result of
the Combination. Modification accounting was also required for the non-TSR portion of the 2024, 2023 and 2022 PSP awards as the
vesting conditions changed as a result of the Combination. These modifications were accounted for as a Type 1 probable-to-probable
modification. Modification accounting was not required for the TSR portion of the 2024 PSP awards as the fair value, vesting
conditions and classification did not change as a result of the Combination.
The total incremental fair value associated with the modification of the 2024, 2023 and 2022 PSP was $27 million, $49 million and
$30 million respectively.
Long-Term Incentive Plan
On July 5, 2024, immediately prior to the Combination, the Board adopted the LTIP, pursuant to which Smurfit Westrock plc may
grant RSUs, PSUs, stock options, including incentive stock options, stock appreciation rights, share awards, which may be subject to
time-based or performance-based vesting conditions, and cash bonus incentives to eligible employees (including Named Executive
Officers), directors and consultants/independent contractors. The key purpose of the LTIP is to retain key executives and to align the
interests of our executives with the achievement of sustainable long-term growth and performance.
Performance Share Units granted under the LTIP
On August 2, 2024, the Company granted PSUs under the LTIP. The performance period for these awards begins on July 8, 2024, and
ends on December 31, 2026. The number of shares that will ultimately vest are based on a TSR condition, where a participant can earn
between 0% and 200% based on the TSR achieved relative to a peer group. The Smurfit Westrock plc 2024 LTIP authorizes granting
of 26 million shares to employees. As of December 31, 2024, there were 25,521,231 shares available to be granted under this plan
(including RSUs), assuming the PSUs previously granted vest at maximum.
The table below summarizes the changes in the PSUs for the year ended December 31, 2024:
| Number of shares | Weighted average grant date fair value | ||
| Outstanding at beginning of year | — | $— | |
| Granted | 232,422 | 50.07 | |
| Outstanding at end of year | 232,422 | $50.07 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
16. Share-based Compensation - continued
The fair value assigned to the awards, which are subject to TSR performance, was calculated as of the grant date using the Monte
Carlo simulation model. The grant date fair values for the TSR portion of these awards were $50.07 for 2024. The Monte Carlo
simulation takes into account peer group TSR and volatilities together with the following assumptions:
| Year ended December 31, | |
| 2024 | |
| Risk-free interest rate (%) | 3.7% |
| Expected volatility (%) | 33.7% |
| Expected term (years) | 2.4 |
For the awards granted on August 2, 2024, in order to account for the Combination, the expected volatility rate applied was based on a
blended volatility that used historical adjusted daily stock prices that were time weighted based on pre- and post-acquisition prices of
Smurfit Kappa, WestRock, and Smurfit Westrock. For a term of 0.08 years, historical volatility of Smurfit Westrock was used (which
was calculated as the time from the transaction date of July 5, 2024, to the grant date of August 2, 2024). For the remaining term of
2.33 years, a market capitalization weighted volatility was used for Smurfit Kappa and WestRock as of the transaction date. The risk-
free interest rate is based on the U.S. Treasury Rate Yield Curve, adjusted to approximate zero coupon yields using the “bootstrap”
technique, over a period equal to the expected term.
During the year ended December 31, 2024, no shares vested.
As of December 31, 2024, unrecognized compensation expense related to the awards was $9 million, which will be recognized over
the remaining weighted average vesting period of 2.0 years.
Restricted Stock U****nits
As part of the Combination described in “Note 2. Acquisitions”, the Company replaced outstanding Westrock RSU Awards (other
than director RSUs) for current employees and Westrock PSUs with Smurfit Westrock RSUs and a cash award equal to $5 per share.
See Smurfit Westrock RSUs acquired in connection with the Combination outlined below. See “Note 2. Acquisitions - Outstanding
WestRock Share-based Compensation Awards” for additional information relating to the acquired share-based compensation awards.
On August 2, 2024, the Company granted RSUs under the LTIP. The service period for these awards begins on July 8, 2024, and ends
on December 31, 2024. The RSU awards will vest, subject to the participants’ continued service through to the vesting date.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
16. Share-based Compensation - continued
The table below summarizes the changes in the RSUs granted under the LTIP and Westrock RSU awards converted to Smurfit
Westrock RSU awards during the year ended December 31, 2024:
| Number of shares | Weighted average grant date fair value | ||
| Outstanding at beginning of year | — | $— | |
| Acquired in connection with Combination | 5,393,653 | 46.85 | |
| Granted | 56,936 | 48.09 | |
| Forfeited | (43,432) | 46.86 | |
| Vested | (1,695,195) | 46.86 | |
| Outstanding at end of year | 3,711,962 | $46.87 |
During the year ended December 31, 2024, 1,695,195 shares vested having a fair value of $75 million. As of December 31, 2024,
unrecognized compensation expense related to the awards was $54 million, which will be recognized over the remaining weighted
average vesting period of 1.6 years.
Stock Options
On July 5, 2024, as part of the Combination with WestRock, the Company assumed 203,707 Stock Options. During the year ended
December 31, 2024, 61,581 options were exercised, 136 options expired, and 141,990 options remain outstanding. The aggregate
intrinsic value of options exercised was $1 million.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
17. Income Taxes
The components of income before income taxes are as follows:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Income before income taxes: | |||||
| Domestic (Ireland) | $197 | $173 | $235 | ||
| Foreign (U.S.) | (111) | (17) | (22) | ||
| Foreign (Other) | 474 | 982 | 1,213 | ||
| Total income before income taxes | $560 | $1,138 | $1,426 | ||
| Income tax expense consists of the following components: | |||||
| Current tax expense (net of investment tax credits of $8, $10 and $16) | |||||
| Domestic (Ireland) | $64 | $44 | $33 | ||
| Foreign (U.S., Federal & State) | 66 | 4 | 1 | ||
| Foreign (Other) | 248 | 292 | 316 | ||
| Total current tax expense | $378 | $340 | $350 | ||
| Deferred tax expense (benefit): | |||||
| Domestic (Ireland) | $19 | $2 | $— | ||
| Foreign (U.S., Federal & State) | (123) | 1 | 1 | ||
| Foreign (Other) | (33) | (31) | 40 | ||
| Total deferred tax (benefit) expense | (137) | (28) | 41 | ||
| Total income tax expense | $241 | $312 | $391 |
The differences between income tax expense and the amount computed by applying the Republic of Ireland statutory trading income
tax rate of 12.5% (the primary rate of our country of domicile) to income before income taxes are as follows:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Income before income taxes | $560 | $1,138 | $1,426 | ||
| Income before income taxes multiplied by the statutory income tax rate | 70 | 142 | 178 | ||
| Effects of: | |||||
| Income subject to different rates of tax | 104 | 171 | 197 | ||
| Change related to outside basis difference in foreign subsidiaries | 9 | 8 | 17 | ||
| Change in valuation allowance | 14 | (1) | 32 | ||
| Uncertain tax positions | 10 | 12 | 10 | ||
| U.S. state and local taxes | (10) | — | — | ||
| Ireland non-deductible interest | 12 | 11 | 4 | ||
| Non-deductible U.S. executive compensation | 12 | — | — | ||
| Non-deductible transaction costs | 21 | 11 | — | ||
| Other items | (1) | (42) | (47) | ||
| Income tax expense | $241 | $312 | $391 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
17. Income Taxes - continued
The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities consist of the following:
| December 31, | |||
| 2024 | 2023 | ||
| Deferred tax assets: | |||
| Pension liabilities and other postretirement benefits | $45 | $78 | |
| Carryforwards | 570 | 126 | |
| Lease liabilities | 196 | 50 | |
| Accrued expenses | 341 | 97 | |
| Stock-based compensation | 33 | 5 | |
| Other | 144 | 66 | |
| Total | $1,329 | $422 | |
| Deferred tax liabilities: | |||
| Property, plant and equipment | (3,338) | (313) | |
| Investments in subsidiaries | (179) | (126) | |
| Prepaid pension asset | (124) | — | |
| Intangibles | (183) | (5) | |
| Inventory reserves | (203) | — | |
| Other non-current assets | (91) | — | |
| Other | (114) | (51) | |
| Total | $(4,232) | $(495) | |
| Valuation allowances | (372) | (67) | |
| Net deferred tax liability | $(3,275) | $(140) |
At December 31, 2024, we had net operating loss carryforwards of approximately $2,214 million. Of these net operating losses,
$1,655 million expire between 2025 and 2044 and $559 million of losses carryforward indefinitely. At December 31, 2024, we also
had other carryforwards of $113 million of tax credit carryforwards, the majority of which expire within 5 to 10 years.
The following table represents a summary of the change in the valuation allowances against deferred tax assets for each year:
| 2024 | 2023 | 2022 | |||
| Balance at the beginning of the fiscal year | $67 | $68 | $60 | ||
| Increases through continuing operations | 21 | 9 | 38 | ||
| Reductions through continuing operations | (7) | (10) | (6) | ||
| Net change in the valuation allowance through continuing operations | 14 | (1) | 32 | ||
| Reclassifications related to the disposal of Russian operations | — | — | (24) | ||
| Valuation allowances assumed as part of the Combination | 291 | — | — | ||
| Net change in the valuation allowance | 305 | (1) | 8 | ||
| Balance at the end of the fiscal year | $372 | $67 | $68 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
17. Income Taxes - continued
We consider a portion of earnings from certain foreign subsidiaries as subject to repatriation and have recognized deferred taxes
accordingly. However, we consider that all other outside basis differences from all other foreign subsidiaries to be indefinitely
reinvested. Accordingly, we have not provided for any deferred taxes for amounts that would be due upon recovery of those
investments.
As of December 31, 2024, we estimate our unremitted earnings of foreign subsidiaries that are considered indefinitely reinvested to be
approximately $1,663 million. In the event of a distribution in the form of dividends or dispositions of the subsidiaries, we may be
subject to incremental foreign tax, subject to an adjustment for foreign tax credits, withholding taxes or income taxes payable to the
foreign jurisdictions. As of December 31, 2024, the determination of the amount of unrecognized deferred tax liability related to
investments in foreign subsidiaries that are indefinitely reinvested is not practicable.
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years presented is as follows:
| 2024 | 2023 | 2022 | |||
| Balance at the beginning of the fiscal year | $50 | $40 | $23 | ||
| Additions for tax positions taken in current year | 11 | 12 | 25 | ||
| Unrecognized tax benefits acquired as part of the Combination | 427 | — | — | ||
| Additions for tax positions taken in prior years | 1 | — | — | ||
| Reductions for tax positions taken in prior years | — | (1) | (2) | ||
| Reductions due to settlements | (8) | — | (1) | ||
| Currency translation adjustments | (6) | — | — | ||
| Reductions as a result of a lapse of the applicable statute of limitations | (3) | (1) | (5) | ||
| Balance at the end of the fiscal year | $472 | $50 | $40 |
As of December 31, 2024 and 2023, the total amount of unrecognized tax benefits was approximately $472 million and $50 million,
respectively, exclusive of interest and penalties. Of these balances, as of December 31, 2024 and 2023, if all unrecognized tax benefits
recorded were to prevail, approximately $429 million and $46 million, respectively, would benefit the effective tax rate.
We recognized interest accrued related to income taxes in income tax expense amounting to $8 million and $1 million in the years
ended December 31, 2024 and 2023, respectively; no penalties were recorded during the period. As of December 31, 2024, and 2023,
we have liabilities of $127 million and $2 million, respectively, related to estimated interest and penalties for income taxes.
As of December 31, 2024, $72 million of unrecognized tax benefits are expected to be resolved within the next 12 months.
See “Note 21. Commitments and Contingencies — Brazil Tax Liability” for additional information.
We file tax returns in Ireland and foreign jurisdictions. With limited exceptions, we are no longer subject to income tax examinations
by tax authorities for years prior to 2016.
During the years ended December 31, 2024, 2023 and 2022, cash paid for income taxes, net of refunds, was $383 million,
$439 million and $338 million, respectively.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans
We operate both defined benefit and defined contribution pension plans as well as other postretirement benefit plans throughout our operations in accordance with local conditions
and practice. The disclosures included below relate to all pension schemes and other postretirement benefits in the Company. The majority of plans are of the defined benefit type
and are funded by payments to separately administered funds.
In connection with the Combination, Smurfit Kappa acquired the existing employee benefit plans of WestRock. At the time of the acquisition, the projected benefit obligation in
respect of the acquired pension and postretirement benefits amounted to $4,930 million and plan assets of $5,164 million.
After the transaction, the Company reports more than 95% of its benefit obligations by order of size in the U.S., the UK, the Netherlands, Canada, Germany, and Ireland.
In the U.S., the largest plan is the qualified WestRock Company Consolidated Pension Plan which represents more than 50% of the Company’s benefit obligations. It consolidates
former WestRock plans that were frozen for salaried and non-union hourly employees at various times in the past, and nearly all remaining U.S. salaried and U.S. non-union hourly
employees accruing benefits ceased accruing benefits as of December 31, 2020. In addition, the Company sponsors several smaller qualified and non-qualified pension plans and
postretirement benefit plans. For the qualified plans the Company contributes the minimum required contribution in accordance with the provisions of the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations thereunder.
In the UK, the Company sponsors four pension funds of which the largest are the Smurfit Kappa UK Pension Fund which is closed to future accrual and the Field Group Pension
Plan which is closed for new hires. The Company operates a defined benefit pension fund in The Netherlands for Smurfit Kappa’s current, former, and retired employees and
beneficiaries.
Smurfit Westrock sponsors several defined benefit pension plans and postretirement benefit plans in Canada. The primary defined benefit pension funds are closed defined benefit
plans for WestRock’s salaried employees and for unionized employees at La Tuque and Pointe-aux-Trembles.
The Company has a few pension plans in place for its current and former employees in Germany. The major plan is a closed pension plan for the employees of Smurfit Kappa. The
plan is broadly unfunded with direct pension payments to retirees and beneficiaries by the Company.
In Ireland, the Company sponsors two frozen pension funds - the largest plan is the Smurfit Kappa Ireland Pension Fund for salaried employees.
The pension funds are governed by a board of trustees or similar institutes. The funding requirements are agreed between the Company, the trustees and the relevant regulators on
country or state level in the UK, the Netherlands, Canada, and Ireland.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
The following table shows the changes in benefit obligation, plan assets and funded status for the years ended December 31:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||
| Change in projected benefit obligation: | |||||||||||||||
| Benefit obligation at beginning of year | $42 | $43 | $2,406 | $2,193 | $— | $— | $10 | $10 | |||||||
| Service cost | 11 | — | 32 | 23 | — | — | 3 | 2 | |||||||
| Interest cost | 105 | 2 | 112 | 91 | 2 | — | 2 | — | |||||||
| Plan amendments | — | — | (10) | 5 | — | — | — | — | |||||||
| Actuarial (gain) loss | (81) | 1 | (50) | 106 | (2) | — | (4) | — | |||||||
| Benefits paid | (131) | (4) | (135) | (100) | (2) | — | (4) | (3) | |||||||
| Plan participant contributions | — | — | 6 | 6 | — | — | — | — | |||||||
| Curtailments | — | — | (1) | — | — | — | — | — | |||||||
| Settlements | — | — | (45) | (19) | — | — | — | — | |||||||
| Acquisitions | 3,851 | — | 969 | — | 61 | — | 49 | — | |||||||
| Other items | — | — | — | — | — | — | — | 1 | |||||||
| Foreign currency rate changes | — | — | (152) | 101 | — | — | (4) | — | |||||||
| Benefit obligation at end of year | $3,797 | $42 | $3,132 | $2,406 | $59 | $— | $52 | $10 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||
| Change in plan assets: | |||||||||||||||
| Fair value of plan assets at beginning of year | $31 | $31 | $1,886 | $1,683 | $— | $— | $2 | $2 | |||||||
| Actual gain on plan assets | 58 | 3 | 78 | 128 | — | — | — | — | |||||||
| Employer contributions | 6 | 1 | 113 | 109 | 2 | — | 4 | 3 | |||||||
| Plan participant contributions | — | — | 6 | 6 | — | — | — | — | |||||||
| Benefits paid | (131) | (4) | (135) | (100) | (2) | — | (4) | (3) | |||||||
| Settlements | — | — | (45) | (19) | — | — | — | — | |||||||
| Acquisitions | 4,215 | — | 949 | — | — | — | — | — | |||||||
| Foreign currency rate changes | — | — | (122) | 79 | — | — | — | — | |||||||
| Fair value of plan assets at end of year | $4,179 | $31 | $2,730 | $1,886 | $— | $— | $2 | $2 | |||||||
| Funded status at end of year | $382 | $(11) | $(402) | $(520) | $(59) | $— | $(50) | $(8) | |||||||
| Amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||
| Non-current assets | $508 | $2 | $127 | $27 | $— | $— | $— | $— | |||||||
| Current liabilities | (13) | (1) | (33) | (29) | (8) | — | (4) | (1) | |||||||
| Non-current liabilities | (113) | (12) | (496) | (518) | (51) | — | (46) | (7) | |||||||
| Funded status at end of year | $382 | $(11) | $(402) | (520) | $(59) | $— | $(50) | $(8) | |||||||
| Accumulated Benefit Obligation | $3,794 | $42 | $3,078 | $2,351 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
The net actuarial loss (gain) in benefit obligation for the U.S. Plans and Non-U.S. Plans is generally driven by a change in discount rates and to a lesser degree the rate of
compensation change in the Non-U.S. Plans.
Accumulated other comprehensive loss (income) at December 31 not yet recognized as components of net periodic benefit cost consist of:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||
| Net actuarial loss (gain) | $8 | $5 | $659 | $757 | $(2) | $— | $(2) | $— | |||||||
| Prior service credit | — | — | (16) | (6) | — | — | — | — | |||||||
| Total accumulated other comprehensive loss (income) | $8 | $5 | $643 | $751 | $(2) | $— | $(2) | $— |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
The following table sets forth the pension plans for which their accumulated benefit obligation (“ABO”) or projected benefit obligation (“PBO”) exceeds the fair value of their
respective plan assets on December 31:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||
| Plans with projected benefit obligations in excess of plan assets: | |||||||||||||||
| Projected benefit obligation | $125 | $13 | $1,308 | $1,417 | $— | $— | $— | $— | |||||||
| Accumulated benefit obligation | 125 | 13 | 1,266 | 1,374 | — | — | — | — | |||||||
| Fair value of plan assets | — | — | 779 | 870 | — | — | — | — | |||||||
| Plans with accumulated benefit obligations in excess of plan assets: | |||||||||||||||
| Accumulated benefit obligation | 125 | 13 | 1,262 | 1,362 | — | — | — | — | |||||||
| Fair value of plan assets | — | — | 774 | 855 | — | — | — | — | |||||||
| Plans with accumulated postretirement benefit obligations in excess of plan assets: | |||||||||||||||
| Accumulated postretirement benefit obligation | 59 | — | 52 | 10 | |||||||||||
| Fair value of plan assets | $— | $— | $2 | $2 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
The net periodic benefit cost recognized in the Consolidated Statements of Operations is composed of the following for the years ended December 31:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | ||||||||||||
| Service cost | $11 | $— | $— | $32 | $23 | $32 | $— | $— | $— | $3 | $2 | $2 | |||||||||||
| Interest cost | 105 | 2 | 1 | 112 | 91 | 44 | 2 | — | — | 2 | — | — | |||||||||||
| Expected return on assets | (142) | (2) | — | (112) | (82) | (69) | — | — | — | — | — | — | |||||||||||
| Amortization of: | |||||||||||||||||||||||
| Net actuarial (gain) loss | — | (1) | — | 39 | 33 | 35 | — | — | — | — | — | (1) | |||||||||||
| Prior service credit | — | — | — | (1) | (1) | (1) | — | — | — | — | — | — | |||||||||||
| Curtailment gain | — | — | — | (1) | — | — | — | — | — | — | — | — | |||||||||||
| Settlement loss (gain) | — | — | — | 20 | 8 | (1) | — | — | — | — | — | — | |||||||||||
| Other one-time expense | — | — | — | — | — | — | — | — | — | — | 1 | — | |||||||||||
| Net periodic benefit (income) cost | $(26) | $(1) | $1 | $89 | $72 | $40 | $2 | $— | $— | $5 | $3 | $1 |
Service cost is included within Cost of goods sold and Selling, general and administrative expenses while all other cost components are recorded within Pension and other
postretirement non-service expense, net.
As part of the Company’s pension de-risking strategy, annuities were purchased with an insurance company for the pensioners in our Irish Executive Fund during the quarter ended
June 30, 2024. As a result of this transaction, a settlement loss of $20 million occurred when approximately 70% of the projected benefit obligation was settled.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income for the years ended December 31:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | ||||||||||||
| Net actuarial loss (gain) | $3 | $— | $(2) | $(16) | $60 | $(11) | $(2) | $— | $— | $(4) | $— | $(1) | |||||||||||
| Prior service (credit) cost arising during the year | — | — | — | (10) | 5 | (1) | — | — | — | — | — | — | |||||||||||
| Amortization of prior service credit | — | — | — | 1 | 1 | 1 | — | — | — | — | — | — | |||||||||||
| Amortization of actuarial gain (loss) and settlement gain (loss) | — | 1 | — | (59) | (41) | (34) | — | — | — | — | — | 1 | |||||||||||
| Exchange rate (gain) loss | — | — | — | (24) | 33 | (65) | — | — | — | 2 | — | — | |||||||||||
| Amount recognized in other comprehensive loss (income) | 3 | 1 | (2) | (108) | 58 | (110) | (2) | — | — | (2) | — | — | |||||||||||
| Amount recognized in net periodic pension benefit (income) cost and other comprehensive loss (income) | $(23) | $— | $(1) | $(19) | $130 | $(70) | $— | $— | $— | $3 | $3 | $1 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
Major actuarial assumptions used in determining the benefit obligations and net periodic pension cost for our defined benefit plans are presented in the following tables.
Weighted‐average assumptions used to determine benefit obligations as of December 31 are:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||
| Discount rate | 5.66% | 4.93% | 4.42% | 3.81% | 5.51% | 4.93% | 7.44% | 3.30% | |||||||
| Rate of compensation increase | 3.02% | 5.00% | 2.32% | 2.64% | —% | —% | 2.60% | 2.60% | |||||||
| Interest crediting rates | 4.51% | —% | 1.91% | 2.00% | —% | —% | —% | —% |
Weighted-average assumptions used in the calculation of benefit plan expense for years ended December 31:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||||||||||||||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | ||||||||||||
| Discount rate | 4.93% | 5.15% | 2.75% | 3.81% | 4.15% | 1.54% | 4.93% | 5.15% | 2.75% | 3.30% | 3.70% | 1.15% | |||||||||||
| Rate of compensation increase | 5.00% | 5.00% | 3.50% | 2.64% | 2.64% | 2.30% | —% | —% | —% | 2.60% | 2.60% | 2.30% | |||||||||||
| Expected long-term rate of return on plan assets | 5.85% | 4.11% | 3.50% | 4.73% | 4.79% | 3.02% | —% | —% | —% | —% | 3.95% | 1.40% | |||||||||||
| Interest crediting rates | —% | —% | —% | 2.00% | 2.00% | 2.00% | —% | —% | —% | —% | —% | —% |
At December 31, 2024, the discount rates for both the U.S. and non-U.S. pension plans and other postretirement plans were determined based on a yield curve developed by our
actuary.
Our assumption regarding the future rate of compensation increases is reviewed periodically and is based on both our internal planning projections and recent history of actual
compensation increases.
We typically review our expected long-term rate of return on plan assets periodically through an asset allocation study with either our actuary or investment advisor. Our expected
rates of return in fiscal 2024 are based on an analysis of our long-term expected rate of return and our current asset allocation.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
Our Investment Policies and Strategies
Our investment policies and strategies guide and direct how the funds are managed for the benefit plans we sponsor. Our main funds include:
-
WestRock U.S. Pension Funds
-
Smurfit Kappa The Netherlands Pension Fund
-
WestRock Canada Pension Funds
-
Smurfit Kappa UK Pension Funds
-
WestRock UK Pension Funds
-
Smurfit Kappa Ireland Pension Funds
The Trustees of all our funded plans all use a fiduciary manager to implement the investment policy appropriate for each plan and there is an Investment Committee for each of
these plans. The investment strategy varies by local legislative requirements, funded status and maturity of the plan. Periodic reviews are made of both investment policy objectives
and investment manager performance.
Over the last few years, we have de-risked certain plans for which market conditions were opportune to do so, using a combination of automatic triggers and decision making by
the applicable Investment Committee. In these cases the investment strategy targets a percentage allocation to growth assets and a percentage allocation to liability hedging assets
based on each plans funded status and local legislative requirements.
The Company has continued to implement a diversified and strategic investment approach for its various pension plans, aimed at ensuring long-term financial stability and growth.
The strategy focuses on balancing risk and return by investing in a mix of equities, fixed-income securities, alternative assets and property. In alignment with our fiduciary
responsibilities, we have prioritized sustainable investment practices, incorporating environmental, social and governance (ESG) criteria into the decision-making process. The
diversified portfolios have been designed to withstand market volatility while maximizing returns to meet the future obligations of our pension plan beneficiaries. Through regular
monitoring and adjustments, we aim to achieve consistent, risk-adjusted performance to safeguard the financial security of our employees’ retirement funds.
Investments are diversified across asset classes and within each asset class to minimize the risk of large losses. Derivatives, including swaps, forward and future contracts may be
used as asset class substitutes or for hedging or other risk management purposes. All the plans hold highly diversified investment portfolios that are not reliant on any single named
stocks or specific parts of the market.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
Valuation of Our Plan Assets
Pension assets are stated at fair value or Net Asset Value (“NAV”). Fair value is based on the amount that would be received to sell an asset or paid to settle a liability, in an
orderly transaction between market participants at the reporting date. We consider both observable and unobservable inputs that reflect assumptions applied by market participants
when setting the exit price of an asset or liability in an orderly transaction within the principal market for that asset or liability.
We typically review our expected long-term rate of return on plan assets periodically through an asset allocation study with either our actuary or investment advisor. We value the
pension plan assets based upon the observability of exit pricing inputs and classify pension plan assets based upon the lowest level input that is significant to the fair value
measurement of the pension plan assets in their entirety.
The Company's weighted target asset allocations are as follows:
| Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||||||
| U.S. Plans | Non-U.S. Plans | U.S. Plans | Non-U.S. Plans | ||||
| 2024 | 2024 | 2024 | 2024 | ||||
| Equities | 29% | 16% | —% | —% | |||
| Fixed Income | 60% | 73% | —% | —% | |||
| Real Estate | 3% | —% | —% | —% | |||
| Other (incl. Liability-Driven Investments (“LDI”)) | 8% | 11% | —% | 100% |
Fair Value Measurement
The guidance for fair value measurements and disclosure sets out a fair value hierarchy that group fair value measurement inputs into the three classifications outlined in the table
below. Transfers between levels are recognized at the end of the reporting period.
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability reflecting the reporting entity’s own assumptions or external inputs from inactive markets.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
The following table summarizes our pension plan assets measured at fair value on a recurring basis (at least annually) as of December 31:
| Defined Benefit Pension Plans | |||||||||||||||
| U.S. Plans | |||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Asset Class | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||
| Cash | $224 | $— | $— | $224 | $1 | $— | $— | $1 | |||||||
| Equity | 483 | 2 | — | 485 | — | 3 | — | 3 | |||||||
| Government Bonds | — | 356 | — | 356 | — | — | — | — | |||||||
| Corporate Bonds | 154 | 2,585 | — | 2,739 | — | 26 | — | 26 | |||||||
| Real Estate / Property | — | 1 | — | 1 | — | 1 | — | 1 | |||||||
| Insurance Contracts | — | — | — | — | — | — | — | — | |||||||
| Derivatives | — | 10 | — | 10 | — | — | — | — | |||||||
| Investment Funds | — | — | — | — | — | — | — | — | |||||||
| Other (incl. LDI) | — | 1 | — | 1 | — | — | — | — | |||||||
| Total assets measured using fair value hierarchy | $861 | $2,955 | $— | $3,816 | $1 | $30 | $— | $31 | |||||||
| Assets measured at NAV | 363 | — | |||||||||||||
| Total assets | $4,179 | $31 |
.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
| Defined Benefit Pension Plans | |||||||||||||||
| Non-U.S. Plans | |||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Asset Class | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||
| Cash | $21 | $55 | $— | $76 | $23 | $8 | $— | $31 | |||||||
| Equity | 509 | 97 | 1 | 607 | 348 | 88 | 13 | 449 | |||||||
| Government Bonds | 313 | 489 | — | 802 | 653 | 34 | — | 687 | |||||||
| Corporate Bonds | 190 | 516 | — | 706 | 158 | 178 | — | 336 | |||||||
| Real Estate / Property | 8 | 50 | 24 | 82 | 3 | 64 | 28 | 95 | |||||||
| Insurance Contracts | — | — | 29 | 29 | — | — | 35 | 35 | |||||||
| Derivatives | — | (120) | — | (120) | — | (29) | — | (29) | |||||||
| Investment Funds | — | 19 | — | 19 | — | — | — | — | |||||||
| Other (incl. LDI) | 13 | 62 | 77 | 152 | 1 | 180 | 101 | 282 | |||||||
| Total assets measured using fair value hierarchy | $1,054 | $1,168 | $131 | $2,353 | $1,186 | $523 | $177 | $1,886 | |||||||
| Assets measured at NAV | 377 | — | |||||||||||||
| Total assets | $2,730 | $1,886 |
| Other Postretirement Benefit Plans | |||||||||||||||
| Non-U.S. Plans | |||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Asset Class | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets For Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||
| Insurance Contracts | $— | $— | $2 | $2 | $— | $— | $2 | $2 | |||||||
| Total assets measured using fair value hierarchy | $— | $— | $2 | $2 | $— | $— | $2 | $2 | |||||||
| Assets measured at NAV | — | — | |||||||||||||
| Total assets | $2 | $2 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
The assets recognized for the OPEB plans are pledged insurance contracts in respect of specific German benefits. These insurance contracts are considered level 3 plan assets.
NAV Measurement
Commingled fund investments are valued at the NAV per share multiplied by the number of shares held. The determination of NAV for the commingled funds includes market
pricing of the underlying assets as well as broker quotes and other valuation techniques. Fixed income and fixed income related instruments consist of commingled debt funds,
which are valued at their NAV per share multiplied by the number of shares held. The determination of NAV for the commingled funds includes market pricing of the underlying
assets as well as broker quotes and other valuation techniques.
We maintain holdings in certain private equity partnerships and private real estate investments for which a liquid secondary market does not exist. The private equity partnerships
are commingled investments. Valuation techniques, such as discounted cash flow and market based comparable analyses, are used to determine fair value of the private equity
investments. Unobservable inputs used for the discounted cash flow technique include projected future cash flows and the discount rate used to calculate present value.
Unobservable inputs used for the market-based comparisons technique include earnings before interest, taxes, depreciation and amortization multiples in other comparable third
party transactions, price to earnings ratios, liquidity, current operating results, as well as input from general partners and other pertinent information. Private equity investments
have been valued using NAV as a practical expedient.
Private real estate investments are commingled investments. Valuation techniques, such as discounted cash flow and market based comparable analyses, are used to determine fair
value of the private equity investments. Unobservable inputs used for the discounted cash flow technique include projected future cash flows and the discount rate used to calculate
present value. Unobservable inputs used for the market-based comparison technique include a combination of third-party appraisals, replacement cost, and comparable market
prices. Private real estate investments have been valued using NAV as a practical expedient.
Equity-related investments are hedged equity investments in a commingled fund that consist primarily of equity indexed investments which are hedged by options and also hold
collateral in the form of short-term treasury securities. Equity related investments have been valued using NAV as a practical expedient.
A reconciliation of the beginning and ending balances of the pension plan assets measured at fair value using significant unobservable inputs (Level 3) is presented below:
| Defined Benefit Pension Plans | |||||||||||
| Non-U.S. Plans | |||||||||||
| Balance at December 31, 2023 | Actual return on plan assets | Purchases | Sales and settlements | Currency Impact | Balance at December 31, 2024 | ||||||
| Equity | $13 | $— | $— | $(12) | $— | $1 | |||||
| Real Estate / Property | 28 | (1) | 6 | (8) | (1) | 24 | |||||
| Insurance Contracts | 35 | (3) | 1 | (2) | (2) | 29 | |||||
| Other (incl. LDI) | 101 | 1 | 5 | (26) | (4) | 77 | |||||
| Total assets | $177 | $(3) | $12 | $(48) | $(7) | $131 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
| Other Postretirement Benefit Plans | |||||||||||
| Non-U.S. Plans | |||||||||||
| Balance at December 31, 2023 | Actual return on plan assets | Purchases | Sales and settlements | Currency Impact | Balance at December 31, 2024 | ||||||
| Insurance Contracts | $2 | $— | $3 | $(3) | $— | $2 | |||||
| Total assets | $2 | $— | $3 | $(3) | $— | $2 |
| Defined Benefit Pension Plans | |||||||||||
| Non-U.S. Plans | |||||||||||
| Balance at December 31, 2022 | Actual return on plan assets | Purchases | Sales and settlements | Currency Impact | Balance at December 31, 2023 | ||||||
| Equity | $— | $— | $13 | $— | $— | $13 | |||||
| Real Estate / Property | 41 | 3 | — | (17) | 1 | 28 | |||||
| Insurance Contracts | 31 | 2 | 3 | (2) | 1 | 35 | |||||
| Other (incl. LDI) | 62 | 10 | 38 | (12) | 3 | 101 | |||||
| Total assets | $134 | $15 | $54 | $(31) | $5 | $177 |
| Other Postretirement Benefit Plans | |||||||||||
| Non-U.S. Plans | |||||||||||
| Balance at December 31, 2022 | Actual return on plan assets | Purchases | Sales and settlements | Currency Impact | Balance at December 31, 2023 | ||||||
| Insurance Contracts | $2 | $— | $— | $— | $— | $2 | |||||
| Total assets | $2 | $— | $— | $— | $— | $2 |
The assumed healthcare cost trend rates as of December 31 are:
| Other Postretirement Benefit Plans | |||||||
| U.S. Plans | Non-U.S. Plans | ||||||
| Years ended in December 31, | |||||||
| 2024 | 2023 | 2024 | 2023 | ||||
| Health care cost trend rate assumed for next year | 6.29% | 5.14% | 5.56% | —% | |||
| Rate to which the cost trend rate gradually declines | 4.00% | 5.00% | 5.56% | —% | |||
| Year the rate reaches the ultimate rate | 2048 | 2025 | 2024 | — |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
Pension Plan Contributions and Benefit Payments
Established funding standards govern the funding requirements for our qualified and approved pensions in various jurisdictions. We fund the benefit payments of our nonqualified
or unfunded plans as benefit payments come due.
During 2025, based on estimated year-end asset values and projection of plan liabilities we expect to make contributions and/or benefit payments of approximately: $55 million for
our non-qualified or unfunded plans and $80 million for our qualified or funded plans.
At December 31, 2024, projected future pension and other postretirement benefit payments (excluding any termination benefits) were as follows:
| Year ending December 31, | Defined Benefit Pension Plans | Other Postretirement Benefit Plans | ||
| 2025 | $452 | $13 | ||
| 2026 | 457 | 12 | ||
| 2027 | 466 | 11 | ||
| 2028 | 470 | 10 | ||
| 2029 | 470 | 9 | ||
| 2030-2034 | 2,535 | 44 |
Defined Contribution Plans
We have 401(k) plans that cover certain U.S. salaried, union and non-union hourly employees, generally subject to an initial waiting period. The 401(k) plans permit participants to
make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code. At December 31, 2024, our contributions may be up to 7.5% for U.S. salaried and
non-union hourly employees, consisting of a match of up to 5% and an automatic employer contribution of 2.5%.
Outside the U.S., the Company operates various defined contribution plans for its employees in line with local market practice and the tax and legal rules in the jurisdictions in
which they operate.
The expense for defined contribution pension plans for the years ended December 31, 2024, 2023 and 2022, was $170 million, $79 million, and $75 million, respectively. The
increase in the expense for the year ended December 31, 2024 was due to the Combination.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
18. Retirement Plans - continued
Multiemployer Plans
As a result of the acquisition of WestRock, we participate in several multiemployer pension plans (“MEPP” or “MEPPs”) that provide retirement benefits to certain union
employees in accordance with various collective bargaining agreements and WestRock has participated in other MEPPs in the past. In the normal course of business, we evaluate
our potential exposure to MEPPs, including potential withdrawal liabilities. In fiscal 2018, WestRock submitted formal notification to withdraw from the Pace Industry Union-
Management Pension Fund (“PIUMPF”) and recorded a withdrawal liability and a liability for their proportionate share of PIUMPF’s accumulated funding deficiency (“AFD”).
Subsequently, in fiscal 2019 and 2020, WestRock received demand letters from PIUMPF, including a demand for withdrawal liabilities and for their proportionate share of
PIUMPF's AFD. In July 2021, PIUMPF filed suit against WestRock in the U.S. District Court for the Northern District of Georgia claiming the right to recover their pro rata share
of the pension fund’s AFD along with interest, liquidated damages and attorney's fees.
In connection with the Combination, we assumed withdrawal liabilities of $169 million, including liabilities associated with PIUMPF's AFD demands.
In November 2024, PIUMPF and the Company entered mediation and reached resolution of the litigation. In December 2024, we paid $37 million to settle the AFD matter with
each party bearing their own attorney’s fees in connection with the litigation. The litigation was subsequently dismissed with prejudice. We adjusted the provisional amount
recognized in the Combination to the settlement amount with an offsetting credit to goodwill. At December 31, 2024, we had recorded withdrawal liabilities of $131 million.
With respect to certain other MEPPs, in the event we withdraw from one or more of the MEPPs in the future, it is reasonably possible that we may incur withdrawal liabilities in
connection with such withdrawals. Our estimate of any such withdrawal liabilities, both individually and in the aggregate, are not material for the remaining plans in which we
participate.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except per share data)
19. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
| Years ended December 31, | |||||
| 2024 | 2023 | 2022 | |||
| Numerator: | |||||
| Net income attributable to common shareholders | $319 | $825 | $1,034 | ||
| Denominator: | |||||
| Basic weighted average shares outstanding | 386 | 258 | 258 | ||
| Effect of dilutive share options | 3 | 2 | 3 | ||
| Diluted weighted average shares outstanding | 389 | 260 | 261 | ||
| Basic earnings per share attributable to common shareholders | $0.83 | $3.19 | $4.00 | ||
| Diluted earnings per share attributable to common shareholders | $0.82 | $3.17 | $3.96 |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. These comprise of restricted stock units, performance stock units and performance
shares issued under the Company’s long-term incentive plans. Details of these plans are set out in “Note 16. Share-based
Compensation”.
For the years ended December 31, 2024, 2023 and 2022, respectively, there were no material weighted average share-based
compensation awards excluded from the diluted earnings per share computation because the effect would have been antidilutive.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
20. Disposal of Russian Operations
The sale of the Russian operations was completed on March 20, 2023, following the Company’s previously announced plan to exit the
Russian market in an orderly manner in 2022. The results of the operations in Russia were not presented as a discontinued operation as
they did not represent a strategic shift that had or will have a major effect on our operations and financial results. Such operations are
neither a major line of business or a major geographical area and represented less than 1.5% of the Company’s net sales in 2023 and in
- During the year ended December 31, 2022, in advance of classifying the Russian disposal group as held for sale, the recoverable
value of zero was reassessed based on the terms of the sales agreement entered into, applying the fair value less costs to sell method.
This resulted in an impairment charge of $159 million being recorded in 2022 within Impairment of other assets.
Upon completion of the sale during 2023, the assets and liabilities previously classified as held for sale were derecognized and a pre-
tax net loss on disposal was recognized of $10 million within Other (expense) income, net.
21. Commitments and Contingencies
We have financial commitments and obligations that arise in the ordinary course of our business. These include debt (discussed in
“Note 14. Debt”), lease obligations (discussed in “Note 12. Leases”), pension liabilities (discussed in “Note 18. Retirement Plans”)
and capital commitments, purchase commitments and certain legal proceedings are discussed below.
Capital Commitments
Estimated costs for future purchases of Property, plant and equipment that we are obligated to purchase as of December 31, 2024, total
approximately $916 million.
Purchase Commitments
In the table below, we set forth our enforceable and legally binding purchase obligations as of December 31, 2024. These obligations
relate to various purchase agreements for items such as minimum amounts of energy, fiber, wood purchases, transport and software
licensing over periods ranging from one year to six years. Some of the amounts are based on management’s estimates and assumptions
about these obligations, including their duration, the possibility of renewal, anticipated actions by third parties, and other factors.
Because these estimates and assumptions are necessarily subjective, our actual payments may vary from those reflected in the table.
Total purchase commitments are as follows:
| 2025 | $1,136 |
| 2026 | 400 |
| 2027 | 244 |
| 2028 | 173 |
| 2029 | 143 |
| Thereafter | 301 |
| Total | $2,397 |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
21. Commitments and Contingencies - continued
Brazil Tax Liability
Our subsidiary, WestRock, is challenging claims by the Brazil Federal Revenue Department that we underpaid taxes as a result of
amortization of goodwill generated by the 2002 merger of two of its Brazilian subsidiaries. The matter has proceeded through the
Brazil Administrative Council of Tax Appeals (“CARF”) principally in two proceedings, covering tax years 2003 to 2008 and 2009 to
2012.WestRock was assessed additional taxes, penalties, and interest in both CARF proceedings. In the proceeding for the tax years
2003 to 2008, WestRock was also assessed penalties and interest for fraud, but WestRock won the fraud claim in the proceeding for
the tax years 2009 to 2012. WestRock subsequently filed two lawsuits in Brazilian federal courts seeking annulment of the adverse
CARF decisions. In February 2025, the federal court adjudicating the WestRock challenge to CARF's decision against WestRock for
the 2003 and 2008 period issued a ruling in favor of WestRock nullifying the financial assessments in that case. The decision of the
federal court is subject to appeal.
We assert that we have no liability in these matters. The total amount in dispute before CARF and in the annulment actions relating to
the claimed tax deficiency was R$752 million ($122 million) as of December 31, 2024, including various penalties and interest.
Resolution of the tax positions could have a material adverse effect on our cash flows and results of operations or materially benefit
our results of operations in future periods depending upon their ultimate resolution.
PIUMPF-Related Litigation
Refer to “Note 18. Retirement Plans” for the resolution of the litigation filed by PIUMPF against the Company.
Asbestos-Related Litigation
We have been named as a defendant in asbestos-related personal injury litigation, primarily in relation to the historical operations of
certain companies that have been acquired by the Company. To date, the costs resulting from the litigation, including settlement costs,
have not been significant. We accrue for the estimated value of pending claims and litigation costs using historical claims information,
as well as the estimated value of future claims based on our historical claims experience. As of December 31, 2024, there were
approximately 660 such lawsuits. We believe that we have substantial insurance coverage, subject to applicable deductibles and policy
limits, with respect to asbestos claims. We also believe we have valid defenses to these asbestos-related personal injury claims and
intend to continue to contest these matters vigorously. Should the Company’s litigation profile change substantially, or if there are
adverse developments in applicable law, it is possible that the Company could incur significantly more costs resolving these cases. We
record asbestos-related insurance recoveries that are deemed probable. In assessing the probability of insurance recovery, we make
judgments concerning insurance coverage that we believe are reasonable and consistent with our historical dealings and our
knowledge of any pertinent solvency issues surrounding the insurers. The Company currently does not expect the resolution of
pending asbestos litigation and proceedings to have a material adverse effect on the Company’s results of operations, financial
condition or cash flows. As of December 31, 2024, the Company had recorded liabilities in respect of these matters of $73 million and
estimated insurance recoveries of $47 million.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
21. Commitments and Contingencies - continued
Italian Competition Authority Investigation
In August 2019, the Italian Competition Authority (the “AGCM”) notified approximately 30 companies, of which Smurfit Kappa
Italia, a subsidiary of Smurfit Westrock, was one, that an investigation had found the companies to have engaged in anti-competitive
practices, in relation to which the AGCM levied a fine of approximately $138 million on Smurfit Kappa Italia, which was paid in
In October 2019, Smurfit Kappa Italia appealed the AGCM’s decision to the First Administrative Court of Appeal (TAR Lazio),
however Smurfit Kappa Italia was later notified that this appeal had been unsuccessful. In September 2021, Smurfit Kappa Italia filed
a further appeal to the Council of State which published its ruling in February 2023. While some grounds of appeal were dismissed,
the Council of State upheld Smurfit Kappa Italia’s arguments regarding the quantification of the fine. As a result, the AGCM was
directed to recalculate Smurfit Kappa Italia’s fine. On March 7, 2024, the AGCM notified Smurfit Kappa Italia that its fine had been
reduced by approximately $18 million. Smurfit Kappa Italia has appealed the amount of this reduction and a decision on that appeal is
expected later in 2025.
Separate to these proceedings regarding the fine, in May 2023, Smurfit Kappa Italia filed an application with the Council of State for
revocation of the February 2023 ruling to the extent that it failed to consider certain pleas that had been raised by Smurfit Kappa Italia
on appeal. One such plea is to be (re-)assessed by the Council of State, which, if successful, could determine the partial annulment of
the August 2019 AGCM decision, although this would not impact the size of the fine levied on Smurfit Kappa Italia. A decision is
expected later in 2025.
After publication of the AGCM’s August 2019 decision, a number of purchasers of corrugated sheets and boxes initiated litigation
proceedings against Smurfit Kappa companies, alleging that they were harmed by the alleged anti-competitive practices and seeking
damages. These actions are still in early stages and Smurfit Westrock cannot predict its potential liability or their outcomes with
certainty at this point in time. In addition, other parties have threatened litigation against Smurfit Westrock seeking damages (either
specified or unspecified). It cannot be anticipated whether these threatened actions will become actual litigation proceedings, nor
whether any amounts claimed will be the same as those that have been threatened.
International Arbitration Against Venezuela
Smurfit Kappa, which is now a subsidiary of Smurfit Westrock, announced in 2018 that due to the Government of Venezuela’s
measures, Smurfit Kappa no longer exercised control over the business of Smurfit Kappa Carton de Venezuela. Smurfit Kappa’s
Venezuelan operations were therefore deconsolidated in the third quarter of 2018. Later that year, Smurfit Kappa’s wholly owned
subsidiary, Smurfit Holdings BV, filed an international arbitration claim against the Bolivarian Republic of Venezuela before the
World Bank’s International Center for Settlement of Investment Disputes (“ICSID”) seeking compensation for Venezuela’s unlawful
seizure of its Venezuelan business as well as for other arbitrary, inconsistent and disproportionate State measures that destroyed the
value of its investments in Venezuela. Following the exchange of written submissions, an oral hearing was held in September 2022 in
Paris.
On August 28, 2024, upon the completion of its deliberations, the arbitral tribunal issued an award granting Smurfit Holdings BV,
then a wholly owned subsidiary of Smurfit Westrock, compensation in excess of $469 million, plus legal costs of $5 million, plus
interest from May 31, 2024, until the date of payment (the “Award”). In September 2024 Smurfit Holdings BV initiated proceedings
against the Bolivarian Republic of Venezuela to enforce the Award. In December 2024, the Bolivarian Republic of Venezuela applied
to ICSID to annul the Award. An Annulment Committee will now be formed by ICSID to decide on this application.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
21. Commitments and Contingencies - continued
Combination-Related Litigation
In May 2024, in connection with the Combination, two lawsuits were filed by purported shareholders of WestRock challenging the
sufficiency of the disclosures that have been made in connection therewith in the definitive proxy statement that WestRock filed with
the SEC on April 26, 2024: Robert Scott v. WestRock Company et al., No. 652627/2024 (N.Y.S.), filed on May 21, 2024, and Richard
McDaniel v. WestRock Company et al., No. 652638/2024 (N.Y.S.), filed on May 22, 2024. Both complaints, which name WestRock
and its directors as defendants, alleged state law claims for breach of fiduciary duty. The plaintiffs in the Scott and McDaniel cases
filed notices of voluntary dismissal in their respective cases on January 15, 2025. Those notices were effective upon filing, and
accordingly these lawsuits are no longer pending.
Other Litigation
We are a defendant in a number of other lawsuits and claims arising out of the conduct of our business. While the ultimate results of
such suits or other proceedings against us cannot be predicted as of the date of this Annual Report on Form 10-K, we believe the
resolution of these other matters will not have a material adverse effect on our results of operations, financial condition or cash flows.
22. Variable Interest Entities
Trade Receivables Securitization Arrangements
The Company is a party to arrangements involving securitization of its trade receivables. The arrangements required the establishment
of certain special purpose entities namely Smurfit Kappa International Receivables DAC, Smurfit Kappa Receivables plc and Smurfit
Kappa European Packaging DAC (a subsidiary of Smurfit Kappa Receivables plc). The sole purpose of the securitization entities is the
raising of finance for the Company using the receivables generated by certain operating entities, as collateral. All entities are
considered to be VIEs.
The Company is the primary beneficiary of Smurfit Kappa International Receivables DAC, Smurfit Kappa European Packaging DAC
and Smurfit Kappa Receivables plc, through various financing arrangements and due to the fact that it is responsible for the entities’
most significant economic activities.
The carrying value of the restricted assets and limited recourse liability as of December 31, 2024 ($765 million and $5 million
respectively) and as of December 31, 2023 ($819 million and $20 million respectively) approximates fair value due to the short-term
nature of the securitized assets and the floating rates of the liabilities.
Timber Note Receivable Securitization Arrangement
The Company is also a party to an arrangement involving securitization of its note receivable. Pursuant to the sale of forestlands in
2007, a special purpose entity (“SPE”) namely MeadWestvaco Timber Notes Holding, LLC (“MWV TN”) received an installment
note receivable in the amount of $398 million (“Timber Note”). Using this installment note as collateral, the SPE received proceeds
under secured financing agreements, which is recorded as a non-recourse liability.
Using the Timber Note as collateral, MWV TN received $338 million in proceeds under a secured financing agreement with a bank.
Under the terms of the agreement, the liability from this transaction is non-recourse to the Company and is payable from the Timber
Note proceeds upon its maturity in October 2027. As a result, the Timber Note is not available to satisfy any obligations of the
Company. MWV TN can elect to prepay at any time the liability in whole or in part, however, given that the Timber Note is not
prepayable, MWV TN expects to repay the liability at maturity from the Timber Note proceeds.
The Company is the primary beneficiary of MWV TN through various financing arrangements and due to the fact that it is responsible
for the entity’s most significant economic activities. This entity is considered to be a VIE.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
22. Variable Interest Entities - continued
The carrying value of the restricted asset and non-recourse liability as of December 31, 2024 ($387 million and $333 million
respectively) approximates fair value due to their floating rates. The fair values of the restricted assets and non-recourse liabilities are
classified as level 2 within the fair value hierarchy.
Green Power Solutions
Green Power Solutions of Georgia, LLC (“GPS”) is a joint venture providing steam to the Company and electricity to a third party
client. The Company owns a 48% interest in GPS and the majority of the debt issued through the entity SP Fiber Holdings Inc. (“SP
Fiber”), a 100% owned subsidiary. Based on the commercial and financial relationships in force between SP Fiber and GPS, it has
been determined that the SP Fiber has a controlling financial interest in and is the primary beneficiary of GPS. The vehicle holds
unrestricted cash of $2 million as of December 31, 2024.
The carrying amounts of the assets and liabilities of VIEs reported within the Consolidated Balance Sheets are set out in the following
table:
| December 31, | |||
| 2024 | 2023 | ||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $2 | $3 | |
| Accounts receivable | 767 | 816 | |
| Non-current assets: | |||
| Property, plant and equipment, net | 60 | — | |
| Other non-current assets | 389 | — | |
| Total assets | $1,218 | $819 | |
| Liabilities | |||
| Current liabilities: | |||
| Accounts payable | $6 | $— | |
| Current portion of debt | 2 | — | |
| Other current liabilities | 2 | — | |
| Non-current liabilities: | |||
| Non-current debt due after one year | 8 | 20 | |
| Other non-current liabilities | 335 | — | |
| Total liabilities | $353 | $20 |
23. Related Party Transactions
We sell products to and receive services from affiliated entities. These transactions are undertaken and settled at normal trading terms.
No guarantees are given or received by either party. Related party balances and transactions were not material for any period
presented.
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
24. Accumulated Other Comprehensive Loss
The tables below summarize the changes in accumulated other comprehensive loss by component for the years ended December 31,
2024, 2023 and 2022:
| Foreign Currency Translation | Cash Flow Hedges | Defined Benefit Pension and Postretirement Plans | Other Reserves**(1)** | Total**(2)** | |
| Balance at December 31, 2021 | $833 | $14 | $850 | $(751) | $946 |
| Other comprehensive loss (income) | 366 | 7 | (110) | — | 263 |
| Balance at December 31, 2022 | $1,199 | $21 | $740 | $(751) | $1,209 |
| Other comprehensive (income) loss | (410) | (5) | 53 | — | (362) |
| Balance at December 31, 2023 | $789 | $16 | $793 | $(751) | $847 |
| Other comprehensive loss (income) | 895 | — | (87) | — | 808 |
| Reclassification from retained earnings | — | — | (209) | — | (209) |
| Balance at December 31, 2024 | $1,684 | $16 | $497 | $(751) | $1,446 |
(1) This relates to a reverse acquisition reserve which arose on the creation of a new parent of the Company prior to the United
Kingdom and Ireland listings.
(2) All amounts are net of tax and noncontrolling interest.
A summary of the components of other comprehensive (loss) income, including noncontrolling interest, for the years ended
December 31, 2024, 2023 and 2022, is as follows:
| Year ended December 31, | |||||||||||
| 2024 | 2023 | 2022 | |||||||||
| Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | Pre-Tax | Tax | Net of Tax | |||
| Foreign currency translation (loss) gain | $(895) | $— | $(895) | $410 | $— | $410 | $(366) | $— | $(366) | ||
| Defined benefit pension and other post- retirement benefit plans: | |||||||||||
| Net actuarial gain (loss) arising during year | 19 | (5) | 14 | (60) | 13 | (47) | 14 | (1) | 13 | ||
| Amortization and settlement recognition of net actuarial loss | 59 | (15) | 44 | 40 | (9) | 31 | 33 | (1) | 32 | ||
| Prior service credit (cost) arising during year | 10 | (2) | 8 | (5) | 2 | (3) | 1 | — | 1 | ||
| Amortization of prior service credit | (1) | — | (1) | (1) | — | (1) | (1) | — | (1) | ||
| Foreign currency gain (loss) - pensions | 22 | — | 22 | (33) | — | (33) | 65 | — | 65 | ||
| Derivatives: | |||||||||||
| Changes in fair value of cash flow hedges | — | — | — | 5 | — | 5 | (6) | — | (6) | ||
| Changes in fair value of cost of hedging | — | — | — | — | — | — | (1) | — | (1) | ||
| Consolidated other comprehensive (loss) income | (786) | (22) | (808) | 356 | 6 | 362 | (261) | (2) | (263) | ||
| Less: Other comprehensive loss (income) attributable to noncontrolling interests | — | — | — | — | — | — | — | — | — | ||
| Other comprehensive (loss) income attributable to common shareholders | $(786) | $(22) | $(808) | $356 | $6 | $362 | $(261) | $(2) | $(263) |
Smurfit Westrock plc
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
25. Subsequent Events
The Company has evaluated subsequent events through the date the Company issued the Consolidated Financial Statements. Except as
noted below, the Company has concluded that no events or transactions have occurred that may require disclosure in the
accompanying financial statements.
Dividend Approval
On January 30, 2025, the Company announced that its Board approved a quarterly dividend of $0.4308 per share on its ordinary
shares. The quarterly dividend of $0.4308 per ordinary share is payable March 18, 2025 to shareholders of record at the close of
business on February 14, 2025.
Previous: Item 7A. Quantitative and Qualitative Disclosures About Market Risk · Next: Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.