GRAPHIC PACKAGING HOLDING CO

Note 1. Nature of Business and Summary of Significant Accounting Policies

Nature of Business

Graphic Packaging Holding Company ("GPHC" and, together with its subsidiaries, the "Company") is committed to creating consumer packaging that makes a world of difference. The Company, a leading sustainable consumer packaging provider, operates on a global basis, is one of the largest producers of cartons and containers for the packaging of consumer goods and paperboard-based foodservice packaging solutions in the United States ("U.S.") and Europe, and holds leading market positions in paperboard used to produce consumer packaging solutions, including recycled, unbleached and bleached paperboard.

The Company's customers include many of the world's most widely recognized companies and brands with prominent market positions in beverage, food, foodservice and other consumer products. The Company strives to provide innovative paperboard packaging solutions preferred by consumers. The Company delivers marketing and performance benefits to its customers through its global packaging network, its proprietary carton and packaging designs, and its commitment to quality, service, and environmental stewardship.

Basis of Presentation and Principles of Consolidation

The Company's Consolidated Financial Statements include all subsidiaries in which the Company has the ability to exercise direct or indirect control over operating and financial policies. Intercompany transactions and balances are eliminated in consolidation.

The Company is a party to a Japanese joint venture, Rengo Riverwood Packaging, Ltd. in which it holds a 50% ownership interest that is accounted for using the equity method.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are recorded when known. Estimates are used in accounting for, among other things, pension benefits, retained insurable risks, slow-moving and obsolete inventory, allowance for doubtful accounts, useful lives for depreciation and amortization, impairment testing of goodwill and long-lived assets, fair values related to acquisition accounting, fair value of derivative financial instruments, share-based compensation, deferred income tax assets and potential income tax assessments, and loss contingencies.

Cash and Cash Equivalents

Cash and cash equivalents include bank deposits and other marketable securities that are highly liquid with maturities of three months or less.

Accounts Receivable and Allowances

Accounts receivable are stated at the amount owed by the customer, net of an allowance for estimated uncollectible accounts, returns and allowances, and cash discounts. The allowance for doubtful accounts is estimated based on historical experience, current economic conditions, reasonable and supportable forecasts of future economic conditions and the creditworthiness of customers. Receivables are charged to the allowance when determined to be no longer collectible.

The Company engages with third-party financial institutions to sell certain trade accounts receivable from customers. Transfers under these agreements meet the requirements to be accounted for as sales of receivables in accordance with the Transfers and Servicing topic of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification (the "Codification"). The receivables sold are reflected as a reduction of accounts receivable on the Consolidated Balance Sheets at the time of sale. The corresponding proceeds are reflected in Cash Flows from Operating Activities within the Consolidated Statements of Cash Flows. Receivables related to the Company's European program are sold in exchange for cash and a Beneficial Interest, therefore, a portion of the proceeds are reflected as "Beneficial Interest on Sold Receivables" and "Beneficial Interest Obtained in Exchange for Proceeds" in Cash Flows from Investing Activities within the Consolidated Statements of Cash Flows. The loss on sale for all programs is included in Other Expense, Net in the Consolidated Statements of Operations. The following table summarizes the activity under these programs for the years ended December 31, 2025 and 2024:

(a)Included in Other Current Assets on the Consolidated Balance Sheets and represents a beneficial interest in the receivables sold to the financial institutions, which is a Level 3 fair value measure.

Receivables sold under all programs subject to continuing involvement, which consists principally of collection services, were $814 million and $778 million as of December 31, 2025 and 2024, respectively.

The Company also participates in supply chain financing arrangements offered by certain customers that qualify for sale accounting in accordance with the Transfers and Servicing topic of the FASB Codification. As of December 31, 2025 and 2024, the Company sold receivables of $1,138 million and $1,104 million, respectively, related to these arrangements.

The fees associated with the sale of receivables for all programs were $57 million and $64 million as of December 31, 2025 and 2024, respectively, and are included in Other Expense, Net in the Consolidated Statements of Operations.

Accounts Payable and Supplier Finance Program

The Company has arranged a supplier finance program ("SFP") with a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date on the applicable invoice. The transactions are at the sole discretion of both the suppliers and financial institution, and GPHC is not a party to the agreements and has no economic interest in the supplier's decision to sell a receivable. The range of payment terms negotiated by the Company with its suppliers is consistent, irrespective of whether a supplier participates in the program. The agreement with the financial intermediary does not require GPHC to provide assets pledged as security or other forms of guarantees for the SFP. Amounts due to the Company's suppliers that elected to participate in the SFP are included in Accounts Payable on the Consolidated Balance Sheets and payments made under the SFP are reflected in Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.

The activity of the Company's outstanding obligations confirmed as valid under its SFP for the years ended December 31, 2025 and 2024, is as follows:

Non-cash additions to Property, Plant and Equipment, Net included within Accounts Payable on the Consolidated Balance Sheets were $79 million, $198 million, and $145 million as of December 31, 2025, 2024 and 2023, respectively.

Concentration of Credit Risk

The Company's cash, cash equivalents, and accounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents are placed with financial institutions that management believes are of high credit quality. Accounts receivable are derived from revenue earned from customers located in the U.S. and internationally and generally do not require collateral. For the years ended December 31, 2025, 2024 and 2023, no customer accounted for more than 10% of net sales.

Inventories

Inventories are stated at the lower of cost and net realizable value with cost determined based on standard (which approximates actual), average or actual cost. Work in progress and finished goods inventories are valued at the cost of raw material consumed plus direct manufacturing costs (such as labor, utilities and supplies) as incurred and an applicable portion of manufacturing overhead. Inventories are stated net of an allowance for slow-moving and obsolete inventory.

Property, Plant and Equipment and Depreciation

Property, plant and equipment are recorded at cost. Improvements, renewals and extraordinary repairs that extend the life of the asset are capitalized; other repairs and maintenance charges are expensed as incurred. The Company's cost and related accumulated depreciation applicable to assets retired or sold are removed from the accounts and the gain or loss on disposition is included in income from operations.

Interest is capitalized on assets under construction for one year or longer with an estimated spending of $1 million or more. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset's estimated useful life. Capitalized interest was $52 million, $34 million and $8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company assesses its long-lived assets, including certain identifiable intangibles, for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. To analyze recoverability, the Company projects future cash flows, undiscounted and before interest, over the remaining life of such assets. If these projected cash flows are less than the carrying amount, an impairment would be recognized, resulting in a write-down of assets with a corresponding charge to earnings. The impairment loss is measured based upon the difference between the carrying amount and the fair value of the assets. The Company assesses the appropriateness of the useful life of its long-lived assets periodically.

Depreciation is computed using the straight-line method based on the following estimated useful lives of the related assets:

Depreciation expense, including the depreciation expense of assets under finance leases, for 2025, 2024 and 2023 was $467 million, $463 million and $528 million, respectively.

Intangible Assets and Amortization

Intangible assets with a determinable life are amortized on a straight-line or accelerated basis over their useful lives. The amortization expense for each intangible asset is recorded in the Consolidated Statements of Operations according to the nature of that asset.

Goodwill is the Company's only intangible asset not subject to amortization. The following table displays the intangible assets that continue to be subject to amortization and accumulated amortization expense as of December 31, 2025 and 2024:

The Company recorded amortization expense for the years ended December 31, 2025, 2024 and 2023 of $69 million, $94 million and $91 million, respectively. The Company expects amortization expense for the next five consecutive years to be approximately as follows: $64 million, $63 million, $61 million, $59 million, and $57 million.

Goodwill

The Company evaluates goodwill for impairment annually as of October 1, as well as whenever events or changes in circumstances suggest that the fair value of a reporting unit may no longer exceed its carrying amount.

The Company tests goodwill for impairment at the reporting unit level, which is an operating segment or a level below an operating segment, which is 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 management regularly reviews the operating results of that component. Two or more components of an operating segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. As of October 1, 2025, the Company had five reporting units, four of which had goodwill.

The Company may perform a qualitative impairment analysis of goodwill associated with each of its reporting units to determine if it is more likely than not that the carrying value of a reporting unit exceeded its fair value. The Company performed a quantitative impairment test as of October 1, 2025.

The impairment evaluation of goodwill is measured at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the estimated fair value of the reporting unit. The estimated fair value of each reporting unit is determined by utilizing a cash flow analysis based on the Company's forecasts, discounted using a weighted-average cost of capital and market indicators of terminal year cash flows based upon a multiple of EBITDA. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is considered impaired.

In determining fair value, management considers a number of factors in developing our forecasts of future cash flows, including but not limited to, economic projections of revenues and EBITDA margins, changes in working capital, capital expenditures and discount rates, and market data and analysis, including EBITDA exit multiples. The assumptions used are based on what a hypothetical market participant would use in estimating fair value. Fair value determinations are sensitive to changes in the factors described above. The assumptions used are based on what a hypothetical market participant would use in estimating fair value. There are inherent uncertainties related to these factors and judgments used to estimate the reporting unit fair value and the related analysis of potential goodwill impairment.

As a result of its annual quantitative impairment test, the Company concluded that all reporting units with goodwill have a fair value that exceeded their carrying value, and thus goodwill was not impaired.

A material change in the fair value or carrying value of our International, Foodservice or Paperboard Manufacturing reporting units may result in impairment of the reporting units. For example, our ability to achieve our projected revenues and targeted EBITDA margins are key assumptions in our estimated future cash flows. If our actual experience in future years falls significantly below our current projections, the fair value of the reporting unit could be negatively impacted. Similarly, an increase in interest rates would lower our discounted cash flows and negatively impact the fair value of the reporting unit. A decline in the market price of our common stock, resulting in a decrease in our market capitalization may indicate a decline in the fair value of individual reporting units. We believe our projections and assumptions are reasonable based on current market conditions, past performance and other factors but it is possible they could change, impacting our fair value estimate, or the carrying value could change.

The following is a rollforward of goodwill by reportable segment:

(a)Represents goodwill and final purchase accounting adjustments recorded for Bell. (see Note 4. Business Combinations).

(b)Relates to the Augusta Divestiture (see Note 19. Divestitures).

Asset Retirement Obligations

Asset retirement obligations are accounted for in accordance with the provisions of the Asset Retirement and Environmental Obligations topic of the FASB Codification. A liability and asset are recorded equal to the present value of the estimated costs associated with the retirement of long-lived assets where a legal or contractual obligation exists and the liability can be reasonably estimated. The liability is accreted over time and the asset is depreciated over the remaining life of the asset. Upon settlement of the liability, the Company will recognize a gain or loss for any difference between the settlement amount and the liability recorded. Asset retirement obligations with indeterminate settlement dates are not recorded until such time that a reasonable estimate may be made. The Company's asset retirement obligations consist primarily of landfill closure and post-closure costs at certain of its paperboard manufacturing facilities. At December 31, 2025 and 2024, the Company had liabilities of $12 million and $12 million, respectively. The liabilities are primarily reflected as Other Noncurrent Liabilities on the Consolidated Balance Sheets.

International Currency

The functional currency of the international subsidiaries is usually the local currency for the country in which the subsidiaries own their primary assets. The translation of the applicable currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate during the period. Any related translation adjustments are recorded directly to a separate component of Shareholders' Equity, unless there is a sale or substantially complete liquidation of the underlying foreign investments. Gains and losses on foreign currency transactions are included in Other Expense, Net in the Consolidated Statements of Operations, for the period in which the exchange rate changes.

The Company pursues a currency hedging program which utilizes derivatives to reduce the impact of foreign currency exchange fluctuations on its consolidated financial results. Under this program, the Company has entered into forward exchange contracts in the normal course of business to hedge certain foreign currency denominated transactions. Realized and unrealized gains and losses on these forward contracts are included in the measurement of the basis of the related foreign currency transaction when recorded.

Revenue Recognition

The Company manufactures and converts paperboard for and into consumer packaging made from renewable or recycled materials, from which it generates revenue from contracts with customers. Revenue is disaggregated primarily by geography as further explained in Note 15. Business Segment and Geographic Area Information. All reportable segments and the Paperboard Manufacturing operating segment recognize revenue under the same method, allocate transaction price using similar methods, and have similar economic factors impacting the uncertainty of revenue and related cash flows.

Revenue is recognized on the Company's annual and multi-year supply contracts when the Company satisfies the performance obligation by transferring control over the product or service to a customer, which is generally based on shipping terms and passage of title under the point-in-time method of recognition. For the years ended December 31, 2025, 2024 and 2023, the Company recognized $8,581 million, $8,775 million and $9,383 million, respectively, of revenue from contracts with customers.

The transaction price allocated to each performance obligation consists of the stand-alone selling price, estimates of rebates and other sales or contract renewal incentives, and cash discounts and sales returns ("Variable Consideration") and excludes sales tax. Estimates are made for Variable Consideration based on contract terms and historical experience of actual results and are applied to the performance obligations as they are satisfied. Purchases by the Company's principal customers are manufactured and shipped with minimal lead time, therefore performance obligations are generally satisfied shortly after manufacturing and shipment. The Company uses standard payment terms that are consistent with industry practice.

The Company's contract assets consist primarily of contract renewal incentive payments to customers which are amortized over the period in which performance obligations related to the contract renewal are satisfied. As of December 31, 2025 and 2024, contract assets were $21 million and $24 million, respectively. The Company's contract liabilities consist principally of rebates, and as of December 31, 2025 and 2024 were $59 million and $69 million, respectively.

Retained Insurable Risks

It is the Company's policy to self-insure or fund a portion of certain expected losses related to group health benefits and workers' compensation claims. Provisions for expected losses are recorded based on the Company's estimates, on an undiscounted basis, of the aggregate liabilities for known claims and estimated claims incurred but not reported.

Shipping and Handling

The Company includes shipping and handling costs in Cost of Sales.

Research and Development

Research and development costs, which relate primarily to the development and design of new packaging machines and products and are recorded as a component of Selling, General and Administrative expenses, are expensed as incurred. Expenses for the years ended December 31, 2025, 2024 and 2023 were $19 million, $17 million, and $16 million, respectively.

Business Combinations, Exit Activities and Other Special Items, Net

The following table summarizes the transactions recorded in Business Combinations, Exit Activities and Other Special Items, Net in the Consolidated Statements of Operations for the years ended December 31:

(a)Relates to the Company's closures of itsthree smaller recycled paperboard manufacturing facilities (which includes Tama, Middletown and East Angus), the closures of multiple packaging facilities, and the discontinuation of the Texarkana swing capacity project (see Note 18. Exit Activities).

(b)Includes the sale of the Augusta, Georgia bleached paperboard manufacturing facility (the “Augusta Divestiture”) in 2024 and the sale of the Company'stwo packaging facilities in Russia ("Russian operations") in 2023 (see Note 19. Divestitures).

(c)These costs relate to the AR Packaging Group AB ("AR Packaging"), Tama and Bell acquisitions (see Note 4. Business Combinations).

(d) In 2025, these costs are related to compensation expense for stock incentive plans due to Company performance adjustments for the 2024 and 2025 grants of performance-based restricted stock units previously expensed in 2024, and related to the terms of the 2024 grants (which differed from the 2023 grants) under the Graphic Packaging Holding Company 2014 Omnibus Stock and Incentive Compensation Plan (the "2014 Plan") (see Note 7. Stock Incentive Plans).

(e)In 2024, these costs include $3 million related to the devaluation of the Nigerian Naira and $10 million related to the change in terms of the 2024 grant of restricted stock units under the Graphic Packaging Holding Company 2014 Omnibus Stock and Incentive Compensation Plan (the "2014 Plan") (see Note 7. Stock Incentive Plans). In 2023, $9 million related to the devaluation of the Nigerian Naira in June 2023.

Exit Activities

In the fourth quarter of 2025, construction of the Company's new recycled paperboard manufacturing facility located in Waco, Texas was completed, and operations commenced. The Company incurred total start-up charges of $55 million for the new recycled paperboard manufacturing facility from announcement date through December 31, 2025. In conjunction with the completion of this project, the Company closed its Middletown, Ohio, recycled paperboard manufacturing facility in May 2025 and its East Angus, Quebec, recycled paperboard manufacturing facility in December 2025 in order to consolidate production into fewer, more efficient locations. These were in addition to its Tama, Iowa recycled paperboard manufacturing facility, which the Company closed in the second quarter of 2023 as further discussed below. Charges associated with these closures are included in Exit Activities in the table above. For more information, see Note 18. Exit Activities.

Also during the fourth quarter of 2025, the Company implemented cost and production optimization initiatives resulting from its review of support functions and other expenses. The Company incurred charges of $6 million related to these initiatives in the fourth quarter of 2025, which are included in Exit Activities in the table above for the year ended December 31, 2025.

During 2024 and 2023, the Company decided to close multiple packaging facilities. Production from these facilities has been consolidated into other existing packaging facilities. The costs associated with these exit activities are included in Exit Activities in the table above. In addition, during 2025, the Company recognized a gain of $34 million on the sale of properties, which is also included in Exit Activities in the table above. For more information, see Note 18. Exit Activities. Current Assets on the Consolidated Balance Sheet include $8 million and $15 million relating to multiple paperboard manufacturing and packaging facilities that met the held for sale criteria as of December 31, 2025 and 2024, respectively.

During the third quarter of 2023, the Company decided to discontinue the project in Texarkana to modify an existing paperboard machine to add swing capacity between bleached and unbleached paperboard in order to focus growth investments in the strategic expansion of recycled paperboard capacity. The Company incurred charges of $16 million within Corporate and Other related to the write-off of assets, which were primarily engineering, consulting, and permitting costs for this project. Charges associated with this project are included in Exit Activities in the table above. For more information, see Note 18. Exit Activities.

Also during the third quarter of 2023, the Company decided to permanently decommission the K3 recycled paperboard machine in Kalamazoo, Michigan as part of its recycled paperboard network optimization plan that the Company initiated in 2019. In connection with this project, which was completed as of December 31, 2024, the Company incurred charges of $20 million related to the write-off of inventory and accelerated depreciation for the assets included in Costs of Sales in the Company's Consolidated Statements of Operations and $8 million for dismantling of the recycled paperboard machine for the assets included in Exit Activities. For more information, see Note 18. Exit Activities.

Divestitures

In May 2024, the Company completed the Augusta Divestiture to Clearwater Paper Corporation for a total consideration of $711 million. The gain associated with this divestiture is included in Charges/(Gains) Associated with Divestitures in the table above. For more information, see Note 19. Divestitures.

In November 2023, the Company completed the sale of its Russian Operations. Impairment charges associated with this divestiture are included in Charges/(Gains) Associated with a Divestiture in the table above. For more information, see Note 19. Divestitures.

Acquisitions

In January 2023, the Company completed the acquisition of Tama, a recycled paperboard manufacturing facility located in Tama, Iowa for approximately $100 million. The costs associated with this acquisition were less than $1 million and are included in Charges Associated with Business Combinations in the table above. For more information, see Note 4. Business Combinations. Subsequently, in the second quarter of 2023, the Company closed this facility. Charges associated with this project are included in Exit Activities in the table above. For more information, see Note 18. Exit Activities.

In September 2023, the Company completed the acquisition of Bell, an independent packaging company for $262 million. The acquisition included three packaging facilities located in South Dakota and Ohio and is reported within the Americas Paperboard Packaging reportable segment. Charges Associated with this acquisition are included in Charges Associated with Business Combinations in the table above. For more information, see Note 4. Business Combinations.

Share Repurchases and Dividends

On April 30, 2025, the Company's Board of Directors authorized an additional share repurchase program to allow the Company to purchase up to $1.5 billion of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the "2025 share repurchase program"). The previous $500 million share repurchase program was authorized on July 27, 2023 (the "2023 share repurchase program"), in addition to the $500 million share repurchase program was authorized on January 28, 2019 (the "2019 share repurchase program"), which was completed in May 2024. At December 31, 2025, the Company had $1.715 billion available for additional repurchases under the 2025 and 2023 share repurchase programs.

Share repurchases are reflected as a reduction of common stock for the par value of the shares, with any excess of share repurchase price over par value allocated between capital in excess of par value and retained earnings.

The following table presents the Company's share repurchases for the years ended December 31, 2025, 2024 and 2023:

During 2025, 2024 and 2023, GPHC paid cash dividends of $128 million, $122 million and $123 million, respectively. Though the decision to distribute cash dividends rests solely with the Board of Directors, the Company presently intends to maintain a quarterly cash dividend, subject to earnings and liquidity considerations.

Adoption of New Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU expands disclosures in an entity's income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The Company adopted this standard, using the prospective method of adoption resulting in enhanced disclosures (see Note 9. Income Taxes), with no material impact on the Company's financial position, results of operations, or cash flows.

Accounting Standards Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU simplifies and modernizes the capitalization guidance for internal-use software costs by eliminating references to prescriptive software development stages and introducing a principles-based approach. Under the new guidance, capitalization begins when management authorizes and commits to funding the project and it is probable the software will be completed and used as intended, considering any significant uncertainties in development. This ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods. Early adoption is permitted. Entities may apply the guidance prospectively, retrospectively, or using a modified approach for in-process projects. The Company is currently evaluating the impact of this ASU on its disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This ASU amends existing guidance to simplify the application of hedge accounting, enhance alignment between risk management activities and financial reporting, and provide additional flexibility in the designation and measurement of certain hedging relationships. This ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. The disclosure updates are required to be applied prospectively. The Company is currently evaluating the impact of this ASU on its disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies and improved existing interim disclosure requirements and the applicability of interim reporting guidance. It is effective for interim reporting periods within annual reporting periods beginning after December 31, 2027. Early adoption is permitted. Entities may apply the guidance prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this ASU on its disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU includes targeted updates covering a broad range of topics, intended to clarify, correct errors or make minor improvements. It is effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact of this ASU on its disclosures.

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, requiring disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. This aims to improve investor insights into company performance. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of this ASU on its disclosures.

Note 2. Supplemental Balance Sheet Data

The following tables provide disclosure related to the components of certain line items included on the Consolidated Balance Sheets.

Receivables, Net:

Inventories, Net by major class:

Property, Plant and Equipment, Net:

(a)Includes gross assets under finance lease of $143 million and related accumulated depreciation of $43 million as of December 31, 2025, and gross assets under finance lease of $142 million and related accumulated depreciation of $36 million as of December 31, 2024.

(b)Includes gross assets under finance lease of $39 million and related accumulated depreciation of $23 million as of December 31, 2025, and gross assets under finance lease of $40 million and related accumulated depreciation of $21 million as of December 31, 2024.

Other Accrued Liabilities:

(a)Accrued payables balance in 2024 included a payable for a $96 million purchased tax credit that was paid in 2025.

(b)Other accrued expenses include several types of expenses such as accrued bonus, external outside services and production costs.