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

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

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

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

year ended December 31, 2024, as well as the information under the heading “Management’s Discussion and Analysis of the

Financial Condition and Results of Operations” that were disclosed in the Form 10-K for the year ended December 31, 2024, as filed

with the U.S. Securities and Exchange Commission (the “SEC”) on March 7, 2025 (the “2024 Form 10-K”). This discussion contains

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

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

results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item

1A. in the 2024 Form 10-K, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. Please also refer to

the section above entitled “Cautionary Note Regarding Forward-Looking Statements" for additional information.

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

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

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

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

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

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

OVERVIEW

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

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

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

markets.

Transaction Agreement and Combination with WestRock

As described in “Note 2. Acquisitions” of the Condensed Consolidated Financial Statements, the Combination closed on July 5, 2024.

The consolidated financial statements of Smurfit Westrock following the Smurfit Kappa Share Exchange are a continuation of the

financial statements of Smurfit Kappa and therefore, the historical consolidated financial information for periods prior to the

Combination, including the comparatives presented, reflect the pre-Combination carrying values of Smurfit Kappa except for the

retrospective adjustment to reflect the Company’s legal share capital as the successor after giving effect to the Smurfit Kappa Share

Exchange.

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

accounting for the Combination.

Recent Developments

Capacity Reduction and Facility Closures

On April 30, 2025, we announced our plan to permanently close our CRB mill in St. Paul, Minnesota, U.S. and discontinue production

at our containerboard mill in Forney, Texas, U.S.. The Company has also initiated consultations with local works councils in Germany

with a view to permanently closing two converting facilities there. The mill closures are expected to reduce our capacity by over

500,000 tons. The mill closures and two converting facility closures are not expected to have a significant impact on our net sales as

we aim to match our supply with customer demand.

We expect to record approximately $287 million of certain pre-tax charges associated with these closures (including $188 million of

pre-tax non-cash asset impairment charges) over the remainder of 2025 and into 2026. See “Note 18. Subsequent Events” of the

Condensed Consolidated Financial Statements for additional information. Excluding these charges, the elimination of corresponding

fixed costs is anticipated to increase overall profitability.

EXECUTIVE SUMMARY

Smurfit Westrock’s net sales increased by $4,726 million, to $7,656 million in the three months ended March 31, 2025, from $2,930

million in the three months ended March 31, 2024. As described in greater detail below, this increase was primarily due to the

acquisition of WestRock along with a higher selling price mix, partly offset by a negative foreign currency impact and a negative

volume impact.

Net income attributable to common shareholders increased by $193 million, to $384 million in the three months ended March 31,

2025, from $191 million in the three months ended March 31, 2024. This increase was primarily due to the acquisition of Westrock,

with the positive impact of the Combination partially offset by higher interest expense. Refer to “Results of Operations” for a detailed

review of Smurfit Westrock’s performance.

Net cash provided by operating activities increased by $193 million, to $235 million in the three months ended March 31, 2025, from

$42 million in the three months ended March 31, 2024, primarily due to a $627 million increase in net income adjusted for non-cash

items, including depreciation, depletion and amortization, cash surrender value increase in excess of premiums paid, share-based

compensation expense, deferred income tax benefit, and pension and other postretirement funding more than cost. The increase in net

income adjusted for non-cash items was partially offset by the $434 million increase in the cash outflows from changes in operating

assets and liabilities as a result of the Combination and a higher selling price mix. During the three months ended March 31, 2025,

Smurfit Westrock invested $477 million in capital expenditures. The Company’s net cash inflow from changes in debt was $444

million, and it paid $225 million of cash dividends to shareholders. See the section entitled “Liquidity and Capital Resources” below

for additional information.

SIGNIFICANT FACTORS AND TRENDS AFFECTING SMURFIT WESTROCK’S RESULTS

Smurfit Westrock’s operations have been, and will continue to be, affected by many factors, some of which are beyond the Company’s

control. Smurfit Westrock’s net sales are primarily derived from the sale of containerboard, corrugated containers, paperboard,

consumer packaging, and other paper-based packaging products. As such, Smurfit Westrock’s net sales during any period are largely

influenced by volumes, prices and costs of the corrugated containers and consumer packaging products that Smurfit Westrock sells

during that period.

Volumes

In general, demand for corrugated containers and consumer packaging is closely correlated with overall economic growth and activity.

It also directionally correlates with levels of industrial production and is impacted by the trends affecting the choice of medium (paper,

plastic, glass, metal, or wood) used in the packaging of these products. As a result, demand is driven by the need for: (i) packaging

products for consumer and industrial goods, (ii) higher value-added corrugated products used for point-of-sale displays and consumer

and shelf-ready packaging, and (iii) packaging of pharmaceutical products and the growth of related industries. Normal patterns of

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

and related lockdowns), and global economic and geopolitical developments (including tariffs or other trade restrictions), among

others.

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

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

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

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

packaging.

Prices and Costs

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

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

chemicals, and transportation, overlaying supply and demand balances.

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

containerboard price movements tend to impact the prices of corrugated containers. In turn, the cost of paper is influenced by

movements in the price of its major raw materials—wood or recycled paper—along with other supply and demand factors. Smurfit

Westrock’s production processes are energy-intensive, making production costs also sensitive to the price of energy (primarily gas and

electricity), which have historically been volatile. Other key cost drivers include employee benefit expenses, largely determined by

workforce size, and shipping and handling costs, which are generally affected by fuel prices and overall labor inflation.

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

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

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

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

Foreign Currency Effects

Smurfit Westrock operates in multiple countries across North America, Europe, MEA, APAC, and LATAM. As a result, currency

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

RESULTS OF OPERATIONS

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

	Three months ended March 31,
	2025		2024
Net sales	$7,656		$2,930
Cost of goods sold	(6,079)		(2,220)
Gross profit	1,577		710
Selling, general and administrative expenses	(988)		(380)
Transaction and integration-related expenses associated with the Combination	(36)		(23)
Operating profit	553		307
Pension and other postretirement non-service income (expense), net	9		(10)
Interest expense, net	(167)		(25)
Other expense, net	(5)		(5)
Income before income taxes	390		267
Income tax expense	(8)		(76)
Net income	382		191
Net loss attributable to noncontrolling interests	2		—
Net income attributable to common shareholders	$384		$191

Results of operations for the three months ended March 31, 2025*, compared to the* three months ended March 31, 2024

Net Sales

Net sales increased by $4,726 million, to $7,656 million in the three months ended March 31, 2025, from $2,930 million in the three

months ended March 31, 2024. This increase was primarily due to the impact of $4,736 million related to the acquisition of WestRock.

Excluding the impact of this acquisition, net sales decreased by $10 million primarily resulting from a $175 million net negative

foreign currency impact and a negative volume impact of $43 million, largely offset by a $209 million positive impact due to a higher

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

Cost of Goods Sold

Cost of goods sold increased by $3,859 million, to $6,079 million in the three months ended March 31, 2025, from $2,220 million in

the three months ended March 31, 2024. The increase in cost of goods sold was primarily due to the impact of the acquisition of

WestRock of $3,930 million. Excluding the impact of this acquisition, cost of goods sold decreased by $71 million primarily due to

net positive foreign currency movements and lower volumes, partly offset by higher input prices.

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

SG&A expenses increased by $608 million, to $988 million in the three months ended March 31, 2025, from $380 million in the three

months ended March 31, 2024. The increase in SG&A expenses of $608 million was primarily due to additional SG&A expenses of

$570 million related to the acquisition of WestRock.

Transaction and Integration-related Expenses Associated with the Combination

The Company incurred transaction and integration-related expenses associated with the Combination of $36 million and $23 million in

the three months ended March 31, 2025 and 2024, respectively.

Transaction-related expenses associated with the Combination were $2 million and $23 million in the three months ended March 31,

2025 and 2024, respectively. Transaction-related costs associated with the Combination comprised of banking and financing related

costs as well as legal and other professional services which were directly attributable to the Combination and retention payments that

were contractually committed to and associated with the successful completion of the Combination.

Integration-related expenses associated with the Combination were $34 million in the three months ended March 31, 2025. 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.

**Pension and Other Postretirement Non-Service Income (**Expense), Net

Pension and other postretirement non-service income (expense), net decreased by $19 million, to income of $9 million in the three

months ended March 31, 2025, from expense of $10 million in the three months ended March 31, 2024. This decrease was primarily

due to an $80 million increase in the return on plan assets primarily due to acquired pension assets in connection with the

Combination, that was partially offset by an increase in interest costs of $64 million primarily due to acquired pension liabilities in

connection with the Combination.

Interest Expense, Net

Interest expense, net increased by $142 million to $167 million in the three months ended March 31, 2025, from $25 million in the

three months ended March 31, 2024. The increase was primarily the result of interest on debt assumed as part of the Combination and

the senior notes issued in April 2024 (for further details on these senior notes see “Note 14. Debt” of the 2024 Consolidated Financial

Statements). The increase was partially offset by higher interest income of $16 million primarily due to increased average cash

balances in the period.

Other Expense, Net

Other expense, net remained at $5 million in the three months ended March 31, 2025, consistent with the three months ended

March 31, 2024 due to a $6 million net positive impact from foreign currency translation of monetary assets and liabilities and a $4

million increase in income from equity method investments. This was offset by a $10 million expense recorded in the three months

ended March 31, 2025 in connection with the sale of receivables under an accounts receivable monetization program acquired as a

result of the Combination.

Income Tax Expense

Income tax expense was $8 million in the three months ended March 31, 2025, compared to an income tax expense of $76 million in

the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 2025, was 2.1%, while the

effective tax rate for the three months ended March 31, 2024, was 28.5%. The effective tax rate was primarily impacted by the

resolution of certain unrecognized tax benefits.

See “Note 12. Income Taxes” of the Condensed Consolidated Financial Statements for the primary factors impacting our effective tax

rates.

SEGMENT INFORMATION

Smurfit Westrock has identified three operating segments based on how the CODM makes key operating decisions, allocates resources

and assesses the performance of the Company’s business. These operating segments are as follows: (i) North America, which includes

operations in the U.S., Canada and Mexico, (ii) Europe, MEA and APAC and (iii) LATAM, which includes operations in Central

America and Caribbean, Argentina, Brazil, Chile, Colombia, Ecuador and Peru. No operating segments have been aggregated for

disclosure purposes.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis, but

exclude certain central costs such as corporate costs, including executive costs, and costs of Smurfit Westrock’s legal, company

secretarial, pension administration, tax, treasury and controlling functions and other administrative costs. Segment profitability is

measured based on Adjusted EBITDA, defined as income before income taxes, unallocated corporate costs, depreciation, depletion

and amortization, interest expense, net, pension and other postretirement non-service income (expense), net, share-based compensation

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

	Three months ended March 31,
	2025		2024
Net sales (aggregate):****(1)
North America	$4,669		$412
Europe, MEA and APAC	2,582		2,194
LATAM	513		341
Segment Adjusted EBITDA:
North America	$785		$59
Europe, MEA and APAC	389		385
LATAM	115		54

(1) Net sales before intersegment eliminations

The three months ended March 31, 2025*, compared to the* three months ended March 31, 2024

North America Segment

Net Sales

Net sales before intersegment eliminations for the North America segment increased by $4,257 million, to $4,669 million in the three

months ended March 31, 2025, from $412 million in the three months ended March 31, 2024. This increase was primarily due to the

positive impact of $4,276 million from the acquisition of WestRock.

Adjusted EBITDA

Adjusted EBITDA for the North America segment increased by $726 million, to $785 million in the three months ended March 31,

2025, from $59 million in the three months ended March 31, 2024. This increase was primarily due to the positive impact of $718

million from the acquisition of WestRock.

Europe, MEA and APAC Segment

Net Sales

Net sales before intersegment eliminations for the Europe, MEA and APAC segment increased by $388 million, to $2,582 million in

the three months ended March 31, 2025, from $2,194 million in the three months ended March 31, 2024. This increase was primarily

due to the impact of $378 million which related to the acquisition of WestRock. Excluding the impact of this acquisition, net sales

before intersegment eliminations increased by $10 million primarily due to a higher selling price mix of $138 million, largely offset by

a net foreign currency impact of $81 million primarily due to the strengthening of the U.S. dollar against the euro and a negative

volume impact of $44 million.

Adjusted EBITDA

Adjusted EBITDA for the Europe, MEA and APAC segment increased by $4 million, to $389 million in the three months ended

March 31, 2025, from $385 million in the three months ended March 31, 2024. There was a $37 million positive impact from the

acquisition of WestRock. Excluding the impact of this acquisition, Adjusted EBITDA decreased by $33 million mainly due to higher

input prices of $166 million and a net foreign currency impact of $9 million, partly offset by a higher selling price mix impact of $138

million.

LATAM Segment

Net Sales

Net sales before intersegment eliminations for the LATAM segment increased by $172 million, to $513 million in the three months

ended March 31, 2025, from $341 million in the three months ended March 31, 2024. This increase was primarily due to the positive

impact of $177 million from the acquisition of WestRock.

Adjusted EBITDA

Adjusted EBITDA for the LATAM segment increased by $61 million, to $115 million in the three months ended March 31, 2025,

from $54 million in the three months ended March 31, 2024. This increase was primarily due to the positive impact of $54 million

from the acquisition of WestRock.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

Smurfit Westrock’s primary sources of liquidity are the cash flows generated from its operations, its commercial paper program, and

committed credit lines. The uncommitted commercial paper program is supported by the $4,500 million revolving loan facility with a

separate swingline sub-facility which allows for same-day drawing in U.S. dollar. The amount of commercial paper outstanding does

not reduce available capacity under the revolving loan facility. The primary uses of this liquidity are to fund Smurfit Westrock’s day-

to-day operations, capital expenditures, debt service, dividends and other investment activity, including acquisitions.

As of March 31, 2025, Smurfit Westrock held cash and cash equivalents of $797 million, of which $357 million were held in euro,

$173 million were held in U.S. dollars and $267 million were held in other currencies. At March 31, 2025, the Company had $4,833

million in undrawn committed facilities available under the revolving loan facility and receivables securitization facilities. The

weighted average period until maturity of undrawn committed facilities was 4.2 years as of March 31, 2025. Combined with cash and

cash equivalents of $797 million, the Company had $5,630 million of available liquidity.

As of March 31, 2025, Smurfit Westrock had $14,281 million of debt, excluding debt issuance costs. As of March 31, 2025, the

carrying amount of current debt was $1,300 million. The carrying amount of the Company’s debt includes a fair value adjustment

related to debt assumed through mergers and acquisitions. At March 31, 2025 the unamortized fair value market adjustment was

$45 million. Included within the carrying value of Smurfit Westrock’s borrowings as of March 31, 2025 are deferred debt issuance

costs of $62 million, of which $8 million is current, all of which will be recognized in interest expense in Smurfit Westrock’s

Condensed Consolidated Statements of Operations using the effective interest rate method over the remaining life of the borrowings.

See “Note 11. Debt” of the Condensed Consolidated Financial Statements for a discussion of the Company’s additional debt-related

information.

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

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

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

foreseeable future.

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

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

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

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

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

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

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

Condensed Consolidated Balance Sheets. Receivables involved with these customer-based SCF programs constitute approximately 5%

of the Company’s accounts receivable balance at March 31, 2025. In addition, Smurfit Westrock has monetization facilities that sell to

third-party financial institutions all of the short-term receivables generated from certain customer trade accounts. See “Note 10. Fair

Value Measurement” of the Condensed Consolidated Financial Statements for a discussion of the Company’s monetization facilities.

Smurfit Westrock’s working capital management strategy includes working with its suppliers to revisit terms and conditions, including

the extension of payment terms. The Company’s current payment terms with the majority of its suppliers generally range from payable

upon receipt to 120 days and vary for items such as the availability of cash discounts. The Company does not believe its payment

terms will be shortened significantly in the near future, and does not expect its net cash provided by operating activities to be

significantly impacted by additional extensions of payment terms. Certain financial institutions offer voluntary SCF programs that

enable the Company’s suppliers, at their sole discretion, to sell their receivables from Smurfit Westrock to the financial institutions on

a non-recourse basis at a rate that leverages the Company’s credit rating and thus might be more beneficial to the Company’s

suppliers. Smurfit Westrock and its suppliers agree on commercial terms for the goods and services we procure, including prices,

quantities and payment terms, regardless of whether the supplier elects to participate in SCF programs. The suppliers sell Smurfit

Westrock goods or services and issue the associated invoices based on the agreed-upon contractual terms. The due dates of the

invoices are not extended due to the supplier’s participation in SCF programs. Smurfit Westrock suppliers, at their sole discretion if

they choose to participate in a SCF program, determine which invoices, if any, they want to sell to the financial institutions. No

guarantees are provided by the Company under SCF programs, and it has no economic interest in a supplier’s decision to participate in

the SCF program. Therefore, amounts due to the Company’s suppliers that elect to participate in SCF programs are included in the

“Accounts payable” line item in the Company’s Condensed Consolidated Balance Sheets and the activity is reflected in “Net cash

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

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

the financial institutions varies from period to period, the amount generally averages approximately 12-14% of the Company’s

accounts payable balance. The outstanding payment obligations to financial institutions under these programs were $389 million as of

March 31, 2025.

Smurfit Westrock also participates in certain vendor financing and commercial card programs to support travel and entertainment

expenses and smaller vendor purchases. Amounts outstanding under these programs are classified as debt primarily because the

Company receives the benefit of extended payment terms and a rebate from the financial institution that would not have otherwise

been received without the financial institution's involvement. Smurfit Westrock also has receivables securitization facilities that allows

for borrowing availability based on underlying accounts receivable eligibility and compliance with certain covenants. See “Note 11.

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

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

Cash Flow Activity

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

Flows for the three months ended March 31, 2025 and 2024:

	Three months ended March 31,
	($ in millions)
	2025	2024
Net cash provided by operating activities	$235	$42
Net cash used for investing activities	$(476)	$(207)
Net cash provided by financing activities	$151	$—

Net cash provided by operating activities increased by $193 million to $235 million in the three months ended March 31, 2025 from

$42 million in the three months ended March 31, 2024, primarily due to a $627 million increase in net income adjusted for non-cash

items, including depreciation, depletion and amortization, cash surrender value increase in excess of premiums paid, share-based

compensation expense, deferred income tax benefit, and pension and other postretirement funding more than cost. The increase in net

income adjusted for non-cash items was partially offset by the $434 million increase in the cash outflows from changes in operating

assets and liabilities as a result of the Combination and a higher selling price mix. The increase in the cash outflows from changes in

operating assets and liabilities includes the outflows of $39 million resulting from the sale of accounts receivables in connection with

monetization agreements.

Net cash used for investing activities of $476 million in the three months ended March 31, 2025 consisted primarily of capital

expenditures of $477 million. Net cash used for investing activities of $207 million in the three months ended March 31, 2024

consisted primarily of capital expenditures of $208 million.

Net cash provided by financing activities of $151 million in the three months ended March 31, 2025 consisted primarily of cash

inflows from a net increase in debt of $444 million, partially offset by cash dividends paid to shareholders of $225 million, tax paid in

connection with shares withheld from employees of $64 million and debt issuance costs of $5 million. Net cash used for financing

activities of nil in the three months ended March 31, 2024 consisted of cash outflows from purchases of treasury stock of $27 million

offset by cash inflows from a net increase in debt of $27 million.

Contractual Obligations and Commitments

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

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

contractual obligations are reflected on Smurfit Westrock’s Condensed Consolidated Balance Sheets as of March 31, 2025, while

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

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

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

Analysis of Financial Condition and Results of Operations” of the Form 10-K for the fiscal year ended December 31, 2024.

Off-Balance Sheet Arrangements

As of March 31, 2025, Smurfit Westrock did not have any off-balance sheet arrangements.

NON-GAAP FINANCIAL MEASURE

Definitions

Non-GAAP Financial Measure

Smurfit Westrock reports its financial results in accordance with generally accepted accounting principles in the U.S. (“GAAP”).

However, management believes “Adjusted EBITDA”, a non-GAAP financial measure discussed below, provides Smurfit Westrock’s

Board of directors, investors, potential investors, securities analysts and others with additional meaningful financial information that

should be considered when assessing its ongoing performance relative to other periods because it adjusts out non-recurring items that

management believes are not indicative of the ongoing results of the business. Smurfit Westrock management also uses this non-

GAAP financial measure in making financial, operating and planning decisions, and in evaluating company performance. Non-GAAP

financial measures are not intended to be considered in isolation of or as a substitute for, or superior to, financial information prepared

and presented in accordance with GAAP and should be viewed in addition to, and not as an alternative for, the GAAP results. The

non-GAAP financial measure Smurfit Westrock presents may differ from similarly captioned measures presented by other companies.

Adjusted EBITDA

Smurfit Westrock uses the non-GAAP financial measure “Adjusted EBITDA” to evaluate its overall performance. The composition of

Adjusted EBITDA is not addressed or prescribed by GAAP. Smurfit Westrock defines Adjusted EBITDA as net income before

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

income (expense), net, share-based compensation expense, other expense, net, 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.

Management believes that the most directly comparable GAAP measure to Adjusted EBITDA is “Net income”.

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

GAAP measure, for the periods indicated.

	Three months ended March 31,
	($ in millions)
	2025		2024
Net income	$382		$191
Income tax expense	8		76
Depreciation, depletion and amortization	603		148
Transaction and integration-related expenses associated with the Combination	36		23
Interest expense, net	167		25
Pension and other postretirement non-service (income) expense, net	(9)		10
Share-based compensation expense	43		15
Other expense, net	5		5
Other adjustments	17		(18)
Adjusted EBITDA	$1,252		$475

Other adjustments in the table above include restructuring costs of $15 million and losses at closed facilities of $2 million for the three

months ended March 31, 2025. For the three months ended March 31, 2024, Other adjustments includes a reimbursement of a fine

from the Italian Competition Authority of $18 million.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes during the three months ended March 31, 2025 to Smurfit Westrock’s critical accounting policies

and estimates as identified in Smurfit Westrock’s Annual Report on Form 10-K for the year ended December 31, 2024.

NEW ACCOUNTING STANDARDS

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

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

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