Smurfit WestRock SW · USD

3. Segment InformationThe chief operating decision maker (“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.We have identified three operating segments, which are also our reportable segments, as follows: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.Our operating segments are consistent with our internal management structure and no operating segments have been aggregated for disclosure purposes.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.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.

4. Revenue RecognitionDisaggregated RevenueASC 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 years ended December 31, 2025, 2024 and 2023. Net sales are attributed to segments based on the location of production. Year ended December 31, 2025North AmericaEurope, MEA and APACLATAMTotalRevenue by product:Paper$4,386$1,552$192$6,130Packaging13,8349,3081,90725,049Total$18,220$10,860$2,099$31,179Year ended December 31, 2024North AmericaEurope, MEA and APACLATAMTotalRevenue by product:Paper$2,271$1,468$117$3,856Packaging7,6308,0881,53517,253Total$9,901$9,556$1,652$21,109Year ended December 31, 2023North AmericaEurope, MEA and APACLATAMTotalRevenue by product:Paper$106$1,380$53$1,539Packaging1,5177,8041,23310,554Total$1,623$9,184$1,286$12,093Packaging 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.Revenue Contract BalancesContract 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.On the Consolidated Balance Sheets, contract assets reported within “Other current assets” were $170 million and $197 million at December 31, 2025 and December 31, 2024, respectively, and contract liabilities reported within “Other current liabilities” were $6 million and $5 million at December 31, 2025 and December 31, 2024, respectively.

21. Commitments and ContingenciesWe have financial commitments and obligations that arise in the ordinary course of our business. These include debt (discussed in “Note 15. Debt”), lease obligations (discussed in “Note 13. Leases”), pension liabilities (discussed in “Note 19. Retirement Plans and Deferred Compensation Arrangements”) and capital commitments, purchase commitments and certain legal proceedings are discussed below.Capital CommitmentsEstimated costs for future purchases of Property, plant and equipment that we are obligated to purchase as of December 31, 2025, are $1,149 million.Purchase CommitmentsIn the table below, we set forth our enforceable and legally binding purchase obligations as of December 31, 2025, excluding the capital commitments disclosed above. These obligations relate to various purchase agreements for items such as minimum amounts of energy, supplies (including fiber, wood, and chemicals), transport and software licensing over periods generally ranging from one year to seven 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:Year ended December 31,Total2026$60920272632028159202977203065Thereafter109Total$1,282Brazil Tax LiabilityOur 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.

15. DebtThe following were individual components of debt: December 31,20252024AmountWeighted average interest rateAmountWeighted average interest rate$292 million senior debentures due 2025$——%$2927.5%$700 million receivables securitization due 20275505.0%4355.7%$500 million senior notes due 2027——%5003.4%€750 million senior notes due 2027——%7811.5%$600 million senior notes due 20286004.0%6004.0%$500 million senior notes due 20285003.9%5003.9%$750 million senior notes due 20297504.9%7504.9%€500 million senior green notes due 20295870.5%5200.5%€230 million receivables securitization due 20292573.6%54.3%€100 million receivables securitization due 20291173.1%——%$400 million senior notes due 20304008.2%4008.2%$750 million senior green notes due 20307505.2%7505.2%$300 million senior notes due 20313008.0%3008.0%€500 million senior green notes due 20315873.5%——%$500 million senior notes due 20325004.2%5004.2%$76 million senior notes due 2032766.8%766.8%€600 million senior green notes due 20327043.5%6243.5%$600 million senior notes due 20336003.0%6003.0%€500 million senior green notes due 20335871.0%5201.0%$1,000 million senior green notes due 20341,0005.4%1,0005.4%$850 million senior green notes due 20358505.4%8505.4%$800 million senior green notes due 20368005.2%——%€600 million senior green notes due 20367043.8%6243.8%$3 million senior notes due 203736.8%36.8%$150 million senior notes due 20471507.6%1507.6%$1,000 million senior green notes due 20541,0005.8%1,0005.8%Commercial paper1554.0%5464.8%Vendor financing and commercial card programs99—%116—%Farm credit facility6005.5%6006.1%Other bank loans938.3%1297.2%Finance lease obligations5485.8%5365.8%Total debt, excluding fair value adjustments, bond discounts and debt issuance costs13,86713,707Unamortized fair value adjustments, bond discounts and debt issuance costs(94)(112)Total debt13,77313,595Less: Current portion of debt(346)(1,053)Non-current debt due after one year$13,427$12,542As of December 31, 2025, we have senior notes in issuance with a total par value of $11,448 million (December 31, 2024: $11,340 million), of which $3,169 million are denominated in euro (December 31, 2024: $3,069 million) and $8,279 million are denominated in U.S. dollars (December 31, 2024: $8,271 million).The weighted average interest rate for short-term debt was 3.3% and 5.1% as of December 31, 2025, and 2024, respectively.

18. Income Taxes The components of income before income taxes are as follows:Years ended December 31,202520242023Income before income taxes:Domestic (Ireland)$315$197$173Foreign (U.S.)(73)(111)(17)Foreign (Other)717474982Total income before income taxes$959$560$1,138Income tax expense consists of the following components:Current tax expense (net of investment tax credits of $6, $8 and $10)Domestic (Ireland)$71$64$44Foreign (U.S., Federal & State)42664Foreign (Other)337248292Total current tax expense$450$378$340Deferred tax expense (benefit):Domestic (Ireland)$(4)$19$2Foreign (U.S., Federal & State)(108)(123)1Foreign (Other)(78)(33)(31)Total deferred tax benefit(190)(137)(28)Total income tax expense$260$241$312Total income tax expense consists of the following components:Domestic (Ireland)$67$83$46Foreign (U.S., Federal & State)(66)(57)5Foreign (Other)259215261Total income tax expense$260$241$312The 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 for the year ended December 31, 2025 is as follows:Year ended December 31,2025Income before income taxes$959Ireland corporate tax rate 12012.5%Foreign tax effectsUnited States Statutory tax rate difference between United States and Ireland (8)(0.8)% State and local taxes, net of federal benefit (8)(0.8)% Change in valuation allowances 333.4% Effects of cross border tax laws - GILTI 111.1% Effects of cross border tax laws - Subpart F 121.3% Nontaxable company-owned life insurance (COLI) (9)(0.9)% R&D tax credits (8)(0.8)% Other 80.8%MexicoStatutory tax rate difference between Mexico and Ireland323.3%Tax benefits associated with inflation deductions(41)(4.3)%Other10.1%BrazilStatutory tax rate difference between Brazil and Ireland232.4%Other(5)(0.5)%FranceStatutory tax rate difference between France and Ireland151.6%Corporate surtax80.8%Other30.3%Spain Statutory tax rate difference between Spain and Ireland 141.5% Other (9)(0.9)%ColombiaStatutory tax rate difference between Colombia and Ireland181.9%Other(3)(0.3)%Germany Local corporate trade tax (8)(0.8)% Other 30.3%NetherlandsTax expense from foreign currency exchange transactions101.0%Austria Statutory tax rate difference between Austria and Ireland 80.8% Other 10.1%SwedenStatutory tax rate difference between Sweden and Ireland70.7%Other10.1%Other foreign jurisdictions464.

17. Share-based CompensationShare-based compensation expense relates primarily to awards granted under the Deferred Bonus Plan (“DBP”) and the Performance Share Plan (“PSP”) as well as Performance Share Units (“PSUs”) and Restricted Stock Units (“RSUs”). Share-based compensation expense recognized in the Consolidated Statements of Operations is as follows: Years ended December 31,202520242023Deferred Bonus Plan$15$24$29Performance Share Plan616535Performance Share Units112—Restricted Stock Units50109—Total share-based compensation expense$137$200$64Income tax benefit related to share-based compensation expense$12$15$—Social charges relating to equity settled share-based payments for the years ended December 31, 2025, 2024 and 2023, were $2 million, $6 million and $2 million, respectively.The following note disclosure details the legacy Smurfit Kappa 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 PlanThe DBP is a legacy Smurfit Kappa plan. No new awards were issued under the DBP from 2025 onwards. The number of shares awarded under the DBP during the years ended December 31, 2024 and 2023, were 651,648 and 764,182, respectively.During the years ended December 31, 2025, 2024 and 2023, 586,113, 523,972, and 483,801 shares vested having a fair value of $32 million, $21 million, and $18 million, respectively. As of December 31, 2025, the unrecognized compensation expense related to the DBP was $12 million, which will be recognized over the remaining weighted average vesting period of 1.2 years.Performance Share PlanThe PSP is a legacy Smurfit Kappa plan. No new awards were issued under the PSP during 2025. The number of shares awarded under the PSP during the years ended December 31, 2024 and 2023 were 1,700,922, and 2,003,416, respectively.During the years ended December 31, 2025, 2024 and 2023, 1,414,298, 742,163 and 1,322,030 shares vested having a fair value of $77 million, $30 million and $50 million, respectively.As of December 31, 2025, the unrecognized compensation expense related to the PSP was $33 million, which will be recognized over the remaining weighted average vesting period of 1.1 years.

13. LeasesComponents of Lease CostsThe following table presents certain information related to the lease costs for finance and operating leases:Years ended December 31,202520242023Operating lease costs$(391)$(264)$(118)Variable and short-term lease costs(144)(123)(47)Finance lease cost:Amortization of lease assets(54)(26)(3)Interest on lease liabilities(20)(14)(1)Total lease costs$(609)$(427)$(169)Supplemental Consolidated Balance Sheets Information Related to LeasesBalance Sheet LocationDecember 31,20252024Operating leases:Operating lease right-of-use assetsOther non-current assets$1,051$986Current operating lease liabilitiesOther current liabilities$321$309Non-current operating lease liabilitiesOther non-current liabilities774710Total operating lease liabilities$1,095$1,019Finance leases:Property, plant and equipmentProperty, plant and equipment, net$472$419Accumulated amortization(84)(36)Property, plant and equipment, net$388$383 Current finance lease liabilitiesCurrent portion of debt$43$33Non-current finance lease liabilitiesNon-current debt due after one year507506Total finance lease liabilities$550$539Lease Term and Discount RateDecember 31,20252024Weighted average remaining lease term:Operating leases6.5 years5.1 yearsFinance leases11.9 years13.1 yearsWeighted average discount rate:Operating leases5.0%4.9%Finance leases5.8%5.

2. Acquisitions2024 AcquisitionsAs referred to in “Note 1. Description of Business and Summary of Significant Accounting Policies”, the Combination (consisting of the Merger with WestRock and the Smurfit Kappa Share Exchange) closed on July 5, 2024. The Combination created a global leadership position for the Company in sustainable packaging, characterized by quality, product, and geographic diversity.Merger Consideration The following table summarizes the components of the aggregate consideration for the Merger. 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(1)$1,291Smurfit Westrock Shares issued to WestRock Shareholders(2)12,098Converted WestRock Options and WestRock RSU Awards attributable to pre-Combination service(3)101Settlement of pre-existing relationships, trade and other payable and receivable balances with WestRock(4)(29)Aggregate Merger Consideration$13,461(1) 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.(2) 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. (3) 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.(4) 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.